Global Developments and Analysis: Weekly Monitor, 21 February 2022 - 27 February 2022

Economic

MENA faces a crisis as the world’s key wheat producers are at war

As two of the world’s key wheat producers face off in an all-out war, tomorrow looks grim for the Middle East and North Africa (MENA) countries that need wheat from Ukraine and Russia. Russia is the world’s number-one wheat exporter – and largest producer after China and India – Ukraine is among the top five wheat exporters worldwide. “The wheat harvest starts in July and this year’s yield is expected to be a healthy one, meaning abundant supply for global markets in normal conditions. But a protracted war in Ukraine can affect the harvest in that country, and therefore global supplies,” Karabekir Akkoyunlu, a lecturer in politics of the Middle East at SOAS, University of London, told Al Jazeera. In addition, the planned expulsion of some Russian banks from the international SWIFT banking system in retaliation for Moscow’s invasion of Ukraine is expected to hit the country’s exports. “At a time of global food crisis and supply chain disruptions due to the coronavirus pandemic, this is a real concern, and it is already pushing prices up to record levels,” he said. Though Turkey domestically produces about half of the wheat it consumes, it has become increasingly reliant on imports, 85 percent of which come from Russia and Ukraine. Click here to read... [2]

China lifts all restrictions on wheat imports from Russia

China is now fully open to Russian wheat deliveries, as all import restrictions have been lifted, the South China Morning Post has reported, citing the country’s General Administration of Customs. The announcement was made public on Feb 24, hours after Russia began its military operation in Ukraine, the paper says, adding that the deal could provide a lifeline to the Russian economy as it faces tough economic sanctions from the EU and the US, and at the same time addresses China’s need to enhance food security. China previously restricted imports from Russia due to phytosanitary concerns, as a measure to control the spread of plant diseases. Earlier this month, during Russian President Vladimir Putin’s visit to Beijing, China agreed to allow imports from Russia. The crisis in Ukraine sent global wheat prices to record highs this week. Russia, the world’s top wheat exporter, and Ukraine, dubbed ‘the breadbasket of Europe’, both account for nearly a third of the global wheat export market. China refused to condemn Russia's actions in Ukraine, instead calling for the sides to “exercise restraint” and accusing the United States of “fueling fire” in the region. Click here to read... [3]

China boosts oil reserves, ignoring U.S. push for global release

China has ramped up purchases into its oil reserves this year even as oil prices soared, despite calls from Washington for a global coordinated stocks release to help cool the market, industry data showed and traders said. Washington has sought cooperation from China to bolster the impact of a coordinated release of strategic oil stocks from major consumers to dampen the surge in oil prices, which topped $100 a barrel this week for the first time since 2014 after Russia invaded Ukraine. On Feb 24, President Joe Biden said the United States was working with other countries on a new release following on from one in November last year. The United States had announced a release of 50 million barrels from its own stocks in November and said China, India, Japan, South Korea the UK would do the same. The move came as U.S. gasoline prices soared and inflation spiked. India, Japan, South Korea and the UK said they would release some modest volumes into the market. China, the world’s No.2 consumer and largest importer, never officially committed to the move and has been buying more for its reserves instead. Two oil trading sources said Beijing ramped up purchases immediately after Chinese President Xi Jinping met Russian leader Vladimir Putin in early February in Beijing. Click here to read... [4]

Companies head for the exit in Russia as sanctions intensify

Energy giants BP and Shell, global bank HSBC and the world’s biggest aircraft leasing firm AerCap joined a growing list of companies looking to exit Russia on Feb 28, as Western sanctions tightened the screws on Moscow over its invasion of Ukraine. The West has moved to punish Russia with a raft of measures, including closing airspace to Russian aircraft, shutting out some Russian banks from the SWIFT global financial network and restricting Moscow’s ability to use its $630bn foreign reserves. Russia’s economy was already reeling on Feb 28. The rouble plunged to a record low, while the central bank doubled its key interest rate to 20 percent and kept stock markets and derivative markets closed. Shell on Feb 28 said it would exit all its Russian operations, including the flagship Sakhalin-2 plant in which it holds a 27.5 percent stake, and which is 50 percent owned and operated by Russian gas group Gazprom. BP, Russia’s biggest foreign investor, announced at the weekend that it was abandoning its 20 percent stake in state controlled Rosneft at a cost of up to $25bn, cutting the British firm’s oil and gas reserves in half. Equinor, the energy firm majority owned by the Norwegian state, said it would start divesting its joint ventures in Russia. Click here to read... [5]

