Global Developments and Analysis: Weekly Monitor (19-25 February 2024)

Economic

Beijing warns China’s US$63 trillion financial sector: serve the real economy and enrich lives

China’s financial sector needs to focus on supporting the real economy and must refrain from “fake financial innovation”, state media has proclaimed amid a tightening of regulations as Beijing seeks to flex its financial might. In what is widely believed to be a warning against capital idling and speculative activities by banks and lending institutions, People’s Daily called for the 453-trillion-yuan (US$63 trillion) financial sector to be more dedicated to technological innovation, advanced manufacturing, green development and small enterprises. Financial institutions should avoid “letting money circulate within the sector” for the sake of arbitrage, and should not allow themselves to be distracted from the real economy, the Communist Party mouthpiece said in a commentary on Feb 23. The warning came as regulators toughened rules governing quant trading – which utilises strategies generated by computer algorithms and involves the rapid buying and selling of securities – while also addressing concerns over the fragility of the nation’s financial system against the backdrop of a local debt mountain, property slump and stock market chaos due to the pull-out of overseas capital. Zhao Xijun, a finance professor at Renmin University in Beijing, said the article was mainly pointing to risks in China’s huge shadow banking industry that has filled the gaps left by the traditional banking sector, such as peer-to-peer lending schemes that collapsed and “damaged social stability” in the past few years. Click here to read… [2]

First Russian bank receives Chinese credit rating

China Lianhe Credit Rating has assigned Alfa-Bank, Russia’s largest private lender, an international rating of AA- with a stable outlook, the bank said in a statement on Feb 21. Alfa-Bank has become the first large Russian bank to receive an international rating in China. Alfa-Bank is at the same level that Lianhe rates the Russian sovereign. The agency attributed its decision to a number of factors such as Alfa-Bank’s systemic importance, efficient corporate management, high asset quality, and strong lending capacity. The Chinese agency also highlighted the diversified structure of the bank’s credit portfolio and pointed to stable sources of operational income, which it believes will ensure that the bank demonstrates consistent growth. The development comes as Alfa-Bank is on course for a major expansion in China as it seeks to become the first private Russian bank to open full-scale branches in two key cities – Beijing and Shanghai. The bank’s board of directors views the scaling up of operations in the Asian powerhouse as “strategically important.” Last year, Alfa-Bank emerged as the top lender in Chinese yuan in Russia, accounting for a third of all yuan loans in the Russian market. Click here to read… [3]

Israel’s economy shrinks by a fifth – data

Israel’s economy faced one of the biggest contractions in the country’s history in the fourth quarter of last year due to the ongoing war with Hamas, a report from the country’s Central Bureau of Statistics revealed on Feb 19. The country’s GDP slumped by a seasonally adjusted 19.4% in the final three months of 2023, which was the first quarterly drop in Israel’s economy in two years. The contraction was significantly worse than both the Bloomberg and Reuters consensus forecast of a 10% decline. The hostilities paralyzed businesses, prompted evacuations and a record call-up of reservists, which removed roughly 8% of the country’s workforce, according to economists. The war caused a severe disruption to Israel’s $520 billion economy, leading to “restrictions comparable to shutdowns imposed during the Covid-19 pandemic, causing a sudden crash in manufacturing, jolting consumption and briefly emptying schools, offices and construction sites,” Bloomberg wrote. Investment in Israel took the biggest blow, plunging by 70%, while private consumption, a major driver of economic growth, dropped by 27% in the fourth quarter. Public consumption plummeted by almost 90%, data showed. Meanwhile, government spending skyrocketed by 88.1%, according to the statistics. Increased military spending played a large role in the surge. Click here to read… [4]

UAE banks closing Russian accounts – media

Several large banks in the United Arab Emirates have begun closing the accounts of Russian companies and individuals due to the risk of secondary Western sanctions, the news outlet Vedomosti reported on Feb 19, citing businessmen working in the UAE. The sources, whose identities are not disclosed in the article, told Vedomosti that in September tier-one UAE banks, such as First Abu Dhabi Bank, Emirates NBD, and Abu Dhabi Commercial Bank, largely purged their ties to Russia. It thus became virtually impossible to carry out transactions with Russia using these banks. This happened after Russia’s Ak Bars Bank, which used to be the main channel for Russia-Emirati payments, came under US sanctions. Second-tier institutions have allegedly so far treated Russian companies and individuals more loyally, but have demanded that these clients purchase additional banking services or put extra funds on their accounts. The sources also complained that it has recently become next to impossible to open a new account with the country’s larger banks. Many applications from Russian residents are returned after the first compliance check. The sources attributed the problem to sanctions. Click here to read… [5]

