Global Developments and Analysis: Weekly Monitor (03-09 June)

Economic

Gold Surpasses Euro, Challenges Dollar Dominance in Global Reserves

Sturdy central bank gold buying since 2009 and a rising gold price has grown the precious metal’s share of global international reserves to the detriment of fiat currencies. By the end of 2023 gold surpassed the euro and the next fiat currency to be challenged is the US dollar. Often when financial analysts draw charts on the distribution of international reserves they focus on foreign exchange (omit gold) and start when the euro was introduced in 1999. Based on such charts the dollar’s share of total reserves appears to be falling slowly, from a peak of 72% in 2001 to 58% in 2023. In addition, it seems there is not one specific currency that is competing with the dollar. But why not include gold and look back as far as possible? By combining multiple sources, we get a glimpse of the dissemination of reserve currencies from 1899 until 1935 (both fiat and gold), and a full picture starting from 1950. This paints a whole different story. Instead of showing only the demise of the dollar at snail pace, the historic balance between gold and fiat currencies is revealed. It’s not the dollar that normally backs the international monetary system, it’s gold. Gold used to make up the majority of international reserves, even when sterling was said to be the world reserve currency before the dollar. Click here to read… [2]

Chinese Money Managers Eye Middle East Oil Wealth

China’s sovereign wealth fund and a number of banks and hedge funds have boosted their presence in the Middle East, aiming to get a larger slice of the oil-wealth pie and raising concerns in the United States over closer cooperation between China and the U.S. allies in the Gulf region. This year, several state-held Chinese banks, the Chinese $1.35-trillion sovereign wealth fund, and a number of asset managers from the world’s second-largest economy have established offices and businesses in Dubai, Abu Dhabi, and other financial centres in the Middle East, where the revenues from oil are expected to be used in high-tech and AI sectors. The Chinese financial institutions are set to compete with the established presence of the top Wall Street banks in the Middle East. The countries in the Gulf, for their part, are looking at China for investments and are welcoming banks and asset managers with knowledge of the Chinese market. This year alone, Infini Capital Management, a Hong Kong-based alternative investment firm, announced the opening of an Abu Dhabi office. Infini became the first Asian hedge fund to set up business in the United Arab Emirates (UAE), “as it looks to tap into deepening ties between Asia and the Middle East,” Emirates news agency WAM reported in March. Click here to read… [3]

The Dollar Is at Its Strongest Since the 1980s. Can It Last?

For a decade now, currency markets have been ruled by the strengthening dollar. But no kingdom lasts forever. Contrary to what many on Wall Street expected, the U.S. dollar has gotten a fresh wind this year, as bumpy inflation data has prompted investors to dial back bets on rate cuts. Measured against other currencies, the greenback is still below the recent 2022 peak when an aggressive Federal Reserve was raising interest rates. But it remains historically expensive in inflation-adjusted terms—just 10% shy of the level at which Richard Nixon ended gold convertibility in 1971, for example, according to data from the Bank for International Settlements. It hasn’t been so consistently strong since the 1980s when the Fed was headed by Paul Volcker, the epitome of the hawkish central banker. In 1985, the dollar rose so much that U.S. officials became worried about the blow it was dealing to domestic manufacturers. Famously, they agreed to coordinate its depreciation in a meeting with officials from Britain, Germany, France and Japan in the Plaza Hotel in New York. By 1988, it had lost a third of its real value. Something similar could happen again on a smaller scale, particularly if Donald Trump wins the presidential election in November. Click here to read… [4]

Bangladesh cuts GDP growth target to 6.7% as economic crisis bites

Bangladesh has cut its annual GDP growth target and pledged to rein in spending as the country grapples with an economy beset by soaring inflation, unstable exchange rates and rapidly depleting foreign reserves. The moves were announced June 06 as Prime Minister Sheikh Hasina's government unveiled a 7.97 trillion-taka ($67.5 billion) budget for the next fiscal year, which starts in July. Dhaka said it now expects the economy to grow 6.7% in the fiscal year, down from an earlier 7.5% target. But observers cast doubt on the lowered forecast, citing high inflation and stagnant private-sector investment growth. "I would call this a feel-good or paper target," said Hossain Zillur Rahman, chairman of the Dhaka-based Power and Participation Research Center think tank. "GDP growth is a combination of several factors, and I don't think some of the major factors are in good shape now." The government's spending plans were about 8% higher than in the previous budget -- well off the double-digit increases of earlier years. To control expenses, Dhaka trimmed its budget deficit forecast to 4.6% of GDP, down from around 5%. Finance Minister Abul Hassan Mahmood Ali said the new budget prioritizes "fiscal responsibility and restrained spending," reflecting a "cautious approach." But he added officials would not prolong spending cuts to avoid hindering economic growth. Click here to read… [5]

