In Other News: Russian Cyberattacks, Iran Nuclear Ambitions & More – September 11, 2020

September 11, 2020

Microsoft warned yesterday in a report that the Russian unit responsible for the hack of the Democratic National Committee in 2016, Fancy Bear, is engaging in accelerated and increasingly sophisticated cyberattacks on both Democratic and Republican campaign officials, consultants, and think tanks in the lead-up to the 2020 election. Microsoft also warned that Chinese hackers are actively targeting Biden campaign staff and high-profile members of the US policy and national security communities, and that Iranian hackers have targeted the Trump campaign, but with limited success. Separately, the US announced yesterday that it had designated four Kremlin-linked individuals – including Ukrainian parliamentarian Andrii Derkach – for new sanctions related to their attempted interference in 2020 elections. According to information in the Microsoft report, a previous round of US sanctions on and retaliatory cyberattacks against Kremlin-linked cyber units for their efforts to improperly influence US elections may have actually prompted Fancy Bear to step up its attacks rather than deterring further activities. Electoral interference via cyberattack is emerging as the new normal, not only in the US, but also in EU countries and other democracies. In addition to shoring up their own cyberdefenses, the US and its allies may soon find common cause in establishing rules of the road – and agreed multilateral countermeasures – to protect their systems from increasingly aggressive cyberattacks by non-democratic powers.
Iran’s nuclear chief announced this week that the country is building a new facility for production of advanced uranium enrichment centrifuges near its Natanz nuclear site. The facility would replace one that was damaged in a July fire that Iran claims was the result of sabotage. This latest announcement is one of a string of incidents and information releases indicating that Iran is repeatedly violating its commitments under a nuclear deal signed in 2015 with the US, China, France, Germany, Russia, and the UK  in exchange for the lifting of sanctions. A few days prior, the International Atomic Energy agency reported that Iran now has more than 10 times the amount of enriched uranium it is permitted to possess under the 2015 nuclear accord, though the stockpile is not enriched to levels required to build a nuclear weapon. Iran began to more openly violate its commitments under the accord after the US withdrew in 2018, and has continued openly flouting agreed restrictions while engaged in a steady escalation of tensions with the US. The Iranians are progressing in their push to develop a nuclear weapon, and this will become an increasingly troubling issue for the US and our allies. Iran is approaching a red line that if crossed could well result in a military confrontation.

Warning shots were fired at the disputed India-China border in the Himalayas, marking the first reported violation in decades of a long-held no-firearm protocol at the Line of Actual Control (an agreed, de facto demarcation between the two countries). Though there were no casualties, this was an alarming escalation, especially in light of weeks of attempts by both sides to reach a diplomatic resolution after a June border confrontation between the Chinese and Indian armies killed at least 20. Since the fatal June incident, India and China have flooded the area with reinforcements, artillery, tanks, and aircraft, while simultaneously pursuing a diplomatic solution. We do not think that either country wants war, but with nationalist sentiment running high on both sides, Indian and Chinese leaders are also under pressure not to back down. With neither side willing to advance or retreat, China and India may be entering into a prolonged standoff with occasional flare-ups between their two armies, any of which could have the potential to create more casualties.

In Other News: Evidence Against the Kremlin, India-China Standoff & More – September 4, 2020

September 4, 2020

Evidence is piling up linking the Kremlin to extralegal assassinations and foreign election meddling, increasing the risk that Russia will face more cohesive pushback from the international community. This week, news emerged that: 1) the Kremlin-backed Internet Research Agency had set up fake Facebook accounts and even hired journalists to write for a fake left-wing news site to stoke partisan tensions; 2) a Homeland Security Department memo asserted with high confidence that Russian state media agencies were pushing false information about U.S. presidential candidate Joe Biden’s mental health; and 3) the German government confirmed doctors’ initial findings that Russian dissident Alexey Navalny was poisoned with Novichok in what is thought to be an attempted assassination by the Russian state. Meanwhile, in Belarus, journalists from Russian state-backed TV channel RT stepped in to replace hundreds of Belarusian journalists who went on strike in protest against what were widely viewed as fraudulent elections that delivered a victory to Alexander Lukashenko, a longtime Kremlin ally who has been president of Belarus since 1994. Each of these incidents has at least a veneer of plausible deniability, complicating a coordinated international response. However, it is only a matter of time until the cumulative impact of Russia’s actions causes sufficient alarm for countries or blocs to band together to counter the Kremlin’s increasingly aggressive stance toward its enemies, perceived and real.