UAE Exits Watchdog’s Dirty Money List in Quick Turnaround

The United Arab Emirates was removed from a global watchdog’s “gray list” on Feb 23, less than two years after the Gulf state’s demotion, capping a push by local authorities to clamp down on illicit financial flows. The Paris-based Financial Action Task Force highlighted how the oil-rich country had strengthened its regime for anti-money laundering and combating terrorist financing. “The UAE is therefore no longer subject to the FATF’s increased monitoring process,” the watchdog said in a statement. The decision could lead to smoother foreign currency transactions, lower inter-bank fees, and increased trade and investment, according to Moody’s Analytics Industry Practice Lead Mohamed Daoud. “Even so, don’t expect the international compliance community to immediately change the way it interacts with the country.” “Think of it as a gradual thawing, not an instant spring,” he said. “Specific actions by the UAE, reactions from other nations and financial institutions, and even global geopolitical shifts will all influence the size of the benefits.” Following its latest review, the FATF placed Namibia and Kenya on the gray list. For the UAE, which was added to the list of jurisdictions under increased monitoring in March 2022, the de-listing marks a rapid turnaround. A Bloomberg investigation at the time chronicled Dubai’s status as a destination for some of the world’s wealthiest exiles. Click here to read… [6]

France Seeks First Meeting for India-to-EU Infrastructure Link

France is preparing a first meeting to discuss an infrastructure link that would connect India to Europe via the Middle East to counter a similar Chinese initiative. President Emmanuel Macron named Gerard Mestrallet, the former chief executive officer of French energy utility Engie SA, his envoy to lay the ground work of the project. The concept, known as IMEC, aims to create a network of railroads, ships, gas pipelines and internet cables. “I’d like to convene the representatives of other IMEC member states in a gathering in the next two months,” Mestrallet told Bloomberg in an interview, adding that it was too early to say where or how the meeting would take place. The plan, initially announced on the sidelines of the Group of 20 summit in New Delhi last year, could need a decade or more to materialize, according to Mestrallet. It took shape after Russia invaded Ukraine but suffered a major setback after the start of the Israel-Hamas war, which has stoked tensions in the Middle East. That conflict has spilled over into the Red Sea shipping lanes, highlighting the need for alternative and secure trade routes. Members of the India-Middle East-Europe Economic Corridor include the US, India, Saudi Arabia, the United Arab Emirates and the European Union. Click here to read… [7]

Pakistan Considers Iran Gas Pipeline Restart Despite U.S. Sanctions

Pakistan is mulling over completing a much-delayed pipeline project with Iran, which has been stalled for years and has failed to move forward due to US sanctions. Islamabad is considering finalizing the first phase of the 80-kilometer pipeline, according to Pakistani news site The Nation. "Islamabad is contemplating to kick-off construction work on the 80 kilometers portion of Iran-Pakistan gas pipeline project… to escape a potential penalty of $18 billion," the report said. "Pakistan will submit an application to seek a waiver of US sanctions for the IP project. Initially, it has been decided that in the first phase of the IP project, work on the 80 km portion from the Pak–Iran border to Gwadar will be started," a source in the Pakistani energy ministry told the outlet. The project, which aims to connect the Pakistani port city of Gwadar to the Iranian border, was launched in 2013. It required Pakistan to complete the construction of its end of the pipeline by 2014. Iran said it has already completed its side of the pipeline and has invested $2 billion in the project. Pakistani officials warned in May last year that Islamabad could face an $18 billion fine if it fails to complete the Iran–Pakistan Gas Pipeline project. Click here to read… [8]

Russia tears up Soviet-era fishing agreement with UK

British fishermen will be banned from operating in the Barents Sea, one of the world’s largest fisheries for cod and haddock, under new legislation passed by the lower house of Russia’s parliament, the State Duma, on Feb 21. The bill, which rescinds an agreement signed between the governments of the USSR, the UK, and Northern Ireland in 1956, was passed in its third reading. The so-called Fisheries Agreement had allowed British ships to fish in the Barents Sea off the north coast of the Kola Peninsula. It was initially signed for a period of five years and automatically renewed every five years since neither party ever withdrew from the agreement. “The agreement was unfortunately one-sided giving the authority and right to fish only to our partners at the time,” Deputy Agriculture Minister Maksim Uvaidov said, clarifying the details of the treaty. He added that the agreement didn’t provide Soviet fishermen with similar rights. Taking into account the UK’s decision to strip Russia of ‘most favored nation’ status in 2022, which led to a 35% tariff hike on Russian goods, Moscow says that ending the Soviet-era agreement “will not cause serious foreign policy or economic consequences” for the country. Commenting on the legislation, Duma Chairman Vyacheslav Volodin said that by tearing up the agreement Russia was returning to its own possession the fish that the UK had been consuming for decades. Click here to read… [9]