China 'legacy' chip fears best addressed with targeted measures

While Beijing's ambitions to lead the way in advanced microchips will likely not be realized due to U.S. export controls, China is poised to potentially dominate production of older kinds of semiconductors. In the industry, “legacy” semiconductors are defined as chips of at least 20 manometers, where the smaller the size rating, the more advanced the chip. For chips in the range of 20-40 nm, projected additions of production capacity by generously subsidized Chinese chipmakers exceed both existing production in Taiwan -- currently the top source of such chips -- and planned capacity there, combined. These kinds of legacy chips remain important for large swathes of the industrial base of wealthy economies for applications ranging from electric vehicles to Internet of Things devices. While the U.S. and other nations need to be wary of becoming reliant on Chinese production in yet another sector, attempts to hold China back in legacy chipmaking face long odds. U.S. allies that are home to makers of chipmaking equipment and tools are unlikely to see the further extension of export controls as worthwhile. Indeed, China already can or soon will be able to produce much of the requisite equipment needed to make these legacy chips. The tariff increases on Chinese chips that U.S. President Joe Biden announced last month will not be effective in stopping Beijing's market grab, both because most legacy chips enter the U.S. inside finished products and because the American market is only one part of global chip demand. Click here to read… [6]

South Korea woos African nations over critical mineral supplies

South Korea is wooing African countries in a bid to secure minerals essential to producing batteries, electric vehicles and smartphones, as the high-tech economy tries to curb its heavy reliance on China for lithium, graphite and rare earths. President Yoon Suk Yeol is hosting South Korea's first summit with African countries, inviting leaders and delegations from 48 members of the African Union. They agreed at the two-day Korea-Africa Summit that ended on June 05 to launch the Korea-Africa Critical Minerals Dialogue as an institutional foundation for enhancing cooperation. "Recognizing [South] Korea's leadership in advanced industries and Africa's importance as a globally significant region for critical mineral reserves, we emphasize the need to expand mutually beneficial cooperation and knowledge sharing, including at the mini-lateral level, to promote the development of industries related to critical minerals," a joint declaration said on June 04. South Korea's Ministry of Trade, Industry and Energy classified 10 minerals, including lithium, nickel, cobalt, manganese and graphite, as being of "critical" importance last year, with the aim of reducing reliance on any one country to less than 50% by 2030. South Korea imported 64% of its lithium and 94% of its graphite from China in 2022, according to government data. Click here to read… [7]

China gives first approvals for public trials of advanced autonomous driving

China has granted approval to a first group of nine automakers to carry out tests on vehicles with advanced autonomous driving technologies on public roads, as part of a plan to accelerate adoption of self-driving cars. The tests of so-called level three autonomous driving technologies will be carried out by automakers including BYD and Nio, as well as major state-owned manufacturers such as Changan Automobile, GAC and SAIC, according to a statement published by the industry ministry on June 04. Fleet operators such as ride-hailing companies will also be involved in the tests. The auto industry has defined five levels of autonomous driving, spanning driver assistance features such as cruise control at level one to fully self-driving cars at level five. China issued the guideline of the nationwide scheme last November to start accepting applications from companies that seek to roll out more fully autonomous driving vehicles for mass adoption. In the plan, drivers in the test vehicles are allowed to take their hands off the steering wheels, with automakers and fleet operators taking responsibility for safety. The ministry said the trial would pave way for further commercialization of more advanced autonomous driving technologies, without elaborating. Automaker executives said it was a step closer to allowing level three vehicles to be sold to, and used by, individual buyers and fleet operators. Click here to read… [8]

Japan sees record low births, fertility rate in 2023

The number of Japanese children born in 2023 sank to an all-time low of 727,277, while the total fertility rate shrank to its smallest level on record, health ministry data showed on June 5. It was the eighth consecutive year for both figures to decline. The number of births was down by 43,482, or 5.6 percent, from 2022 and hit the lowest mark since such statistics became available in 1899, according to the data. The total fertility rate, which indicates the number of children a woman is expected to give birth to during her lifetime, fell from 1.26 to 1.20 in 2023, the smallest since the rate was first calculated in 1947. The National Institute of Population and Social Security Research had projected 739,000 births in 2023, but the actual figure was 10,000 fewer. By prefecture, Okinawa had the highest fertility rate, at 1.60, followed by Miyazaki and Nagasaki, both at 1.49. Tokyo’s fertility rate of 0.99 was the lowest in the nation, followed by Hokkaido at 1.06 and Miyagi at 1.07. A health ministry representative said a number of things were behind the continuing decline in births. “Various factors, such as economic instability and difficulties in balancing work and child rearing, which prevent individuals from realizing their hopes for marriage, childbirth and child rearing, are intertwined in a complex manner,” the representative said. Click here to read… [9]

