Global Developments and Analysis: Weekly Monitor (24-30 June 2024)

Economic

World headed for ‘food wars’ – major commodities trader

The world is facing “food wars” as geopolitical tensions have triggered a rise of protectionism amid concerns about waning supplies, according to one of the largest global agricultural commodity traders, Olam Agri, as cited by the Financial Times on June 26. The Singapore-based trading house is part of the wider Olam Group, which operates in more than 60 countries and supplies food and industrial raw materials to 22,000 customers worldwide. “We have fought many wars over oil. We will fight bigger wars over food and water,” Olam Agri’s chief executive Sunny Verghese was quoted as saying at the Redburn Atlantic and Rothschild consumer conference last week. The CEO warned that trade barriers imposed by governments seeking to prop up domestic food stocks had exacerbated food inflation. According to the report, food prices started to climb in the wake of the pandemic and soared after the escalation of the Ukraine conflict and Western sanctions against Russia. The restrictions have resulted in some exports of grain and fertilizers being blocked, deepening food insecurity in poorer countries and exacerbating the cost-of-living crisis. At the same time, big agricultural commodity traders reaped record profits in 2022, Verghese pointed out. According to the CEO, the elevated food price inflation was in part the result of government intervention as wealthier countries stockpiled surpluses of strategic commodities which had “created an exaggerated demand-supply imbalance.” Click here to read… [2]

The Key Takeaways of the 2024 Statistical Review of World Energy

Last year, after 70 years of publishing the Statistical Review of World Energy, BP handed over the publication to the Energy Institute (EI). The full report and all data can be found at this link. The Statistical Review is instrumental in providing comprehensive data on global oil, gas, and coal production and consumption, as well as on carbon dioxide emissions and renewable energy statistics. On June 20th, the EI published its second Statistical Review. It was another year of record highs for consumption of fossil fuels and emissions, but also record generation of renewables. Primary energy consumption increased by 2% from 2022, surpassing pre-COVID levels by over 5%. Renewable energy grew at six times the rate of total primary energy, making up 14.6% of total consumption. But fossil fuels still dominate, constituting 81.5% of primary energy consumption despite a slight percentage decline from 2022. Global energy consumption increased by 12.3 exajoules from 2022. Fossil fuels contributed 7.8 exajoules (63.6% of the increase) while renewables contributed the remaining 4.5 exajoules. Global energy demand continues to grow faster than the ability of renewables to keep pace, much less displace fossil fuels. Global emissions rose by 2.1%, crossing 40 billion metric tons of CO2 equivalents for the first time. Emissions from flaring and industrial processes saw significant increases, contributing to record levels. Click here to read… [3]

China Surpasses Europe in Per Capita Energy Consumption

“China has changed the energy world, but now China is changing,” the International Energy Agency (IEA) reported in their 2023 flagship World Energy Outlook. The second-largest economy in the world has saturated its own market. After years and years of building roads, buildings and other infrastructure as fast as it possibly could, the vast Chinese domestic market is finally just about tapped. But while China’s economic growth is plateauing, its energy demand just keeps growing. After decades of breakneck growth, China’s economy is slowing down, the country-wide property bubble is bursting, and unemployment rates are blisteringly high as a record number of students graduate only to face a stagnant job market. But instead of redirecting, Beijing is doubling down on manufacturing and leaning on exports to keep the country’s great economic gears turning. As a result, China’s energy consumption per capita has surpassed that of Europe for the first time in history. This eclipse has been a long time coming, as China’s energy consumption has grown at a brisk clip over the past decades. According to figures from the IEA, China’s per-person energy consumption grew a jaw-dropping 489% in the two-decade stretch from 2001 to 2021. While China’s greenhouse gas emissions have also climbed over the same time period, they haven’t kept pace with energy demand thanks to China’s unparalleled investments in renewable energy. Click here to read… [4]

Europe’s Response to China Shock 2.0: Hold China Closer

The first China shock that devastated manufacturing in the U.S. in the early 2000s bypassed large parts of Europe. A second shock now under way looks much more threatening. But rather than simply erect ever higher barriers to the flood of Chinese imports, as the U.S. has done, European leaders are seeking an alternative: rolling out a welcome mat. European officials have largely been in favor of investments from Chinese battery makers such as CATL and from Chinese electric-vehicle manufacturers such as BYD in Hungary and Chery Automobile in Spain. In the 1980s, faced with a wave of low-cost Japanese auto imports, the Reagan administration negotiated export quotas that encouraged Japanese manufacturers to build factories in the U.S. U.S. officials have been less willing to repeat that formula with China, which, unlike Japan, they consider a threat to national security. The White House, for example, is weighing curbs on Chinese “connected cars” that could transmit customer data back to China. Europeans worry less about such risks, although they could change their minds—as they did on telecom infrastructure supplied by Huawei Technologies. While Chinese purchases of existing European businesses have collapsed in recent years, in part because of growing European scrutiny, greenfield investment—i.e. newly created companies or plants—has risen rapidly, reaching 78% of all Chinese foreign direct investment in Europe last year, according to data compiled by the Mercator Institute for China Studies and Rhodium Group. Click here to read… [5]