K-defense: South Korea's weapons industry goes global

First came glitzy, boppy K-pop. Then came soapy, soppy K-drama. Now, according to South Korean President Yoon Suk Yeol, it is time for another K-moniker for a new, more pessimistic era, as the country with a relentlessly global brand seizes another booming export niche: weapons. "I support the bold challenge of K-Defense," Yoon wrote in the guest book during a December visit to the offices of Hanwha Aerospace, one of the standout companies in South Korea's burgeoning defense industry. In a shiny industrial area outside the capital called Pangyo Techno Valley, also home to tech giants Naver and Kakao, Yoon posed for pensive photos while admiring hulking aircraft engines. "Some people have considered the defense industry to be a war industry and have had negative opinions about it," read Yoon's message. "In fact, the defense industry is a peaceful industry that shares our values in the global security system while guaranteeing the safety of our allies and people who respect the international order." South Korean exports are mainly driven by semiconductors, cars and boy bands. But in recent years, the country's defense companies, whose skills have been honed amid a seven-decade-old confrontation with North Korea, have raised their global profiles with the signing of landmark deals. Click here to read… [10]

China bond outperformance tells a bigger story

China’s stock investors could be excused for feeling like President Xi Jinping is disinterested in their plight as market valuation losses mount. Bond punters seem ascendant, though, as Beijing officialdom makes clear it has their backs in the way few international funds saw coming. The hyper-targeted nature of policy rescue efforts by the People’s Bank of China (PBOC) and other arms of the state explain why yuan-denominated corporate bonds were among the globe’s best-performing asset classes last year. The dollar bonds of local government financing vehicles (LGFV) were also big winners in 2023. Unlikely, too, given all the hand-wringing about the US$9 trillion LGFV debt mountain. The borrowing binge has credit rating companies worried that municipal debt will be China’s next crisis, one that could dwarf today’s huge property troubles. The reason bonds are winning: Xi’s team understands that a vibrant sovereign bond market is needed to defuse the property crisis and head off a local government debt meltdown. The same goes for achieving Xi’s bigger goal of replacing the dollar as the linchpin of trade and finance. That’s not to say Xi’s team has given up on putting a floor under China’s stock markets or gross domestic product (GDP). In 2023, inflation-adjusted GDP beat Beijing’s target to grow at 5.2%. But nominal GDP slipped to 4.6% from 4.8% a year earlier as deflationary pressures mount. Click here to read… [11]

Thai Land Bridge bid straddles a delicate US-China line

Thailand hopes China will help build a US$2.8 billion, east-west highway and railway “Land Bridge” across the kingdom, linking the Andaman Sea and Gulf of Thailand as a short-cut for oil and other international cargo currently sailing further south via Singapore and the Malacca Strait. Inland southern China could then also use existing north-south roads and rails to enable Chinese overland access, for the first time, to southern Thailand’s two planned deep-sea ports on the Andaman and Gulf coasts, opening westward to the Indian Ocean and east to the Pacific. Thailand describes the Land Bridge plan as a faster, shorter and cheaper route for international shipping compared to the narrow, congested, southern Strait of Malacca wedged between Singapore and Indonesia. The scheme marks a scaled-down version of the often-proposed but never-realized Kra Canal, more recently dubbed the Thai Canal, which envisions digging a channel across southern Thailand’s narrow Kra isthmus. The canal scheme, which would could cost upwards of $25 billion by some estimates, has sunk on a constitutional provision that defines the kingdom as “indivisible.” The Land Bridge concept, the project’s advocates say, dodges any potential legal challenge. Click here to read… [12]

Korean Stocks Have a New Driver: The Government

Korea might be the next Japan for investors, with its stock market shaken out of slumber by an activist shareholder in the unlikely form of its government. Among those watching the recent rally in Japanese stocks—which took the Nikkei benchmark back above its 1989 high this week—seems to have been South Korean President Yoon Suk Yeol. In a speech last month, he took aim at the “Korean discount” that has long plagued the country’s stock market. Since then, Korean regulators have announced potential measures to encourage higher valuations, such as a name-and-shame policy for undervalued companies inspired by similar measures undertaken in Japan last year. A formal package of reforms, called the “corporate value-up program,” is expected to be announced on Feb 19. You might wonder why companies aren’t already focused on a task that is central to public-company governance in the West. High inheritance tax gives the families who control many big Korean companies a reason to keep valuations down and extract cash in other ways, such as through dubious related-party transactions, according to a paper published late last year by Jonathan Pines, a portfolio manager at U.S. investment-management firm Federated Hermes. Historically, close relations between these families and the government stymied reform. But a boom in retail share ownership during the pandemic seems to have shifted the balance of political power toward minority interests. Click here to read… [13]

