The Arkin Group

March 23, 2023

Little of real substance emerged from the meeting from Xi and Putin other than platitudes about their enduring special relationship. Riding high from the Chinese brokered peace deal between Saudi Arabia and Iran, Xi was able to have yet another photo op brandishing his proposed peace deal between Russian and Ukraine. While the Saudi-Iranian deal is full of promise but short on details, this deal is a non-starter and Xi shows little interest in pushing Putin to get to a real place for meaningful negotiations with Kyiv.

While China speaks of its desire for peace, what Xi is most interested in is projecting to the world (especially the Global South) the emergence of new Chinese global leadership free from what he would term the shackles of the West’s hegemonic influence. Xi is offering a new sort of alliance to many of the world’s leading oil and gas purveyors – Iran, Russia, Saudi Arabia, Iran – that offers a bolstered market for their oil and gas but also an alternative world order. But what that really means is a world free from international norms for territorial sovereignty, human rights, and political freedom, free from pesty regulations of transparency and accountability, free from the rule of law, free from much of the international order that keeps the global economy functioning and has on balance ushered the greatest period of political stability that the world has ever known.

It is a curious gamble that Xi is coming out so boldly on this regressive, petrochemical-heavy vision for the world economy when the imperative posed by climate change and water shortages (underscored by the UN Water Conference being held this week) require alternative energies and technologies and a reinforced global cooperation that can only take place within the framework of an international order. It is possible that there is more bluster and posturing behind these efforts than real enduring power. Xi has real domestic challenges whether it be his flailing housing sector to an existential demographic crisis of population decline. His efforts may have a shorter horizon to shore up cheaper energy to help subsidize an economic recovery and to make marginalized leaders in Moscow, Tehran and Riyadh more beholden to him.

Still, there’s strong reason to believe that many of the Global South are taken in by these grand gestures buttressed by a decade’s long investment-cum-diplomatic campaign in Belt and Road. It is a critical time for the West to realize both the strategic import of this part of the world and the strategic opportunity to make an alternative, sustainable case for international cooperation opposed to what is essentially long-term fealty to an autocratic and ruthless Beijing regime.

March 17, 2023

Emboldened by an unprecedented third term, Chinese President Xi’s ambitions are inciting many firsts. In a meeting with members of the Chinese private sector in early March, President Xi accused Washington of enacting a policy of “containment” towards China- a term fraught with negative historic connotation and economic implications. This inaccurate, binary description of the relationship supports Xi’s recently announced vision of a new world order, “the global civilization initiative”, which unsurprisingly seeks to put China at the helm and minimize Washington. But Xi’s attempts to reinvent Chinese foreign policy and capitalize on the global uncertainty stemming from the Russian invasion of Ukraine are not going unchallenged.

It’s also increasingly clear that China’s demands as the world’s second largest economy are what’s informing its new geopolitical strategy. Last Friday, China brokered a historic deal between Iran and Saudi Arabia. It’s unusual for Beijing to step into the role of global mediator, but China is now Saudi Arabia’s top trading partner, and regional stability in the Gulf has assumed new significance. With its great energy dependence and appetite, China can’t afford unstable suppliers, and we can anticipate Beijing to again take up the role of global statesman in other regions where its economic interests are at stake.

It’s also in Russia’s interest to have a stable Gulf as its economic relations and weapons-dependence on Iran have increased over the course of its Ukraine invasion. But as Russia continues to attack Ukraine with no discernable end in sight, China might be angling to serve as a mediator between the battling nations. There are economic implications here as well- China’s trade with Russia hit a record high of $190 billion last year. Riding his success as a Gulf negotiator, Xi is anticipated to travel to Russia as soon as next week and he’s expected to have a phone call with Ukrainian President Zelenskyy after the visit. This would reportedly be the first conversation that the two leaders have had since the onset of the war.

But just as Xi has been establishing political alliances in its effort to take the global lead, Chinese efforts have incited the need for stronger alliances among its adversaries. On Thursday, Japan and South Korea met in Tokyo for their first summit in over a decade. Hours before the meeting, North Korea expressed itself by launching a long-range missile that landed in waters west of Japan. The threat from China and North Korea has necessitated that Japan and South Korea overcome their historic disputes and rebuild their economic and security relations; further developments here are anticipated.

In addition, the Australia-United Kingdom-United States “AUKUS” security pact, founded in fall 2021, is advancing its efforts to increase security in the Indo-Pacific region. This week, the trio announced that Australia will be getting its first nuclear-powered submarines, a least three of them from the United States. The issue of owning a nuclear-powered fleet has been contentious in Australia, which is committed to being a nuclear-free country. President Biden was quick to stress that the subs would be nuclear-powered, not nuclear armed, but it’s the Chinese who appear most miffed.