Myanmar junta arrests dozens in bid to stabilize currency

Myanmar’s junta is cracking down on gold and foreign exchange traders and agents selling foreign real estate, with 35 arrests announced in the last two days as part of efforts to stabilise its rapidly depreciating currency. State media said these include five people charged with illegally selling condominium units in Thailand and 14 people arrested for allegedly destabilizing the foreign currency exchange rate. The kyat currency hit a record low last week, plummeting to around 4,500 per dollar on the black market, according to five foreign exchange traders. Black market rates for the kyat have for years been significantly higher than the reference rate of Myanmar’s central bank, currently set at 2,100 kyat per dollar. “The government is working towards the stability of the country and the rule of law,” the Global New Light of Myanmar newspaper said on June 04, carrying photographs of over a dozen suspects. “Security organizations have taken action against businesspeople engaged in speculation to hinder the country’s economic development,” it said. Another 21 people have been arrested for allegedly destabilizing gold prices, the newspaper reported on June 03. The impoverished Southeast Asian country of about 55 million people has been in political and economic turmoil since a 2021 coup when the military ousted an elected civilian government after a decade of tentative democracy and economic reform. Click here to read… [10]

EU must extend Russia sanctions for US to lend Ukraine $50bn – FT

Washington is ready to lend Kiev $50 billion, to be repaid with profits generated from frozen Russian assets, as long as the EU extends indefinitely its sanctions on Moscow, the Financial Times reported on June 05, citing a leaked discussion paper. According to the FT report, the US wants the EU to keep in place, until the end of the Ukraine conflict, its sanctions on Russian state funds, which expire every six months unless renewed by unanimous consent, the aim being to ensure that Washington “is not left on the hook for repayments.” However, such a decision requires the approval of EU leaders, including Hungarian Prime Minister Viktor Orban, a vocal critic of the bloc’s campaign of sanctions on Russia, the outlet noted. The US is pushing for a deal ahead of next week’s G7 summit in Italy, where a financing mechanism backed by profits from Russian assets is expected to be at the centre of the discussion, the article said. The top option under consideration is a plan to give Ukraine a loan in cooperation with other G7 members that matches the projected windfall profits from about $300 billion in Russian assets frozen by the West. The loan could amount to as much as $50 billion, the outlet said, citing diplomats. Click here to read… [11]

UK to deport asylum seekers to Africa next month – media

The UK intends to start deporting asylum seekers who are in the country illegally to Rwanda starting July 23, Reuters reported on June 03, citing a government lawyer. The announcement follows the passage of the Safety of Rwanda Bill by the UK Parliament in April, paving the way for the start of deportation flights. The legislation aims to block court challenges that have stalled the enforcement of an initial agreement between London and Kigali for asylum seekers who entered the UK illegally to be sent to the East African nation for claim processing. Documents were submitted to the London High Court by the British government after a charity, Asylum Aid, challenged the policy, the outlet said. The intention was “to effect removals with a flight to Rwanda on July 23, 2024 (and not before),” the report said, citing government lawyers. Last month, the British government announced it had launched a series of nationwide raids to track down illegal immigrants ahead of the first deportation flights scheduled for July, under a controversial immigration policy promoted by Prime Minister Rishi Sunak. The highly contested scheme is dependent on Sunak’s Conservative Party winning the upcoming election. In a recent announcement, the prime minister said that flights deporting asylum seekers would not leave before Britons go to the polls on July 4. Click here to read… [12]

Gaza unemployment since start of Israel’s war soars to nearly 80%: ILO

Unemployment in the Gaza Strip has hit a “staggering” 79.1 percent since Israel launched its military onslaught on the besieged and bombarded territory in October last year, according to the United Nations labour agency. In its latest assessment of the impact of the war on employment, the International Labour Organization (ILO) also said on June 06 that joblessness in the occupied West Bank, which has also been hit by the crisis, had also reached nearly 32 percent. This brings the average unemployment rate across the occupied Palestinian territory to 50.8 percent. The figures, however, do not include those who have exited the labour force altogether amid worsening job prospects, the ILO said, warning that the actual numbers were higher. “This excludes Palestinians who have given up on finding a job,” said Ruba Jaradat, ILO regional director for Arab States. “The situation is much worse”. Israeli attacks on Gaza since the start of the war have killed at least 36,654 people and wounded 83,309, with thousands more missing under the rubble and presumed dead, according to Palestinian health officials. Israel launched its assault after Palestinian group Hamas led an attack in southern Israel on October 7 that killed about 1,140 people, according to Israeli tallies. In the West Bank, meanwhile, the Palestinian toll in Israeli attacks over the same period includes more than 530 killed and some 5,200 wounded. Click here to read… [13]