Nvidia hits $2 tril. valuation as AI frenzy grips

Nvidia hit $2 trillion in market value on Feb 23, riding on an insatiable demand for its chips that made the Silicon Valley firm the pioneer of the generative artificial intelligence boom. The milestone followed another bumper revenue forecast from the chip designer that drove up its market value by $277 billion on– Wall Street's largest one-day gain on record. Its rapid ascent in the past year has led analysts to draw parallels to the picks and shovels providers during the gold rush of 1800s as Nvidia's chips are used by almost all generative AI players from chatGPT-maker OpenAI to Google. That has helped the company vault from $1 trillion to $2 trillion market value in just around nine months - the fastest among U.S. companies and in less than half the time it took tech giants Apple and Microsoft. "For AI companies today – the leaders of the sector – what's going to be binding for them is not going to be demand. It's just going to be their capacity to answer the surging demand," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank. Nvidia's shares were trading more than 4 percent higher at a record high of $818 on Feb 23, maintaining its position as the third most valuable U.S. company. They have surged nearly 60 percent this year, after more than tripling in value in 2023. Click here to read… [14]

China Approves $17 Billion in Loans for White-List Projects

Chinese officials have approved more than $17 billion in loans for a “white list” of real-estate projects, offering fresh signs that Beijing is moving forward to prop up the country’s sluggish property market. China’s housing regulator said Feb 21 that 123.6 billion yuan ($17.19 billion) in loans had been approved for projects as of Feb. 20. That includes CNY29.43 billion already loaned out to 162 projects in 57 cities. Chinese local govenments in January created their white list of projects eligible for stimulus, including some from troubled property companies such as Country Garden Services, Sunac and CIFI. Chinese banks will review the white lists from local governments and release loans to approved projects. Analysts said the loans approval offers a sign that Beijing is following through on plans to support property projects and ensure the delivery of promised housing, but it will have limited impact on fueling new investment. “It could ease homebuyers’ concerns on uncompleted properties and delivery,” said Sonija Li, Maybank’s head of retail research. The move comes after the Chinese central bank on Feb 21 lowered its five-year loan prime rate by 25 basis points, the largest cut since the rate was introduced in 2019. That has spurred hopes of boosting demand for mortgages, which are anchored to the rate. Click here to read… [15]

Singapore to require departing flights to use sustainable fuel from 2026

Singapore plans to require all flights departing the country to use sustainable aviation fuel (SAF) from 2026, its transport minister said on Feb 19, as the city-state joins the global aviation industry’s efforts to switch to greener fuel. Under the plan, announced by Chee Hong Tat at the Changi Aviation Summit on the eve of the Singapore Airshow, the country aims for a 1% SAF target from 2026 and plans to raise it to 3-5% by 2030, subject to global developments and the wider availability and adoption of SAF. “The use of SAF is a critical pathway for the decarbonization of aviation and is expected to contribute around 65% of the carbon emission reduction needed to achieve net zero by 2050,” the Civil Aviation Authority of Singapore (CAAS), which developed the plan in consultation with industry and other stakeholders, said in a statement. SAF can be made either through synthetic processes or from biological materials, like used cooking oil or wood chips. SAF currently accounts for 0.2% of the jet fuel market. The aviation industry says this will rise to 65% by 2050 as part of a plan to reach “net zero” emissions by then, though that will require an estimated $1.45 trillion to $3.2 trillion of capital spending. Click here to read… [16]

Strategic

U.S. faces 4 threats but only equipped for 1 war, experts say

The Biden administration's struggle to push through Congress a massive supplemental budget to fund ongoing battles in Ukraine, Gaza and a potential future conflict in Taiwan has brought to the fore a fundamental question: How many wars can America take on at once? "The U.S. military is currently sized to be able to conduct something less than two simultaneous or overlapping major conflicts," the Congressional Research Service noted in a report titled "Great Power Competition: Implications for Defense -- Issues for Congress," last updated in January. For almost three decades after the end of the Cold War, the Pentagon maintained a "two-war construct," under which the U.S. made sure it had the ability to win two simultaneous wars in different theaters. The idea was that the U.S. would be able to take on a hostile country in the Middle East -- such as Iraq or Iran -- and still be able to defeat North Korea in East Asia. But in 2018, a little-discussed, but fundamental shift took place in U.S. military planning. Every four years, the U.S. Department of Defense issues its capstone military guidance called the National Defense Strategy, or NDS. Arguably, the most important element of the NDS is the "force planning construct," which specifies the number of conflicts the U.S. military should be prepared to face at the same time. Click here to read… [17]