The subs will grant Australia with the ability to travel farther and more quickly, and potentially carry out long-range strikes as needed. The nuclear fleet underscores the imperative for regional security and the threat imparted by Beijing. While Washington’s previous efforts on Asian security were primarily in the form of bilateral agreements, there is now an incentive to empower independent interactions among regional allies. But it’s murky territory, as by now many regional players like Australia have strong trade relationships with China, and it’s unclear if Beijing will seek to economically punish them for upping their physical defense.

March 9, 2023

Recent events demonstrate that post-Soviet states are wary of fully aligning with Putin. Russia’s invasion of Ukraine has had a widespread impact on global food, energy, and geopolitics, but it’s also directly impacted the stature and political strategy of Russia’s post-Soviet neighbors. These countries are now grappling with how to navigate and reshape their historic, political, and economic ties to Russia given the increasingly threatening and unstable regional operating environment. Some countries have decided to fully turn their back on Putin, while others are striving to balance the demands and needs of multiple global powers to their strategic advantage.

The struggle was visible this week in Tbilisi, Georgia where citizens took to the streets to protest a new Putin-esque legislative proposal. The proposed bill would have required Georgian organizations to register as “foreign agents” if they received more than 20% of their funding from abroad. The bill smacks of similar legislation that’s been active for years in Russia to curb internal dissent. Fortunately, the Georgian government responded to the sizable opposition of its citizens, and advice from EU leaders, and announced on Thursday that it will be dropping the proposed bill.

One of the primary concerns of the bill, in addition to the anti-democratic implications of such legislation, comes from Western-facing Georgians who want to join the European Union. To do so, Georgia can’t be viewed as a corrupt, authoritarian state operating under Putin’s shadow. Likewise, over the past few years, Moldova’s President Sandu has been leading her nation on a track to EU membership. But it’s complicated, because there are influential factions of society within these post-Soviet states that are still more inclined to side with Russia. What’s notable right now, however, is that other post-Soviet nations that aren’t even vying to be closer to the EU or NATO still don’t want to fully align with Putin.

Indeed, conditions have shifted for Central Asian countries that have previously relied heavily on Russia for security and economic opportunities. Russia can’t be everywhere at once, and its military presence in Central Asia has declined over the past year. Further, many of these nations physically move their goods through Russia and are nervous about the continued impact of sanctions on their exports. Central Asian leaders have also noted Putin’s diminished role as a regional mediator. At the Munich Security Council meeting a few weeks ago, it was US Secretary of State Antony Blinken who met on the sidelines with the Armenian and Azerbaijani leaders to discuss peace prospects for the Nagorno-Karabakh conflict. Previously, Putin brokered the most recent peace deal.

In the Nagorno-Karabakh conflict, and in other areas of regional strife, Washington is presenting itself as a partner, not necessarily a mediator. This is a strategic play, because picking sides between Washington and Moscow is a risky proposition for many post-Soviet states who are more inclined to seek balanced relations between major powers. Further complicating their strategies, Central Asian countries also need to carefully manage their relations with Beijing. Balancing the needs and impact of these global heavyweights is going to be important for the economic and physical security of Central Asian states moving forward, and they don’t want to put all of their eggs in Putin’s basket.

Indeed, Russia’s Ukraine invasion has disrupted the paradigm and the United States has a chance to play an increased role as a partner in the region. This opportunity, while not a clear win for Washington, is still a loss for Putin who has been trying to exclusively dominate the area for decades. Just less than two weeks ago, Secretary Blinken visited Kazakhstan and Uzbekistan and attended the first ministerial-level engagement in the region of the C5+1 Diplomatic Platform – including Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan, since 2015. Blinken’s visit signals a change in how Washington is approaching the region. Instead of focusing on how these states can help US efforts in Afghanistan, the focus will now be on empowering these nations to avoid being coopted by aggressive neighbors.

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.

The German-French relationship is still the beating heart of the European Union and it needs to stay healthy. In late January, 60 years after France and West Germany signed the Treaty at the Élysée, French and German heads of state again met in Paris to reconfirm their bilateral friendship. It’s more critical than ever that French President Macron and German Chancellor Scholz overlook their rocky start and present a united front against Russian aggression. The French-German relationship generally propels the EU, but since Brexit in 2020, this relationship has become even more important. When Germany and France are in alignment, the entire EU profits. But when they diverge, it threatens to grind the EU to a halt. Right now, there’s too much at stake for the EU to be anything less than fully functional.