China eyes bold tech and economic goals for next decade, sets plenum dates to work on details

China’s political leadership has set ambitious economic and tech development goals for the next decade, signalling a consensus among the Communist Party’s upper echelon on how best to cope with China’s economic challenges. The goals were unveiled in a statement on June 27 that also announced that the party would hold its long-anticipated third plenum meeting from July 15 to 18. The announcements came after the meeting of the Politburo – the highest decision-making body in Chinese politics – and set the tone for the coming plenary session to be attended by more than 370 members of the Communist Party elite. The 10-year goals range from the economy to social development and state building, and will extend beyond President Xi Jinping’s third term, which ends in 2028. The plenary session will “primarily examine issues related to further comprehensively deepening reform and advancing Chinese modernisation”, according to state news agency Xinhua. It will also lay out a series of interim goals to be reached by 2035, which is pivotal for China to narrow the gap with the United States and other advanced economies and seek a stronger footing in the high-end value chain, which ultimately serve China’s second ambitious centenary goal in 2049 – to become an economic and technology superpower. Click here to read… [6]

China tightens rules for rare earths mining and refining, spells out fines for breaches

China has issued a raft of regulations to tighten management of rare earths production, elements that are playing an ever-important role in the global technology race. In a document released on June 29, the State Council said the new rules would come into effect on October 1. The regulation spells out that the resources belong to the state and that “no organisation or individual may encroach upon or damage” them. To improve oversight of the industrial chain, government agencies will coordinate and manage the mining and refining of the ores and ensure that the products can be traced. The regulation is designed to protect and “rationally develop” rare earth resources while safeguarding the environment and securing the country’s resources, according to the document. China is the world’s top producer of rare earth elements, a group of more than a dozen metals essential to modern technologies ranging from electric vehicles to wind turbines, robots and military weapons. The country is also a leader in technology to refine rare earths, which require intense processing to produce usable material. In recent years, China has banned the export of rare earth extraction and separation technologies as well as technology to make rare earth magnets. In an article in November, the country’s top anti-espionage agency highlighted rare earths as strategic mineral resources that were “directly related to national security”. Click here to read… [7]

Taiwan announces Thailand investment deal, marking first pact under Lai

Taiwan on June 28 said it has signed an investment pact with Thailand, the second-largest economy in Southeast Asia, in an effort to boost commercial and economic ties. The pact is the first of its kind since Taiwan's new President Lai Ching-te took office in May. It comes as China has further ramped up pressure and efforts to isolate Taiwan globally, and as Taiwanese businesses increasingly shift investments from China to Southeast Asia. "With the restructuring of the global supply chain, Southeast Asia has become a popular target of Taiwanese investment, with Thailand becoming a preferred destination for Taiwan's electronics and electrical components industry, among others," the Taiwan government's Office of Trade Negotiations said in a news release. Thailand is the fifth country to sign such an investment agreement with Taiwan since the pro-sovereignty Democratic Progressive Party took over the presidency in 2016, under Lai's predecessor Tsai Ing-wen. That same year, Tsai's government launched what is known as the New Southbound Policy, which seeks to diversify the Taiwanese economy away from Communist China, which claims Taiwan as its own despite never having ruled it. The Philippines, India and Vietnam have signed similar deals, along with Canada. Click here to read… [8]

Indonesia to levy 100-200% duties on clothing, ceramics, minister says

Indonesia will impose safeguard duties of 100% to 200% on imports ranging from footwear to ceramics, reviving a plan to protect domestic industries, the trade minister said. The planned import duties average more than 100%, Trade Minister Zulkifli Hasan told reporters on June 28. "If we are flooded with (imported goods), our micro, small and medium enterprises could collapse." Southeast Asia's biggest economy issued a regulation late last year to tighten monitoring for more than 3,000 imported goods, from food ingredients to electronics to chemicals. However, the regulation was reversed after domestic industry said it hindered the flow of imported materials needed by domestic industry. Duties will be imposed soon and could affect imports of footwear, clothing, textiles, cosmetics and ceramics, Zulkifli said. The Indonesian Trade Safeguards Committee is investigating to determine duty rates, senior trade ministry official Budi Santoso said on June 29. Indonesia mainly imports apparel and clothing accessories from China, Vietnam and Bangladesh, data from the statistics bureau show. Click here to read… [9]