US blocks third Gaza ceasefire push at UN

The United States has vetoed a UN Security Council measure calling for a ceasefire in Gaza, casting the lone ‘no’ vote on a draft that garnered support from most other members. Washington had used its veto power to block two prior attempts, arguing the move would not produce a “durable peace.” The call for an immediate humanitarian truce was shot down by the US delegation on Feb 20. While 13 nations in the 15-member Security Council favored the Algerian-drafted resolution, Washington was the sole country to vote no, while Britain abstained. ”Demanding an immediate, unconditional ceasefire without an agreement requiring Hamas to release the hostages will not bring about a durable peace. Instead, it could extend the fighting between Hamas and Israel,” US Ambassador to the UN Linda Thomas-Greenfield told the council before the vote. Last weekend, Thomas-Greenfield signaled that the US would oppose the new ceasefire effort, arguing that it could undermine negotiations between the warring parties, aimed at achieving a temporary pause in the fighting and the release of the remaining hostages held by Hamas. While the latest draft resolution did not directly tie a ceasefire to the fate of the hostages, it separately called for the unconditional release of those captured by Palestinian militants during Hamas’ October 7 terrorist attack on Israel. Click here to read… [18]

Israel-Hamas War Splits G-20, Risking Paralysis at Meeting

The Group of 20 nations is so split on the conflicts in Gaza and Ukraine that they may be forced to reduce the forum’s scope and avoid geopolitical issues altogether this year, according to people familiar with the matter. Removing all sensitive political topics from G-20 statements would diminish the relevance of the format, said one of the people, who spoke on the condition of anonymity. But that would give the group the chance on reaching consensus on other issues. G-20 foreign ministers will meet in Rio de Janeiro starting Feb 21, when the group is expected to discuss the conflict in the Middle East. Complicating the upcoming gathering is the fact that Brazilian President Luiz Inacio Lula da Silva over the weekend compared Israel’s war on Hamas with Adolf Hitler’s extermination of Jews during the Holocaust. Lula is setting the tone for developing nations since Brazil holds the rotating presidency of the G-20. Several Latin American countries have pulled their ambassadors from Israel, while South Africa has filed a lawsuit with the International Court of Justice, accusing Israel of genocide. The Group of Seven represents the US and its main allies while the G-20 brings together countries from across the spectrum, including China, and so it becomes a focus for global disputes. Israel is not a member of the G-20. Click here to read… [19]

Israeli parliament backs Netanyahu’s rejection of a Palestinian state

Israeli lawmakers have voted to back Prime Minister Benjamin Netanyahu’s rejection of any “unilateral” recognition of a Palestinian state as international calls have grown for the revival of Palestinian statehood negotiations. Feb 21’s symbolic declaration, issued during Israel’s war on Gaza, also received backing from members of the opposition with 99 of 120 lawmakers voting in support, a Knesset spokesperson said. The Israeli position is that any permanent accord with the Palestinians must be reached through direct negotiations between the two sides and not by international dictates. That is despite Netanyahu openly stating his opposition to a Palestinian state, and presenting himself to the Israeli public as a bulwark against any such state. No talks on Palestinian statehood talks have been held since 2014, when Israel refused to accept a state encompassing all of the Palestinian territory illegally occupied by Israel. “The Knesset came together in an overwhelming majority against the attempt to impose on us the establishment of a Palestinian state, which would not only fail to bring peace but would endanger the state of Israel,” Netanyahu said. The vote was condemned by the Palestinian Ministry of Foreign Affairs and Expatriates, which accused Israel of holding the rights of the Palestinian people hostage by occupation of territories where Palestinians seek to establish a state. Click here to read… [20]

EU launches Red Sea naval mission to protect shipping from Houthi attacks

The European Union has launched a naval mission to protect cargo ships in the Red Sea from attacks from Yemen’s Houthi rebels. European Commission President Ursula von der Leyen announced the decision to deploy Naval Force Operation Aspides on Feb 19 on X, saying, “Europe will ensure freedom of navigation in the Red Sea, working alongside our international partners.” “Beyond crisis response, it’s a step towards a stronger European presence at sea to protect our European interests.” The naval mission will send European warships and airborne early warning systems to the Red Sea, Gulf of Aden and surrounding waters. Italian Foreign Affairs Minister Antonio Tajani confirmed the launch during a meeting of foreign ministers in Brussels, Belgium, calling it “an important step towards common European defence”. So far, France, Germany, Italy and Belgium have said they plan to contribute ships. Aspides vessels, whose operational command centre will be in the Greek city of Larissa, will have orders to fire on the Houthis only if they attack first and will not be authorised to shoot pre-emptively, an EU official told the German Press Agency dpa. Since November, the Houthis have been attacking commercial and military shipping in the busy Red Sea, across which 12 percent of global trade travels. Click here to read… [21]

US unveils new major sanctions package against Russia for war in Ukraine, Navalny's death

