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.