Sri Lanka reaches $5.8bn debt restructuring deal with Japan, India, others

Bankrupt Sri Lanka received a fresh boost on June 26 after reaching an agreement in Paris to restructure $5.8 billion of debt with creditors, as the government tries to steer the country out of its worst economic crisis. Sri Lanka's creditor committee includes Japan, South Korea, Australia, the U.S. and France. India also is working with the group as a non-member creditor. President Ranil Wickremesinghe, addressing the nation June 26 evening, hailed the agreements as a "significant milestone in the recent history of Sri Lanka." "Sri Lanka won," he said. Shehan Semasinghe, the state minister of finance, said earlier in the day that Sri Lanka and the Export-Import Bank of China had signed a final agreement on debt treatment totaling $4.2 billion. "We are pleased to announce that the final agreement has been reached on debt restructuring between Sri Lanka and the Official Creditor Committee (OCC) on the sidelines of the Paris Forum 2024 in Paris, France," Semasinghe posted on X from Paris. "On behalf of Sri Lanka, I would like to sincerely thank the OCC chairs -- France, India, and Japan -- as well as the Export-Import Bank of China for their leadership in this process, as well as all OCC members for their unwavering support," he wrote. Murtaza Jafferjee, chair of the Colombo-based Advocata Institute think tank, said the government has completed half the job, and the remaining task is to reach an agreement with commercial creditors. Click here to read… [10]

Philippines, Bangladesh push Asian migrant numbers to record high

A record 6.93 million Asians newly migrated overseas for work in 2023, as more people from the Philippines, Bangladesh and other countries chase opportunities in advanced economies hungry for labor. The data, compiled by the Asian Development Bank Institute, Organisation for Economic Co-operation and Development and International Labour Organization, will be presented at a roundtable in Bangkok that starts June 27. The 2022 total has also been revised to 5.2 million from 4.6 million. The number of new migrants from Asia had plunged with the spread of COVID-19 after peaking at 6.1 million in 2015 and 2016. But it has since bounced back, increasing 34% last year and topping the previous record by about 800,000. The ADBI attributed the surge not only to a recovery in labor migration, but to structural shifts like a shrinking working-age population in advanced economies. Remittances by migrant workers to the Asia-Pacific also set record in 2023 at about $371.5 billion, making up 43% of total global remittances. The Philippines sent the largest number of migrants at 2.3 million, a 93% jump from 2022 and accounting for a third of the labor migration from Asian countries. Bangladesh followed with 1.3 million, then Pakistan by 860,000. Roughly two-thirds of migrant workers from the Philippines are women, many of whom work as housekeepers, cleaners, nurses and caregivers. Top destinations include the Middle East, Hong Kong and Singapore. Click here to read… [11]

Thai banks are the top suppliers of financial services to Myanmar’s military, U.N. expert says

Thai banks have become the main supplier of international financial services for Myanmar’s military government, enabling it to purchase goods and equipment to carry out its increasingly bloody war against pro-democracy resistance forces and armed ethnic minority groups, a U.N. expert said in a report issued June 26. The report by Tom Andrews, the U.N. special rapporteur on the situation of human rights in Myanmar, tracks how the military junta has been able to continue procuring arms by shifting suppliers of financial services and military hardware as previous sources have been blocked by sanctions imposed by the United States, the European Union and other states. The report charges that companies in Thailand, Myanmar’s eastern neighbor, have taken up the slack left by the withdrawal of Singapore firms’ business with the military junta. It says the junta, formally known as the State Administration Council, “continues to engage with a broad international banking network to sustain itself and its weapons supplies.” “Over the past year, 16 banks located in seven countries processed transactions related to SAC military procurement; 25 banks have provided correspondent banking services to Myanmar’s state-owned banks since the coup,” says the report, titled “Banking on the Death Trade: How Banks and Governments Enable the military Junta in Myanmar,” presented to the U.N. Human Rights Council. Click here to read… [12]

U.S. dollar climbs to new 38-year peak vs yen; euro rises

The U.S. dollar surged to a fresh 38-year peak against the yen on July 01, as Treasury yields on the long end rose sharply, keeping investors on heightened alert for intervention from Japanese authorities to bolster the country's currency. The yen's weakness was exacerbated by data showing Japan's economy shrank more than initially reported in the first quarter. The euro, on the other hand, climbed on July 01 after a convincing and historic win by the French far right in the first round of parliamentary elections fell slightly short of some expectations, leaving the final result dependent on party deals before a second-round next weekend. In afternoon trading, the dollar soared to 161.72 yen , its strongest level since 1986. It was last up 0.4% at 161.48 yen. The yen has fallen more than 12% this year. "We're close to what would be defined as a one-way market, gains in 12 of the last 15 days, and five of the last six weeks," said Marc Chandler, chief market strategist, at Bannockburn Global Forex in New York. "People know that they are on thin ice on intervention. But they know that the weakness of the yen is related to the rise in Treasury yields and the slowness of Japan to raise rates. So even if Japan intervenes, the market will view intervention as an opportunity to buy dollars." Click here to read… [13]

