Global Developments and Analysis: Weekly Monitor, 28 February 2022 - 06 March 2022

Economic

Japan, U.S. and Europe banks risk losses from $150bn Russia exposure

Banks across Japan, the U.S. and Europe are staring down potentially big losses from their Russian operations, as sanctions and an exodus of global companies dim the prospects of recouping a combined $150 billion in debt owed by the country and businesses. Financing agreements for such projects often include a force majeure clause, granting temporary relief in extraordinary circumstances like war or economic sanctions. This means debtors rarely default as long as their projects remain in operation. But the projects themselves could fail if countries like the U.S. or Japan impose new Russia sanctions that interfere with their services. In addition to the three Japanese megabanks -- Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group -- the state-run Japan Bank for International Cooperation also provides financing for projects in Russia. European banks are the largest lenders to Russia, according to the Bank for International Settlements. France topped the list with $32.6 billion in outstanding claims as of the end of September, followed by Italy with $30.9 billion. Austria had $22.7 billion in claims. The U.S. holds another $25.3 billion in Russian debt, while Japan's total comes to $11.5 billion. Citigroup said Feb 28 that it has nearly $10 billion in exposure to Russia, including financing, securities and deposits. Click here to read... [2]

Forget Londongrad: Switzerland in Focus as Sanctions Target Rich

As Europe targets wealthy Russians to pressure President Vladimir Putin into ending the war against Ukraine, Switzerland is emerging as a key player after deciding on Feb 28 to break with its historic neutrality and enforce European Union sanctions. The country of 8.6 million inhabitants has long been attractive for wealthy Russians, lured by the discretion and light-touch regulation it offers. While comprehensive figures are hard to come by, data from the Basel-based Bank for International Settlements show Russian residents and companies held $11 billion in Swiss bank accounts as of September, more than double the roughly $5 billion in the U.K. Even that figure grossly understates the extent of Russian wealth in the country, because it doesn’t include brokerage accounts, investments or assets held through offshore companies. Private bankers at the country’s biggest wealth managers, who requested anonymity to discuss internal information, estimate that rich Russians have in excess of $100 billion stashed away across the country’s lenders, with one person putting the figure at $300 billion -- equal to almost 40% of the Swiss economy. Click here to read... [3]

Powell Says Fed Is on Track to Raise Rates in Two Weeks

Federal Reserve Chairman Jerome Powell said he would propose a quarter-percentage point rate increase at the central bank’s meeting in two weeks amid high inflation, strong economic demand and a tight labor market, offering an unusually explicit preview of anticipated policy action. Mr. Powell said March 02 that, before Russia’s invasion of Ukraine last week, he expected the central bank would follow that initial rate rise with a series of increases this year. “For now, I would say that we will proceed carefully along the lines of that plan,” Mr. Powell told the House Financial Services Committee on March 02. “We’re going to avoid adding uncertainty to what is already an extraordinarily challenging and uncertain moment.” While it was too soon to say how the war and heavy sanctions imposed by the West against Moscow would influence the U.S. economy, he revealed general urgency to continue tightening policy. Mr. Powell effectively ended a debate in markets and among other Fed officials over whether they would lift rates from zero this month with a larger half-percentage-point increase. Excluding volatile food and energy categories, so-called core inflation rose 5.2%, close to a 40-year high. “This is strong, high inflation, and it’s very important that we get on top of it, and that’s exactly what we’re going to do,” Mr. Powell told lawmakers. Click here to read... [4]

China to raise defense spending 7.1%, outpacing GDP target

China will spend 7.1% more on defense this year, outpacing last year's hike and the government's modest economic growth forecast as Premier Li Keqiang seeks to safeguard the country's sovereignty, security and development interests. Li pledged to enhance military training and combat readiness for the People's Liberation Army, which is developing an array of weapons from stealth fighters to aircraft carriers. The spending figure, set at 1.45 trillion yuan ($229.47 billion) in the national budget released on March 05, is closely watched by China's neighbors and in Washington as a barometer of how aggressively the country will beef up its military. This year's 7.1% hike marks the seventh consecutive single-digit increase but is the fastest pace since the 7.5% proposed for 2019. It also comes in above targeted slower economic growth of around 5.5% amid domestic headwinds for the world's second largest economy, including a downturn in the country's vast real estate sector and lackluster consumption. China is nervous about challenges on several fronts, ranging from Chinese-claimed Taiwan to U.S. naval and air missions in the disputed South China Sea near Chinese-occupied islands and a festering border dispute with India. The budget gives only a raw figure for military expenditure, with no breakdown. Click here to read... [5]