Indian and Chinese soldiers engaged in another tense standoff for the first time since a clash at the border in June killed at least 20. The soldiers, stationed in the Himalayas near the Line of Actual Control (an agreed demarcation at the two countries’ long-disputed border), approached each other and shouted but did not engage. Indian officials have indicated that the incident was in response to a late-night Indian operation to claim vantage points allowing them to observe Chinese troop movements in disputed territory, and that the operation was prompted by Chinese incursions into Indian territory. This latest flare-up would be unremarkable except that it is the first such incident since the fatal June clash, and comes after several weeks of bilateral efforts to ease tensions. Parallel with those efforts have been a series of punitive Indian trade actions targeting China, including restricting Chinese firms’ access to buildout of India’s 5G network and a ban on dozens of Chinese apps (like TikTok), as well as moves to bolster diplomatic and military ties to countries like the U.S. that are powerful enough to be a credible counterweight to China. India appears to be using every means at its disposal to counter what it – and most of the rest of the world – sees as a pattern of aggressive Chinese behavior targeting neighboring countries. Any incident that adds to the risk of escalation is cause for concern, especially when it involves two nuclear-armed neighbors with nationalist-leaning heads of state. However, we do not think either side has the appetite now for a larger conflict.

Latin America’s economy will contract by approximately 9.4% in 2020, according to the International Monetary Fund (IMF). Mexico, Argentina, and Peru are likely to see double-digit declines in growth this year, making it the worst economic downturn in the region since WWII. Still, the IMF projects that the region will see a recovery of 3.7% growth in 2021. Many countries have tried to mitigate the impacts of Covid-19, but the pandemic continues to rage through the region. Brazil’s confirmed death toll from Covid-19 currently stands at approximately 120,000, and Mexico’s is at about 64,000. Popular outreach by their governments could be blunting the economic impacts in the short term. But Latin America is suffering from multiple related economic factors from the pandemic including: 1) the negative impacts of lockdowns and travel restrictions inside the region; 2) the reduction of trade within and outside the region; 3) the reduction of foreign investment; and 4) lower remittances from the United States and Europe. Many countries are also suffering from a decline in global demand for commodities, a significant drop in tourism, and low oil prices. Coming out of the pandemic, the region will likely have to deal with growing crime, insecurity, and social and political unrest – and the possibility of increased migration to the United States from Mexico and Central America. See TAG’s Special Report: Latin America for more insight.

“Will Brazil’s ‘Car Wash’ Prosecutors Stay on the Job?” Latin America Advisor, September 3, 2020

Asked if Brazil’s “Operation Car Wash” task force is in peril, TAG’s Amanda Mattingly responded that “Disbanding the popular anti-corruption task force would unleash a torrent of criticism of President Bolsonaro and his prosecutor general, Augusto Aras.” Amanda underscored the tremendous amount of support in Brazil for the team of prosecutors and exposing corruption and said, “Under no circumstance would this not be seen as political and an attempt to avoid investigations involving alleged graft by Bolsonaro’s own family members.” Amanda’s comments were published in the Inter-American Dialogue’s Latin America Advisor on September 3, 2020.

“Will Brazil’s ‘Car Wash’ Prosecutors Stay on the Job?” Latin America Advisor

Latin America: Economic Contraction, Energy Issues, Politics & the Pandemic – September 3, 2020

Special Report

Latin America: Economic Contraction, Energy Issues, Politics & the Pandemic

The Economy & Covid-19

Latin America’s economy as a whole is set to contract by approximately 9.4% in 2020, according to the International Monetary Fund (IMF). This is down by four percentage points from its April projection and since the largest economies of the region – Brazil and Mexico – have suffered from the worst outbreaks of Covid-19. According to Goldman Sachs analysts, Mexico, Argentina, and Peru are likely to see double digit declines in growth this year, making it the worst economic downturn in the region since WWII. Still, the IMF projects that the region will see a recovery of 3.7% growth in 2021.