Germany is the largest European country in terms of landmass, population, economy, and budget, but it sometimes appears to lack the self-confidence of France. Traditionally, within the EU, France took the lead on foreign policy and defense matters, while Germany, given its size, dynamism, and innovation, took the lead on economic matters and government financial policies. With the Russian invasion of Ukraine, however, this balance between Germany and France has shifted.

Under the heading of “Zeitenwende”, Scholtz decided to increase Germany’s defense budget above the NATO agreed level of 2% GDP, investing a total of 100 billion Euros in defense. Paris had hoped this money would help fund joint European defense industry projects, but instead the first German decisions point in a different direction. Indeed, in a move that disappointed France but is indicative of Germany’s security priorities, the Germans moved to purchase F 35’s fighter planes off the shelf from the United States and Arrow 3 missiles for air defense from Israel.

On the economic and government fronts, tensions between Paris and Berlin were visible in the energy dossier last year. The energy market price challenges resulting from cutting off Russian products led to substantive compensation packages, government subsidies and price ceilings in Germany. Only with great difficulty and strong French insistence were these translated on the European level. More generally, France wanted higher EU spending and EU-guaranteed national lending, while Germany, which would have to cover a relatively larger part of the cost, was more hesitant. Further, while France believes its focus on nuclear energy has been validated by current events, Germany persists in phasing-out nuclear energy.

Judging from the outcome document of the Élysée summit, however, discord and discussions are being set aside to ensure a joint vision for the future. And while coherence among EU members on investing in extra defense capabilities is self-evident and hardly original, there are some notable new initiatives that will require innovative solutions and collaboration between France and Germany. There’s fresh and increased security focus on both cyber and space – areas where buying products off the shelf is not feasible. The same applies to renewable energy initiatives, where bilateral investments in hydrogen, decarbonization, nuclear fusion and new battery technology will be necessary to translate the vision into reality.

Completing projects like the European Capital Market Union, the European Banking Union and enhancing the European Technology Champions Initiative are additional EU goals that will require support from both nations. Both Germany and France will be implemental for further institutional EU reform, by enhancing QMV voting, areas where no full unanimity is needed to make decisions, and modernization of EU electoral law provisions. Additionally, a joint investment in cultivating a younger generation of leaders, through the Génération Europe – Jeunes talents franco-allemands/Generation Europa: Deutsch-Französische Nachwuchskräfte initiative, shines in stark contrast to the UK’s decision after Brexit to no longer participate in EU student exchange program Erasmus.

These projects are promising and present areas of joint opportunity for the French and Germans. And if the two nations can continue to work through their areas of division, as demonstrated in more recent weeks, the EU will be all the stronger because of it. Needless to say, as the battle between Russia and Ukraine shows little sign of stopping, there’s no more important time for EU to be a strong and positive democratic global force.

February 23, 2023

History will look back at the Russian invasion of Ukraine — that took place a year ago today — and say that this was a defining inflection point in global realignment. What is most striking is how very disruptive the invasion has been and how the downstream effects have prompted strategic pivots from nearly all parties. A flailing NATO was reinvigorated and a resonant counter narrative to the global rise in autocracy began to crystallize in the zeitgeist. What’s more the undergirding tenants of economic cooperation stood strong with countries and private corporations largely complying at their own initiative to the international sanctions regime. Europe weened itself from Russian energy incurring a cost no one expected it to bear and prompted an accelerated shift to clean energies, concurrently depriving Russia of its biggest leverage with Europe. Supply chain disruptions from Covid were exacerbated, catalyzing an enduring effort to diversity supply chains away from China. China’s role as an essential partner for Russia is undeniable but Russia’s role for China is less that of a strategic partner and more that of a useful pawn who can distract Western attention away from the South China Sea and China’s own regional expansion ambitions. Still China’s support for Russia will remain circumscribed by the importance of its trade relationships with the West. Perhaps most stark is this diminishment of Russia’s strategic agency as an energy exporter and viable strategic threat to Europe;: if Russia cannot win against Ukraine, then it doesn’t hold a chance against Europe. This reality has prompted a heightened risk of domestic political trouble within Russia coming from its Far Right flank.