Korean Air, Malaysia Airlines flights disrupted by pressurization problems

A Korean Air flight to Taiwan was forced to return to Incheon airport west of Seoul after a sudden depressurization on the plane, a Boeing 737 Max 8, the transport ministry said June 25. The ministry said 19 of the 133 people aboard the flight June 22 were sent to hospitals due to ear pain and nosebleeds, but none suffered serious injuries. The airline and the ministry said the cause of the problem was under investigation. The aircraft was grounded, and the ministry ordered South Korea’s 11 airlines to examine pressurization systems in all their 400 aircraft. The sudden depressurization occurred about 50 minutes after the flight's departure. Separately, Malaysia Airlines said one of its flights en route to Bangkok on June 24 made a U-turn back to Kuala Lumpur after the Airbus A-330 experienced a “pressurization issue.” Malaysia Airlines said its pilots initiated an emergency descent even though the aircraft had not reached the altitude of 8,000 feet and oxygen masks were not deployed. Flight MH780 was carrying 164 passengers and 12 crew members. An investigation was underway. The 737 Max has a troubled history. After Max jets crashed in 2018 in Indonesia and 2019 in Ethiopia, killing 346 people, the FAA and other regulators grounded the aircraft worldwide for more than a year and a half. Click here to read… [14]

Record number of labor strikes held in Germany in 2023 – report

Germany saw a sharp increase in industrial actions and labor disputes in 2023, according to a new report published by the Institute of Economic and Social Sciences (WSI). A total of 312 labor disputes were recorded in Germany last year, up from 225 in 2022, the report said. The strikes linked to those disputes resulted in the equivalent 1,527,000 working days of labor lost — twice as much as the previous year, according to the institute. Among the longest strikes were ones that lasted 123 and 180 days, figures cited in the report show. The last time the number of strikes was this high was 2015, the statistics showed. Germany was perceived by many as a “strike republic” last year, the report added, noting that the industrial disputes had seriously impacted the everyday lives of many people. Strikes in the fields of public transportation, the postal service, and among airport and railway workers were among the notable examples, it said. According to the WSI, high inflation and wage losses were the primary factors driving the increase in labor disputes. The question of “how the costs of inflation are distributed between capital and labor” was at the core of such conflicts, it said. Some labor market changes that put employees in a relatively stronger position also contributed to their determination to seek better pay and working conditions, it added. Click here to read… [15]

German Industry Vulnerable to Chinese Retaliation

After several weeks of escalating tit-for-tat trade war salvos between China and Europe, threatening to scuttle billions in auto trade between the two blocs, over the weekend China agreed to enter talks with the EU over its decision to impose higher tariffs on imports of Chinese electric vehicles during a visit to Beijing by Germany’s vice-chancellor, which was aimed at soothing tensions. Robert Habeck, Germany's minister for economic affairs and climate action, the same minister who was crucified by Deutsche Boerse CEO Theodor Weimer in his recent rant, welcomed the move by China to enter discussions with Brussels on EU tariffs but said it was “a first step and many more will be necessary”. His comments came after China’s ministry of commerce said Beijing and Brussels had agreed to launch consultations on an anti-subsidy investigation launched by the EU last year. The probe led to a decision this month to increase tariffs on Chinese EVs to as high as 48%, which in turn provoked China's anger and threats to retaliate in kind on Europe's internal combustion cars. The announcement followed a video conference between China’s minister of commerce Wang Wentao and EU executive vice-president and trade commissioner Valdis Dombrovskis. Click here to read… [16]

Strategic

Why China’s latest corruption probes hint at fury, betrayal over political disloyalty

An unusual decision by Beijing to announce corruption probes into two former defence ministers on the same day has underscored the fury and frustration of the Communist Party’s leadership over persistent graft that is deemed a threat to China’s fighting capacity and nuclear deterrence, analysts said. In an unprecedented move, the party’s 24-person Politburo decided to launch corruption investigations into Wei Fenghe and his successor Li Shangfu, and expelled both from the party, according to statements about the decision released by state news agency Xinhua on June 27. The two men will face criminal charges from military prosecutors too. Li was sacked from his job in October, just seven months after he became defence minister. Wei held the position from 2018 to 2023. Observers drew attention to the especially harsh wording in the brief statements of the accusations against the two men. The statements said they “betrayed the trust of the party and the CMC [Central Military Commission], seriously polluted the political environment of the military, and caused great damage to the party’s cause, national defence and military construction, as well as the image of its senior leaders”. The wording is much harsher than the accusations against Xu Caihou and Guo Boxiong, two former vice-chairmen of the CMC – China’s top military command body – who were sacked for corruption during the first term of President Xi Jinping, according to a political scientist from Nanjing university, who asked not to be named due to sensitivity of the matter. Click here to read… [17]