Ukraine crisis: yuan’s emergence as a safe haven a win for China’s economy

The resilience of the Chinese yuan last week was noteworthy as the foreign exchanges reacted to unfolding events in Ukraine. While sensitive to the tragedy and human cost of war, forex markets necessarily reacted by adopting a risk-averse approach, seeking out currencies that are held to have safe-haven characteristics. The renminbi would now appear to be one of a select group of safe haven currencies, and in present circumstances that is no bad thing for China. News of Russia’s invasion of Ukraine initially triggered equity market sell-offs around the world, while in the currency markets, investors sought to secure currencies traditionally regarded as safe havens in times of major uncertainty, such as the Japanese yen, the Swiss franc and, of course, the US dollar. This time, the yuan was also sought after. Indeed, it “has been trading like a safe-haven currency during the Ukraine crisis”, Khoon Goh, head of Asia research at Australia & New Zealand Banking Group in Singapore told Reuters, adding, “Prospects for further easing [in China] should see growth recover, hence keeping Chinese equities resilient even as US equities have sold off.” Investors will surely have taken into account that Beijing has been extolling the virtues of yuan stability. Click here to read... [6]

Ukraine crisis: Gulf energy exporters refuse to take sides

Saudi Arabia, the United Arab Emirates and Qatar have dashed Europe’s hopes of providing an alternative to Russian hydrocarbons amid the Ukraine crisis, after confirming that they would not be taking sides in the conflict. The Gulf’s three major oil and gas exporters recently reiterated their neutral stance and signalled that they will not be boosting production or diverting cargoes - despite the European Union’s urgent need to wean itself off Russian energy supplies as tensions mount. Repeated lobbying by the United States and France has failed to sway Saudi Arabia, whose de facto leader Crown Prince Mohammed bin Salman told French President Emmanuel Macron on Feb 27 that Riyadh was committed to its “Opec-plus agreement” with Russia, the world’s second-largest exporter of oil. Salman “affirmed the kingdom’s keenness on the stability and balance of oil markets”, according to an official Saudi Press Agency report on the call - repeating the line his father had already told US President Joe Biden twice: in calls on February 9 and last August. Taken together, Saudi Arabia, the UAE and Kuwait have about 5 million barrels per day of spare production capacity that they could start delivering within 60 days if they so wished. Click here to read... [7]

Japan-backed Sakhalin-2 LNG project rocked by Shell exit

Shell will exit all oil and gas projects involving Russian state-owned energy giant Gazprom in response to Russia's invasion of Ukraine, including a landmark LNG plant that has served as a symbol of cooperation between Tokyo and Moscow. The British oil major will quit the joint venture for the Sakhalin-2 offshore liquefied natural gas plant. Shell's move puts the spotlight on Japanese groups Mitsui & Co. and Mitsubishi Corp., the two other investors in Sakhalin-2. The project has importance for Japan's energy security, now being tested by the Ukraine invasion. LNG is Japan's biggest import from Russia. Shell holds a 27.5% interest in Sakhalin-2, while Gazprom owns 50%. Mitsui and Mitsubishi control 12.5% and 10%, respectively. Sakhalin-2 can produce about 10 million tons of LNG per year, equivalent to more than 10% of Japan's annual imports. About half is supplied to eight Japanese gas and power companies through long-term contracts. The plant is near Japan, South Korea and China, the world's largest LNG consumer. LNG carriers can travel from Sakhalin to buyers in northeastern Asia within days, while shipments can take more than two weeks to arrive from Qatar and more than three weeks from the U.S. Click here to read... [8]

Russia-Ukraine War Risks Putting Fed in Bigger Bind

The war in Ukraine isn’t likely to prevent the Federal Reserve from raising interest rates next month, but any worsening of inflation pressures could force the central bank to tighten policy even more aggressively than already hinted by senior officials. In public comments and interviews last week, Fed officials endorsed plans to lift rates at their March 15-16 meeting. They said it was too soon to tell how the war will affect the economic outlook but they are monitoring developments carefully. Their problem is that they had anticipated U.S. inflation, now running at a 40-year-high, to peak this quarter. Geopolitical developments that push up prices through the spring, particularly for energy and commodities, could force the Fed to accelerate rate increases this summer, which would raise the risk of a recession next year. Fed officials will spend the next two weeks closely monitoring how a powerful package of Western sanctions ripples through financial markets and the global economy. During geopolitical shocks, the Fed generally avoids taking steps that increase uncertainty. But with inflation running far above its 2% target and the Ukrainian crisis threatening to push prices even higher, the Fed could face considerable urgency to continue with planned rate rises. Click here to read... [9]