US re-establishes Gaza aid pier damaged in bad weather

The United States military has announced it has reinstalled a temporary aid pier in Gaza that had been damaged in bad weather, saying humanitarian assistance will flow through the floating dock in the “coming days”. The US military’s Central Command (CENTCOM) said on June 07 that the pier will enable the delivery of “much-needed humanitarian aid” to Gaza. The Palestinian territory has been brought to the verge of famine due to a suffocating blockade by Israel, a top US ally that receives billions of dollars in aid from Washington every year. “In coming days, CENTCOM will facilitate the movement of vital food and other emergency supplies, in support of the US Agency for International Development,” the US military said in a social media post. Aid groups have long warned that the US pier is an ineffective way to deliver aid and cannot be a substitute for opening land routes, which had been blocked or severely restricted by Israel. Late in May, 20 aid organisations, including Amnesty International and Doctors Without Borders, called the US-installed dock part of “cosmetic changes” that fail to address the crisis adequately. “As Israeli attacks intensify on Rafah, the unpredictable trickle of aid into Gaza has created a mirage of improved access while the humanitarian response is in reality on the verge of collapse,” the groups said in a statement. Click here to read… [14]

OPEC+ Extends Oil Cuts Into 2025

OPEC and its partners in OPEC+ this weekend decided to extend their production cuts, including both voluntary and group-wide cuts, until 2025. Energy Intelligence’s Amena Bakr reported that the voluntary cuts specifically would be extended until the third quarter of 2024, after which the countries currently cutting would begin to bring back production if the market conditions are right. “We are waiting for interest rates to come down and a better trajectory when it comes to economic growth ... not pockets of growth here and there,” Saudi Arabia’s energy minister Abdulaziz bin Salman said, as quoted by Reuters, in comments on what market conditions OPEC would be looking for to start rolling back the cuts. Oil prices slipped despite the news of the solid extension of the overall cuts, likely because most of the total cuts, which amount to some 3.66 million bpd, per Bakr, come from the voluntary scheme, totalling some 2.2 million bpd. Another reason for the reaction of oil traders was probably the upward adjustment of the UAE’s production quota. The OPEC member has been grumbling against the production cuts so the rest of the cartel raised its production baseline by 300,000 bpd at this weekend’s meeting. However, “The deal should allay market fears of OPEC+ adding back barrels at a time when demand concerns are still rife,” Energy Aspects’ Amrita Sen told Reuters. Click here to read… [15]

America’s War Machine Can’t Make Basic Artillery Fast Enough

Ground wars are still won with bullets and artillery shells. The US can’t make the latter fast enough. Russia’s invasion of Ukraine has evolved into a throwback to an earlier, ordnance-intensive era of warfighting—and the most important hardware on the battlefield is the 155-millimeter shell. At 2 feet tall and weighing about 100 pounds (or a little more than half a meter and 45 kilograms), the shells are a standard munition among NATO countries. They also are in perilously short supply. Since the Cold War ended in the 1990s, the Pentagon has divested or neglected facilities once used to make everything from shells to explosive powder and focussed instead on transforming warfare with high-tech weaponry. What’s left is crumbling infrastructure, outdated machinery and a tiny workforce that can’t keep up with growing international demand. Before Ukraine was invaded, US production averaged 14,400 shells a month. The US is now spending more than $5 billion to overhaul aging factories from Scranton, Pennsylvania, to rural Louisiana to southwest Virginia, with the goal of cranking out 100,000 155mm shells every month by the end of next year. It is a mobilization that in its speed and breadth is unlike anything since World War II. The US once made 155mm shells in vast quantities. It entered the Korean War with more than 6 million rounds on hand, according to Parameters, a US Army War College publication. Click here to read… [16]

Strategic

Western-led global order eroded by nonstate armed groups

The presence of nonstate actors that entrench their rule in areas beyond state control is growing globally. Like Hamas, the Houthi rebel group in Yemen, which attacks merchant vessels in the Red Sea, and the Lebanon-based Hezbollah group also have both military and civilian wings. They take root in the lives of ordinary people on the back of religious beliefs. In Latin America, Ecuador has seen cash-rich drug trafficking gangs gain momentum. Afghanistan has seen the Taliban, an Islamist militant group, return to power. Nonstate armed groups thrive in "failed states," which have no fully functional government, posing a threat to regional stability. As of the summer of 2023, there were 195 million people living under the rule of nonstate armed groups around the world, or one-fortieth of the global population, according to an estimate by the International Committee of the Red Cross. Of the more than 450 such armed groups, 41% collect taxes, 25% have judicial or dispute-settlement mechanisms and 16% provide medical services. They act as if they were governments and have won hearts and minds among the people living in the territories they control, resulting in chronic confrontation between states and nonstate armed groups. The rise of nonstate rulers and the trend toward global multilateral polarization as U.S. power declines are two sides of the same coin. Click here to read… [17]

