The Arkin Group

April 28, 2023

Russia continues its physical and ideological attacks, but Ukraine and allies are holding their ground. It’s been nearly two months since Russia had the audacity to attack Kyiv, but on Friday, Putin renewed his attack on the capital city and broader nation. Ukraine’s air defense reportedly shot down over 10 Russian cruise missiles in Kyiv airspace, but a barrage of Russian missiles killed at least 17 people in the central Ukrainian cities of Uman and Dnipro, including two children. The intense wave of attacks is in line with Russia’s complete disregard for attacking civilian targets and infrastructure and supports the UN’s latest findings that Russian forces and private military companies in Ukraine have perpetrated significant human rights violations over the course of its unprovoked invasion.

In response to Friday’s attacks, Ukrainian President Zelenskyy quickly issued a request to his allies for more air defense supplies. And Zelenskyy has consistently demonstrated that if his troops are well-supplied, Ukraine can prevent a Russian advance. While there’s currently a lot of chatter about an upcoming Ukrainian counteroffensive, the fact that Ukraine can defend Kyiv as effectively as it did on Friday demonstrates how far the discussion has come. Over a year ago, when Russia first invaded, Ukraine surprised much of the world by its ability to hold Putin at bay. These days, Russia is exerting great effort just trying to maintain control of one city, as the back and forth on Bakhmut continues.

Indeed, given the initial projections of Russian military dominance, holding the line is itself a type of victory for Ukraine. This week, Zelenskyy had a long phone call with Chinese President Xi, indicating that China might be growing tired of the war’s negative global economic ramifications. Xi said that he’d send special representatives to Ukraine and hold talks with all parties on resolving the crisis. But as Russia ramps up his attacks, and Ukraine continues to defend itself effectively, the circumstances just aren’t conducive to ceasefire. And based on Putin’s historic behavior, the Ukrainians don’t have any reason to believe that Russia would be satisfied with one.

In addition to the physical attacks on Ukraine, Russia is excessively attacking opposition figures and attempting to expand the definition of cybercrime to repress dissent. Earlier this week, Russia handed an extraordinarily high 25-year prison sentence to Vladimir Kara-Murza, an opposition activist who was charged with treason and spreading false information about the Russian military after speaking out against the Ukraine invasion. After the sentencing, Kara-Murza’s lawyer, who has defended other prominent Russian activists and dissidents, was also compelled to flee the country due to a warning that there was “interest” in him.

Russia’s fierce desire to contain any counternarrative about its leadership and policies is also visible in its consistent protest of global cyber cooperation. A UN panel just finished another round of negotiations on a new international cybercrime treaty and a draft is expected by June. But Russia has unsurprisingly advocated for the treaty to expand the definition of cybercrime to include greater control of information and speech. Russia’s hesitation is, of course, also complicated by its state-level involvement in perpetrating cybercrimes. While the goal of the new treaty is international cooperation on cybercrimes, Russia has protested previous such agreements like the Budapest Convention due to concerns that it encroached on national sovereignty. Indeed, Russia is unlikely to sign-off on the latest cyber treaty, but the nation’s desire to criminalize free speech on a global level is further proof of just how repressive it’s become.

April 20, 2023

Brazilian President Lula’s recent visit to China brings the BRICS back into the spotlight, but the seeds for multipolarity were planted years ago. This week, Brazilian President Lula da Silva’s trip to Beijing reinvigorated the discussion of multipolarity and distributed alternatives to Washington’s economic dominance. Despite broader rhetoric on reducing the role of Western-dominated financial institutions, what Lula really wants from China is investment to help rejuvenate Brazil’s industrial sector. When Lula speaks of multipolarity, as he has done for decades, he means that his country wants options. And China offers finances without many of the regulatory restrictions imposed by the European Union or Washington.

The concept of the BRICS – Brazil, Russia, India, China, and South Africa, was originally coined by members of the US financial industry for the purpose of spotlighting investment opportunities. But thus far, the group has struggled to fully live up to its potential- the Brazilian economy contracted last year, China suffered economic fallout from its zero-Covid restrictions and Evergrande crises, South Africa’s economy contracted more than expected in late 2022 due to its failing power grid limiting industrial growth, and India’s economic growth is also anticipated to decrease in the near term. Russia, of course, is locked in an expensive and self-destructive war with no end in sight.

The BRIC countries, aware of their growing potential, held their first formal summit in Russia in 2009, and the concepts that the group discussed then were close to what they are now. The group still wants alternatives to the US Dollar and over the years has been inching towards this goal. BRICS members have increased the use of their own currencies when trading with one another and jointly established the New Development Bank in 2014- as a hopeful rival to US-dominated institutions like the World Bank. Since 2022, Russia, under sanctions, has also been advocating to create a common currency among BRICS members.

