In Other News – Lithuania stands up to China as Taiwan opens a de facto embassy in Vilnius & More – 11/19/2021

November 19, 2021

Lithuania stands up to China as Taiwan opens a de facto embassy in Vilnius. In defiance of ongoing pressure from Beijing, on Thursday Lithuania announced that Taiwan had formally opened a de facto embassy in Vilnius using the name Taiwan. Other Taiwan offices in the United States and Europe refer to themselves as “Taipei” and avoid refence to the island itself, which China continues to view as its own. Back in August, when Lithuania refused to reverse its decision to open a de facto Taiwan embassy in Vilnius, Beijing recalled its Lithuanian ambassador and demanded that Vilnius follow suit. Chinese state media further remarked that Lithuania was “crazy” and epitomized the anti-China path in Europe.

This week Lithuanian Foreign Minister Landsbergis, who has called upon Japan and the United States to step-up joint coordination against China, said that economic pressure from Beijing poses a test for Lithuania, and that democratic countries must align in opposition to China’s coercive measures. Other Central European states like the Czech Republic and Slovakia have also been growing closer to Taiwan and could economically benefit from Taiwanese investment and strengthening trade; but this is a trend that China would like to avoid. Taiwan’s foreign ministry stated that the new Vilnius office would chart a “new and promising course” for relations with Lithuania, and cooperation on industries like fintech, lasers, and semiconductors is anticipated.

On visit to Europe former Brazilian President Lula da Silva is treated like a head of state but at home he’s taking concerted measures to become an effective one. Former Brazilian President Lula was making the rounds in Europe this week, trying to consistently differentiate himself on global issues from current Brazilian President Bolsonaro. Lula, whose corruption charges were annulled last spring and is currently the leading candidate for the upcoming 2022 Presidential elections, visited French President Emmanuel Macron in Paris and was received in a manner usually reserved for a current head of state. Macron and Lula reportedly discussed the future of the European Union and integration of Latin America. Lula also gave a speech before a committee within the European Parliament where he received a standing ovation.

While Lula’s international reach is apparent, he’s also making dramatic efforts back home to make sure that if he does secure the presidency, he’s going to be able to lead effectively. Two weeks ago, Brazilian journalists broke the news that Lula was reaching out to a historic nemesis, Brazilian politician Geraldo Alckmin to serve as his vice president. Whether or not the two ultimately unite, Lula’s outreach to Alckmin, who ran against him in a heated campaign in 2006 and has consistently supported Lula’s opponents, suggests that the former president is willing to take great strides to form a broad coalition and ensure a future majority in congress.

In Other News – US Appeals Court allows WhatsApp to move forward with a lawsuit against NSO Group & More – 11/12/2021

November 12, 2021

Turkish drones continue to grow in influence and sophistication, placing Turkey in esteemed but complicated geopolitical position. This week, leading Turkish defense company Baykar announced that it will be testing two new unmanned aircraft with the ability to take off from naval ships, further securing Ankara’s position at the forefront of drone technology. According to Baykar’s CEO, the new drones should be ready in about two years and will extend the nation’s capabilities from land to sea. Over the past twenty years, Ankara has made a concerted effort to build up its defense industry and designing advanced drones has been central to this effort. The results appear to be paying off, as the use of Baykar’s Bayraktar TB2 drones has contributed significantly to recent military victories in Syria, Iraq, Libya, and Azerbaijan, among others, and the firm has signed export deals with 13 countries. Turkey is now reportedly one of the world’s top four drone producers along with China, Israel, and the United States.

But Ankara’s efforts to be at the forefront of drone technology also puts it in a delicate geopolitical position. Turkish drone strikes in northeastern Syria continue to target areas controlled by the US-backed Syrian Democratic Forces, contributing to tensions with Washington. And even when Turkey isn’t directly behind the strikes, its drone sales are viewed as indirect support of a nation. Egypt was recently angered by news of potential Turkish drone sales to Ethiopia, and Russia continues to be upset by Ankara’s ongoing relationship with Ukraine. In 2019, Ukraine, who has been critical in the development of the TB2 platform, signed an agreement for over ten Turkish drones and joined a venture with Turkey to produce nearly 50 more. Two weeks ago, Russia warned Ankara over arms sales to Kyiv after a TB2 drone attacked pro-Russian separatists in Ukraine, and on Wednesday US Secretary of State Antony Blinken expressed concern about “unusual Russian military activity” along the Ukraine border that hints at a possible Russian invasion, a scenario that would put Turkey further in the balance.