As the war is likely to drag on for some time, this global realignment will continue and in step with it will be a battle for predominance in the 21st century between China and the West. Already, traditional alliances and partnerships in the Middle East are shifting, whether it be Turkey’s irksome role holding up NATO expansion, the ambiguous positioning of Israel, UAE, and Saudi as traditional U.S. allies, or Iran and Russia’s newfound brotherhood of de facto rogue states who are more and more likely to engage in active measures and asymmetrical mischief. The assertive neutrality of India, South Africa, and nearly the whole of Latin America underscores the critical role that the Global South will now play in matters of international diplomacy and geopolitical problem-solving including war, energy, food, resources, and addressing climate change. What is at stake is whether the international system of governance and its institutions will ultimately hold. The war has brought to the fore a realization that the past several decades have brought unprecedented peace and prosperity to the world (with the glaring exceptions of the Middle East and Afghanistan) and this entire system is currently under strain from Russia’s abrogation of the tenant of territorial sovereignty and its willingness to breach international norms of war and commit human rights abuses. There is an opportunity here for the West to try and turn the page for its own wars of choice and make a case for a reassertion of Western democratic values with its trademark rule of law, and investment to fill the emergent vacuums being left by China’s faltering Belt and Road initiative. China will continue to press the case for multipolarity and alternative centers of influence away from the West. The greatest threat to the West may be its own resolve threatened by internal political dynamics, whereas Xi and Putin have demonstrated time and time again how they will not countenance even a modicum of domestic dissent.

And yet perhaps the most enduring observation to take away from this last year is the indomitable strength of the Ukrainian people’s desire for self-determination. Only history will tell how the fault lines will eventually settle but there is enormous resilience, innovation, and brilliance to be found in the will to resist. And that is something to never be underestimated.

February 17, 2023

One year after the Russian invasion of Ukraine, the regional fight for justice has global implications. At this time last year, Western politicians, journalists, analysts, and intelligence officials were heatedly debating whether Putin would have the audacity and political support to invade Ukraine (again). Today, at the Munich Security Conference, Ukraine’s Western allies are instead trying to figure out how to support Kyiv for the long haul, as fears of a prolonged conflict loom large. It’s also become increasingly clear that the outcome of this regional battle will establish a precedent for global geopolitical conditions to come.

Regionally, Putin’s disregard for human life has been on full display. Within its own borders, Russia has recruited prisoners, exploited its poorest and most desperate citizens, arrested, tortured, and killed political dissidents, and turned against members of its minority populations. In Ukraine, Putin’s army has attacked civilians and civilian infrastructure, tortured and raped women and minors, and forcibly separated thousands of Ukrainian children from their families to “re-educate” them at Russian camps.

Further, as the war’s anniversary approaches, Putin’s cronies are organizing a mass action to celebrate the Russian military in an event termed “The Heroes of Our Time.” Attendees will be able to record videos of themselves in front of war memorials and craft goods to send to the frontlines. The regime is also encouraging citizens to paint murals honoring the troops across Russian cities, thereby enlisting regular people as propaganda artists, and coordinating meetings between soldiers and Russian schoolchildren. It will all culminate in a Moscow rally where Putin is expected to speak.

Meanwhile, thousands are dying on the battlefield, and the fight is increasingly intense in Eastern Ukrainian cities like Bakhmut and Vuhledar. The discussion at the Munich conference was understandably about keeping Ukraine armed with the weapons it needs during the latest Russian offensive and in the weeks or months to come. But we also cannot lose sight of the larger geopolitical implications of any potential Russian gains. Indeed, our adversaries seem to be capitalizing on the uncertain global conditions to strengthen their alliances.

This week, for the first time in 20 years, an Iranian President traveled to China. President Xi Jinping gave a warm welcome to his Iranian counterpart Ebrahim Raisi and his large delegation, and lauded China’s “solidarity and cooperation” among the current complex geopolitical environment. Xi also called for the lifting of sanctions against Iran and remarked that he would support Iran’s efforts to safeguard its national sovereignty. At the same time, Xi assured Iran that he’d help reinvigorate negotiations on the Iran nuclear deal, and the two leaders signed cooperation agreements on items like agriculture and trade, and China’s traditional soft power initiatives like sports and culture.

Further, China and Iran are closely watching the Ukrainian battlefield to assess both the tactics of modern warfare and the political implications. Thanks to the Russians, Iranian drones are on exhibit in Ukraine, and US officials have noted that Iran is learning how the drones operate in different weather and circumstances, allowing the developers to refine the weapons for future use. The Iranians are also reportedly planning to build a drone factory several hundred miles outside of Moscow.

The Chinese are no doubt also noting which weapons are effective for an offensive on a neighboring state, and taking stock of the type of economic and political penalties facing Putin’s regime. Important lessons can be gleaned from Putin’s attempts to restock ammunition, troops, and political propaganda as the second year of his attack continues. Ukraine’s allies, too, must take stock of the previous year – recognizing that this battle is larger than the immediate region and increasing our support accordingly.