For Europe, Russia Sanctions Will Sting

Russia’s invasion of Ukraine threatens to set back Europe’s economic recovery from the Covid-19 pandemic, as sanctions, tensions and energy prices weigh on businesses and households in parts of the continent at a time when growth is slowing and inflation rising. The scale of the shock will depend on how far tit-for-tat sanctions escalate the economic side of the conflict. The EU said on Feb 25 it would cut off 70% of Russia’s banking system from international financial markets and place limits on the amount of money that Russian elites can hold in the EU. The bloc also imposed export bans on key equipment, including aircraft and their spare parts, semiconductors and what it describes as “cutting-edge technologies,” and parts needed to upgrade Russia’s oil refineries. The EU didn’t impose sanctions on its main item of business with Russia: buying Russian oil and gas. While energy sanctions are the biggest punishment that the EU could inflict on Moscow for invading Ukraine, Europe’s shortage of alternative energy sources means it can’t use it. Around 40% of Europe’s gas imports come from Russia, with large economies like Germany and Italy especially reliant on it as a supplier. Russia also supplies more than a quarter of the EU’s oil imports. Click here to read... [10]

China can break SWIFT sanctions but at a high cost

China’s Cross-Border International Payments System (CIPS) can replace SWIFT for Russian trade financing, a Chinese academic told the Shanghai-based Observer news site (guancha.cn) in a February 27 interview. Over the weekend, the United States and its allies excluded a list of Russian banks from the SWIFT, or Society for Worldwide International Financial Telecommunications, network that clears interbank payments in US dollars and other Western currencies, although Russia has not yet been subject to a blanket exclusion. In the past, exclusion from SWIFT meant complete isolation from global markets and normal trade financing, as in the case of American sanctions against Iran. But the CIPS system, which China began to develop in 2015, is now fully operational. China might be reluctant to help Russia circumvent SWIFT sanctions, said Professor Chen Xi of the Shanghai Advanced Institute of Finance at Jiaotong University in an “Observer” interview because the United States might retaliate by imposing sanctions on Chinese banks. That would have disastrous consequences, Chen added. Risks to the financial system cut both ways, the German daily Die Welt wrote on February 27. “CIPS already handles US$50 billion of daily transactions. That is considerably less than the $400 billion of transactions that pass every day through SWIFT, but CIPS volume has increased rapidly,” the German newspaper reported. Click here to read... [11]

Five essential commodities hit by war in Ukraine

The war in Ukraine is threatening further disruption to already stretched supply chains. Ukraine and Russia may only account for a small proportion of the imports of major manufacturing nations like Germany and the US, but they are essential suppliers of raw materials and energy for many crucial supply chains. Russia and Ukraine together account for more than a quarter of global wheat exports, while Ukraine alone makes up almost half of the exports of sunflower oil. Both are key commodities used in many food products. If harvesting and processing is hindered in a war-torn Ukraine, or exports are blocked, importers will struggle to replace supplies. With global transport already severely disrupted in the aftermath of the pandemic, a war could create further problems. The transport modes likely to be affected are ocean shipping and rail freight. Russia and Ukraine lead the global production of metals such as nickel, copper and iron. They are also largely involved in the export and manufacture of other essential raw materials like neon, palladium and platinum. As part of the sanctions toward Russia, the US has been threatening to cut off Russia’s supply of microchips. But this rings hollow when Russia and Ukraine are such key exporters of neon, palladium and platinum, all of which are critical for microchip production. Click here to read... [12]

China’s algorithm law takes effect to curb Big Tech’s sway in public opinion

A new regulation in China designed to rein in the use of recommendation algorithms in apps went into effect on March 01, representing Beijing’s latest effort to curb the influence of Big Tech companies in shaping online views and opinions. The Cyberspace Administration of China (CAC), the country’s internet watchdog, unveiled the draft of the regulation last August, hoping to “regulate algorithm-empowered recommendation activities on the internet”. The final version of the rules – jointly drawn up by the CAC, Ministry of Industry and Information Technology, Ministry of Public Security, and State Administration for Market Regulation – were published in January. The regulation marks a bold attempt by the Chinese government to tame the use of algorithms, the technology behind the recommendation functions that are commonly found in apps and websites these days, giving suggestions to consumers on what to read, watch or buy online. These algorithms “must be regulated” because “it is easy to abuse customised recommendations, thereby damaging our personal rights and interests, and even endangering national security in more serious cases”, Zuo Xiaodong, vice-president of the China Information Security Research Institute, was cited as saying in a post published on the CAC’s WeChat account on March 01. Click here to read... [13]