Latin America has been considered the global epicenter of the pandemic since early June, accounting for more than 40% of the world’s new Covid-19 deaths despite having only 8% of the population. Latin American governments, central banks, and international financial institutions have taken steps to mitigate the impacts of Covid-19, but the pandemic continues to rage through many parts of the region. Brazil, Mexico, Peru, and Chile have been hit hardest according to confirmed numbers of cases, but numbers out of Bolivia, Ecuador, and Venezuela are less clear. There is a widely held belief that Covid-19 cases are undercounted due to a lack of testing capacity as well as political will on the part of some governments, including in Venezuela, Mexico, and Brazil. Brazil’s confirmed death toll to Covid-19 currently stands at approximately 120,000, and Mexico’s is at about 64,000.

Both Mexican President Andrés Manuel López Obrador (popularly known as “AMLO”) and Brazilian President Jair Bolsonaro have underplayed the coronavirus since the beginning and were slow to implement shutdown orders in their countries – even when governors urged the federal governments to take specific measures. Many Brazilians and Mexicans live and work in the informal economy, so shutting down the country and asking people to work from home was just not a possibility in their view. Bolsonaro has also denied responsibility for the virus saying, “I’m sorry but what do you want me to do” and AMLO has told Mexicans to “lose weight and pray.”

But neither AMLO nor Bolsonaro seem to have suffered in approval ratings for their handling of the virus and the resulting economic downturn. In Mexico, an August poll by Parametria found AMLO’s approval rating to be 65%, while the Mexican newspaper Reforma’s August poll found his approval rating to be 56%. In Brazil, an August poll by Datafolha found 37% gave Bolsonaro a positive approval rating, which is up from 32% in June and the highest his ratings have been since he took office.

Popular outreach could be buoying their approval ratings and blunting the economic impacts in the short term. But Latin America is suffering from multiple related economic factors from the pandemic including: 1) the negative impacts of lockdowns and travel restrictions inside the region; 2) the reduction of trade within and outside the region; 3) the reduction of foreign investment; and 4) lower remittances from the United States and Europe. Many countries are also suffering from a decline in global demand for commodities, a significant drop in tourism, and low oil prices.

Energy Issues

Energy is a key sector of the economy in Latin America and will be important for the recovery of the region. The oil market is currently in trouble worldwide – oil prices have come back from recent lows but remain depressed by the pandemic’s impact on global demand. This augurs poorly in the near term for oil-producing countries in Latin America. The continuing spread of Covid-19 through the region means there is little visibility on when consumption and growth will start to pick up again, but consensus is against any real optimism about a recovery before 2021.

If oil stays as cheap as it is, that could undermine the value proposition for costly sub-salt exploration and development offshore Brazil. Venezuela’s economy was already in ruins heading into the pandemic, and low oil prices have only added to the pressure. According to the Organization of the Petroleum Exporting Countries (OPEC), Venezuela produced 339,000 barrels per day in July, which was up from 336,000 barrels per day in June. These are production levels not seen in Venezuela since the 1930s.

There will probably be some big deals in oil, but they may be of the consolidation/distressed assets variety, whereas the big infrastructure spending is more likely to be in natural gas and renewables. The United States is pushing to export more of its LNG to Latin America, but that is going to require new import capacity, pipelines, and capex spending.

Climate considerations are also playing a role in government decision-making throughout Latin America, particularly as countries in the region seek to expand energy access. This bodes well for renewables, but also potentially for natural gas. Natural gas burns cleaner than oil, is growing easier to deliver by ship and truck, is available for export in large quantities from the United States (with low shipping costs) and is also increasingly available from South American sources thanks to technological advances. Although economics in Argentina’s Vaca Muerta shale are currently challenged by low oil prices, in recent years, natural gas production growth from shale was sufficient to spur a resumption of exports to neighboring Chile and Brazil and to trigger Argentina’s first-ever exports of liquified natural gas (LNG) last year.

Social & Political Consequences

Coming out of the pandemic, the region will likely have to deal with growing crime, insecurity, and social and political unrest – and the possibility of increased migration to the United States from Mexico and Central America. Political stability will be necessary for the economic recovery in the region, but it is far from certain as many people in Latin America have begun to feel disillusioned with democracy. Economic prosperity has not been a natural correlation to democracy, and neither has security. Rapid urbanization, poor social services (like healthcare and education), weak democratic institutions, and persistent inequality, which were already chronic in the region, have been exacerbated by the pandemic and the economic contraction.