US Appeals Court allows WhatsApp to move forward with a lawsuit against NSO Group, implications for accountability of tech companies. NSO Group, the Israeli developer of Pegasus spyware that’s reportedly been used by authoritarian governments worldwide to surveil political opponents and journalists, took a hit earlier this week when the US Ninth Court of Appeals concluded that the immunity granted to foreign governments that prevents them from civil litigation in US courts does not extend to NSO. WhatsApp is accusing NSO of targeting its California servers with malware and hacking into 1,400 WhatsApp user accounts in violation of US state and federal law. This week’s appeals court decision supports an earlier 2020 ruling from a lower court and comes just a week after the US Department of Commerce added NSO to its “entity list,” which limits the group’s access to US components and technology. NSO is expected to try to reverse the sanctions and has argued in court that its technology is designed to help law-enforcement authorities gain insight to terrorists and criminals who are hiding behind encrypted apps to plot attacks or crimes. But thus far US courts have concluded that whatever NSO’s government customers do with the software and services does not render NSO an “agency or instrumentality of a foreign state.” It is possible that NSO could try to take the case to the US supreme court, but it’s uncertain whether the court would take the case.

“A Spymaster and a Gentleman, Jack Devine Dispels CIA Myth and Dispenses his Truth,” Jack Devine on The Live Drop November 8, 2021

Jack Devine speaks to The Live Drop about his initial impressions of Santiago in 1971, the vast difference between liberalism and communism, and he clarifies the extent and limitations of US involvement in both of Pinochet’s coup attempts.

Link to podcast

In Other News – Tech companies & US try to curb Russian Influence in Nicaraguan Elections & More – 11/5/2021

November 5, 2021

Before Nicaraguan elections, tech companies, US government take action to curb corruption and Russian influence. For several months Nicaraguan President Daniel Ortega and his Vice President wife Rosario Murillo have been locking up political opponents and driving dissidents, businesspeople, and journalists out of the country to prevent any viable competition for the November 7 presidential elections. But Ortega, who has been in power since 2006, has also been running an online disinformation campaign since 2018, and this week Facebook parent company Meta announced that it had taken down 1000 fake accounts controlled by Ortega’s government. While the misinformation effort hasn’t been directly linked to Moscow, Russian’s strong influence in Nicaragua is apparent in several realms – through the sale of Russian tanks and military equipment to Managua as well as the construction of an alleged satellite facility. The two nations also recently signed an IT security agreement that effectively allows Russia to use Nicaragua as a platform for electronic and cyber operations. In response, this week the US Congress approved the RENACER Act, calling for new sanctions on Nicaragua and increased monitoring of human rights abuses and Russian activities in the country, and Washington will also review Nicaragua’s participation in Central America Free Trade Agreement.

Pressure from the Gulf worsening Lebanon’s crisis. Lebanon is in a dire economic crisis and Saudi Arabia, a key economic partner and traditional ally of Lebanon’s Sunni Muslim community, just dealt a blow to Beirut by cutting off all diplomatic and economic ties. Saudi has clearly been frustrated with the degree of Iran’s power in Lebanon via Tehran’s support of Hezbollah, but the breaking point was a recent comment made by Lebanese television personality-turned Interior Minister George Kordahi that asserted Saudi Arabia was responsible for the war in Yemen and Iran-backed Houthis were only defending themselves. Anger over the remarks has spilled over and other Gulf states like the UAE, Bahrain, and Kuwait have also withdrawn their diplomats from Lebanon. Critically, the Saudi spat could have grave repercussions on an already ravaged Lebanese economy. The Lebanese pound, pinned to the US dollar for over 20 years, has depreciated by more than 90% since 2019, and the economy further plummeted with the devastating Beirut port bombing in 2020 and effects of the Covid-19 pandemic. Lebanese Prime Minister Najib Mikati is reportedly trying to get Kordahi to resign and appease Saudi Arabia, but it’s unclear if Kordahi’s resignation would even do much given Saudi’s clear aggravation with Iran.