Oil soars over question of who can replace Russia

The Ukraine war has sent crude oil prices soaring to their highest in 14 years, reflecting how no producer can easily replace Russian output. With major oil producers, including members of OPEC, still wary about ramping up production for fear of a sudden price reversal, investors and economists say oil prices will remain elevated unless countries curb consumption. International benchmark Brent crude touched a high of more than $139 a barrel on March 07, the most since July 2008. U.S. benchmark West Texas Intermediate reached $130 -- also the highest price since 2008 and up more than 60% from the beginning of the year -- before easing somewhat. Takayuki Honma, chief economist at Sumitomo Corporation Global Research, said the price could hit $150 a barrel if tensions between Ukraine and Russia intensify. Others floated the possibility of $200 oil if the U.S. decides to ban the import of Russian crude. "No oil-producing countries can replace Russian oil supply to Europe," said Tatsufumi Okoshi, a senior economist at Nomura Securities, referring to the major buyer of Russian oil. Even if Saudi Arabia and the United Arab Emirates -- OPEC's two biggest producers -- increase output to their fullest, it would fall short of demand, he said. OPEC last week agreed to maintain its plan to increase output by 400,000 barrels per day for April despite calls for additional production. Click here to read... [6]

Europe faces 40m ton gas shortage on Russia cutoff

Europe could end up short 40 million tons of natural gas -- around 10% of its annual consumption -- should Russian shipments dry up due to Moscow's invasion of Ukraine, pressuring the region to explore alternative sources of the fuel. Europe's gas stockpiles are at their lowest in five years, after cold weather lifted consumption in 2021 even as imports from Russia fell. The region held 21 million tons in underground storage as of the end of February, less than 30% of total capacity. The EU holds enough inventory to replace Russian supply for around a month and a half, Germany's Commerzbank said in a mid-February report. Heating demand drops in April, and consumption more than halves by summer, meaning the bloc faces less risk of exhausting gas supplies once temperatures rise. Still, concerns remain. Local gas production can cover only 40% of European consumption this year, the International Energy Agency estimates. Finding alternative sources for the 140 million tons, or over 30% of consumption, that come from Russia could be an uphill battle. More than 100 million tons are coming from North America or Africa, which may be Europe's best options to plug its shortfall. But even if Europe obtains all 100 million tons of North American and African LNG, it likely will face fierce competition from other buyers for the remaining 40 million tons. Click here to read... [7]

Russia is now exclusively a ruble country

Russian citizens and companies will no longer be able to pay off their foreign debts with currencies other than the ruble, the country’s central bank announced on March 02. Earlier reports also said the central bank had temporarily banned financial institutions from making money transfers from Russia abroad to non-residents, namely citizens of countries that have placed sanctions on Russia. According to business outlet RBC, the regulator sent a letter with the corresponding order to credit institutions on March 1. The ban is effective from March 1 to March 31, 2022 and applies to both individuals and legal entities. The list of countries whose citizens are affected by this ban includes 43 states. In addition, the regulator said that Russian companies can no longer pay dividends to non-residents. The measures come after a number of countries, including the US and EU, placed sanctions on the Russian financial sector in response to Moscow’s military operation in Ukraine. A number of Russia’s largest banks were cut off from SWIFT, while others, including the central bank itself, were subject to various restrictions and had their assets frozen. Click here to read... [8]

Bank of Russia resumes gold buying amid sanctions

The Central Bank of Russia announced it is resuming purchases of gold on the domestic market after a two-year pause. The move comes after the regulator and several of the country’s major banks fell under Western sanctions amid Russia’s military operation in Ukraine. It is estimated that more than half of the country’s foreign exchange reserves, around $400 billion worth held abroad, have been frozen. This has limited the Central Bank’s ability to support the ruble, which has fallen to record lows against major currencies. On the other hand, Russia keeps all of its gold holdings at home. The purchase price of gold is determined daily based on the morning price of the London Bullion Market Association (LBMA). The Bank of Russia stopped gold purchases in April 2020 when prices soared due to the outbreak of the coronavirus pandemic. The head of the regulator, Elvira Nabiullina, explained the move due to high demand for the precious metal on world markets, which Russian exporters could take advantage of. The price of gold jumped following the launch of the military operation in Ukraine last month, surging to $1,962 on February 24, up more than 6% for the month. Russia had more than 2,000 tons of gold at the end of January, data from the International Monetary Fund shows. Click here to read... [9]