Political protests and violence, which were seen in 2019 in places like Bolivia and Chile, could return as the region shifts gears to elections. Bolivia and Chile are both scheduled to hold elections in October, after a presidential contest in Bolivia and a national vote on the need for a new constitution in Chile were postponed due to the pandemic. Brazil is scheduled to have municipal elections in November. Venezuela will have legislative elections in December, but the opposition parties have decided to boycott saying that the election will be rigged. Peru, Chile, Nicaragua, and Ecuador are scheduled to have general elections in 2021, and Mexico will hold midterm elections in June 2021.

Corruption is also a chronic issue. Latin Americans want to weed out corrupt officials, ruling elites, and private sector corporate interests which benefit from corrupt dealings and seem out of touch with the people. At the same time, political parties are increasingly using corruption allegations to undermine their political opponents. For example, AMLO recently floated the idea of a referendum on five former Mexican presidents and whether they should be charged with corruption. This came after a former PEMEX head implicated two former presidents in corrupt dealings involving millions of dollars. If AMLO moves forward with the referendum, it could have profound political consequences.

If you or your firm would like an individualized consultation or more specific information on Latin America, please contact The Arkin Group at 212-333-0280 or at www.thearkingroup.com.

In Other News: China Launches Ballistic Missiles into South China Sea, Mexico’s President Seeks to Expose Past Corruption & More – August 28, 2020

August 28, 2020

China launched four medium-range “aircraft carrier killer” ballistic missiles into the South China Sea during military exercises on Wednesday, which has been widely interpreted as a warning to U.S. aircraft carriers in the area, and to U.S. military bases in the Asia-Pacific. China’s territorial claims in the South China Sea have long been a point of contention in U.S.-China relations (and in China’s relationships with Southeast Asian countries whose territorial waters it lays claim to). Up to this point, however, the U.S. has pursued a policy of neutrality in regional territorial disputes, limiting its actions to freedom of navigation exercises and naval support for countries whose claims to the South China Sea overlap with China’s, and whose commercial ships have been harassed at sea by Chinese vessels. In recent weeks, however, the U.S. approach to the conflict has taken a more aggressive turn. Secretary of State Mike Pompeo called China’s claims to the South China Sea “completely unlawful” in a speech on July 13, echoing the 2016 ruling of an international tribunal at the Hague. That same month, the U.S. stepped up military presence in the area by deploying two new aircraft carriers in waters that fall within the boundaries of China’s territorial claims. And this week, the U.S. announced new sanctions on 24 Chinese companies in connection with their contributions to China’s build-up of artificial islands in the South China Sea for military purposes. As the U.S. ups the pressure on China, it will have to carefully calibrate its actions to stay the course without crossing a line beyond which Beijing feels compelled to respond. We do not think either side is seeking outright conflict, but as this cycle of response and counter-response continues, the margin for error will continue to shrink.

Mexican President Andrés Manuel López Obrador (AMLO) seeks to expose past corruption in Mexico as the economy shrinks to Great Depression levels and Covid-19 deaths continue to climb. This week, AMLO proposed the possibility of a popular referendum to decide if five past presidents should be charged with corruption. If the Supreme Court deems it constitutional, the National Electoral Institute will organize the referendum on former presidents Enrique Peña Nieto, Felipe Calderón, Vicente Fox, Ernesto Zedillo, and Carlos Salinas. The move would be unprecedented in Mexico and, coming ahead of the country’s 2021 midterm elections, could have political consequences. AMLO came into office in 2018 with a pledge to weed out corruption in Mexico, and his referendum proposal is part of a recent escalation of his anti-corruption campaign. It also comes less than a week after Emilio Lozoya, the former head of Mexico’s state-owned oil company Pemex, accused 17 former Mexican officials (including Peña Nieto and Calderón) of corrupt dealings worth millions. While AMLO has support from his political party Morena to go after his predecessors, critics believe his anti-corruption campaign is politically motivated and an attempt to distract from his handling of the economy and the pandemic. Mexico’s economy could shrink as much as 13% in 2020, according to the central bank, and Covid-19 deaths have surpassed 62,000.