Israel’s Order to Draft Ultra-Orthodox Faces Political Maelstrom

Israel is facing a legal and political struggle over how many Ultra-Orthodox men should be drafted into the military and how quickly, the result of an historic Supreme Court ruling. Attorney General Gali Baharav-Miara said the army should take on 3,000 Ultra-Orthodox recruits as soon as July 1st following the landmark decision on June 25, while laying out plans to recruit larger numbers in years to come. She also said the government must withhold funds previously allocated to religious seminaries whose students have been able to avoid the draft. The court order to stop allowing the Ultra-Orthodox, known as Haredim, to skip Israel’s system of mandatory military service is unpopular with the group yet has strong broader support. The exemption has stood since the early days of the state, and many Israelis say the burden of supplying forces to fight the ongoing war with Hamas and counter the threat from Hezbollah in Lebanon should be spread equally across society. The decision has implications for Prime Minister Benjamin Netanyahu’s ruling coalition government, which relies on two religious parties to function as a majority. There are 1,800 Haredi soldiers in the Israel Defense Forces already. The court said about 63,000 are available, and the country must act quickly to enforce the new ruling given Israel is at war. Click here to read… [18]

Mainland Chinese and Taiwanese coastguards in tense stand-off near Quemoy

The mainland Chinese and Taiwanese coastguards have been involved in a tense stand-off near Quemoy, the latest flare-up near the Taiwan-controlled island also known as Kinmen. The incident came after four coastguard ships from mainland China were patrolling in waters just 5 nautical miles from Quemoy, according to the Taiwanese coastguard. It said the vessels entered the restricted waters at around 6am on June 25. Two vessels approached from the north of Beiding Islet, while the other two entered waters south of Fuxing Islet. The Taiwanese coastguard sent three patrol boats to monitor the mainland Chinese vessels and issued radio warnings for them to move away. It said there was a stand-off for two hours until the mainland Chinese ships left the area at around 8am. Taiwanese Defence Minister Wellington Koo said the mainland Chinese boats were attempting to challenge Taiwan’s boundary claims around Quemoy. A defence outpost, the island is just 10km (6 miles) away from the mainland Chinese city of Xiamen. In a statement, Taiwan’s coastguard said the actions of the mainland Chinese coastguard “do not contribute to maintaining the relationship between Quemoy and Xiamen, nor do they enhance regional stability”. In response, the mainland coastguard said its actions were “legal”. “Since June, the Fujian Coast Guard has organised fleets to continuously strengthen law enforcement patrols in the waters near Kinmen, further enhancing control over the relevant maritime areas,” the mainland coastguard said in a statement. Click here to read… [19]

China presses Global South leaders to support Taiwan 'reunification'

When Chinese Premier Li Qiang visited Malaysia last week, Prime Minister Anwar Ibrahim said that his country firmly supports China in "achieving national reunification." Support for China's "reunification" with Taiwan was not a phrase that Anwar used when he met Chinese President Xi Jinping in Beijing in March 2023, at least according to the Chinese readout. But Anwar joins a list of Global South and other leaders who have recently mentioned "reunification" in their meetings with Li or President Xi Jinping -- a trend that has not gone unnoticed by Western analysts." Beijing is no longer satisfied with deterring Taiwan independence. Xi Jinping is now seeking to promote reunification," said Bonnie Glaser, the managing director of the Indo-Pacific program at the German Marshall Fund of the United States. China has long made its diplomatic relationships contingent upon its partners' acknowledgment that there is only "one China." But its recent engagements with some other countries suggest it increasingly demands more than that. During a state visit to China in April, Surinamese President Chandrikapersad Santokhi said that Suriname will continue to "unswervingly support China in achieving national reunification." Some, like King Hamad bin Isa Al Khalifa of Bahrain, have said they support "peaceful reunification." Click here to read… [20]

Iran's hardline diplomat, sole moderate to square off in presidential run-off

A moderate lawmaker will face the Iranian supreme leader's protege in a run-off presidential election on July 5 after the country's interior ministry said on June 29 that no candidate had secured enough votes in the first round of voting. June 28's vote to replace Ebrahim Raisi after his death in a helicopter crash came down to a tight race between a low-profile lawmaker Massoud Pezeshkian, the sole moderate in a field of four candidates, and former Revolutionary Guards member Saeed Jalili. The interior ministry said neither secured the 50% plus one vote of over 25 million ballots cast required to win outright, with Pezeshkian leading with over 10 million votes ahead of Jalili with over 9.4 million votes. Power in Iran ultimately lies with Supreme Leader Ayatollah Ali Khamenei, so the result will not herald any major policy shift on Iran's nuclear program or its support for militia groups across the Middle East. But the president runs the government day-to-day and can influence the tone of Iran's policy. The clerical establishment hoped for a high turnout as it faces a legitimacy crisis fueled by public discontent over economic hardship and curbs on political and social freedom. However, turnout in June 28's vote hit a historic low of about 40%, based on the interior ministry count released on June 29. Click here to read… [21]

Pakistan eyes new counterterror operations as security deteriorates

Pakistan is planning to launch fresh counterterror operations as Beijing grows increasingly wary about investing in the country after deadly attacks on Chinese nationals and key economic projects. But the plan, dubbed Operation Azm-i-Istehkam (Operation Resolve for Stability), is facing strong pushback from the political opposition, and there are few assurances that it will be enough to placate Pakistan's key investor. The new counterterror blueprint was announced on June 29, just a day after a top Chinese official warned that security is crucial to Beijing pouring more money into the South Asian nation. "As people often say, confidence is more precious than gold," said Liu Jianchao, head of the Chinese Communist Party's International Department. "In the case of Pakistan, the primary factor shaking the confidence of Chinese investors is the security situation."