Russia sanction: China’s small banks come under scrutiny for their support of Moscow amid US, EU financial hurdles

China’s smaller banks could come under greater scrutiny over financing to Russia as the nation’s biggest lenders are already showing signs of complying with US and European sanctions in a bid to protect their large international footprints. Small banks that don’t have any international business exposure are likely to keep financing Russia and service payments, said Chen Zhiwu, a professor of finance at the University of Hong Kong Business School. “For them, the risk of potentially being sanctioned by the US and West European countries is not that high,” he said. While continuing to deal with Russian entities sanctioned by the US and EU would not be illegal under Chinese or international law – China has not imposed sanctions on Russia and neither has the United Nations – banks run the risk of secondary sanctions if they do business with sanctioned entities, which can cut off their ties with US and EU investors. Chinese banks had about US$33 billion of outstanding lending to Russian entities in 2021, compared with US$56 billion of EU and U.K. bank lending. Some smaller Chinese banks have made Russia a priority. Hong Kong-listed Harbin Bank said in its 2020 annual report that it had lent 8 billion yuan (US$1.3 billion) to Russian banks and had a foreign currency settlement network covering all of Russia. Click here to read... [10]

Dirty money? UAE may be added to financial ‘gray list’

The United Arab Emirates is set for inclusion on a global watchdog’s “gray list” after some of its members indicated that the Gulf nation hadn’t made enough progress in tackling illicit financial flows, according to people familiar with the matter. At least three members of the Paris-based Financial Action Task Force have expressed the view that the UAE hasn’t done enough to exit the review process and therefore will likely get put on the group’s list of countries subject to more oversight, said the people, who requested anonymity as the matter is private. The organization is currently holding its plenary, where members are discussing the UAE government’s efforts to combat dirty money, and a decision is expected to be announced as early as March 04. A gray-list classification isn’t as punitive as the group’s highest-risk “blacklist,” and it suggests that UAE officials are taking steps to address the country’s current deficiencies, the people said. Still, the decision is potentially the most significant step to be taken by the FATF in its three-decade history, given the UAE’s position as a regional financial center. Click here to read... [11]

Libya’s biggest oilfield halts production as crisis deepens

Production was halted at Libya’s biggest oil field and protesters threatened to keep a key export terminal closed, as the OPEC nation plunged deeper into political crisis. The Sharara field, which produces 290,000 barrels a day, was closed March 03 after an unknown group shut down one of its main valves, according to people familiar with the situation. They asked not to be identified as they weren’t authorized to speak to the media. The shutdown occurs as the North African nation, which has been mired in conflict following the 2011 ouster of Moammar Al Qaddafi, once again risks division. Parliament on March 03 swore in a new government to replace Prime Minister Abdul Hamid Dbeibah’s administration, escalating a standoff that risks reigniting fighting. It also takes place against a backdrop of soaring oil prices following Russia’s invasion Ukraine and subsequent international sanctions. Six of Libya’s oil terminals were closed earlier in the day until March 05 due to what the National Oil Corp. said was bad weather. The energy minister, who has been at odds with the NOC over the past year, said the step was unwarranted and a “violation of national security.” Click here to read... [12]

China, Russia trade surges amid Ukraine crisis, but ‘alarm’ as overall export growth slows

China’s trade with Russia surged at the start of the year, but “alarming” slowing overall export growth amid various headwinds have increased the pressure on Beijing to introduce policies to meet its new economic target, analysts said. Bilateral trade with Russia rose by 38.5 per cent to US$26.4 billion from the previous year in combined figures for January and February, which represented the highest growth rate for the first two months of the year since 2010. But overall exports grew by only 16.3 per cent in January and February from a year earlier to US$544.7 billion, which beat expectations but was down from December’s growth of 29.9 per cent. Exports are a key driver for China’s economy and will play a role in reaching the gross domestic product target of “around 5.5 per cent”, which was set on March 05 by Premier Li Keqiang. “Export growth slowed in the first two months this year. This is alarming as exports was a main driver for economic growth last year when investment and consumption were both muted,” said Zhang Zhiwei, chief economist at Pinpoint Asset Management. “With the export growth slowing down, the pressure on the government rises further to loosen policies to achieve the ambitious growth target of 5.5 per cent.” Click here to read... [13]