The United States on Feb 23 announced a new major package of sanctions and export control restrictions, including one against a South Korea-based firm, to ensure accountability for Russia's ongoing war against Ukraine and the death of Russian opposition leader Alexei Navalny. On the eve of the second anniversary of Russia's invasion of Ukraine, Washington unveiled the package, which President Joe Biden said will ensure Russian President Vladimir Putin "pays an even steeper price for his aggression abroad and repression at home." The Treasury and State Departments said that they are sanctioning over 500 individuals and entities to "impose additional costs for Russia's repression, human rights abuses, and aggression against Ukraine." It marked the largest number of such sanctions since the Russian invasion of Ukraine. The Bureau of Industry and Security under the Commerce Department added to its "entity list" for export restrictions 93 entities, which included Daesung International Trading, a company located in South Korea's southeastern city of Gimhae. "Today, I am announcing more than 500 new sanctions against Russia for its ongoing war of conquest on Ukraine and for the death of Alexei Navalny, who was a courageous anti-corruption activist and Putin's fiercest opposition leader," Biden said in a statement. Click here to read… [22]

Russia comments on ‘nukes in space’ allegation

Russia has not deployed nuclear weapons in space and does not intend to do so, President Vladimir Putin and Defense Minister Sergey Shoigu said on Feb 20. Multiple US media outlets claimed last week that Russia may have undisclosed anti-satellite capabilities, possibly nuclear in nature, deeming it a significant national security threat. The rumors were based on a press release from the House of Representatives, widely seen as a way of pressuring Congress to quickly approve more than $60 billion in military aid to Ukraine. “Our position is clear and transparent: We have always been categorically against the deployment of nuclear weapons in space,” said Putin. “Not only have we called for everyone to uphold the treaties already in effect, but repeatedly insisted on strengthening them.” Shoigu, who was at the Kremlin to report on the military operation against Ukraine, also addressed the rumors coming from the US. “Russia has not deployed and does not intend to deploy nuclear weapons in space,” the defense minister stated. “There are no plans to do so.” Kremlin spokesman Dmitry Peskov similarly addressed the US claims last week, dismissing them as a ploy to push the Ukraine aid bill through the House of Representatives. “It’s clear that the White House is trying, by hook or by crook, to push Congress to vote on a bill to approve funding [for Ukraine]. We’ll see what tricks the White House will use,” he said. Click here to read… [23]

Houthis deploy underwater drone for first time – Pentagon

Yemen’s Houthi rebels have attempted to use a submersible drone for the first time, but it was destroyed in yet another wave of US-led coalition attacks over the weekend, the US Central Command has claimed. The US Navy conducted a series of five strikes, hitting three Houthi cruise missiles, an unmanned surface vessel (USV), and one unmanned underwater vessel (UUV) on Feb 17, CENTCOM announced on X (formerly Twitter) on Feb 18. “This is the first observed Houthi employment of a UUV since attacks began in Oct. 23,” the US military wrote, claiming it presented an “imminent threat” to US Navy ships and commercial vessels in the area. Since the beginning of the Israeli military operation in Gaza, the Houthi militants, who are in control of a large portion of Yemen, have harassed multiple vessels sailing the Red Sea. In solidarity with the Palestinians in Gaza, the Houthis vowed to attack any ships they find to be linked to Israel until the siege of Gaza stops. In response, the US launched an international maritime coalition to patrol the Red Sea called ‘Prosperity Guardian’, with the stated goal of protecting shipping lanes. Since mid-January, the US and UK have carried out air- and sea-launched attacks against “multiple underground storage facilities, command and control, missile systems, UAV storage and operations sites, radars, and helicopters” in Yemen in an attempt to “degrade Houthi capabilities” to attack military vessels and merchant ships. Click here to read… [24]

Pentagon Has Opened Over 50 Criminal Probes on US Aid to Ukraine

The Pentagon’s inspector general said its criminal investigators have opened more than 50 cases related to aid provided to Ukraine, including some involving contractors, but have yet to firm up any allegations. The investigations, which are at different stages, are looking at issues including “procurement fraud, product substitution, theft, fraud or corruption, and diversion,” the inspector general, Robert Storch, said in a briefing Feb 22. “We have not substantiated any such allegations, though that may well change in the future,” he said. Storch also cautioned there would likely be more investigations into abuse or diversions of US equipment “given the quantity and speed” of gear flowing into Ukraine. The Pentagon is leading Washington’s efforts, along with the State Department and US Agency for International Development, to monitor the roughly $113 billion in aid and funds appropriated for Ukraine, not all of which has been spent, as part of the US-led “Atlantic Resolve” effort to dislodge Russia. A similar process was undertaken for the wars in Iraq and Afghanistan. Auditors have so far uncovered “stresses and gaps” in providing assistance, he said. For example, audits uncovered incomplete manifests for shipments transfered to Ukraine through Poland. “As a result, DoD personnel did not have required visibility and accountability of all types of equipment during the transfer process,” they said in a June assessment. Click here to read… [25]