Turkey posts G-20 topping 11% growth in 2021 as exports surge

Turkey's economy grew a robust 11% in 2021, so far the highest among the Group of 20 leading rich and developing nations, as multinational companies increasingly turned to its strategic location amid a global supply chain crisis. This comes despite a roller-coaster ride for the lira in the second half of the year under President Recep Tayyip Erdogan's unorthodox approach of lowering interest rates despite runaway inflation. Exports increased 33% year-on-year to a record high of $225 billion. The figures for 2021 were in line with market expectations. Erdogan will likely point to the figures as justification for his long-held belief that lower interest rates and a cheaper currency will help to turn Turkey into an export hub, particularly given its key location between East and West and its young vibrant population. Indeed, given its special customs agreement with the European Union, Turkey's advantage as a manufacturing and export hub became clear over the last year as Asia struggled with supply-chain bottlenecks. A World Bank report on Turkey released last week highlighted such trends. "Turkey's goods exports have benefited from the deterioration of global shipping reliability as multinationals sourced more intensively from Turkey, instead of from less reliable and more distant exporters who began charging higher freight prices," it said. Click here to read... [14]

China’s private sector struggling with ‘common prosperity’, Covid-19 and financing; SOEs thrive

Economic pressure has been mounting in the country since the second half of 2021, and it appears that private firms have been bearing most of the pain, while many state-owned enterprises (SOEs) have remained largely intact or have thrived. A pillar of China’s economy, the private sector contributes more than half of the country’s tax revenue, 60 per cent of the gross domestic product, fixed asset investment and foreign direct investment, and more than 80 per cent of urban employment. But in the third quarter last year, the entrepreneur confidence index – a gauge of the economic climate and business prospects – dropped 7.1 percentage points from the first quarter to 118.3 for private firms, while that for SOEs only declined 3.7 percentage points to 128, according to data from the National Bureau of Statistics. “It shows that in the overall demand contraction, the weakening of expectation of private enterprises is more obvious,” said Zhong Zhengsheng, chief economist at Ping An Securities in a February 2022 report. Meanwhile, central SOEs – firms overseen by the central government – recorded a net profit of 1.8 trillion yuan (US$285 billion) last year, increasing 29.8 per cent over the previous year. “The increase in profitability of central SOEs has reached the best level in history,” said Peng Huagang, secretary general and spokesman of the State-owned Assets Supervision and Administration Commission, in a press conference in January.Click here to read... [15]

Strategic

China-US relations: Beijing warned ties will worsen further unless it shifts stance on Ukraine

The crisis in Ukraine cast a shadow over Chinese efforts to mark the 50th anniversary of an important milestone in its relationship with the United States as a former American official warned that ties would worsen if Beijing maintains its current position. “Fifty years ago, the USSR was a common threat that brought us together. Today, Russian aggression threatens to drive us further apart,” former US treasury secretary Jacob Lew said in an online speech to an event to mark the signing of the Shanghai Communique, which paved the way for the establishment of formal relations. “China must decide where to stand and understand that the bilateral relationship with the US will only become more strained in the absence of a clear choice to stand with intervention.” Feb 28’s event was hosted by the semi-official Chinese People’s Association for Friendship with Foreign Countries and the Shanghai municipal government to commemorate the 50th anniversary of the communique, signed at the end of president Richard Nixon’s visit to China in 1972. Those attending the event included a number of senior Chinese officials, including Foreign Minister Wang Yi, Shanghai Communist Party chief Li Qiang and Qin Gang, the ambassador to Washington. But no incumbent US official spoke at the event, though the chargé d’affaires at the US embassy David Meale was there. Click here to read... [16]