S. Korea wins exemption from U.S' Foreign Direct Product Rule regarding exports to Russia

South Korea won an exemption from the United States' expanded export restrictions on Russia over its invasion of Ukraine, Seoul's industry ministry said March 04. The move came as South Korea's Trade Minister Yeo Han-koo met with senior U.S. officials in Washington on March 03 and the two sides agreed to include South Korea in the U.S.' list of exempt countries. Last week, the U.S. government announced the Foreign Direct Product Rule (FDPR) for "all of Russia" as part of its export controls to block Russia's access to global high-tech products and other major items, such as semiconductors, over the Russian invasion of Ukraine. The measure calls on companies to receive a license from the U.S. for tech-related items using U.S. technology before they can be shipped to Russia, which is feared to affect major South Korean exporters, as they use U.S. technology and software. "The U.S. assessed that South Korea's sanctions against Russia are well-aligned with the international standard and announced its decision to put South Korea on the list of FDPR exempt nations," the industry ministry said in a release. South Korea is now included on the list of 33 nations, which includes the European Union, Britain and Japan. Click here to read... [14]

Strategic

Ukraine and Russia foreign ministers to meet in Turkey

Russia’s Foreign Minister Sergey Lavrov and his Ukrainian counterpart Dmytro Kuleba have agreed to meet on March 10, Turkish top diplomat Mevlut Cavusoglu has said, in what would be the first potential talks between the two officials since Russian troops invaded Ukraine on February 24. “Hope this step will lead to peace and stability,” Cavusoglu wrote on Twitter on March 07, announcing that the talks were set to take place on the side of an international diplomatic forum in Antalya, in southern Turkey. NATO member Turkey, which shares a maritime border with Russia and Ukraine in the Black Sea, had been offering to mediate between the sides. Ankara has good relations with both Moscow and Kyiv and has called Russia’s invasion unacceptable even as it opposes sanctions against Moscow. Cavusoglu said that in a call with Russian President Vladimir Putin on March 06, Turkish President Recep Tayyip Erdogan repeated Turkey’s offer to host the meeting, which Lavrov later accepted. “We especially hope that this meeting is a turning point and … an important step towards peace and stability,” he said, according to the news agency Reuters, adding both ministers had asked for him to join the meeting. Russian Foreign Ministry spokesperson Maria Zakharova confirmed the talks on Telegram. Click here to read... [15]

‘Unprecedented challenge’: China top advisory body chief calls for unity behind Communist Party

The leader of China’s top political advisory body called for the country to rally behind the ruling Communist Party as China faces “unprecedented” domestic and international challenges. Delivering his annual report at the opening of the Chinese People’s Political Consultative Conference on March 04, CPPCC chairman Wang Yang said one of the body’s major political tasks was to prepare for the party’s five-yearly national congress later this year. Wang called on all CPPCC members to build consensus and forge unity to maintain a stable political, social and economic environment. Wang’s address – his annual report to the CPPCC – officially launched the week-long “two sessions” – the twin meetings of the advisory body and the national legislature, the National People’s Congress. As a key political apparatus under the ruling party, forging consensus and strengthening unity has always been among the CPPCC’s core functions, according to Nanjing University political scientist Gu Su. Gu said it was no surprise that Wang did not mention the Ukraine crisis in his address as Beijing did not want to encourage public debate over an issue that could create internal rifts. Wang also did not mention Taiwan specifically except in a passing reference to a seminar on cross-strait exchanges. Click here to read... [16]

Kishida says Japan won't seek nuclear sharing with U.S.

