In Other News: Iranian Navy Ships Headed to Venezuela, Bangladesh Economic Growth & More – June 11, 2021

June 11, 2021

Reports indicate that two Iranian navy ships are headed to Venezuela with a transshipment of weapons in an apparent arms deal between the two countries. The U.S. government has been monitoring the movement of the ships Makran and Sahand which sailed around the Cape of Good Hope in Africa and are currently heading northwest across the Atlantic. Reportedly, the U.S. government believes the Makran is carrying fast boats in addition to a cache of weapons for sale to Venezuela. Such missile attack boats are used by Iran’s Islamic Revolutionary Guard Corps in the Persian Gulf and can be outfitted with weaponry. Iran has used these boats to provoke commercial and military boats in the past, including U.S. Navy ships in the Gulf. One of the U.S. concerns is the possibility that Venezuela would adopt a similar strategy in the Caribbean. U.S. Defense Secretary Lloyd Austin commented on the situation in Congressional testimony on June 10 about what is perceived as a provocation in the Western Hemisphere. Iranian officials have commented publicly too, saying that Tehran is not in breach of international law by trading with their ally Venezuela. The United States has sanctions on both Iran and Venezuela and has intercepted and seized transshipments of gasoline from Iranian vessels heading to Venezuela in the past year. The ships are not expected to arrive until July, and reportedly, U.S. officials will be monitoring the ships movements, including refueling at ports along the way, while also weighing options for a response. The successful transshipment of Iranian arms to Venezuela would be a significant escalation in tensions between the United States and each of these countries – potentially complicating U.S. President Biden’s negotiations for a return to the Iran Nuclear Deal.

An uptick in high-profile ransomware attacks brings the necessity of proactive cyber hygiene to the forefront. Over the past year, global cyber criminals have conducted an unprecedented number of ransomware attacks with an estimated $400 million paid out via cryptocurrency in 2020. This is attributed in-part to lax cyber security protocol in work from home arrangements and opportune targeting of industries battling Covid-19, but also due to an increase in the sophistication of the attacks themselves. The first documented ransomware attack was in 1989 but the attacks did not increase until about 15 years later when criminals started to use encryption algorithms that were tougher to crack, locking critical files in a way that could only be recovered with a private decryption key held by the attackers and sold for a ransom. Further, some attackers became more strategic, targeting industries like hospitals that depend on immediate access to their files and are more likely to pay. Cyber criminals now use more clever methods of infiltration such as spear-phishing – where an email is tailored or socially engineered for a particular recipient, increasing the likelihood of a click. The evolution of ransomware combined with society’s growing dependence on files and systems access has led to much higher profit margins for the attackers. If companies pay the ransom, most criminals unlock the files and move on to the next victim. Ransomware itself has helped spur numerous business ventures: sophisticated attackers make and sell ransomware toolkits for less tech-savvy criminals, blockchain analytics firms try to trace and recover the cryptocurrency payments, and ransomware negotiators try to lower the price of file recovery. Experts are debating if paying ransom should be illegal, but ransoms are often paid in secret and can be of an urgent nature, like the recent ransom payment by Colonial Pipeline. Regulation of the cryptocurrency industry is also actively evolving, and authorities are getting more aggressive about tracing cryptocurrency, as the recent recovery of Bitcoin from the Colonial Pipeline attack demonstrates. Perhaps most importantly though, cyber hygiene is key and can prevent cyber criminals from getting into computing systems in the first place.

Mexico’s ruling MORENA political party has lost its supermajority in Congress in the midterm elections, while Peru’s presidential runoff race remains too close to call but with socialist candidate Pedro Castillo taking a slight lead. Mexican President Andrés Manuel López Obrador’s MORENA and affiliated parties lost its qualified majority in the lower house of Congress in the June 6 elections, which were considered the largest elections in Mexican history. Preliminary results indicate that MORENA captured about 35% of the vote and lost at least 50 seats. Official results are expected next week, but it is likely that Mexico’s ruling party will have to negotiate with other smaller parties to move legislation through Congress. At the state level, MORENA took 11 of the 15 governorships. However, candidates from a new political party called Movimiento Ciudadano won the governorships in the states of Jalisco and Nuevo León. The Mexican election season saw escalated levels of political violence, but so far, candidates, parties, and the president are accepting the results. In Peru, the presidential runoff race held on Sunday, June 6 remains contested, with the right-wing candidate Keiko Fujimori, the daughter of former Peruvian President Alberto Fujimori, alleging fraud. The left-leaning, socialist candidate Pedro Castillo, a former school teacher, appears to have a slight lead with 50.2% of the vote to Fujimori’s 49.8%. Approximately 90% of the votes have been counted, and election observers have not indicated any evidence of fraud. While still too close to call, Castillo from the Peru Libre political party is closing in on the presidency. His ascendency to office reflects a growing resentment of political and economic elites in the country as Peruvians seek a new path coming out of the pandemic. It will likely mark a new chapter for Peru and a possible abandonment of market-friendly economic policies as well as a shift in the political landscape of the region.

Bangladesh’s economic prowess draws increased international attention, but internal policies remain key. Bangladesh has been making a slow and consistent economic rise, and in the 2020-21 fiscal year, reported higher GDP per capita than India. The success is largely attributed to the nation’s deliberate plan to develop and promote its garment industry, with a focus on apparel, which now employs over 4.5 million citizens and serves as a global leader in production. Second to garments, Bangladesh relies heavily on remittances, income that surprised many and continued to come in strongly over the past year despite the pandemic. Bangladesh now finds itself under close view of regional players who are trying to both learn from the success story and determine what the nation’s rise could mean for them. Just last week, Bangladesh helped Sri Lanka via a $200 billion currency swap, marking the first time that Sri Lanka borrowed from a South Asian Association for Regional Cooperation (SAARC) member other than India. International media reporting suggests that Qatar has rerouted a $5 billion investment originally destined to Pakistan for Bangladesh, and Malaysia and Japan are expected to up their ongoing investments as well. China’s also taking note, recently threatening longstanding bilateral relations would be damaged if Bangladesh cozies up with members of the Quadrilateral Security Dialogue (Quad), an informal strategic alliance involving the United States, Japan, India, and Australia. The success of Bangladesh’s garment industry is in part attributable to the integration of women in the labor force where they reportedly participate at 36% compared to India’s 20%, in addition to other social and human development indicators which are also higher. However, the nation faces potential destabilizers like political corruption, violent Islamist extremism, the impacts of climate change, and the difficult situation of the Rohingya refugees – all of which Bangladesh will have to navigate as it continues to grow economically.