QUAD ministers to meet in July in Tokyo, defence meet also eyed

The foreign ministers of Japan, the United States, Australia and India plan to hold a meeting of the Quadrilateral Security Dialogue (QUAD) in Tokyo in late July, multiple Japanese and U.S. sources revealed. The meeting in Tokyo is expected to be held in conjunction with the Japan-U.S. foreign and defence ministerial gathering scheduled for around the same time. This will be the first foreign ministers’ meeting for the QUAD since September. The partnership was formed with a focus on countering China’s influence in the Indo-Pacific region. The ministers are expected to discuss Beijing’s growing maritime presence in the East China Sea and the South China Sea, as well as the alliance’s response to North Korea’s nuclear and missile programs. In the Japan-U.S. foreign and defence ministerial meeting, ministers are expected to discuss strengthening the bilateral security alliance, especially its command-and-control capability. U.S. Defense Secretary Lloyd Austin recently announced a command upgrade plan for U.S. forces in Japan. Click here to read… [18]

‘US shadow’: Taiwan’s new defence chief Wellington Koo sets out policy direction

Taiwan’s new defence chief Wellington Koo has set out key aspects of his policy direction, including developing asymmetric warfare and seeking military financing and advice on force restructuring from the United States. In his first policy report to the legislature on June 06, Koo also acknowledged that US President Joe Biden’s latest remarks on whether America would step in to defend Taiwan in the event of an attack by Beijing indicate Washington is sticking to its policy of “strategic ambiguity” on the issue. “As far as I know, Biden has maintained a strategic ambiguity approach, meaning he has not clearly stated whether to send forces or not,” he said when asked by lawmakers if Biden was backing away from previous comments. In an interview with Time magazine published on June 04, Biden said “it would depend on the circumstances” whether the US would use force to defend Taiwan from an attack by the People’s Liberation Army. He would “not rule out using US military force” but made a distinction between deploying ground forces versus using air and naval power. On June 06, Koo said that instead of relying on others, the island must focus on strengthening its own defences. “By enhancing our self-defence capabilities and integrating into the US Indo-Pacific strategy, Taiwan aims to become an effective deterrent. This focus on self-defence capabilities is the key priority for the defence ministry,” he said. Click here to read… [19]

Risk of War Between Israel and Hezbollah Builds as Clashes Escalate

Israel and Hezbollah are moving closer to a full-scale war after months of escalating hostilities with the Lebanese militant group, adding pressure on Israel’s government to secure its northern border. Hezbollah, a U.S.-designated terrorist organization closely aligned with Iran, opened a battle front with Israel on Oct. 8, a day after the deadly Hamas-led raid inside Israel sparked the current war in Gaza. Hezbollah says that its attacks are in support of the Palestinians and that it won’t stop until Israel ceases its war in Gaza. Reluctant to open a second front, Israel initially responded to Hezbollah with tit-for-tat attacks, trying to calibrate its actions to avoid sparking a full-scale war. But in recent weeks, both sides say there has been a sharp rise in hostilities. Hezbollah has increased its drone and rocket attacks, hitting important Israeli military installations. Israel, too, has stepped up attacks, targeting Hezbollah sites deep into southern Lebanon’s Bekaa Valley as well as senior military officials in the group. Without a cease-fire in Gaza and subsequent deal with Hezbollah that meets Israel’s requirements, Israeli officials say an offensive is inevitable against a foe that is far more formidable than Hamas. Benny Gantz, a minister in Israel’s war cabinet, said Israel would return residents to northern Israel by Sept. 1—when schools restart—either “through a deal or through an escalation.” Click here to read… [20]

Spain-Israel tensions soar as Madrid throws support behind Palestine

After Spain recognised Palestinian statehood, Pedro Sanchez met with his Palestinian counterpart, Prime Minister Mohammad Mustafa, and leading officials from several Middle Eastern countries in Madrid. Saudi Arabian Foreign Minister Prince Faisal bin Farhan Al Saud, Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani, and the foreign ministers of Turkey and Jordan were among the group that later posed for a photo on the steps of the Moncloa Palace in the Spanish capital. “On behalf of President [Mahmoud] Abbas and the government of Palestine, the people of Palestine, we warmly welcome Spain’s recognition of the state of Palestine,” Mustafa said of Spain’s historic move. “This recognition strengthens our resolve to continue our struggle for a just and lasting peace.” Ireland, Norway and Slovenia have also joined Spain in the push that has been roundly condemned by Israel. Israeli Foreign Minister Israel Katz sent a furious direct message addressed to Sanchez on X, writing: “Hamas thanks you for your service,” along with a 17-second video that flipped between images of flamenco dancers and apparent scenes of the Palestinian group’s incursion into southern Israel on October 7. He has accused Spain of complicity “in inciting genocide against Jews and war crimes” and called Spain’s deputy prime minister, Yolanda Diaz, anti-Semitic after she closed a speech with the pro-Palestinian slogan “From the river to the sea”. Click here to read… [21]