Prime Minister Fumio Kishida said Feb 28 it is not acceptable for Japan to make a nuclear sharing arrangement with the United States, rejecting the idea of hosting U.S. nuclear weapons as a deterrent amid Russia's invasion of Ukraine. Kishida said in parliament, "It is unacceptable given our country's stance of maintaining the three nonnuclear principles," following a call by former Prime Minister Shinzo Abe the previous day to discuss the option of nuclear sharing. Although it relies on the U.S. nuclear umbrella, Japan maintains its three principles of not producing, possessing or allowing nuclear arms on its territory. In World War II, the Japanese cities of Hiroshima and Nagasaki were devastated by U.S. atomic bombs. Kishida, elected from a Hiroshima constituency, has called for a world free of nuclear weapons. Appearing on a TV program on Feb 27 about Japan's security environment in the face of Russia's invasion of Ukraine, Abe said, "It is necessary to understand how the world's security is maintained. We should not put a taboo on discussions about the reality we face." Some nonnuclear members of the North Atlantic Treaty Organization hold U.S. nuclear weapons under their nuclear sharing arrangements. Click here to read... [17]

Biden sends former top defense officials to Taiwan

U.S. President Joe Biden will send a delegation of former senior defense and security officials to Taiwan on Feb 28, a senior official of his administration said, a sign of support for the island claimed by China after Russia's invasion of Ukraine. The visit, led by onetime chairman of the Joint Chiefs of Staff Mike Mullen, comes at a time when Taiwan has stepped up its alert level, wary of China taking advantage of a distracted West to move against it. Mullen, a retired Navy admiral who served as the top U.S. military officer under former Presidents George W. Bush and Barack Obama, will be accompanied by Meghan O'Sullivan, a former deputy national security adviser under Bush, and Michele Flournoy, a former undersecretary of defense under Obama, according to the official, who spoke on the condition of anonymity. Two former National Security Council senior directors for Asia, Mike Green and Evan Medeiros, will also make the trip, which is intended to "demonstrate our continued robust support for Taiwan," the official told Reuters. The U.S. official declined to say whether the timing of the visit was influenced by Russia's invasion of Ukraine. Taiwan said last week that former U.S. Secretary of State Mike Pompeo, who served under former President Donald Trump, would visit from March 2-5 and meet Tsai. Click here to read... [18]

China says Moscow relations solid, accuses U.S. of building 'Pacific NATO'

China's relations with Russia remain "rock-solid" despite a landslide of criticism over Ukraine, Foreign Minister Wang Yi said March 07, as he repeated calls for dialogue to end the war and accused the U.S. of building an "Indo-Pacific version of NATO". China's top diplomat did not address earlier calls from his Ukrainian counterpart to broker a cease-fire between Moscow and Kyiv, and there was little sign that Beijing was changing its cautious stance toward a bloody conflict that has seen hundreds killed in fierce fighting. "China is willing to continue playing a constructive role in promoting peace talks and is ready to work with the international community to conduct necessary mediation, when necessary," Wang told reporters March 07 at a news briefing on the sidelines of China's annual meeting of its rubber-stamp parliament. "The friendship between the peoples of our two countries is rock-solid." China, which formed a new political and economic partnership with Russia last month, stands out as one of the few countries that has not condemned Moscow sending troops across its neighbor's border, and it has refused to describe Russia's actions as an invasion. On March 07, Wang referred to the fighting as a "dispute" between two nations. China has instead called for dialogue to achieve a peaceful resolution and pledged Monday to supply humanitarian aid to Ukraine, but rejected sanctions aimed at choking off Moscow's ability to finance the offensive. Click here to read... [19]

Despite getting a heads-up, China now treads a fine line over Ukraine

China was given early notice from Russia about its readiness to resort to military operations against Ukraine before its attack began last month, Chinese diplomatic authorities told The Asahi Shimbun. But Beijing has nonetheless found itself in the hot seat since a full-scale invasion began on Feb. 24, as Russian President Vladimir Putin has even hinted that a nuclear strike against the West is on the table, drawing strong condemnation from around the world. According to experts, that puts it in a tricky spot. It runs the risk of overreach if it appears to be siding too much with Moscow over Ukraine, which could undermine China’s top leadership, as the international condemnation of Putin and Russia mounts by the day. Putin was the first leader he met with to resume diplomacy through direct talks, and it marked their 38th summit. At their meeting, Xi said China understands and supports Russia’s opposition to the expansion of NATO, a stance already announced by Chinese Foreign Minister Wang Yi during talks with his Russian counterpart, Sergey Lavrov, the day before, diplomatic sources said. “The Chinese side became aware at that meeting that Putin was determined to not rule out military operations against Ukraine,” the sources said. Xi did not have a response for what Putin said at the Feb. 4 meeting, according to the sources. Click here to read... [20]