U.S. to end Trump-era 'China Initiative' targeting tech theft

The U.S. Justice Department on Feb 23 will end a program focused on fighting Chinese espionage and intellectual property theft, shifting from what an official called a "myopic" focus to address threats from a broader array of hostile nations. Critics have said the initiative, put in place during former President Donald Trump's administration, amounted to racial profiling and that it created a culture of fear that has chilled scientific research. The move is a recognition that the focus on China was too limited, said Matt Olsen, the assistant attorney general for the national security division. The department's "China Initiative," started in 2018, has faced intense scrutiny by civil rights groups and some members of Congress for its expansive investigation into professors at U.S. universities over whether they disclosed financial ties to China when seeking federal grant funding and visiting Chinese scholars from military affiliated universities. But several of the department's cases were dismissed due to flaws in the evidence or the premise, including one against Massachusetts Institute of Technology professor Gang Chen, who was accused of hiding ties to China when seeking federal grant funds. "Anything that creates the impression that the Department of Justice applies different standards based on race or ethnicity harms the department and our efforts and it harms the public".Click here to read... [17]

Russia may hold Iran nuke deal hostage over Ukraine

Before Russian President Vladimir Putin launched the largest military attack on the European continent since World War II, the Joint Comprehensive Plan of Action (JCPOA) was arguably the West’s most urgent diplomatic priority. Sticking points have prevented Tehran and Washington from resolving their differences and it’s unclear exactly how Russia’s invasion of Ukraine might influence the discussions. News reports noted Iran could possibly ramp up shipments beyond 1 million barrels a day within months of a revived accord, offering potential relief as the Ukraine conflict pushed oil above $100 a barrel. European diplomats and US officials don’t share the same level of optimism conveyed by Chinese and Russian diplomats last week, maintaining that there are fault lines that haven’t been bridged and that they risk imploding the talks altogether. But there are indications that what has spawned the current impasse is Iran’s insistence that the US give binding guarantees that future US administrations will not violate the agreement and that all sanctions introduced by Trump, including the designation of the Islamic Revolutionary Guard Corps as a Foreign Terrorist Organization, are dropped. The US team, however, has made it clear that it cannot give any legal guarantee that ties the hands of a future president. Click here to read... [18]

Taliban Halts Further Evacuations, Rejecting U.S. Precondition for Lifting Sanctions

The Taliban said Feb 28 that Afghans will no longer be allowed to leave the country without a good reason, and women will be barred from traveling without a chaperone, rejecting a key U.S. demand before the lifting of sanctions and the recognition of its government. Since the Taliban seized power last summer, thousands of Afghans have continued to try to flee Afghanistan fearing reprisal for their past affiliation with the U.S. and to escape a sharp economic downturn that has left millions on the brink of starvation. The Taliban didn’t outline what reasons it would approve for leaving the country. The Taliban said the restrictions on travel were being imposed for the benefit of its citizens and that Afghan families abroad were languishing in camps in places like Turkey and Qatar, suffering from diseases and without any clear path for the future. “The government is obliged to find out a way to protect their people,” Taliban spokesman Zabiullah Mujahid said at a news conference on Feb 27. “Especially when their path is not clear and they’re not invited. They should not dive into the unknown.” He said religious law prohibited women from traveling without a chaperone—dashing hopes of some that they could leave Afghanistan soon. Click here to read... [19]

Japan’s Defense chief cites leap in North Korea’s missile abilities

Defense Minister Nobuo Kishi signaled Feb. 27 it would be folly not to pay close attention to North Korea’s leaps and bounds in missile technology, referring to a ballistic missile launch earlier in the day. The test marked the eighth this year by Pyongyang. Its last test, a medium-range ballistic missile, was on Jan. 30. “North Korea has been relentlessly test-firing missiles with intensified frequency with new forms of technology,” Kishi said. “We should not overlook the fact that North Korea has made significant strides in missile technology.” Kishi called the latest test “completely unacceptable,” given heightened global concern over Russia’s invasion of Ukraine. The missile came down without incident in waters off the east coast of North Korea after traveling at a maximum altitude of 600 kilometers. Click here to read... [20]

Turkey in Africa pitches non-Chinese, non-Western model

The show of comity played out during the opening ceremony of the FIFA-standard stadium, built by Turkish contractor Summa. The company has built conference halls, hotels, universities, airports and train stations across the continent, and this was its 22nd completed project in sub-Saharan Africa. "This is another great example of how good of a job Turkish companies are undertaking," Senegalese President Macky Sall said. The same day, five agreements were signed between the two countries, including a security-cooperation agreement. Erdogan on Feb 22 made sure to highlight the contributions of its African counterpart. "While developing relations, we carefully plan so that we use Senegalese human resources. With the stadium construction, 1,000 of the 1,500 workers were our Senegalese brothers," he said. Summa said it also used 155 local suppliers. The description stood in stark contrast to Chinese projects, which are often criticized for depending heavily on Chinese workers and Chinese materials. Since coming to power almost 20 years ago, Erdogan has proved a consistent proponent of Turkish contractors expanding abroad. At a recent Turkey-Africa Partnership Summit in Istanbul, Nikkei Asia observed Erdogan gathering Turkish contractors and African leaders together at every occasion for quick chats in between his bilateral meetings, seizing the opportunity even in doorways or hallways. Click here to read... [21]