February 10, 2023

Keeping Russia at bay one year into the war will require unrelenting political and physical will. This week, Ukrainian President Zelenskyy made a whirlwind tour of European capitals to express gratitude to his allies and secure more weapons for his troops. Zelenskyy also advocated for financial aid to run and reconstruct his nation, and to accelerate Ukraine’s membership in the European Union. It’s only the second time that Zelenskyy has traveled outside of Ukraine since the onset of the war, and it’s indicative of the pressure that the Ukrainian leader is facing. As the war enters its second year, sustaining financial, political, and technical support from allies will be essential to maintaining morale and keeping Ukrainian troops equipped to withstand the seemingly endless number of Russian soldiers flooding the East.

Russia is now upping its offensive and conducting missile strikes across multiple cities. Ukrainian analysts and officials report that the latest batch of Russian forces are better trained and equipped, and that fighting is expected to accelerate, particularly around the eastern city of Kreminna. The Russians hope to distract Ukrainian soldiers from Bakhmut, where the Ukrainians are actively fending off attack, and the Russians also want to use Kreminna as an access point to the larger strategic city of Lyman. Putin is reportedly planning to deliver his belated annual address to Russia’s Federal Assembly around February 21, close to the war’s anniversary, and it’s likely that he wants to report some tangible gains.

Indeed, Russia is also assaulting civilian infrastructure in the Donetsk and Kherson regions, and the threat of missile attacks throughout Ukraine remains of grave concern. This week, the Institute for the Study of War noted that Moscow has regained the initiative for the first time since this summer but had yet to score a major strategic gain. While Russia is clearly escalating, the outcome of its efforts remains uncertain, and Ukraine remains firm in its resolve to defend its territory. In the coming weeks, it will be more essential than ever for allies to support Ukraine both through weapons and technical support, as well as through forward-looking efforts to promote EU membership and reconstruction.

India is a critical but complicated counter to China. In recent years, the United States has strengthened its geopolitical and economic ties with India, primarily to support India as an economic alternative to China, but also purportedly because of overlapping values and ambitions. This year, India is serving at the helm of the G-20 and the Shanghai Cooperation, demonstrating the reach and strength of its current political positioning. India is also expected to become the world’s most populous nation over the next 12 months, and its economic ambitions are likewise accelerating.

But India is taking advantage of its strategic global position to first and foremost to promote its own national interests. This week, Russian energy executives attended the India Energy summit to ensure that Russian oil continues to find a key buyer there. Russia currently supplies the most oil of any nation to India, and this mutually beneficial dynamic is only going to reinforce the two nations’ longstanding political ties. Indeed, over the past year, India has become a top customer of Russian crude oil and notably, it doesn’t look like Washington is going to hold it against them. Likewise, India hasn’t faced repercussions for purchasing Russian weapons systems that would normally be under sanction.

While India continues to buy the Russian products, Prime Minister Modi and the Biden Administration are simultaneously collaborating on defense industrial initiatives and critical and emerging technologies. This includes supporting India’s semiconductor sector and a range of initiatives from AI to space. India is wary of Chinese encroachment, both physically on its Himalayan border and on the intelligence and technology fronts, and Washington is a strong ally in this regard.

But although India and the United States are aligned on their goal to curb Chinese aggression, India’s friendship with Russia, who is also a Chinese ally, complicates matters. There’s the risk that any information India shares with Russia will be shared with China, which would ultimately serve against its own best interest, and ours. Further, India’s domestic situation has been marred by an uptick in religious conflict and repressive social policies by the leading party line that has weakened democratic values and human rights within Indian borders. If India hopes to be a real counterweight to China on the global stage, both its political alliances and domestic policies will be factors for potential partners to consider.

February 3, 2023

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.

Geopolitical changes are leading Japan to shift its foreign and defense policies, presenting opportunities for the European Union and the United States. In December, Japan approved a notable defense budget increase in line with the strategy outlined in its latest defense white paper. The updated strategy aims to both expand defense spending and enhance cooperation with likeminded partners. Japan’s primary security threats are North Korea, which is actively furthering its nuclear, missile and military capabilities, and China- whose increasingly aggressive military posture is a threat to many in the region. The increased military cooperation between Russia and China over the past year has only amplified Japan’s concerns.

The white paper denotes a significant shift in Japanese policy. Since WWII, Japan has pursued a pacifist and cautious foreign policy, relying heavily on Washington for its defense, including its nuclear umbrella. Japanese defense spending has been less than 1% of GDP, and even participation in UN peacekeeping missions was politically contentious, often limited to support and medical troops. But in the current international context, Japan feels that it’s necessary to “fundamentally reinforce its defense capabilities as the last guarantor of national security”- and Tokyo is updating its approach accordingly.