Russia's demand for U.S. guarantees may harm nuclear talks: Iran

Russia's demand for written U.S. guarantees that sanctions on Moscow would not harm Russian cooperation with Iran is "not constructive" for talks between Tehran and global powers to revive a 2015 nuclear deal, a senior Iranian official said on March 05. The announcement by Russia, which could torpedo months of indirect talks between Tehran and Washington in Vienna, came shortly after Tehran said it had agreed to a roadmap with the U.N. nuclear watchdog to resolve outstanding issues that could help secure the nuclear pact. "Russians had put this demand on the table (at the Vienna talks) since two days ago. There is an understanding that by changing its position in Vienna talks Russia wants to secure its interests in other places. This move is not constructive for Vienna nuclear talks," said the Iranian official in Tehran, speaking to Reuters. Russian Foreign Minister Sergei Lavrov said on March 06 that the Western sanctions imposed over the war in Ukraine had become a stumbling block for the Iran nuclear deal, warning Russian national interests would have to be taken into account. Lavrov said Russia wanted a written guarantee from the United States that Russia's trade, investment and military-technical cooperation with Iran would not be hindered in any way by the sanctions. Click here to read... [21]

Iran: JCPOA agreement possible as soon as ‘red lines’ considered

Iran’s foreign minister Hossein Amirabdollahian says he is ready to travel to Vienna to finalise an agreement on restoring the country’s 2015 nuclear deal with world powers as soon as all of its “red lines” are considered. The comments on March 04 came during a phone call with Josep Borell, the European Union’s foreign policy chief and coordinator of the negotiations in the Austrian capital. The Iranian foreign ministry said in a statement Amirabdollahian had also told Borrell that Iran was ready to conclude the 11-month talks, but “haste” on the side of the Western parties could not undermine Iranian demands. “The requirement for the presence of foreign ministers in Vienna and announcing a final agreement is contingent on fully observing Iran’s declared red lines, including effective economic guarantees,” Amirabdollahian was quoted as saying. For his part, Borrell said he believed most of Iran’s demands have been met and that the talks to restore the Comprehensive Plan of Action (JCPOA), as the deal is formally known, are on the path to their conclusion. Iran has called for a wide scope of sanctions – including a “foreign terrorist organisation” designation for the Islamic Revolutionary Guard Corps – to be lifted; a mechanism to verify the effective lifting of sanctions and guarantees the United States will not abandon the deal again, as it unilaterally did in 2018. Click here to read... [22]

Analysis: Gulf states cautiously navigate war on Ukraine

The six Gulf Cooperation Council (GCC) states have high stakes in this war. As countries that have historically deep ties to the West, but also have multifaceted relationships with Russia, regional leaders are cautiously navigating this conflict. Despite all GCC members voting earlier this month in favour of a United Nations General Assembly resolution to condemn Russia’s invasion, Gulf monarchies are somewhat divided. On one side of the spectrum is Kuwait, which has aligned its positions on this war most closely with Western powers that stand against Moscow. Last month, when a UN Security Council resolution blasted Russia for assaulting Ukraine, Kuwait was the only Arab state to be on the list of 80 co-sponsors. It is important to note while Qatar has stood up for Ukraine’s sovereignty, Doha is not joining Western powers in advocating financial warfare against Russia. Having developed deeper ties with Russia in the spheres of investment, infrastructure and tourism, Qatar wants to avoid burning bridges with Moscow. Saudi Arabia and the United Arab Emirates (UAE) have been far more careful to maintain neutrality. The UAE and Saudi Arabia have been pivoting east to Russia, China and India. This means that amid conflicts between the West and Moscow, the leaders in Abu Dhabi and Riyadh will be careful to maintain geopolitical balance. Click here to read... [23]