Russia has rejected international calls for an investigation into the poisoning of opposition leader Alexey Navalny on a flight from Moscow to Tomsk, Russia last week. German doctors have determined that Navalny, who is currently in a medically induced coma in a hospital in Berlin after being evacuated from a hospital in Omsk, was poisoned with cholinesterase inhibitors. Russian doctors who treated Navalny claim no evidence of poison was found. Cholinesterase inhibitors are sometimes used for military purposes, such as in nerve agents like Novichok, which was used in the poisoning of former Russian spy Sergey Skripal in 2018. Skripal’s poisoning is just one of a string of high-profile poisonings believed to have been carried out by Russian security services, which featured prominently in attacks on opponents of the Kremlin in the Soviet era (and before), and more recently against people like Russian defector Alexander Litvinenko in 2006 and former Ukrainian president Viktor Yuschenko in 2004. While firm proof has not yet emerged that Navalny’s poisoning was state-sanctioned, it fits a well-established pattern, and is cementing the perception in the international community that the Russians are willing to engage in reckless extralegal assassinations – both in Russia and abroad – without fear of punishment. While it is true that the international community has limited options for a formal response, this incident will likely further isolate Russia from its western allies whose markets it will need to pull the country out of a deep Covid-19-induced recession. The World Bank has forecast that the Russian economy could contract by as much as 6% this year.

In Other News: Situation in Belarus, U.S. Seizes Iranian Fuel Heading to Venezuela & More – August 21, 2020

August 21, 2020

The EU has announced plans for targeted sanctions on officials believed to have been involved in rigging recent presidential elections in Belarus, which delivered yet another victory to strongman president Aleksandr Lukashenko, who has held the office since 1994. Lukashenko claimed to have won with more than 80% of the vote, triggering widespread protests that lasted for more than a week before he ordered security services to put down the uprising, which is ongoing. Since protests began on August 9, two have died and nearly 7,000 have been imprisoned, with many alleging beatings and other forms of abuse by security services. The EU also plans to sanction officials involved in repressing protests. Lukashenko has sought to pin blame for the demonstrations on foreign influence and funding and has called for tighter border controls to prevent movement of fighters or weapons into the country and heightened scrutiny of NATO movements in Poland and Lithuania. The EU’s narrow, targeted sanctions are seen as an attempt to avoid accusations of meddling on the protesters’ behalf. Russia has echoed Lukashenko’s concerns about foreign interference and has pledged it will not engage in direct military intervention, but if Moscow stays true to form it will likely find less conspicuous ways to intervene to prevent Belarus from tilting towards Europe, (propaganda, funding, cut-rate energy supplies, etc).

The U.S. government seized 1.1 million barrels of Iranian fuel heading to Venezuela last week. The high stakes at sea operation to enforce U.S. sanctions involved negotiations with a Greek shipping magnate, George Gialozoglou, to forfeit the fuel without the use of force. A U.S. judge issued the warrant for the seizure, considering the shipment of Iranian fuel on four Greek-owned tankers to be in violation of U.S. sanctions against Iran. In the legal opinion of the United States, oil sold by the Iranian National Oil Company helps to fund Iran’s Islamic Revolutionary Guard Corps, which was designated as a terrorist organization by the United States in 2019. Reportedly, the seized fuel will be sold on the open market and the money will go to a victims of terrorism fund. Meanwhile, Venezuela, which supposedly paid for the fuel up front, will not receive anything. Venezuela has been suffering from extreme gasoline shortages due to its own ailing oil infrastructure, the current economic crisis brought on by the pandemic, and U.S. sanctions on Venezuela’s oil sector, which were imposed in 2019 as well. Earlier shipments of Iranian fuel did make it to Venezuela in late May and early June despite U.S. warnings.

Mali’s president Ibrahim Boubacar Keïta was ousted in a military mutiny on Tuesday after months of anti-government demonstrations over corruption, economic mismanagement, growing insecurity, and allegations of electoral malfeasance. The U.S. has expressed concern that an increasingly unstable Mali could become a hub for violent extremists throughout the region. A prior coup, in 2012, led to a rebellion that allowed militant jihadist groups to expand throughout large parts of the country. Mali’s West African neighbors (particularly Burkina Faso and Niger, which have also been subject to increasing militant attacks) fear that Mali could once again be forced to cede territory to militants and are seeking to mitigate the risk that those forces grow unchecked at their borders. While the military has announced plans for a transitional government, the Economic Community of West African States (ECOWAS) has called for Keïta’s reinstatement and plans to send envoys to continue negotiations which began prior to the military incursion. ECOWAS is also concerned about setting a precedent where military takeovers become the norm in lieu of negotiated political solutions. France has been spending heavily to help stabilize Mali since the 2012 coup – shelling out nearly $1 billion a year – with some drone support from the U.S., but these efforts have thus far failed to mitigate the problem. West Africa is not at the forefront of U.S. policy priorities at present, but a collapsed state that is at the center of transnational extremist activity will eventually become a global problem.