Of the multiple regional threats, China is Japan’s greatest security challenge. The active Japan-China dispute regarding ownership of the Senkaku/ Diaoyu islands, strategically located between the two nations, demonstrates Japan’s vulnerability and frustration. Already twice in January, Chinese vessels have intruded into Japanese waters around the islands, putting Japan on-guard. China’s threats towards Taiwan and its claims on the South China sea have also been explicitly added to the list of contentious issues between the two countries.

As the white paper describes, the Japanese are hoping to address these threats first and foremost by bolstering self-defense via increased cooperation with likeminded countries. This includes upgrading relations with the United States, but also with Australia, India, and European allies, as well as many Southeast Asian countries who are likewise under threat of the Chinese claims on the South China Sea. Enhanced maritime and military cooperation are stated as clear goals.

Japan also wants to be able to deter an attack by developing a counter strike capability, which is where things really diverge from previous policy. Tokyo plans to double its budget in line with the current NATO target of 2% GDP (more than $300 billion), which will lead to enormous outside investments. Japan has a particular interest in cruise missiles, air and missile defense, cyber security, space defense, stockpiling ammunition, and fuel, and it’s also developing a policy on economic security, vis a vis dependence on China.

The new Japanese approach has momentum and has already translated into concrete action. In January, as incoming chair of the G7, Prime Minister Fumio Kishida made a whirlwind tour of Italy, France, the United Kingdom and the United States. There, he quickly secured oral and written agreements about intensified defense and foreign policy cooperation in renewed strategic partnerships or alliances. This week, SG NATO Stoltenberg visited Japan and concluded a joint declaration with Kishida on enhancing cooperation, building upon various developments in the past two months.

For the EU, it makes sense to support Japan’s more assertive defense posture on both the political and economic levels. In the short term, the EU and allies are concerned with Russia’s naked aggression against Ukraine, but in the long-run China will offer the West a systemic challenge. With the need to strengthen its defense against this adversary, Japan will look to European companies for equipment, especially in areas where United States is not the preferred and established supplier. A good example of this is the joint development by UK, Italy and Japan of a next generation fighter jet in the program called “Tempest”, announced last December.

Japan is also leaning into global initiatives that aim to limit China’s prowess. Just this week, the Japanese joined the Washington-led initiative to further restrict what chip-making equipment can be sold to China, and more of these agreements are anticipated. Further, as Japan, and others, adapt policies to increase self-defense in areas ranging from military equipment to food and supply chain, EU and Western alliances are likely to expand, and leaders in Moscow and Beijing will be increasingly confronted with the unanticipated ramifications of their aggression and partnership.

January 27, 2023

Sanctions, tanks, and other measures to limit Russia’s influence. The Kremlin-aligned Wagner Group mercenary outfit has been nothing but a menace for the past decade, but its shameless recruitment of thousands of prisoners to fight against Ukraine has put a spotlight on the scale and methods of the group. It’s just business as usual, however, for Russian businessman Yevgeny Prigozhin, who finally decided to come clean on his association as the Wagner boss back in September. Notably, Prigozhin had previously sued a UK journalist for making the association.

The Wagner Group has had a long, detrimental impact on Eastern Ukraine. Most recently, the mercenary force has been at the forefront of efforts to capture Soledar and Bakhmut, and it’s seemingly met with more success than official Russian-state fighters. On Wednesday, Kyiv officials confirmed that Ukrainian forces had retreated from Soledar and pulled back to their previous defensive positions in what’s being viewed as a moderate but also symbolic victory for Putin. It’s also true, however, that a significant number of Wagner fighters were killed in the process.

On Thursday, Washington expanded its financial war against Russia, formally labelling the Wagner Group a “transnational criminal organization” and unleashing a new slew of sanctions against the mercenary force. US Treasury Secretary Janet Yellen remarked that “Today’s expanded sanctions on Wagner, as well as new sanctions on their associates and other companies enabling the Russian military complex, will further impede Putin’s ability to arm and equip his war machine.”

It makes sense to hit Wagner at its financial heart, because when Prigozhin shows up, there’s a good chance that there’s a business incentive behind it. In the Donbas, it’s likely that Prigozhin wants to reap the economic rewards of the region’s salt and gypsum mines, in addition to raising his clout within the Russian political establishment. Sanctions will be one way for the United States to attack him at the jugular, but many of the places and people he relies on for support aren’t going to comply with them.