Declassified papers reveal extent of US military aid to Ukraine – media

The US has drastically increased its shipments of lethal aid to Ukraine since late last year, including weapons and gear for urban combat, the Washington Post reported on March 05, after viewing declassified accounting for transfers and sales. According to the Pentagon's paperwork, from as early as December Washington had been actively equipping the Kiev government with shotguns, special suits for explosive ordnance disposal and other items useful for combat in urban areas – that's more than two months before the Russian invasion occurred. And over the past week the deliveries of American arms to Ukraine intensified further, with Kiev getting Stinger anti-aircraft missile systems for the first time and boosting its arsenal of anti-tank Javelin missiles, among other things. The list has illustrated the great extent to which the Biden administration “sought to prepare the Ukrainian military to wage a hybrid war against Russia,” the Washington Post added. Some $240 million out of the $350 million in lethal aid that had been approved in late February has already been supplied to Ukraine, according to a senior defense official. This adds to around $200 million in military assistance that Washington greenlighted for Ukraine in late December, sending M141 single-shot shoulder-launched rocket launchers, M500 shotguns, Mk-19 grenade launchers, M134 miniguns and other gear to the country. Click here to read... [24]

US gives NATO countries ‘green light’ to provide fighter jets to Ukraine

US Secretary of State Tony Blinken told CBS News on March 06 that Washington has given a “green light” to NATO members to supply Ukraine with fighter jets, and that the US would work to replace any jets sent to Kiev. Blinken spoke after Ukrainian President Volodymyr Zelensky urged US lawmakers to intervene in the ongoing conflict with Russia. Asked whether NATO members could begin sending planes to Ukraine, Blinken said “that gets a green light.” The US’ top diplomat then said that Washington was already working with Polish officials to “backfill” any aircraft they send to Ukraine - meaning the US would replace every Polish aircraft given to Kiev with an American one. Supporting the delivery of jets to Ukraine occupies a middle ground for the US between active intervention in Ukraine and purely economic retaliation against Moscow. The US and NATO have ruled out a no-fly zone, and repeatedly stated that they would not send troops to Ukraine. However, delivering fighter jets to the Ukrainians has not proven simple thus far. The European Union pledged warplanes to Ukraine late last month, but faced two significant hurdles: first finding jets that Ukrainian pilots could fly, and then finding countries willing to deliver them from their airports.Click here to read... [25]

Any countries imposing no-fly zone over Ukraine party to conflict: Putin

Russian President Vladimir Putin warned March 05 that any country imposing a no-fly zone over Ukraine would be considered by Moscow to have entered the conflict. Ukrainian leader Volodymyr Zelensky has pleaded with the West to support a no-fly zone as his besieged country resists Moscow's invasion, but allies have so far ruled out such a move, fearing it would escalate into a wider war with nuclear-armed Russia. Putin warned that a no-fly zone would have "colossal and catastrophic consequences not only for Europe but also the whole world". "Any movement in this direction will be considered by us as participation in an armed conflict by that country," the Russian leader said during a meeting with employees of national airline Aeroflot. He also suggested Ukraine could lose its statehood if it continues along this path. "The current (Ukrainian) authorities must understand that if they continue to do what they are doing, they are putting in question the future of Ukrainian statehood. And if this happens, they will be fully responsible," he said. Click here to read... [26]

South Korean COVID-19 patients to place ballots directly into boxes

The National Election Commission (NEC) decided March 07 to allow COVID-19 patients and those in quarantine to place their completed ballots directly into the ballot boxes in March 09's presidential election, after others finish voting. The decision comes after the election watchdog took criticism for its improper handling of COVID-19 patients' ballots during early voting on Saturday, as NEC workers collected patients' votes in unofficial containers, sparking concerns about the integrity of the election. Despite the NEC's new guidelines, a backlash may occur after the election, as the presidential race is expected to be the closest one in Korea's history. During its emergency meeting, the NEC decided to allow coronavirus patients to put their completed ballots in the ballot boxes by themselves from 6 p.m., March 09, after the regular polling ends. COVID-19 patients and those in quarantine are allowed to vote from 6 p.m. to 7:30 p.m. During the early voting period on March 06, COVID-19 patients and those in quarantine began filling in votes from 5 p.m. while other voters were also still casting their ballots. To avoid contact between them, the NEC required COVID-19 patients to vote in separate polling booths and election workers collected their votes in paper bags, parcel boxes and even plastic trash bags, and put the ballots into the official ballot boxes on behalf of the voters. Click here to read... [27]