New US Government report links security and climate change. In late October, the Office of the Director of National Intelligence (ODNI) released the first-ever National Intelligence Estimate (NIE) on climate change, assessing that global warming “will exacerbate risks to US national security interests as the physical impacts increase and geopolitical tensions mount about how to respond to the challenge.” Nations are arguing about who should be fiscally responsible for the global transition to clean energy and competing to see who can profit from the shift. While countries have historically used control over resources as a political weapon or asset, they can truly exploit their position now that prices for coal and gas are high, supply is low, and alternative greener options are not yet viable. The NIE also highlights how the fight for limited natural resources, like water, could lead to new territorial claims and reignited border disputes. We’re already seeing this with China’s water pursuits in the Himalayas, impacting both India and Tibet. Humanitarian crises caused by flooding and other natural disasters are also anticipated to rise and could make certain areas entirely uninhabitable, further increasing global political instability.

In Other News – US Senators urge President Biden not to sanction India on Russian weapons purchase & More – 10/29/2021

October 29, 2021

US Senators urge President Biden not to sanction India on Russian weapons purchase, implications for global Russian defense deals and China. In 2018, India committed to buy five units of the Russian S-400 surface-to-air defense missile systems and the first batch is scheduled to arrive this year. Delhi aims to ramp-up defenses against Pakistan and China, particularly given the ascent of the Taliban and ongoing border disputes, but the S-400 purchase subjects India to sanctions under the US Countering America’s Adversaries Through Sanctions Act (CAATSA) which prohibits engagement with Russian defense or intelligence sectors. In 2020, Washington sanctioned Turkey under CAATSA for purchasing the S-400 system, but some US senators are arguing there is now a “national security imperative” for waiving sanctions on India. Security challenges from Pakistan and China are simmering on India’s borders, and this week Beijing issued the Land Border Law, which takes effect Jan 1, detailing how China guards its land borders and emphasizing that the nation is willing to fight for territorial integrity it deems “sacred and inviolable.” India has one of the few remaining unsettled boundaries with China, and the law sends a strong signal that Beijing isn’t going to hesitate to use force.

As COP26 approaches, green and sustainable bonds continue to gain traction. The 26th United Nations Conference of the Parties Climate Change Conference (COP26) begins in Glasgow this weekend, with companies, nations, and investors all making pledges and commitments to curb global warming. As part of this initiative, Qatar Energy, a top global liquefied natural gas (LNG) supplier, is reportedly on track to become the first national oil company in the Gulf to sell green bonds as part of its sustainability initiative. According to a recent report by Moody’s ESG Solutions, green, social, sustainability, and sustainability-linked bond issuance will reach a global combined $1 trillion in 2021, nearly doubling from 2020. Green bonds, which have been around for over a decade, are typically used to finance projects pertaining to environmental issues like renewable energy, while social bonds tackle issues like education and healthcare. Sustainability bonds speak to both causes and became especially relevant during Covid-19 which brought social financing to the forefront at the same time climate pressures have increased.

Upcoming local elections in South Africa could challenge leading party. After a summer marked by political infighting, social unrest, looting, and a lapse in the provision of basic services, on Monday South Africa will hold local elections. Voters will be looking for candidates to get the economy back on track and resolve the negative impacts of Covid-19, especially given the continued rolling blackouts and high national unemployment rate over 30%. However, analysts have cautioned that voters are being fed misinformation by campaigners and could be voting to sway national issues that wouldn’t be changed in a local election. Religion has also been newly used as a campaigning tool, with some parties advocating for a return of religious education. Media reports indicate that many younger voters are apathetic and disillusioned with both the ruling African National Congress (ANC) and the broader political apparatus. Nonetheless, local elections tend to be a good gauge for general elections in South Africa, and it will be telling to see how the ANC, who’s won every general election since 1994, will fare given the exceedingly complicated economic and political environment.