Indeed, these financial weapons need to be complemented by tactical ones, and this week the United States and Germany both finally decided to provide Ukraine with heavy tanks – Abrams and Leopards respectively. In response, Putin unleashed a fierce barrage of Russian missiles and stated that the weapons transfers will count as “direct involvement” in the war and that red lines were now a thing of the past. There are also UK intelligence reports suggesting that a Belarusian front could open soon, and that Russian troops will continue to flow, however ill-trained and disenfranchised they may be.

Ukraine remains strong in its resolve to intensify its defenses, and with the eventual help of these tanks it could move the battle lines back towards Russia. But right now, it’s winter and the Russians want to wear-down Ukrainians by keeping them in the dark, biting cold without steady sources of heat and power. The corruption crackdown this week further underscores both the dynamism and the strategic reflection of the Ukrainian leadership that understands it needs to keep troop morale high and lay the groundwork for a post-war Ukraine that sets it on the path to European Union membership.

If Ukraine can stay the course, strategically Russia will continue to flounder. The longer-term effects of sanctions and Russian energy embargo will also increase pressure on the Kremlin. Further, we’re already seeing signs that Washington is working on developing political alliances and fostering good will with some of Putin’s more traditional but malleable international allies.

Europe’s Global Gateway seeks to challenge China’s Belt and Road Initiative- and the time is finally ripe. While China isn’t losing power as quickly as the Western media would like to portray, there are a couple of notable developments indicating that Beijing will face not only domestic pressures but international competition. For the past decade, China has been funding global infrastructure development projects via its Belt and Road Initiative (BRI), but the cracks in the system are rapidly expanding. The BRI adopted a high-risk but potentially high-reward strategy: focus on less-developed countries and regions and offer them large loans and services.

BRI financial contracts have been managed by state-owned Chinese banks, and you could often see Chinese workers conducting most of the physical work. This arrangement came with its own set of political, environmental and security concerns at the local level. Tensions have been particularly high in places like Pakistan where certain nationalist groups have previously physically attacked Chinese workers, and where citizens continue to protest the Chinese interference in their livelihoods- raising concerns both about Pakistani government response to the protestors and the viability of the projects.

It’s unclear how much China was ever expecting to be repaid for their loans or efforts, but the past two years of global economic turmoil have certainly not been conducive for repayments. The original thought was that if the projects weren’t paid for, they’d become Chinese property. And based on the type of projects that China supported, you could see that they were angling for eventual ownership- even without adequately considering how they’d handle pushback from the local communities. This is particularly true in regions where China was trying to secure extractive commodities.

But the extent of the money now owed to China from BRI defaulters is so large that it’s thrown the nation into a rather dire financial situation. This is further amplified by inability of domestic Chinese businesses like Evergrande to repay their loans to the state banks. Earlier this week, US Treasury Secretary Janet Yellen was in Zambia where she called China a “barrier” to debt reform. She clearly touched a nerve, and the Chinese Embassy in Zambia immediately snapped back, stating that Washington should get its own house in order.

Washington is making a concerted effort to be more strategic about Africa and mitigate the nefarious influence of China and Russia in the region, but the EU also recognizes that now is a favorable moment to assert itself. The EU Global Gateway initiative, which last year promised to mobilize EUR 300 billion by 2027 for infrastructure projects outside of the EU, appears to have been injected with new momentum. To start, the Global Gateway is likely to focus on a dam and hydroelectric plant in Cameroon, and a submarine optical fiber cable to connect the Mediterranean and Northern Africa.

The EU will hope to differentiate itself from the BRI through transparency and a “values-based” offer, reflecting European environmental and social standards where China had none. However, critics complain that the scale of the EU offerings pales in comparison to that of China, and that it’s just foreign aid in new packaging. Still, it’s notable that, in addition to its efforts in Africa, the EU is also expected to challenge Beijing closer to home. According to media reports, these could include an energy transition partnership with Indonesia, collaboration on digital connectivity with the Philippines, and alternate energy projects in Central Asia.

The EU is expected to finalize its Global Gateway project list in early February, and it could not come at a more necessary and opportune time.

January 29, 2023

The risk assessment on providing Ukraine with heavy weapons has rightfully shifted. When Russia first invaded Ukraine almost a year ago, no one was exactly sure how the war was going to play out. Most analysts agreed that Ukraine would put up a strong fight, but few grasped the high-level competency and devotion of Ukrainian forces, and Russia’s inability to launch a quick and efficient military campaign. While NATO did immediately and effectively rally around the Ukrainian cause, since then there have been ongoing debates about the amount and type of weapons that the West should provide to Ukrainian forces.