Arms industry eyes boost as Europe looks to bolster defences

Russia's invasion of Ukraine has catapulted defence spending up the political agenda in Europe and could herald a new era of purchases led by Germany, according to weapons makers gathering at an arms fair in Saudi Arabia this week. The World Defense Show, where Europe's Airbus, MBDA and Leonardo are exhibiting alongside nearly 600 other weapons makers, is taking place amid the largest assault on an European state in 70 years. The conflict has reignited interest in security issues after years of European defence spending cuts and fatigue following NATO failures in Afghanistan. Germany, which has long played down the role of its military in foreign policy, Denmark and Poland have all said they will ramp up defence spending with war at their doorstep. "There was peace for decades and people thought there would be peace forever. Unfortunately, that assumption has been proven wrong," Hristo Ibouchev, the executive director of Bulgarian firearms and munitions maker Arsenal, told Reuters. German Chancellor Olaf Scholz has said Berlin could buy F-35 stealth warplanes from the United States, but also that future advanced weaponry would be purchased from European consortia. Click here to read... [28]

Australia to build nuclear-submarine base as PM warns of Ukraine war spillover

The Australian government will spend at least A$10 billion (US$7.4 billion) building a new base to house a future fleet of nuclear submarines, as Prime Minister Scott Morrison warns the war in Ukraine will “inevitably stretch” to the Asia-Pacific. Morrison announced the project, the first construction of a major new base in Australia since the 1990s, in a foreign policy speech in Sydney on March 07. The Defence Department has selected three possible east coast locations for the submarine facility – Newcastle and Port Kembla in the state of New South Wales and the Queensland capital of Brisbane. In his speech to the Lowy Institute, Morrison warned against rising militarisation and attacks on liberal democracies in the Asia-Pacific region, saying “Australia faces its most difficult and dangerous security environment in 80 years”. News of the base comes as Morrison seeks to burnish his national security credentials ahead of an election that must be held by the end of May, with the prime minister’s centre-right Liberal National coalition badly trailing the opposition Labor Party in opinion polls. Australia already has one submarine base on the country’s west coast, where its ageing fleet of Collins-class submarines are based. Morrison said the west coast base will continue to operate even after the new facility is completed. Click here to read... [29]

Medical

Scientists identify new gene differences in severe COVID-19 patients

Scientists have pinpointed 16 new genetic variants in people who developed severe COVID-19 in a large study published on Mar 7 that could help researchers develop treatments for very sick patients. The results suggest that people with severe COVID-19 have genes that predispose them to one of two problems: failure to limit the ability of the virus to make copies of itself, or excessive inflammation and blood clotting. The scientists said their discoveries, published in the journal Nature, could help prioritise the likely treatments that could work against the disease. Eventually, the information could even help predict which patients were likely to become severely ill. "It is potentially possible in future that we will be able to make predictions about patients based on their genome at the point of presenting (for) critical care," said Kenneth Baillie, consultant in critical care medicine at the University of Edinburgh and one of the study authors, told reporters. The genetic analysis of nearly 56,000 samples from people in Britain showed differences in 23 genes in COVID-19 patients who became critically ill, when compared with the DNA of other groups included in the study, including 16 differences that had not been previously identified. The new findings could help guide scientists in their search for existing drugs that might be useful for treating COVID-19. Click here to read... [30]

Major EU nation ditches Covid-19 passports, face masks

Starting March 14, people in France will no longer need to present a Covid-19 passport to attend indoor public venues, French Prime Minister Jean Castex announced on March 03 in an interview with TF1. The head of the French cabinet said the situation with the pandemic was improving “thanks to our collective efforts,” allowing the country to lift some restrictions. Face masks will no longer be mandatory in less than two weeks in France, except for passengers on public transport, the official said. Elderly people will still need to show proof of vaccination to access elderly home care, Castex said, while caregivers will have to be vaccinated to work there. In the same interview, the prime minister discussed details of the plan to cope with the fallout from the Russian military action in Ukraine and Western sanctions imposed in retaliation. President Emmanuel Macron on March 02 announced that the country will take steps to make its economy more resilient, as he delivered a speech to the nation. He said he will work to protect France’s most vulnerable industries by finding new supply routes and markets for them. Click here to read... [31]