Putin outlines Russian response to long-range strikes

Russia is considering “asymmetric” measures against Kiev’s sponsors due to Ukraine’s use of Western-supplied weapons against its territory, Russian President Vladimir Putin has said. The Russian leader’s remarks came at a meeting with heads of international news agencies on June 05, on the sidelines of the St Petersburg International Economic Forum (SPIEF). “We have no illusions in this regard,” Putin added, repeating his prior comments that Ukrainian troops might be pulling the trigger, but the US and its allies are providing the intelligence and targeting information. Russia will respond by boosting air defences and destroying these missiles, Putin said. “Secondly, if someone deems it possible to supply such weapons to the war zone, to strike our territory… why shouldn’t we supply similar weapons to those regions of the world, where they will be used against sensitive sites of these countries?” the Russian president added. “We can respond asymmetrically. We will give it a thought.” If the West continues to escalate, such actions “will completely destroy international relations and undermine international security,” Putin noted. “If we see that these countries are being drawn into a war against us, and this is their direct participation in the war against Russia, then we reserve the right to act in a similar way. This is a recipe for very serious problems,” he warned. Click here to read… [22]

US tests nuclear missiles

The American military has announced it carried out two tests of intercontinental ballistic missiles (ICBMs) over the past three days, describing the launches as routine and unrelated to world events. Two Minuteman III missiles were launched from Vandenberg Space Force Base in California on June 04 and June 06, the Pentagon said. They were armed with dummy re-entry vehicles instead of the nuclear warheads they would normally carry. “This test launch is part of routine and periodic activities intended to demonstrate that the US nuclear deterrent is safe, secure, reliable and effective to deter 21st century threats and reassure our allies,” the Air Force Global Strike Command said about June 04’s launch. There have been “over 300” tests of this kind so far, the Pentagon noted. It said that this week’s launches were “not the result of current world events.” Russia began a series of tactical nuclear exercises in one of its military districts last month, in what the Kremlin called a response to “unprecedented” Western escalation of the Ukraine conflict. Since then, Ukraine has allegedly targeted two of Russia’s early warning radars, raising the possibility of a nuclear exchange. The US Air Force and Space Force worked together on the Vandenberg tests, which saw the dummy warheads fly approximately 4,200 miles (over 6,700km) before splashing down at a site on Kwajalein Atoll, in the Marshall Islands. Click here to read… [23]

Bahrain sent message through Russia to normalise ties with Iran: Official

Bahrain has sent a request via Russia to re-establish diplomatic relations with Iran, Iranian news outlets have reported, citing presidential adviser Mohammad Jamshidi. The reports on June 07 come after several public statements by Bahraini officials expressing openness to restoring ties with Iran after years of tensions between the two countries. “Bahrain has sent a message to Iran through Russia to normalise relations with Iran,” Jamshidi was quoted as saying by Iran’s Press TV. Manama had cut off diplomatic relations with Tehran in 2016 following a spike in tensions between Saudi Arabia and Iran. Bahrain had also accused Iran of involvement in anti-government protests that swept the country in 2011. Saudi Arabia normalised its own relations with Iran as part of a Chinese-brokered agreement last year. Last month, during a visit to Moscow, Bahrain’s King Hamad bin Isa Al Khalifa said the Gulf Island looks forward to improved relations with Iran. Bahrain’s state news agency BNA cited him as saying that there was no reason to delay the resumption of relations between the two countries. King Hamad reiterated that message when he met with Chinese Premier Li Qiang in Beijing last week. “We seek to resume diplomatic ties with Iran as a neighbour, and we welcome your support for this effort to promote peace and stability in the region.” Click here to read… [24]

FBI chief warns of Moscow-style terrorist attack in US

The US faces a growing threat of a coordinated jihadist attack, comparable to the one that killed 145 people at Russia’s Crocus City Hall, FBI chief Christopher Wray has told lawmakers in Washington. Wray issued his warning in a testimony to a US Senate committee on June 04, arguing that his agency needed increased funding to help protect Americans from terrorism. The FBI has proposed a 6.2% budget increase to $11.3 billion for its next fiscal year, at a time when some Republican lawmakers are pushing for spending cuts. “Just in the time that I’ve been FBI director, we’ve disrupted multiple terrorist attacks in cities and communities around the country,” Wray said. “We need funding to continue protecting America from terrorism.” The March 22 attack at the Crocus concert venue, near Moscow, left 145 people dead and over 500 injured. The suspected gunmen, who are citizens of Tajikistan, shot concertgoers at close range and set off smoke bombs and explosives, triggering a fire in which some victims were reportedly trapped. Russia’s Federal Security Service (FSB) has alleged that Ukrainian military intelligence was behind the massacre, possibly using Islamists as proxies. Terrorist threats in the US have escalated since the Israel-Hamas war began last October, Wray said. He claimed that a “rogues’ gallery of terrorist groups had called for attacks on America and its allies. Click here to read… [25]