In Other News: Israel-UAE Deal, Lebanese Prime Minister Resignation & More – August 14, 2020

August 14, 2020

Israel and the UAE reached a potentially historic deal yesterday that will begin the process of normalizing relations and temporarily suspend Israeli annexation of territory in the West Bank, while also angering Palestinians and further isolating Iran in the region. The two countries will send ambassadors and establish some commercial ties, including flight connections, making the UAE the first Gulf country and the third country in the region to establish diplomatic ties with Israel after Egypt (1980) and Jordan (1994). One of the key drivers behind the rapprochement appears to have been mutual mistrust of Iran, which is also shared by other Gulf neighbors, and the world is watching to see whether more of them follow suit. Additional deals could start the process of formalizing an alignment of Israel and its neighbors on the need for security cooperation to counter Iran’s aggression by proxy in the region. Iran and Turkey have slammed the deal as a betrayal of Muslims, and Palestinians have also been sharply critical of the deal, which excluded them from negotiations and undermined long-held unity among Arab neighbors in support of Palestine. One of the biggest impacts will be political – this is a major coup both for Israeli Prime Minister Benjamin Netanyahu and President Trump, whose administration helped broker the deal. An official signing will take place at the White House.

The government of Lebanese Prime Minister Hassan Diab resigned Monday amid public anger and consecutive days of protests after a massive port explosion that killed more than 200 people, injured thousands more, and displaced hundreds of thousands. Protests turned violent, with demonstrators throwing stones and other objects, and police responded with what has been described as excessive force, including the use of tear gas and rubber bullets. The country’s president, Michel Aoun, has asked the government to stay on in a caretaker capacity until a new cabinet can be formed. Parliament is now charged with selecting a new Prime Minister, which is likely to be a long process complicated by jockeying among the country’s competing sectarian (and other) factions. Furthermore, the resignation did little to quell protests, which continued into Monday night. Lebanon was contending with economic crisis and protests even prior to the Covid-19 outbreak and last week’s explosion. Few expect a change in cabinet makeup to effect any real change, and many fear endemic corruption will hamper efforts to effectively deploy much-needed aid. Continued failure on the part of Lebanon’s political class to govern effectively, especially in a crisis, is likely to prolong social unrest.

Russia has registered the world’s first Covid-19 vaccine (and called it Sputnik V), sparking widespread global concern about the potential impact of administering inoculations that have not undergone sufficient testing. The vaccine has not yet completed a “phase three” trial, in which thousands of participants are tested. Thus far, it has only been tested on 76 people. Regardless, it will be available to select groups of vulnerable individuals, such as Russian medical personnel by the end of August. Use in the general population is not expected until January 2021. The development has been welcomed in some quarters – a Brazilian institute expects to start producing it in the second half of 2021, and the Philippines will host a Russia-funded phase three clinical trial scheduled to start in October. Philippine President Duterte reversed course after initially offering to be a test subject, saying that he would wait until May 2021, after the phase three trial is over. A major requirement of a successful vaccine is that people trust and accept it – if not, few will agree to be inoculated. Beyond the obvious risk that an untested vaccine could have unintended negative health impacts, if it is widely administered and found to be ineffective, that could undermine public confidence in any future vaccines with greater potential to protect against the virus. Furthermore, Putin is taking a substantial political risk, given his push to return Russia to its Soviet-era global standing. While first place in the vaccine race can be a source of both prestige and national pride, failure, and the embarrassment that would entail for the country, could severely dent his popularity.