Although challenging the dollar’s hegemony has been a consistent BRICS theme, so long as the United States remains the dominant global economy, there isn’t much of a credible alternative. The group’s potential collaborative financial prowess is also impeded by a deep-seeded China-India rivalry. Further, over the decades of leadership, Washington has gained unique insights and refined its financial policies, whereas China is new to the challenges of being a global lender. What has quietly been sowed over the course of the BRICS years, however, is the investment that China and Russia have made throughout the developing world- including a concerted propaganda effort to present the West as responsible for all global financial and geopolitical woes.

Both China and Russia have looked to Africa for investment opportunities, but their efforts have been weakened by Russia’s war on Ukraine. In Africa, Russia has been diligently presenting itself as an alternative to the West for security cooperation, energy, and natural resource exploitation for years. It’s also been actively curating local media to shamelessly present its invasion of Ukraine as an act against Western dominance. With the upcoming Russia-Africa summit to be held for the first time post-Covid, battle-torn Russia will try to further reap the political rewards of its ongoing investment efforts. But Ukraine has fully commanded Putin’s attention and he doesn’t have as much to offer as in previous years.

China has also invested heavily in infrastructure throughout the continent via its Belt and Road Initiative. So far, this seems to be a double-edged sword, particularly as myriad loan recipients are suffering from the economic reverberations of Russia’s war. Chinese policies to maximize debt repayment have turned ugly in places like Sri Lanka and Zambia, with China ostensibly afraid that it will lose too much from some of its riskier investments. This struggle could ultimately play out with China deciding to collaborate with multilateral financial institutions or, more likely, doubling down on its own strategy.

As the BRICS are set to meet for their 15th annual summit this summer in South Africa, the group is expected to discuss expanding its membership, with countries like Algeria at the forefront. Putin has also reportedly accepted the invitation to attend the summit, but as South Africa is a signatory to the Rome Statute and is required to comply with the International Criminal Court, it would be expected to arrest Putin should he step foot within its territory. The topic is already making waves within local South African media, and it’s uncertain exactly what will happen. What’s clear, however, is that while Putin has invested heavily to control the narrative in Africa, his ongoing invasion of Ukraine is likely to challenge his alliances.

A View from Abroad

Once a month, In Other News features a short op-ed heavily informed by the European perspective. We hope that these special monthly pieces will offer our readers an enriched understanding of global events and allow for a more robust international risk calculus.

President Biden’s upcoming visit to Northern Ireland on the 25th anniversary of the Good Friday Agreement indicates a potential shift in UK politics. In the aftermath of the Brexit referendum, economic decisions have been tightly interwoven with political ideology in the United Kingdom. But since UK Prime Minister Rishi Sunak took the helm last October, his economic policies appear to be primarily driven by pragmatism. Still, it’s uncertain if Sunak is truly adapting his ideology or instead believes that without immediate measures to promote a stronger UK economy, ideology won’t matter because his party will lose the next election.

Under Brexit, UK trade with Europe, and subsequently the UK economy, has faced myriad challenges. The UK’s reluctance to negotiate more constructively with the EU about issues resulting from the Ireland- Northern Ireland Protocol also created political and economic problems in Belfast. But Liz Truss’ departure from office last fall was a turning point, and Sunak and Finance Minister Jeremy Hunt have been quick to make some practical changes.

Hunt immediately reversed several aspects of Truss’ ineffective mini budget, thus stabilizing the financial markets and the pound exchange rate. The Foreign Affairs and Defense Ministers also updated the national security strategy to again incorporate the European Union as an ally. The latest security Integrated Review seeks to balance UK ambitions and financial means, toning down the rhetoric of ‘Global Britain’ and repositioning the nation in line with its capacities, stressing the need for cooperation with like-minded friends.

Sunak has also been trying to ameliorate the political struggle in and about Northern Ireland. Over the past several months, his team has quietly negotiated a solution, establishing the Windsor Framework agreement to replace the doomed Ireland – Northern Ireland protocol. In principle, Sunak’s government’s agreement with the EU on Northern Ireland has been approved by the House of Commons in London, but it has yet to re-start Parliamentary work in Belfast. Nonetheless, the agreement opened the possibility of President Biden’s upcoming Good Friday Agreement anniversary visit. Notably, Sunak is also expected to discuss a free trade agreement with Biden at the upcoming meeting.