U.S. Defense Secretary discusses military exchanges in Cambodia visit

U.S. Defense Secretary Lloyd Austin met Cambodia's leadership on June 04 and discussed resuming military training programmes, in a visit aimed at reversing gains made by China amid concern about its growing presence at a Cambodian naval base. Cambodia allowing China to develop Ream Naval Base, located at a key waterway to the Gulf of Thailand in Sihanoukville province, has Washington worried that it will give Beijing a new outpost near the contested South China Sea, much of which is claimed by China. Ties between the United States and Cambodia have been strained in recent years, with Washington vocal over the government's dismantling of the political opposition and concerned about China's growing influence. Austin held separate meetings with Cambodian Prime Minister Hun Manet and the leader's father Hun Sen, who until last year had been premier for nearly four decades and now serves as president of the senate. He also met with Defense Minister Tea Seiha. "We had substantive conversations about ways to strengthen U.S.-Cambodian defence ties, and I'm looking forward to further dialogue," Austin said of the meetings, in a post on social media platform X. Cambodian media carried pictures from the meetings but the government had yet to issue a statement on the outcome. Click here to read… [26]

Philippines Rejects ‘Absurd’ Beijing Demand Over South China Sea

The Philippines said it will continue to maintain and supply its South China Sea outposts without seeking permission from any other nation, dismissing Beijing’s demand to do so as “absurd, nonsense and unacceptable.” “Our operations are conducted within our own territorial waters and EEZ,” National Security Adviser Eduardo Ano said in a statement late June 08, referring to the nation’s exclusive economic zone. “We will not be deterred by foreign interference or intimidation.” Ano was responding to Chinese Foreign Ministry spokesperson Mao Ning’s comment on June 07 that the Philippines should notify Beijing in advance if it wants to deliver provisions or evacuate personnel from its grounded warship in the Second Thomas Shoal. China claims swathes of the South China Sea, including areas the Philippines views as part of its exclusive economic zone. Beijing has barred delivery of construction materials to the rusty World War II-era ship, BRP Sierra Madre, which Manila has kept as its military outpost in the disputed shoal since 1999. Ano cited the China Coast Guard’s “aggressive actions” against a Philippine vessel evacuating a sick soldier on May 19 from the ship, which he called “barbaric and inhumane.” “Such actions are not only violations of international maritime laws but also of basic human rights,” he said. Click here to read… [27]

Black Sea Port Becomes Geopolitical Battleground Between China and the EU

China has won the bid to build a deep-sea port in Georgia's Anaklia, marking the country's first Chinese-built and operated megaproject on the Black Sea coast. The deal strengthens Tbilisi and Beijing's growing ties and pushes China's presence closer to Europe. It also influences the future of the Middle Corridor, a global trade route that Georgia serves as a strategic node. Georgia announced that a Chinese consortium submitted the sole bid to build a sprawling deep-sea port in Anaklia, marking the first megaproject on the Black Sea coast to be built and operated by Chinese firms. The development brings an end to a multiyear political saga inside Georgia over building a deep-sea port at Anaklia, while the role of the Chinese consortium pushes Tbilisi's growing ties with Beijing into the spotlight. Georgian Economy and Sustainable Development Minister Levan Davitashvili made the announcement at a May 29 press conference, where he said the government had received bids from a Swiss-Luxembourgish consortium and a joint offer from China Communications Construction Company and the Singapore-based China Harbour Investment. He added that China Road and Bridge Corporation and Qingdao Port International will serve as subcontractors to build the port. Davitashvili said Tbilisi only received a final proposal from the Chinese consortium, though, which now looks set to build the country's first deep-sea port. He said more details would be revealed "in the coming days." Click here to read… [28]

Armenia Courts Western Allies as Relations with Russia Deteriorate

Armenian-Russian relations are experiencing another spike in tension. The Armenian government briefly pulled the plug on a major Russian propaganda platform, and Prime Minister Nikol Pashinyan has accused two unnamed member states of a Moscow-led security alliance of conspiring to help Azerbaijan to reconquer Nagorno Karabakh. Once strategic partners, Armenia and Russia have fallen out amid accusations by Yerevan that the Kremlin did not fulfill its obligations to defend Armenian security interests during the Second Karabakh War. The fighting ended in the fall of 2023, when Azerbaijani forces drove an estimated 100,000 Karabakh Armenians residents from the territory. Since then, Pashinyan’s government has downgraded relations with Russia, while forging stronger ties with the United States and European Union. Officials in Yerevan announced May 29 the suspension of broadcasts by Russia's state-owned broadcaster, Channel One, ostensibly citing unpaid debts to the Armenian agency that controls digital frequencies. But the move appeared to have a political connection too. The suspension followed Channel One's broadcast of a talk show featuring fierce criticism of Pashinyan’s leadership. Russian lawmakers during the program accused Pashinyan of undermining the Russian-Armenian alliance and of making excessive concessions to Azerbaijan that weakened Armenia’s national security. Channel One broadcasts resumed in Armenia, according to multiple media reports on May 31, after Russia covered its payment arrears. Click here to read… [29]