Haley’s 2024 Hopes Fade as Trump Wins Big on Her Home Turf

Even a home-state advantage couldn’t give Nikki Haley her first win of the Republican presidential primaries, as South Carolina voters overwhelmingly chose Donald Trump. Early results showed Trump easily winning the state’s primary Feb 24, as he pushes toward a general-election rematch against Democratic President Joe Biden. Former South Carolina Governor Haley has vowed to remain in the race through Super Tuesday on March 5, to give moderate Republicans and independents time to coalesce around her increasingly long-shot candidacy. Many big Republican donors, loathe to see Trump return to the White House, have stood by her and poured millions into her campaign. “Nearly every day, Trump drives people away,” Haley told supporters Feb 24 night. “I’m not giving up this fight when a majority of Americans disapprove of both Donald Trump and Joe Biden.” But she has so far failed to persuade Republican primary voters, even those in South Carolina who know her best. Trump has now triumphed in all contests held to-date, trouncing rivals by wide margins in states with wildly different electorates. Haley, his last remaining serious challenger for the 2024 GOP presidential nomination, has failed to convince rank-and-file Republicans to abandon him, despite his mounting legal problems and her skills on the trail. Click here to read… [26]

ECOWAS lifts sanctions on Niger amid tensions in West Africa bloc

The West African regional bloc is lifting most sanctions imposed on Niger over last year’s coup, in a new push for dialogue following a series of political crises that have rocked the region in recent months. A no-fly zone and border closures were among the sanctions being lifted “with immediate effect”, the president of the Economic Community of West African States (ECOWAS) Commission, Omar Alieu Touray, said on Feb 24. The lifting of the sanctions is “on purely humanitarian grounds” to ease the suffering caused as a result, Touray told reporters after the bloc’s summit in the Nigerian capital, Abuja. The summit aimed to address existential threats facing the region as well as implore three military-led nations that have quit the bloc – Niger, Mali and Burkina Faso – to rescind their decision. The three were suspended from ECOWAS following recent coups. Since then, they have declared their intention to permanently withdraw from the bloc, but ECOWAS has called for the three states to return. Speaking in his opening remarks at the start of the summit, ECOWAS chairman and Nigerian President Bola Tinubu said the bloc “must re-examine our current approach to the quest for constitutional order in four of our Member States”, referring to the three suspended countries, as well as Guinea, which is also military-led. Click here to read… [27]

Turkey’s homemade fighter poised to storm global markets

Turkey’s Kaan Next-Generation Fighter, previously known as the TF-X, has made its first flight, giving rise to geostrategic speculation the fighter jet may soon be available for export to a range of states, according to multiple news outlets. The aircraft was airborne for 13 minutes, reached an altitude of 8,000 feet and a speed of 230 knots while flying alongside an F-16D for support, the reports said. The TF-X cum Kaan project, launched in 2016, aims to replace Turkey’s fleet of US-made F-16s, which will be phased out starting in the 2030s. The Kaan’s design philosophy has evolved since Turkey left the US-led F-35 consortium following the country’s controversial procurement of Russia’s S-400 missile defense system in 2019. The Kaan will be the flagship of Turkey’s military aerospace industry, with the country working on a project to produce locally manufactured jet engines and the design being considered for a sixth-generation fighter replete with artificial intelligence-powered capabilities. Popular Mechanics notes in a March 2023 article that the Kaan is in the same league as South Korea’s indigenously made KF-21 Boramae fighter. This 4.5 generation jet falls short of being a 5th generation aircraft, although a complete stealth configuration and indigenous engines are planned for a third production batch. Click here to read… [28]

Taiwan says it has not stepped up military deployments on frontline islands

Taiwan has not increased military deployments on frontline islands facing China and there is nothing unusual in the military situation around Taiwan, the defense ministry said on Feb 21 amid a rise in tensions with Beijing. Taiwan, which China claims as its own territory despite the island’s rejection, has been wary of efforts by Beijing to ramp up pressure on Taipei following last month’s election of Lai Ching-te as president, a man Beijing considers a dangerous separatist. China’s coast guard on Feb 18 began regular patrols around the Taiwan-controlled Kinmen islands after two Chinese nationals died trying to flee Taiwan’s coast guard after their boat entered prohibited waters. On Feb 19, China’s coast guard boarded a Taiwanese tourist boat in waters close to Kinmen, a move Taiwan denounced as causing “panic.” Speaking at a regular news briefing in Taipei, Taiwan defense ministry intelligence office Huang Ming-chieh said there was currently “nothing abnormal” in China’s military movements around Taiwan. Lee Chang-fu, deputy head of the ministry’s joint operations planning department, added that there was no increase in Taiwan’s deployments on the offshore islands, which also includes the Matsu archipelago further up the Chinese coast from Kinmen. The ministry reiterated it will not intervene in the situation around Kinmen to avoid further escalation in tensions but is making plans with the coast guard for possible “new scenarios”. Click here to read… [29]