The main concern has been that Western military aid could shift Putin’s calculus to the detriment of either the Ukrainians, NATO members, or both. Russia could escalate, retaliate, or grow desperate enough to consider using nuclear weapons in response to the influx of Western weapons. Because of this lingering, if unlikely, threat, Washington and allies have continued to calibrate weapons transfers – albeit somewhat more aggressively.

In addition, Ukraine’s military needs have shifted over the course of the war. Early on, to protect Kyiv, Javelin and Stinger missiles were of great necessity, while more recently, longer-range weapons became relevant to the battlefield further east. The Patriot missile defense system remains of high importance to Ukraine’s defense, and both sides are also burning up shells at rapid clip.

This week, speaking via video message on the sidelines of Davos, President Zelenskyy expressed frustration at a “lack of specific weaponry”, noting that winning the war takes more than motivation and morale. Ukraine is asking for heavy tanks, but the West has remained cautious of providing them. Germany is especially under pressure to deliver some tanks but wants to make sure that it doesn’t have a large target on its back from being the only nation to provide them. US Secretary of Defense Austin is in Europe and is expected to discuss the tank issue later this week, and NATO members will also be weighing the risks and viability of such military aid.

Washington has been gauging its support to Ukraine as the fight has evolved, but so far Putin’s main response to the weapons transfers has been a shift in his messaging to the Russian public, not his battlefield technique. For several months now, Russia has asserted that by sending substantial weapons to Ukraine, NATO is fighting a proxy war. This line has played into Putin’s false but insidious narrative that the West’s entire raison d’etre is to make Russia disappear.

Just this week, Russian Foreign Minister Lavrov likened the US approach to Russia to that of the Nazis to Jews during the Holocaust. This outlandish and offensive statement demonstrates just how much the Kremlin is struggling to convince Russian citizens that their nation is under existential threat– and that without a victory in Ukraine they will be wiped off the map. The force of this fictious narrative, combined with Putin’s total disregard for human life and the number of bodies he’s willing to sacrifice, makes the Russians an enduring threat. Without the heavier weapons that could shift the Russian calculus, it feels like this battle could be interminable.

Among Ukraine’s supporters, there have been arguments that the Ukrainians won’t know how to use the heavy Western weaponry, which has been mostly disproven, or that there will be problems repairing the equipment, which could be a concern. But the issue really is about how the heavier weapons will help shift Ukraine from a defensive to an offensive position. When Russia invaded Crimea in 2014, our response was weak and established a dangerous precedent for the global democratic order. This time, our response has been much stronger, but we’re at the point now where there’s an opportunity to do more.

This all comes in the backdrop of global economic instability, and while Washington just approved a new $2.5 billion military aid package, concerns remain about sustaining this kind of expenditure long term. But as Zelenskyy remarked in his speech to the US Congress, it’s an investment, not charity. The sooner we can give the Ukrainians what they need to push back the Russians, the better it will be for us all.

Lula’s holding firm to his leadership and agenda, but the road looks rocky. On January 8, thousands of Brazilians launched an insurrection where the Brazilian security forces were either unable or unwilling to contain the violence. After former Brazilian President Bolsonaro lost to Lula in a tight election last fall, many Bolsonaro supporters started camping out in protest next to the military barracks in Brasilia. But the protestors became violent soon after Lula assumed office, and the insurrection has led many in Brazil to question if the nation’s democratic foundation remains solid.

Brazilian security forces are now under scrutiny, and recently Lula announced that there were many “colluding agents” in the insurrection- particularly from the Military Police and Armed Forces. Indeed, there are indications that military support of the insurrection was more widespread than initially believed. Investigative findings have demonstrated that many military members, who were often friends or family members with the protestors, offered legitimacy and protection to the perpetrators of January 8.

Lula has been taking active measures to dismiss members of the military who were seconded to staff a variety of offices within the Presidential Palace and replacing them with civilians. He’s also punishing associated officials: Anderson Torres, who had served as Bolsonaro’s Minister of Justice and was serving as Secretary of Justice for the Federal District under Lula, was arrested and the Governor of Brasilia has been suspended for negligence in managing public safety.

So far, Lula seems to either have enough support within the military or there isn’t an appetite to take further action against him. But the episode could be a harbinger of growing political instability. The trajectory of the peaceful protests-to-insurrection also raises the critical question of how political protest turns into violent conspiracy, and at what point should the government intervene. Further, it highlights concerns about stability in greater Latin America, and underlines how critical it is for international leaders to publicly affirm the legitimacy of democratically elected candidates worldwide.