U.S. should abandon ambiguity on Taiwan defense: Japan's Abe

Former Japanese Prime Minister Shinzo Abe said Feb 27 that it is time for the U.S. to make clear that it would defend Taiwan from a Chinese invasion and ditch its longstanding strategic ambiguity. "The U.S. takes a strategy of ambiguity, meaning it may or may not intervene militarily if Taiwan is attacked," Abe said on a Fuji TV morning talk show. "By showing it may intervene, it keeps China in check, but by leaving the possibility that it may not intervene, it makes sure that the [Taiwanese] forces for independence do not run out of control," he said. "It is time to abandon this ambiguity strategy. The people of Taiwan share our universal values, so I think the U.S. should firmly abandon its ambiguity," he said. Abe added that "a Taiwan contingency is a Japan contingency," explaining that Japan's westernmost inhabited island of Yonaguni is just 110 km from Taiwan's main island. If China were to conduct an operation, it would first seek to establish air and sea superiority around Taiwan, he said. "If it were to secure wide air superiority, it would also cover Japan's airspace. [China] would conduct operations in and above the waters too, so this would affect Japan's territorial waters, or at least our exclusive economic zone." The former prime minister also floated the possibility of hosting U.S. nuclear weapons in Japan. Click here to read... [22]

Russia blames UK FM for elevated nuclear alert

Kremlin spokesman Dmitry Peskov said on Feb 28 that Russian President Vladimir Putin placed Russia’s deterrence forces – including nuclear weapons – on high alert in response to statements by British Foreign Secretary Liz Truss on potential conflict between NATO and Moscow. “Statements were made by various representatives at various levels on possible altercations or even collisions and clashes between NATO and Russia,” Peskov told reporters. “We believe that such statements are absolutely unacceptable. I would not call the authors of these statements by name, although it was the British foreign minister.” Speaking to Sky News on Feb 27, Truss said that “if we don't stop Putin in Ukraine, we are going to see others under threat: the Baltics, Poland, Moldova, and it could end up in a conflict with NATO. We do not want to go there.” Truss did not specify how the UK could “stop” Russia in Ukraine, although the British government has already sent anti-tank weapons and other “lethal aid” to Kiev. However, a Foreign Office source told the BBC on Feb 28: “I don't think anything Liz has said warrants that sort of rhetoric or escalation,” adding that Truss has always spoken of NATO – which was formed with the explicit goal of opposing the Soviet Union – as a “defensive alliance.” Click here to read... [23]

Ukraine goes visa-free for foreign fighters

Foreigners who wish to travel to Ukraine and join the International Legion to fight against Russia can do so without a visa starting from March 1, President Volodymyr Zelensky announced on Feb 28 amid the ongoing military offensive launched by Moscow. Zelensky’s Order 82 establishes a visa-free regime for the duration of the current state of emergency and instructs the Ukrainian government to begin its implementation immediately. The only exception is made for citizens of the “aggressor state,” meaning that any Russian nationals who’d like to take Kiev’s side in the conflict are not welcome. The Ukrainian president announced the establishment of the International Legion of Territorial Defense of Ukraine – a separate unit composed entirely of foreign volunteers – on Feb 27, in a speech in which he called the Russian offensive the “beginning of a war against Europe.” “The leadership of Ukraine invites all foreigners who wish to join the resistance to the Russian occupiers and to protect world security to come to our state and to join the ranks of the Territorial Defense Forces,” Zelensky had said, inviting anyone who wishes to “stand side by side” with Ukrainians to do so. Click here to read... [24]

Profile: Who are Ukraine’s far-right Azov regiment?