Tensions in Bolivia are boiling over again as anti-government protesters demand elections. Labor unions and indigenous groups who support former Bolivian President Evo Morales have mounted demonstrations and highway blockades over the last two weeks in an effort to pressure the current government of President Jeanine Áñez to move forward with presidential elections in September. Áñez came into office as a caretaker president last November when Morales fled the country in response to mass protests and ire over marred elections which gave him a narrow victory. Many Bolivians and international observers believed the vote was fraudulent due to widespread irregularities in the process. New presidential elections were supposed to take place in May 2020, but they have been postponed twice now due to the pandemic. The new proposal is for an October 18 election, but protesters want Áñez to honor the September 6 date. The unrest in Bolivia is not surprising, however, given that the pandemic renewed economic grievances among Bolivia’s poor, many of whom are fervent Morales supporters. Morales was Bolivia’s first president of indigenous descent, and although he remains in exile, he still wields influence in the country.

“CIA Legend Jack Devine on Challenges to the U.S. Intelligence Community,” Network 20/20 – August 12, 2020

TAG President Jack Devine spoke on Network 20/20 about the challenges facing the U.S. Intelligence Community and his experiences in the CIA. According to Jack, one of the biggest threats to U.S. interests is the rise of nationalism, populism, and the authoritarian “strongman” and the diminution of democracy around the globe. Russia’s Vladimir Putin is an example. Jack said he thinks “people are underestimating just how aggressive his operations are” and how much of a national security threat Putin poses to the United States. Regarding China, Jack believes tensions between the United States and China are likely to intensify given that China sees itself becoming the number one power in the world over the next 50 years. According to Jack, this makes China a longer term challenge for the United States.

You can watch Jack’s Network 20/20 interview here:

CIA Legend Jack Devine on Challenges to the U.S. Intelligence Community

In Other News: Beirut Explosion, Argentina Debt Deal & More – August 7, 2020

August 7, 2020

An explosion in Beirut this week that killed at least 135 and wounded another 5,000 appears to have resulted from gross incompetence by Lebanese officials, raising the specter of more political instability in an already troubled region. The blast, which registered on seismographs at the level of a 3.3-magnitude earthquake, destroyed commercial and residential sections of eastern Beirut and cut off electricity across vast swaths of the city. Officials say it was triggered by a warehouse fire that ignited thousands of tons of ammonium nitrate that arrived in the Beirut port in 2013 on a dilapidated Russian cargo ship and remained there, despite multiple requests for guidance from Lebanese customs officials as to how to dispose of it safely. Mass protests erupted in Lebanon last year, a reaction to a struggling economy and poor (sometimes corrupt) governance by Lebanon’s political class. The unrest led to the resignation of Prime Minister Said Hariri in October of last year, and this latest incident is sparking renewed anger at the country’s political leadership – on Wednesday, protestors reportedly attacked Hariri’s convoy. The International Monetary Fund has forecast that Lebanon’s economy could contract by as much as 12% this year as a result of Covid-19 lockdowns. That, coupled with outrage over this port tragedy, could mean more protests ahead.

Argentina restructured $65 billion in debt with creditors, including BlackRock Inc., in a deal that provides significant debt relief to the country, according to Argentina’s Ministry of Economy. Argentina’s President Alberto Fernández has made it his mission to restructure debt with private creditors as well as with the International Monetary Fund (IMF), which provided a $56 billion bailout to Argentina in 2018. Fernández defeated the market-friendly incumbent President Mauricio Macri last year in elections and took office in December 2019. He believes debt restructuring is crucial to stabilizing Argentina’s economy, which suffers from a weakened peso, inflation of around 45%, and a possible GDP contraction of 12% in 2020 due to the pandemic. The deal allows Argentina to change the payment dates for some new bonds and paves the way for Fernández to now negotiate with the IMF. Argentina has suffered nearly two decades of strife dealing with debt and the specter of default, ever since 2001, when its debt reached $160 billion and the country declared bankruptcy.

U.S. Health and Human Services Secretary Alex Azar will make an official visit to Taiwan, marking the first visit from a cabinet-level U.S. official in six years and another significant step to assert U.S. policy priorities in an already tense bilateral relationship with China. Azar’s visit was carefully calibrated by the Trump administration to send a clear signal to Beijing in support of Taiwan, but to send a cabinet member with relatively little political heft. For comparison purposes, a Taiwan visit by Secretary of State Mike Pompeo, who recently called attention to Taiwan’s “vigorous democracy” in a speech railing against China’s censorship, human rights abuses, and theft of U.S. intellectual property, would have likely crossed a red line. China will feel compelled to respond, though its response is likely to be proportional (e.g. ratcheting up threats against Taiwan or taking limited punitive action against Lockheed Martin, which recently participated in an arms sale to Taiwan). As with a number of recent small U.S-China dust-ups, we see little immediate risk of escalation from this episode alone. However, the U.S. announcement of a coming ban on popular apps TikTok and WeChat (the latter is a critical component of both communications and business for any firm operating in China) along with threats (that will likely be made good) to delist Chinese companies from U.S. exchanges and reports that the administration may sanction Hong Kong Chief Executive Carrie Lam will add fuel to the fire. Too many of these incidents – or just one that misses the mark – could tip the relationship over the edge into something more confrontational.