Ghalibaf among six approved to run in Iran’s presidential election

Six people, including parliament speaker Mohammad Bagher Ghalibaf, have been approved to run for the snap presidential election on June 28 following the death of President Ebrahim Raisi in a helicopter crash. The Guardian Council, a constitutional vetting body, approved former nuclear negotiator Saeed Jalili and Tehran Mayor Alireza Zakani to run, but 74 others were not, marking another election with wide disqualification of candidates. The 62-year-old Ghalibaf, a former commander of the air force of Iran’s Islamic Revolutionary Guard Corps (IRGC), has been parliament speaker for four years, was the mayor of Tehran from 2005 to 2017, and the chief of police before that. He ran for president in 2005, 2013 and 2017, when he withdrew in favour of Raisi. Jalili, who is Supreme Leader Ayatollah Ali Khamenei’s direct representative to the country’s Supreme National Security Council, withdrew from the 2021 election in favour of Raisi, who won virtually unchallenged. Most prominent among those disqualified are Mahmoud Ahmadinejad, the populist ex-president, as well as moderate candidate and former three-time parliament speaker Ali Larijani – both of whom did not qualify to run in 2021 as well. Iran was slated to have its presidential election in 2025, but the vote was brought forward after Raisi died on May 19 in a helicopter crash in northern Iran. Click here to read… [30]

Australia to expand military recruitment to permanent residents

Australia will broaden its military recruitment to permanent residents as it attempts to address a shortfall in defence personnel, the government announced June 04. Starting in July, New Zealanders who are permanent residents of Australia will be eligible to join the Australian Defence Force. Next year, intake will expand to permanent residents from the U.K., the U.S., Canada and other countries. Applicants must have lived in Australia for at least one year, undergo a 10-year background check and meet other standards and security requirements. They must not have served in a foreign military in the preceding two years and must be eligible for Australian citizenship. A defence spokesperson said new recruits would begin a citizenship process within 90 days of joining. Defence Minister Richard Marles said in a statement that growing the defence force was "essential to meet the nation's security challenges through the next decade and beyond." Australia's military faces "significant workforce challenges," a review last year found, with contractors compromising the largest component of the defence workforce. In February, ADF chief Angus Campbell said the force was about 6.9%, or 4,308 people, below its target level. The shortfall "puts stress" on the entire organization, he told a Senate hearing. Click here to read… [31]

Health

Man in Mexico died of a bird flu strain that hadn’t been confirmed before in a human, WHO says

A man’s death in Mexico was caused by a strain of bird flu called H5N2 that has never before been found in a human, the World Health Organization said June 05. The WHO said it wasn’t clear how the man became infected, although H5N2 has been reported in poultry in Mexico. There are numerous types of bird flu. H5N2 is not the same strain that has infected multiple dairy cow herds in the U.S. That strain is called H5N1 and three farmworkers have gotten mild infections. Other bird flu varieties have killed people across the world in previous years, including 18 people in China during an outbreak of H5N6 in 2021, according to a timeline of bird flu outbreaks from the U.S. Centers for Disease Control and Prevention. Mexican health officials alerted the WHO that a 59-year-old man who died in a Mexico City hospital had the virus despite no known exposure to poultry or other animals. According to family members, the WHO release said, the patient had been bedridden for unrelated reasons before developing a fever, shortness of breath and diarrhoea on April 17. Mexico’s public health department said in a statement that he had underlying ailments, including chronic kidney failure, diabetes and high blood pressure. Hospital care was sought on April 24 and the man died the same day. Click here to read… [32]

Millions in South Africa Grow Old with HIV in Health-Spending Time Bomb

The potential costs are staggering for a nation that already spends as much as 9% of its gross domestic product to fund a part-private part-public health care system, with outlays per person well above those of any other country in sub-Saharan Africa. In last month’s elections, the African National Congress ceded its parliamentary majority for the first time since it first took power under Nelson Mandela in 1994. Without an outright winner, the ANC must decide whether to form a coalition, but some of the biggest potential partners have starkly different views on a range of issues including its proposals to create a state fund to cover the health costs of all South Africans. The longer government takes to address the needs of those aging prematurely with HIV, the bigger the financial drain in a country where 7.8 million people, or almost 13% of the population, live with the virus. “Figuring out how to treat HIV and aging is complicated,” says Francois Venter, a professor of medicine at Johannesburg’s University of the Witwatersrand, yet he pointed to some first steps, like alleviating inflammation and risks such as cardiovascular disease. South Africa spends about $1.8 billion a year to treat people with HIV and AIDS, according to UNAIDS. The program estimates that 15% of all government expenditures are for health, compared with 3.5% in India, the country with the second highest number of HIV cases. Click here to read… [33]