Liu was addressing a meeting of the Joint Consultative Mechanism (JCM), a high-level diplomatic initiative that focuses on topics including security and the China-Pakistan Economic Corridor (CPEC), a $50 billion cornerstone of Beijing's globe-spanning Belt and Road Initiative. Speaking on condition of anonymity, a participant at the meeting told Nikkei Asia that Chinese officials in attendance were visibly upset with Pakistan's security situation. Chinese nationals working in Pakistan have been targeted in a series of deadly attacks, as the country grapples with a rise in militant activity ranging from Islamists aiming to topple the government to separatists seeking to carve out a homeland in the southwestern province of Balochistan -- a center for Chinese investment. Click here to read… [22]

Taliban defy West at U.N. talks while China, Russia eye closer ties

As the Taliban continue to bump heads with the West over the treatment of women and girls in Afghanistan, China and Russia are softening their stance against the regime. For the first time, a Taliban delegation attended a United Nations-sponsored gathering on the Afghan crisis. Others at the two-day meeting held through July 01 in Doha, Qatar, included Rosemary DiCarlo, the U.N. undersecretary-general for political affairs, as well as envoys from the U.S., Europe and Japan. Taliban spokesperson Zabihullah Mujahid at the meeting reportedly urged the international community to lift sanctions, including those cutting Afghan banks off from the international finance system, and to unfreeze Afghan assets overseas. The Taliban took control of Afghanistan after U.S. troops withdrew from the country in August 2021, through no nation has recognized the group as Afghanistan's official government so far. The U.S. has frozen $7 billion of Afghan central bank assets. Taliban restrictions on women and girls are a key flash point. The regime has barred girls from secondary education and heavily limits women's ability to work. All women's beauty salons in Afghanistan have been shut down. The international community is urging the Taliban to address concerns over women's rights, but they have repeatedly countered that women's status as "free and dignified human beings" has been restored under the Taliban's interpretation of Islamic law. Click here to read… [23]

Biden’s debate performance spurs Democratic panic about his ability to lead party against Trump

Above all, Joe Biden ’s allies wanted him to demonstrate strength and energy on the debate stage June 27 night to help put to rest questions about the 81-year-old Democrat’s physical and mental acuity. But on the biggest stage in U.S. politics, Biden did not meet their modest expectations. And by the end of the 90-minute showdown, the Democratic president’s allies — party strategists and rank-and-file voters alike — descended into all-out panic following a debate performance punctuated by repeated stumbles, uncomfortable pauses, and a quiet speaking style that was often difficult to understand. Publicly and privately, Democrats questioned whether the party could or should replace him as the party’s presidential nominee against the 78-year-old former President Donald Trump this fall. “I’m not the only one whose heart is breaking right now. There’s a lot of people who watched this tonight and felt terribly for Joe Biden,” former Democratic Sen. Claire McCaskill said on MSNBC. “I don’t know if things can be done to fix this.” For now, the biggest question for Biden is whether the damage is permanent. Many voters have not yet tuned into an election that’s still more than four months away. The president and his allies are sitting on millions of dollars that have yet to be spent on advertising and swing-state infrastructure. And there’s precedent for recovering from rough debate performances, including Barack Obama’s rebound from an uneven encounter with Mitt Romney in 2012. Click here to read… [24]

North Korea says it tested a multiwarhead missile. Kim covets the weapon to overwhelm U.S. defenses

North Korea said June 27 it had successfully tested a multiwarhead missile, a sophisticated weapon coveted by leader Kim Jong Un to overwhelm missile defenses in the continental United States. The statement contradicted South Korea’s assessment of a failed launch June 26 of a different type of weapon. The launch tested the separation and guidance control of individual mobile warheads to ensure the capability of the Multiple Independent Reentry Vehicle, the North’s official Korean Central News Agency said. The separated mobile warheads “were guided correctly to the three coordinate targets” and a decoy that separated from the missile was verified by radar, it said. It was North Korea’s first known launch event related to the development of a multiwarhead missile, though outside experts believe it was a preliminary test. KCNA, citing the country’s Missile Administration, said it was significant to bolstering North Korea’s missile forces and developing missile technologies that testing of the weapon had entered a full-scale stage. A multiwarhead missile was among the high-tech weapons systems Kim cited on his wish list during a ruling party meeting in early 2021, along with spy satellites, solid-fuel intercontinental ballistic missiles, hypersonic weapons and submarine-launched nuclear missiles. North Korea has since performed a series of tests to develop such weapons systems. Click here to read… [25]