In Other News – Russia accused weaponizing gas supplies; ISIS-K continues to challenge Tabliban authority; & More – 10/22/2021

October 22, 2021

Russia accused of weaponizing gas supplies amid Europe’s ongoing energy crisis. Putin appears to be exploiting Europe’s energy crisis to get EU approval for Russia’s Nord Stream 2 pipeline that bypasses Ukraine, transferring gas from Russia to Germany. While Putin insists that he hasn’t been withholding gas destined for Europe pending the project’s approval, the International Energy Agency has stated that Russia could be doing more to increase gas availability. Natural gas prices in Europe and Asia are reportedly at record highs, due to a combination of increased demand post-Covid, extreme weather, and speculation on the EU’s emissions market, and with winter nearing Europe is looking to ensure the safety of both its economy and citizens. While Putin blames Europe for not storing enough gas after the harsh winter of 2020-2021, he has also remarked that if the Nord Stream 2 is approved he’s 100% certain that Europe’s energy woes would be resolved. Further, it will offer Putin the welcome consequence of endangering Ukraine’s gas supply by pushing Ukraine to the end of the new west-to-east receiving line.

ISIS-K continues to challenge Taliban authority with steady stream of destructive attacks. October has seen multiple, extremely deadly attacks against the Afghan Shi’a population carried out by members of ISIS-K, in what’s part of a larger effort for the group to disrupt any new order established by the Taliban. Two separate bombings of Shi’a mosques during well-attended Friday prayer sessions have resulted in at least 100 deaths and hundreds of injuries. ISIS-K has also been notably active in parts of the country that aren’t its traditional strongholds, like Kandahar, and the group has been brazen enough to kill Taliban police chiefs and other officials. The United Nations has called the most recent Shi’a mosque attack part of “a disturbing pattern of violence” and there isn’t going to be an easy or clean resolution. Weekly ISIS propaganda published via Telegram has further highlighted ISIS’ intent to target Shi’a throughout the Middle East, with particular attention to the ethnic minority Hazara Shi’a population of Afghanistan. Meanwhile, in addition to ethnic minorities, women, artists, and journalists continue to be targeted and disenfranchised by both ISIS-K and the Taliban.

Venezuela-US tensions rise after extradition developments of two key Venezuelan figures. Last weekend Alex Saab, a businessman accused of laundering money for Venezuela and a close advisor to Venezuelan President Nicolás Maduro, was extradited to the United States after being detained in Cape Verde since June 2020. US Secretary of State Antony Blinken remarked that the criminal case against Saab, who also has purported ties to Hezbollah, had transpired for over a decade, but Maduro immediately retaliated by shutting down scheduled negotiations with Washington and detaining six US oil executives. Earlier this week, the Spanish high court gave permission for another extradition to the United States, but this one pertains to a Maduro opponent− Hugo Carvajal, a Venezuelan former spy chief who faces charges of narcotics trafficking and collaboration with the FARC. Carvajal reportedly had a falling out with Maduro and could hold incriminating evidence against him. In the meantime, Maduro seems to be wasting no time upping his US defenses, announcing that Venezuela and Iran will sign a 20-year cooperation accord.

In Other News – Cuban Government opponents denied permission to march in Havanna; US holds two-day virtual summit on cybercrime; & More – October 15, 2021

October 15, 2021

Cuban government opponents denied permission to march in Havana this November, protestors say they will continue without it. On Tuesday, Cuban local authorities rejected the request by a broad group of Cuban artists and dissidents, many reportedly based outside of the country, to hold a rally for civil liberties next month in Havana. The protest was initially scheduled for November 20 but changed to November 15 after the government suddenly designated the 20th as a National Defense Day. November 15, however, marks the date that Cuba is scheduled to reopen its borders to tourists after a two-year Covid-19 shutdown, and active measures of political dissent could be a major disruptor. Cuban authorities, who are on high guard after the rare and widespread anti-government protests last July, have asserted that the aspiring November protestors are linked to subversive organizations and aim for regime change, likely instigated by the United States. According to a statement on the dissident coalition’s Facebook page, protestors are planning to march with or without permission, subjecting them to a potentially violent response and even imprisonment as seen last summer.