Bangladesh resists growing calls to accept more Rohingyas from Myanmar

Bangladesh faces intensifying pressure to accept more Rohingya Muslims fleeing the civil war in neighboring Myanmar, a burden the government in Dhaka insists it cannot bear. Hundreds of Rohingyas have gathered at various points along the nations' border, seeking shelter as Myanmar's military regime battles a strong resistance offensive. Mostafa Mohammad Sazzad Hossain, a spokesman in Dhaka for the United Nations High Commissioner for Refugees, told Nikkei Asia this week: "It is vital that civilians -- children, women and men -- fleeing conflict be allowed to seek and access safety. Denying access to safety further puts them at risk." But the Bangladeshi government is holding firm, arguing that it already hosts over a million Rohingya refugees and cannot take in any more. At a meeting of the National Task Force on Forcibly Displaced Myanmar Nationals in Dhaka on Feb. 14, the UNHCR's representative, Sumbul Rizvi, asked Bangladesh to accept 900 Rohingya people who were waiting at 19 different points along the border, citing humanitarian grounds, according to officials in Bangladesh's Foreign Ministry. Sources familiar with the talks said Foreign Secretary Masud Bin Momen refused and referred to recent, repeated comments by other ministers who have said that no additional Rohingya refugees would be accepted. Click here to read… [30]

Japan and China start new talks on Fukushima water release

Japan and China have launched a new round of discussions regarding the release of treated wastewater from the disaster-hit Fukushima Daiichi nuclear power plant, based on an agreement from a November summit, Nikkei has learned. Officials from Japan's Ministry of Foreign Affairs and the Ministry of Economy, Trade and Industry were among those who took part in the unannounced meeting earlier this year. They are believed to have urged understanding of Japan's stance, stressing that the safety of the process is being monitored in cooperation with the International Atomic Energy Agency. China opposes the discharge of what it calls "nuclear-contaminated water" from Fukushima Daiichi into the sea. It suspended all imports of Japanese seafood after plant operator Tokyo Electric Power Co. Holdings started releasing the water in August. Japan has since urged China to lift the ban. Japanese Prime Minister Fumio Kishida and Chinese President Xi Jinping agreed to hold talks toward resolving the issue when they met in San Francisco this past November. Kishida said afterward that "from now, we will hold discussions grounded in science at the expert level." Japan and China have held working-level meetings on Fukushima wastewater before. But they are still far apart, and it remains unclear whether the latest round of talks could lead to a breakthrough. Click here to read… [31]

Health

Largest Covid vaccine study yet finds links to neurological conditions

A big data study of 99 million people across eight countries showed greater than expected incidence of side effects from various Covid-19 vaccines, the Global Vaccine Data Network (GVDN) said on Feb 19. The study, originally published in the medical journal Vaccine on February 12, looked at 13 neurological, blood, and heart-related conditions, called “adverse events of special interest.” Researchers looked at 99,068,901 vaccinated individuals from ten sites in eight countries. “The size of the population in this study increased the possibility of identifying rare potential vaccine safety signals,” said Kristyna Faksova, the lead author of the study from the Statens Serum Institut in Copenhagen, Denmark. According to the GVDN, the study observed a greater incidence of myocarditis (inflammation of the heart muscle) and pericarditis (inflammation of the heart sac) than expected among those who took the Pfizer/BioNTech (BNT162b2) and Moderna (mRNA-1273) shots. Moderna’s vaccine also had a higher rate of acute disseminated encephalomyelitis (ADEM, inflammation and swelling in the brain and spinal cord), with seven observed events compared to two expected within 42 days of the first shot. Safety signals for myocarditis were “consistently identified” following the first three doses of either mRNA shot, with the highest ratio after the second dose. Click here to read… [32]

What’s fuelling the deadly cholera outbreak in Southern Africa?

A severe cholera outbreak is currently ravaging communities in Southern Africa, spreading across borders in what experts say is the worst such crisis involving the illness that the region has seen in a decade. Thousands of people have died, and thousands of others have been infected with the acute diarrheal disease in at least seven countries. In some of the hardest-hit countries, the outbreak forced millions of students to stay back home in January. Across the region, emergency response centres have sprung up in school fields and stadiums, and are teeming with groaning patients in pain. Fears are mounting that if the outbreak is not tackled soon, healthcare staff could be overwhelmed. In an emergency summoning to address the outbreak earlier this month, leaders of the Southern African Development Community (SADC) said they were working to stop the spread, but a lack of clean water, weak cross-border checks, and a global shortage of vaccines could test that resolve. Here’s a breakdown of what’s causing the spread and how many people have been affected: How widespread is the outbreak? Caused by the vibrio cholerae bacteria, cholera infects the small intestine, producing toxins that the body works hard to expel by secreting large amounts of vomit or watery diarrhoea, leading to rapid dehydration. Click here to read… [33]