EU and Ukraine to sign security deal – Reuters

Brussels intends to sign a defense pact with Ukraine on June 27, Reuters has reported, citing a draft document leaked to the outlet. The deal is intended to demonstrate the Brussels' long-term support for Kiev as the conflict with Moscow shows no sign of ending soon and Ukraine has “no immediate prospect” of joining either the EU or NATO, Reuters added. “Today, Ambassador Igor Zhovkva and I wrapped up discussions on joint security commitments between the EU and Ukraine,” Charles Fries, the deputy secretary-general for ‘Peace, Security and Defense’ at the EU External Action Service, said on X (formerly Twitter) on June 26. “The EU is fully united and resolved to support Ukraine, whatever it takes.” According to the draft, the agreement obligates the bloc to help Kiev in nine areas of security and defense policy, from weapons deliveries and training of the Ukrainian military, to demining and “defense industry cooperation.” Zelensky himself is supposed to sign it in Brussels on June 27, while making an unannounced visit to the summit of EU member state leaders. The security agreement isn’t quite a mutual defense pact, but a pledge that the EU will provide Ukraine with weapons and other aid against “future invasion,” according to anonymous officials who spoke to Reuters. Click here to read… [26]

Biden likely to allow US contractors to deploy in Ukraine – CNN

The administration of US President Joe Biden is reportedly “moving toward” allowing American military contractors to maintain and repair weapons systems in Ukraine. The policy change is still under review by US officials and has yet to receive final approval from Biden, CNN reported on June 25, citing four unidentified people familiar with the deliberations. Allowing contractors to deploy to the conflict zone is seen as one of the possible ways to “give Ukraine’s military an upper hand against Russia,” the media outlet said. Biden remains firm in his refusal to send US military forces to Ukraine, one of the sources told CNN. However, the president has repeatedly approved escalating US involvement in the conflict, including providing American tanks and long-range missiles to Kiev, despite previously stating he wouldn’t take such steps. The possible lifting of a ban on US contractors operating inside Ukraine would be another incremental step toward direct confrontation with Russia. If approved, the latest policy change would reportedly be implemented later this year, enabling the Pentagon to sign contracts to pay potentially dozens of US companies for deploying to Ukraine. Such deployments could speed up repairs of American weapons systems used by the Kiev regime’s forces. Since the conflict began in February 2022, Biden has sought to keep Americans away from the frontlines, CNN said. Click here to read… [27]

Western European states facing army personnel crisis – FT

NATO countries in Europe are reportedly facing a shortage of military personnel and would have difficulty mobilizing a significant number of troops in case of a conflict, the Financial Times reported on June 26.According to the outlet’s analysts, Western European members of the US-led military bloc are said to have 1.9 million troops “on paper.” In reality, however, they would face challenges deploying more than 300,000 people – and even this would require months of preparation. Former NATO Assistant Secretary-General Camilla Grand explained that the bloc’s members have never had to consider mass deployment of their forces and that European defense planning has for many years been limited to matters such as supplying “300 special forces for Afghanistan.” “That’s created gaps,” Grand said, adding that the bloc has seen “a shrinking in forces all over the continent year after year.”Ben Barry, a senior fellow at the International Institute for Strategic Studies, also told FT that NATO’s European members have focused on increasing military budgets but have neglected conscripting more people. According to Barry, European NATO states have now reached a “tipping point of critical mass” and have entered a “vicious circle” in which personnel shortages limit their military capabilities and make it difficult to train new recruits, frustrating existing servicemen and forcing them to leave the army. Click here to read… [28]

Pentagon chief speaks with new Russian defense minister

The Russian and US defense chiefs spoke over the phone on June 25 to discuss the need to maintain communication despite the standoff between the two nuclear powers. It was Defense Secretary Lloyd Austin’s first direct conversation with Andrey Belousov, who replaced Sergey Shoigu as Russia’s defense minister last month. Austin “emphasized the importance of maintaining lines of communication amid Russia’s ongoing war against Ukraine,” Pentagon spokesman Pat Ryder said in the readout of the call. The Russian MOD released a short statement, saying Austin and Belousov “exchanged views about the situation around Ukraine.” Belousov warned the Pentagon chief about “the dangers of further escalation in terms of the continuing deliveries of American weapons to the Ukrainian Armed Forces.” The conversation took place two days after four beachgoers, including two children, were killed in a Ukrainian missile strike on Crimea. Moscow condemned Kiev’s “barbaric” attack, which also injured more than 150 people, saying Ukraine had used US-supplied ATACMS long-range missiles with cluster munitions. The MOD also accused the US of helping Kiev pick the targets for the missile strikes. “We understand perfectly well who is behind this,” Kremlin spokesman Dmitry Peskov told reporters. The US had previously authorized Kiev to use some of the Western weapons supplied to it for strikes deep into Russian territory during Moscow’s new offensive in Ukraine’s Kharkov Region. Click here to read… [29]