As the Russian invasion of Ukraine enters its sixth day, a Ukrainian far-right military regiment is back in the headlines. Russian President Vladimir Putin referenced the presence of such units within the Ukrainian military as one of the reasons for launching his so-called “special military operation … to de-militarise and de-Nazify Ukraine”. On Feb 28, Ukraine’s national guard tweeted a video showing Azov fighters coating their bullets in pig fat to be used allegedly against Muslim Chechens – allies of Russia – deployed in their country. Azov has also been involved in training civilians through military exercises in the run-up to Russia’s invasion. Azov is a far-right all-volunteer infantry military unit whose members – estimated at 900 – are ultra-nationalists and accused of harbouring neo-Nazi and white supremacist ideology. The unit was initially formed as a volunteer group in May 2014 out of the ultra-nationalist Patriot of Ukraine gang, and the neo-Nazi Social National Assembly (SNA) group. Both groups engaged in xenophobic and neo-Nazi ideals and physically assaulted migrants, the Roma community and people opposing their views. As a battalion, the group fought on the front lines against pro-Russian separatists in Donetsk, the eastern region of Ukraine. Just before launching the invasion, Putin recognised the independence of two rebel-held regions from Donbas. Click here to read... [25]

Muted ASEAN response to Russia’s brazen invasion

Russian President Vladimir Putin’s “shock and awe” invasion of neighboring Ukraine, the biggest attack on a European state since World War II, has been met with condemnation from global democracies for the dangerous new precedent being set by Moscow. Yet in Southeast Asia, a region where non-interference in the internal affairs of other nations is sacrosanct among democrats and autocrats alike, governments have been reticent to issue strong statements on the fast-moving developments in Eastern Europe as invading Russian forces attempt to encircle the Ukrainian capital of Kiev. Singapore, both the region’s smallest state and its most outspoken thus far. The immediate focus of Southeast Asian governments has been the evacuation and repatriation of their nationals in Ukraine, a process that embassies have already begun as the region’s diplomatic representatives prepare for a UN General Assembly vote on a US-drafted resolution condemning Russia’s actions expected in the coming days. Vietnam, Moscow’s closest defense partner in Southeast Asia and the region’s largest buyer of Russian military equipment, issued a passive response to the invasion, offering no substantive comment besides calling on “relevant sides to practice self-restraint, step up dialogue efforts and promote diplomatic measures” to end the conflict. Click here to read... [26]

Russia’s Invasion of Ukraine Forces Military Reckoning in Eastern Europe

European countries on the border with Russia or Ukraine put troops on high alert and are rapidly expanding their militaries, with the Russian invasion of its smaller neighbor set to be a watershed moment for the U.S.’s easternmost allies on the continent and the military alliance that binds them together. Lithuania introduced a state of emergency and reinforced military deployments near its border with Russia, while Poland kept active military personnel on duty and canceled leaves of absence and rotations home for the foreseeable future. Both countries also called on the North Atlantic Treaty Organization to invoke Article 4, a clause that would require all 30 governments in the military alliance to hold consultations on the crisis in Ukraine. Meanwhile, Slovakia and Hungary sent troops to manage a possible influx of people fleeing Ukraine. Defense ministers, intelligence officers and senior politicians from Poland, Lithuania, Latvia and Estonia—all NATO members that border either Russia or Ukraine—say the long buildup to the invasion of Ukraine has driven them to aggressively ratchet up their military capabilities. Click here to read... [27]

Turkey blocks naval ships' passage to Black Sea

Turkey on Feb 28 warned countries not to send warships through straits to the Black Sea after President Recep Tayyip Erdogan invoked a 1936 agreement to "stop escalation" in Ukraine. The Montreux Convention Regarding the Regime of the Straits regulates passage of ships through the Bosporus and the Dardanelles under both peacetime and war. Faced with Russia's invasion of Ukraine, which Turkey has called a "war," Foreign Minister Mevlut Cavusoglu made Ankara's position on the straits clear. "We warned all countries, both riparian or non-riparian, not to transit naval vessels from the straits," he told reporters, referring to coastal and non-coastal nations. "So far, there has been no passage or request of passage through the straits," Cavusoglu said. "The Russians were asking if need be, whether Turkey would implement Montreux Convention or not. We have been telling them that we will implement it fully." Turkey's move is not considered to have a significant impact on the war in Ukraine, as Russia already has a substantial fleet at the Black Sea with a clear superiority against Ukraine. "The Russians already have the upper hand in the Black Sea, as Ukraine lost 60% of its naval capabilities after Russia seized Crimea," Can Kasapoglu, director of the security and defense studies program at leading Turkish think tank Center for Economics and Foreign Policy Studies (EDAM), told Nikkei Asia. Click here to read... [28]