United States holds two-day virtual summit on cybercrime, Russia not included. This week the United States held a two-day meeting with representatives from over 30 countries to discuss key cybercrime issues, like prosecuting ransomware criminals and the role of virtual currency in illicit payments, emphasizing that international collaboration is necessarily to thwart the global threat. Australia, Germany, India, and the United Kingdom each headed up a core session. According to a senior US official, Russia was not invited to the meeting due to “various constraints”, but future participation is not off the table. The United States initiated bilateral talks with Russia on ransomware over the summer, where President Biden reportedly shared information about criminal activity emanating from Russian territory, but Putin hasn’t responded with any visibly significant actions thus far. While major cybercrime actors from Russia, and for that matter China, won’t be easily deterred without direct action on the part of Putin and Xi, ransomware criminals often employ transnational networks to launder money across multiple countries and jurisdictions, and there could be opportunities for allies to block criminal behavior along the way.

Iraqi parliamentary election results signal disillusionment with Iran, broader Iraqi political apparatus. Earlier this week, allies of Shi’a cleric Moqtada al-Sadr gained the bulk of Iraqi parliamentary seats, upsetting Iran-backed groups who did much better in 2018 and are already stating they’ll appeal the election results. In recent years, al-Sadr, who is remembered for leading a resistance against US troops back in 2003, has adopted a nationalist bent and gained momentum in his rallying cry against corruption and all foreign interference in Iraqi affairs− particularly by the United States and Iran. But in addition to revealing significant divisions among Shi’a factions in the country, the recent elections showed a great disillusionment of politics in general. Voter turnout of about 40% marked a record low in the post-Saddam Hussein era, indicating widespread distrust of Iraqi politicians and general skepticism about the ability for citizens to affect change; the number of younger voters was especially low.

In Other News – New and rejuvenated alliances surface to curb threat of China, Iran & More – 10/1/2021

October 1, 2021

New and rejuvenated alliances surface to curb threat of China, Iran. Last week the United States, India, Japan, and Australia met at the White House for the first in-person gathering of the reinvigorated Quad Security Dialogue since Biden took office. Although the Quad isn’t a military alliance and there is no formal defense pact, it has the potential to be a powerful strategic partnership given the significance, positioning and shared priorities of the nations involved. India’s presence is particularly notable given its historic resistance to joining security alliances. Vietnam, South Korea, and New Zealand, so-called Quad Plus members, could also come to lean more heavily on the alliance depending on China’s trajectory. The new Australian, US, and UK “AUKUS” pact likewise adopts a group strategy to counter China’s dominance in the Indo-Pacific.

Separately, in the Middle East this week, Israel’s foreign minister traveled to Bahrain in a historic first visit to inaugurate the Israeli embassy in Manama‒ the two nations are expected to sign memorandums of understanding on technology, economics, and water among others. In a meeting that many would have felt impossible just several years ago, the Israeli and Bahraini foreign ministers discussed “shared threats” and sent a clear signal to Iran that they’re willing to go beyond status quo relations to keep their aggressive neighbor in-check.

Implementation of central bank digital currencies likely to grow as pilot finds the concept can save time and money. Recent results from a Bank of International Settlements (BIS)-backed pilot study involving the central banks of Hong Kong and Thailand indicates that cross border payments made via digital forms of fiat currency could reduce transaction time from days to seconds and costs by up to 50%. Over 80 nations are reportedly exploring central bank digital currencies (CBDCs), with China taking the most aggressive approach by simultaneously piloting the digital yuan and making other cryptocurrencies illegal entirely. CBDCs are digital versions of fiat currency and they’re backed by the government which makes them less volatile, and less anonymous, than cryptocurrencies like Bitcoin. With CBDCs, governments hope to capitalize on both blockchain technology and the success of digital payment systems like PayPal and WePay. CBDCs are touted to help nations better reach and serve unbanked citizens, but they also grant the government far greater insight into consumer data that’s currently only held by private fintech companies or banks. The Fed still isn’t entirely sold on the concept, recognizing that the risks of CBDCs include everything from hacking and surveillance, to disrupting the function of domestic financial institutions and the global payments system, but it’s likely going to be under pressure to come up with something given the prevalence of the effort.