Sunak’s government has also encouraged collaboration with the EU on issues like scientific cooperation in the Horizon program, information exchange in the financial sector, agreement on data sharing and especially cooperation in the foreign and security field. He recently held a French-British summit in Paris reconnecting the two countries in friendship and concluded a deal on countering illegal migration. Finalizing the AUKUS agreement on delivering nuclear submarines to Australia together with the United States was another international success.

These efforts have led many to question if Sunak is ultimately placing country before party, but it’s too early to say how his strategy will play out. Given the financial situation that he inherited, however, facing the next round of elections in 2025 without economic improvements would be tantamount to political suicide for the Conservative party. Sunak is making strides, but he isn’t there yet, and every month in the United Kingdom approximately 250,000 people face a tripling of their mortgage payments, as interest rates have soared.

Meanwhile, the Labour Party is also working to strengthen its position. The group is isolating its far-left wing and reaching out to society and business, with the slogan ‘Labour is back in business’ – promising a dialogue when developing its policies once in power. That bodes well for continuity in the return of practicality in the coming period. Indeed, regardless of the outcome of the next election, if both the Conservative and Labour Parties are actively sidelining their more extreme elements, more pragmatic political and economic policy making could return to the United Kingdom.

Help Ukraine Defeat Russia, Then Make Friends

The West neglected Moscow after the Cold War. Helping to defeat Putin would give us another chance.

By Jack Devine
April 11, 2023 6:20 pm ET

A short-term focus on the battlefield shouldn’t stop us from seeing the unique opportunity Ukraine provides to reset the balance of power in favor of supporters of democracy and freedom worldwide and to sideline the emergent autocratic alliances between Russia, China, Iran and North Korea. The way to do it is to defeat Vladimir Putin and then make friends with Russia.

Read the full article clicking here

April 7, 2023

Russia might be inching forward on the battlefield, but it’s a painstaking process met with heavy headwinds on multiple fronts. The battle for the Ukrainian city of Bakhmut may be nearing a close as the Wagner Group alleges that it has gained control in the east of the city. Still, if we’ve learned anything in the past 13 months, it’s to never underestimate the Ukrainians! This high cost “victory” in Russia’s eyes would prompt Moscow to try and lay claim to the whole of the Donesk region, a pyrrhic victory when looked at in light of many public intelligence assessments stating that Russia is currently ill-equipped in strategy, men, arms and ammunition to take much more territory this year. And this bleak assessment factors in the extra civil mobilization, disappointing springtime surge, and drone procurements from Iran.

The intractability of the diminishing prospects of the situation seems to be tacitly acknowledged by Putin’s arrest of the WSJ journalist who reported on the growing effects of sanctions on the Russian economy. In addition, Putin’s agreement with OPEC to decrease oil production to keep prices higher, his recent announcement of an additional surge, and his nuclear sabre rattling announcing nuclear storage facility construction in Belarus also indicate that his situation is increasingly untenable.

Indeed, the longterm economic and political effects of the invasion are also coming home to roost with a remarkable diminishment of Russian intelligence capability on Western soil. Over the past year, there have been several reported occasions where Russian intelligence efforts have been notably disrupted by US and European security services, and this week the director of the Finnish Security and Intelligence Service remarked that the Russian intelligence station in Finland is now half of its former size. Like many European nations, ever since Putin invaded Ukraine, Finland has been expelling suspected spies and refusing visas to any potential agents.

Further, Russian deep-cover spies, like Sergey Cherkasov, who was recently indicted by US authorities for being an “illegal” operative of Russia’s GRU military intelligence agency after allegedly feigning Brazilian citizenship, have also been unmasked. The Russians are now left with fewer valuable human assets and are likely to dive even deeper into cyberespionage. Russian has focused much of its recent intelligence operations within Ukraine with mixed success, but the intensely local effort detracts from Moscow’s international aspirations, and what Putin may be coming to realize is that his pertinence as a global player may be soon obsolete.

Meanwhile, potential parallels between Ukraine and Taiwan were again evoked this week as Taiwanese President Tsai Ing-wen met with House Speaker Kevin McCarthy during a stopover on US soil. Despite the uproar, the timbre and location of this visit is a sign of the U.S. trying to temper Chinese anger given that McCarthy switched up his plans to travel to Taiwan and revert to a meeting method that has occurred six times previously within the framework of the U.S. policy of strategic ambiguity. Taiwan, a critical US supplier of semiconductors, is feeling a growing diplomatic isolation because of a concerted and longstanding Chinese campaign to deprive Taipei of international recognition as several African and Central American countries have cuddled up to Beijing. Interestingly, the former President of Taiwan Ma Ying-jeou traveled to China this week, the first trip ever made by an acting or former President of the island, suggesting that there are domestic political calculations ongoing within Taiwan of those fearful of a Chinese invasion.