Biden Administration Scrambles to Head Off Wider War Between Israel and Hezbollah

A Biden administration push to curtail worsening border clashes between Israel and Hezbollah in southern Lebanon is running into major headwinds because of the difficulty the U.S. faces in arranging a cease-fire in Gaza, U.S. officials say. The connections between the two fronts underscore the diplomatic conundrum facing the White House as it seeks to prevent a full-scale war that could draw in Iran and broaden the fighting well beyond Gaza. The White House insists that de-escalation along Israel’s northern frontier can’t be conditional on an elusive cease-fire in Gaza and is mounting a major diplomatic effort to defuse tensions in the north after weeks of unsuccessful pressure on Hamas to agree to a halt in the fighting in the south. But Hezbollah, a U.S.-designated terrorist group and an ally of Hamas, has intensified rocket and drone attacks in northern Israel in recent weeks, putting more pressure on the government of Israeli Prime Minister Benjamin Netanyahu, which has vowed to end the threat and return some 70,000 citizens who have had to be evacuated. Hassan Nasrallah, Hezbollah’s secretary-general, warned Israel in a televised address from Beirut earlier this month that “no place in the country is safe from our rockets.” Click here to read… [30]

NATO’s New Chief Is a Veteran of Europe’s Fights With Trump

NATO’s next boss is a political survivor who has said “no” to Donald Trump. North Atlantic Treaty Organization members on June 26 approved Dutch Prime Minister Mark Rutte to lead the 32-country alliance after current Secretary-General Jens Stoltenberg’s term ends on Sept. 30. The decision, taken months later than many members had hoped, resolves an internal conflict just two weeks before allies gather in Washington for an annual summit that they hope will serve as a show of unity and strength. Some NATO officials had worried that a protracted leadership fight could undermine cohesion and overshadow other work, particularly in response to Russia. “It was always a matter of when, not whether. So it’s good it’s done,” said former U.S. Ambassador to NATO Ivo Daalder. Since national leaders’ time is precious at a summit, he said, “you try to get as much done before, so that you leave the tough issues that only leaders can decide.” Now NATO can plan an orderly transition from Stoltenberg’s nearly decade in office. Members extended his initial four-year term four times, first for continuity amid rising tension with Russia and more recently because they couldn’t agree on a replacement. “I know I am leaving NATO in good hands,” Stoltenberg said. Click here to read… [31]

Kenya’s Ruto says finance bill to be withdrawn after deadly protests

Kenya’s President William Ruto has said he will not sign a finance bill that led protesters to storm Parliament in anger over rising costs, adding that the bill containing tax hikes would “be withdrawn”. “I concede and therefore I will not sign the 2024 finance bill and it shall subsequently be withdrawn,” Ruto said in a televised address on June 2. “The people have spoken.” Ruto said he would now start a dialogue with Kenyan young people, without going into details, and work on austerity measures – starting with cuts to the budget of the presidency – to make up the difference in the country’s finances. His comments came after dozens of people were reported killed and scores more wounded as police broke up rallies against the contentious bill. The move will be seen as a major victory for the week-old protest movement that grew from online condemnations of the proposed tax increases into mass rallies demanding a political overhaul, in the most serious crisis of Ruto’s two-year-old presidency. Shortly before Ruto’s address, activists called for new protests in Kenya. They called on demonstrators to return “peacefully” to the streets to honour those killed. “You cannot kill all of us. Tomorrow, we march peacefully again as we wear white, for all our fallen people,” Hanifa Adan, a prominent organiser of the youth-led demonstrations, posted on X. “You will not be forgotten!!!” Click here to read… [32]

Health

US government lobbied to remove trans surgery age restrictions – NYT

US health authorities pressured the World Professional Association for Transgender Health (WPATH) to remove age restrictions for teenage surgeries from its guidelines published in 2022, the New York Times reported on June 25, citing newly unsealed court documents. According to the outlet, the administration of President Joe Biden, and specifically the assistant secretary of health, Rachel Levine, who is transgender, feared that age limitations could fuel the growing political opposition to the controversial treatments. In the first draft of the guidelines published in 2021, the WPATH initially planned to set the minimum age for hormonal treatment at 14, 15 for mastectomy, 16 for breast augmentation and facial surgery and 17 of genital surgery or hysterectomy. However, in the final version of the document, which was released a year later, the group mentioned no age limits at all. Emails obtained by the NYT have now reportedly shown that Levine’s staff had contacted the group and took issue with the guidelines, urging WPATH to drop the age limits. “[Levine] and the Biden administration worried that having ages in the document will make matters worse. She asked us to remove them,” one of the letters from a WPATH staffer was quoted as saying. Some members of the organization were reportedly concerned about the government’s intervention and insisted that the commission’s guidelines be based on science and expert consensus rather than politics. Click here to read… [33]