To counter the threat of climate change, some lawyers suggest ecocide should be treated as an international crime. With climate change at the top of the global agenda, over the summer an independent panel of environmental and criminal lawyers drafted a proposal to amend the Rome Statute of the International Criminal Court (ICC) to include ecocide as the fifth international crime. The addition would put ecocide along genocide, war crimes, the crime of aggression and crimes against humanity, and would make private actors like investors and business leaders liable to criminal prosecution. The panel has defined ecocide as “unlawful or wanton acts committed with knowledge that there is a substantial likelihood of severe and either widespread or long-term damage to the environment being caused by those acts.” The definition emphasizes that punishable acts must cause severe and either widespread or long-term environmental damage. The ICC can’t investigate corporations or governments, but individuals who are part of larger groups could be charged. Notably, the addition of ecocide would allow the ICC to prosecute the crimes even if they take place during times of peace where currently environmental violations are only illegal during times of war.

In Other News – World Bank Discontinues Doing Business Report & More – 9/24/21

September 24, 2021

The internet was supposed to be borderless, but national leaders are wielding control over tech companies via local employee requirements. National leaders frustrated with the power of big tech gained a victory this week when Apple and Google capitulated to Russia’s orders and removed an election app created by imprisoned Russian opposition leader Aleksei Navalny just before the onset of Russia’s parliamentary elections. The tech companies reportedly stood their ground, but Russia threatened criminal charges against local Google employees, naming specific individuals who would face prosecution if the companies didn’t comply and remove the app. Countries like Russia and India have recently used their market power to require that tech companies maintain local offices where employees are physically vulnerable to state-level enforcement. In May, Indian police officials raided two local Twitter offices and demanded to know why certain government-issued Tweets had been categorized as “manipulated media.” In July, Putin signed a new law requiring that any social media company with more than 500,000 Russian visitors a day must open physical offices in Russia or else they’d be subject to advertising bans and penalties. Although some countries might be hesitant to make demands on a giant like Google, Russia has developed viable, competing domestic social media platforms and search engines, and is better positioned than most to handle a fallout with Silicon Valley.

World Bank discontinues high profile Doing Business report, rocks credibility of global rating systems. Last week the World Bank announced that it will discontinue its annual Doing Business report after a series of reviews and independent audits revealed that bank leaders pressured staffers to manipulate data and boost the ratings of China and Saudi Arabia in the 2018 and 2020 reports. Launched in 2003, the Doing Business report was part of the World Bank’s effort to remain relevant during the period when major developing countries like India and Brazil were becoming richer and could shop around for private, alternate funding. The report, which has not been without controversy, became a critical global ranking system and national leaders strived to be in the top 20. Members of the World Bank leadership were subsequently under political pressure to cook the books, and there apparently weren’t enough safeguards in place to preserve data integrity. While the recent scandal will impact the direction of the Bank, it will also have ramifications for other global rating initiatives that claim objectivity. As such, it will be more critical than ever for corporations and investors to seek diverse intelligence inputs to understand the true conditions on the ground and make the best decisions on how to proceed.

In attempt to curb ransomware activity, US Treasury issues first sanctions against cryptocurrency exchange. On Tuesday, the White House imposed sanctions against virtual cryptocurrency exchange Suex for its role in facilitating cryptocurrency payments to ransomware attackers. The designation marks the first time that the Treasury Department’s Office of Foreign Assets Controls (OFAC) has sanctioned a virtual cryptocurrency exchange for complicity in ransomware crimes. OFAC is adding Suex to its list of specifically designated nationals (SDNs), a category usually reserved for serious narcotics traffickers or terrorists, and it’s now illegal for US residents or citizens to conduct business with the exchange. Media reports indicate that Suex executives are likely Russian and Czech, but that the exchange operates out of Russia. According to an analysis by the US Treasury Department, over 40% of Suex transactions were associated with illicit actors, and blockchain analytics company Chainalysis identified about $13 million in bitcoin transactions sent through Suex directly tied to ransomware attacks. The Suex sanctions will serve as one component of many needed to curb the uptick of ransomware attacks that continue to disrupt critical supply chains.

San Diego World Affairs Council: Jack Devine and Jonathan Ward on Russia and China

The San Diego World Affairs Council presents the “Distinguished Speaker” Series featuring Jack Devine & Jonathan Ward, Ph.D.

Jack Devine and Jonathan Ward on Russia and China