Ukraine conflict risks uncontrollable escalation of cyberwarfare

Ukrainian computers and networks were the targets of disruptive cyber intrusions, the latest in a series of reported attacks that are rising in frequency and severity. Were the attackers Russian? Were they part of a softening up process aimed at making life more difficult for Ukraine ahead of the Russian military attacks that are now taking place? Occam's razor -- the likeliest explanation is usually the correct one -- suggests this is the case. We cannot be certain, at least not yet. We can be clear on some things about cyberwarfare and its practitioners, however. This is a key and expanding way that nations are waging conflicts that they cannot or do not want to solve with diplomacy. Defenses, at least in the West, are insufficient, if not meager. And the potential for escalation is enormous. Cyberwarfare is not new. As software and networks become part of so much of what we use and communicate with in the modern world, with, at best, after-the-fact attention to security in those systems, they have become irresistible targets. We now have to look at them as essential, not ancillary, elements of conflict. In the wars of today and tomorrow, the virtual and physical worlds will be different, yet linked, battlefields. What might happen on the cyber-front as the Russian invasion of Ukraine proceeds? Click here to read... [29]

Russia’s attack shows drones are high on hit lists – and often under the radar

Experts are calling for higher awareness of the operations of drones in low-altitude airspace as the autonomous weapons become increasingly active, especially during conflicts. On Feb 21, Saudi Arabia’s state-run news agency said 16 people of various nationalities had been wounded at an airport after the interception and destruction of a drone carrying explosives, which it said was launched by Yemen’s Iran-backed rebels. And on Feb 24, drones were among the first batch of attack targets that Russia’s forces destroyed in Ukraine, along with key military assets such as airbases. Military and civilian drones proliferated from the late 1990s, and existing air defence systems struggled to detect and destroy them. The American-developed Predator drone was introduced in 2000 and was used in Afghanistan to launch missiles and in the search for Osama bin Laden. Two decades later, Iranian military commander Qassem Soleimani was killed in Baghdad in a precision drone strike carried out jointly by the United States and Israel. The BBC this month reported that more than 100 countries and militias have drones – armed ones in many cases. A growing number are using them in combat. With technologies for countering them yet to catch up, targeting Ukraine’s drones was an early priority in the Russian offensive. China, a major drone exporter, has acknowledged the importance of low-altitude airspace. Click here to read... [30]

Medical

South Korea drops proof of vaccine, test to aid virus response

South Korea will no longer require people to show proof of vaccination or negative tests to enter any indoor space starting March 01, removing a key preventive measure during a fast-developing omicron surge that’s elevating hospitalizations and deaths. The Health Ministry’s announcement on Feb 28 came as the country set another one-day record in COVID-19 deaths with 114, breaking the previous high of 112 set on Saturday. More than 710 COVID-19 patients were in critical or serious conditions, up from 200-300 in mid-February, while nearly half of the country’s intensive care units designated for COVID-19 were occupied. Park Hyang, a senior health ministry official, said rescinding the “anti-epidemic pass” would free more health workers to help monitor nearly 800,000 virus patients with mild or moderate symptoms who have been asked to isolate at home to save hospital space. About 250,000 people per day in the past week received free rapid antigen tests at public health offices and testing stations. According to the ministry, about half of those came for 24-hour proofs of negative tests. Since December, adults had been required to show their vaccination status through smartphone apps or present a proof of negative tests to enter potentially crowded spaces like restaurants, coffee shops, gyms and karaoke venues. Click here to read... [31]

China perseveres with mRNA COVID-19 shot development amid Omicron, commercial uncertainty

China has spent over a year developing Pfizer-type COVID-19 vaccines that may even help it pivot from stringent "zero-COVID" restrictions, but a changed market and the Omicron variant have muddied prospects before efficacy data has even been published. Still, China is unlikely to join the majority of countries in approving foreign-made vaccines based on messenger RNA (mRNA) technology before making its own, experts said, though a slowing vaccination drive at home and in some other nations and improved supply of approved vaccines have raised questions of viability. "If they (China) use mRNA vaccines, they will produce them themselves rather than take it from outside. It is a matter of national pride and also vaccine diplomacy," said Jaya Dantas, professor of international health at the Curtis School of Population Health in Australia. About 87 per cent of China's 1.4 billion people are fully vaccinated and nearly 40 per cent have received boosters - all non-mRNA shots. Along with a policy of strictly containing every local outbreak, China has prevented any major virus flare-up. However, the efficacy of the vaccination regime against Omicron is unclear. Click here to read... [32]