In Other News: Egypt Edging Closer to Libya Conflict, India Sending Troops to the Border & More – July 31, 2020

July 31, 2020

Egypt edged closer to entering the conflict in Libya when the Egyptian Parliament gave President Abdel Fattah Al-Sisi formal authority to use military force. Al-Sisi has threatened military action against the Turkish-backed western Libyan forces of the Government of National Accord (GNA) if they continue their advance on the coastal city of Sirte in Libya. Egypt, along with the United Arab Emirates (UAE) and Russia, supports the eastern Libyan forces commanded by Khalifa Haftar, and Al-Sisi has said Egypt would not allow for the defeat of Haftar by the GNA. Al-Sisi has threatened the use of force, but he has also called for a ceasefire in Libya. Deploying the Egyptian military would put Egypt in direct conflict with Turkey in a proxy war in Libya, which would have regional security implications. In an effort to gather international support for Egypt’s position, Al-Sisi has courted support from Saudi Arabia and the United States. Saudi Foreign Minister Prince Faisal bin Farhan has said Saudi Arabia supports Egypt’s position on Libya but also called for a political solution to the internal conflict. Al-Sisi has spoken with U.S. President Trump as well, and reportedly, Trump agreed on the need to maintain a ceasefire in Libya. However, the U.S. position on Libya is complicated, particularly as the United States has criticized and threatened to sanction Russian-linked military contractors who have taken control of two of Libya’s largest oil facilities.

India is sending another 35,000 troops to the Actual Line of Control, its contested border with China, as bilateral talks have faltered after a clash with Chinese troops on June 15 killed at least 20. India and China have been engaged for weeks in efforts to resolve the dispute, and Beijing, widely believed to have been the aggressor, had announced that its troops were disengaging in many of their locations in the area. Negotiations are expected to continue, but progress appears to have stalled for now. India’s military is no match for China’s on a normal day, and right now, India is facing twin Covid-19 crises – the world’s fastest-growing infection rate and an economy pummeled by a two-month-plus nationwide lockdown. Its military is already engaged at a section of disputed border with Pakistan, as well as in Jammu and Kashmir, where anti-Delhi resentment is running high following India’s revocation of the area’s semi-autonomous status, and in light of a spate of anti-Muslim policies. India initially seemed to be hitting back at China through punitive trade measures targeting its tech and telecom sectors, banning more than 100 Chinese apps and restricting tech giant Huawei’s involvement in buildout of its 5G network, and under the circumstances, this show of force in the Himalayas is likely to be just that – a show. India’s best option, and one it seems to be simultaneously pursuing, is to hew closely to a strengthening coalition of allies whose collective alarm at Chinese aggression throughout Asia is prompting them to push back in various ways, including high-profile military drills in the South China Sea and closing off their 5G networks to Chinese developers.

Russia plans to officially register the world’s first Covid-19 vaccine by mid-August, which would be a substantial victory for the Kremlin’s push to reestablish the country’s global standing as a scientific powerhouse. The Soviet Union (with Russia at the helm) was notable for its many scientific achievements, including the world’s first artificial satellite and the first human spaceflight. However, the speed at which Moscow aims to introduce this vaccine into the general population has triggered some well-founded skepticism about the development process and suspicions that the country cut corners in its race to be first (though it has reportedly been administering the vaccine to business and political elites since April). Adding to concerns about its safety and efficacy is that data on the vaccine, under development by Gamaleya, has not been released to the public. The U.S. and U.K. have both accused Moscow of attempting to steal Covid-19 vaccine research, and if that effort proved successful, it could help to explain how Russia leapfrogged over an array of well-funded research teams in the West and elsewhere, including in Japan and China. Ultimately, being first may establish a scientific marker, but will be a secondary consideration next to safety, efficacy, affordability, and reliability of production and distribution.