In Other News: China Limits Cryptocurrencies, Anxiety Over Tokyo Olympics & More – May 28, 2021

May 28, 2021

China’s move to limit cryptocurrencies other than its own digital Yuan is a repressive move advertised as a protective measure. Last week, the Chinese Communist Party (CCP) State Council ordered a halt to cryptocurrency trading and mining within its borders, claiming that the ban would better protect its citizens from fraud and lower financial risks and speculative trading. In response to the new policy, the value of Bitcoin and Ethereum – ecosystems heavily dependent on mining activity in China – tumbled and the coins posted their largest one-day loss since the onset of the pandemic last year. But the notion that China designed its policy to reduce criminal activity in the crypto world does not add up. Illicit activity has been shown to only represent a small percentage of all Bitcoin and Ethereum transactions, and law enforcement can have visibility into a number of those transactions via financial regulations, investigative software, and legal process. Further, if the policy is designed to thwart criminal activity, regulations could have targeted privacy coins like Monero which are increasingly used for illicit transactions. With the advent of its own digital Yuan, only the Chinese government will be able to see how its citizens are earning and moving money, and they will be able to track all of it in real time. It has also been suggested that the coins might have expiration dates, allowing the government to provoke national spending during times of economic need. China’s move comes as the latest in a broader effort by the government to surveil and limit the activities of its citizens. It is also possible that China could use its omnipotent control over the coin as leverage against dealings with foreign businesses, preventing the outflow of digital Yuan to companies who protest China’s human rights, environmental, or labor abuses, as the nation is increasingly aggressive against companies who protest against its internal policies.

Anxiety over the Tokyo Olympics is growing, as a major Japanese newspaper and members of the Japanese business community call for the games to be canceled. The Tokyo Olympic games were canceled in 2020 due to the pandemic and rescheduled for July 23 to August 8, 2021, but the timing is now of concern given that the Japanese capital and other parts of the country remain under a state of emergency due to Covid-19. This week, a major newspaper in Japan, the Asahi Shimbun, called for the games to be canceled. The editorial board wrote, “We cannot think it’s rational to host the Olympics in the city this summer.” The business community is also voicing concern. For example, the CEO of SoftBank Group Corp., Masayoshi Son, warned that visitors could bring variants of the virus and a new surge of infections to Japan. In Son’s view, canceling the Olympics would bring financial losses, but going forward would be more dangerous and could lead to additional loss of life, lockdowns, and further economic damage to the country. So far, the International Olympic Committee (IOC) has said that the games will go forward and that 80% of athletes and officials will be vaccinated by then. They also point to strict protocols and restrictions on movement to ensure that the games are safe. However, according to Asahi polling data, more than 80% of the Japanese population would like the Olympics to be canceled. Meanwhile, the U.S. Department of State and Centers for Disease Control and Prevention (CDC) this week warned Americans against traveling to Japan for the summer Olympic games due to concerns for Covid-19 infections and the country’s slow vaccination rate. At this point, it seems unlikely that the games will be canceled. Canceling the games would be a major blow to Japanese Prime Minister Yoshihide Suga and IOC President Thomas Bach, who both insist that the games must go on. But the growing anxiety around the Tokyo Olympics in Japan is evidence that the global concern for Covid-19 remains high and global economic recovery will continue to be hampered by low vaccination rates and the emergence of new, more deadly variants around the world.

Mercenary issue looms large in the backdrop of a recent U.S. visit to Libya, while support by multiple state actors remains necessary for economic security. In mid-May, Acting U.S. Assistant Secretary for Near Eastern Affairs Joey Hood and Special Envoy for Libya Richard Norland visited Libya in what was reportedly the highest level diplomatic visit to Tripoli since 2014. Libya has been in a volatile position of repeated civil wars ever since longtime leader Muammar Gaddafi was captured and executed in 2011. The most recent conflict began in 2019 when East-based Libyan commander Khalifa Haftar attempted to capture Tripoli and take control over Libya’s Government of National Accord (GNA), then the leading party recognized by the United Nations. Haftar, who was supported by the UAE, Saudi Arabia, Russia, and Egypt, was ultimately taken down in late 2020 when Turkey increased its support of the GNA. Turkey supplied advanced military hardware and deployed thousands of Syrian mercenaries and additional troops. Since then, a fragile ceasefire has held, but the situation remains complicated by the number of mercenaries still on the ground. In December 2020, the UN estimated that there were at least 20,000 foreign fighters and mercenaries in Libya, including Syrians, Russians, Sudanese and Chadians. In March, the majority of opposing state actors formally recognized Libya’s newly unified interim government but they have not done much to move the mercenaries. On May 21, UN special envoy for Libya Jan Kubis warned that the continued presence of mercenaries is a threat to the entire region, adding that last month’s killing of longtime Chadian President Idriss Deby is a reminder of the link between the security situation in Libya and security and stability in the region. Getting the Russian mercenaries out of Libya will be particularly difficult, while Turkey’s ground presence is viewed with more nuance by Libya’s Government of National Unity (GNU). Relations between Turkey and Russia will no doubt impact the degree of security that the government is able to achieve moving forward and presents a diplomatic opportunity for the Biden administration in the months leading up to Libya’s December elections.

An air base under construction on Mayun/Perim Island in the Bab el-Mandeb Strait off the coast of Yemen demonstrates the island’s continued appeal, and is likely part of a larger strategic effort to counter threats from Iran-backed Houthi movement. A May 25 AP report of the recent construction of a “mysterious” air base on Mayun Island, broadly believed to be the work of the UAE, was met with a flurry of responses from Yemeni and Saudi government officials. While Emirati officials in Washington and Abu Dhabi have not taken responsibility, U.S. Senator Chris Murphy called the base “a reminder that the UAE is not actually out of Yemen.” The Saudi state news agency SPA made a statement claiming that all equipment on Mayun Island was under control of the Saudi-led Coalition Command and dismissed the notion of UAE involvement. Mayun Island, which sits at the entrance to the Red Sea in the strategic Bab el-Mandeb Strait, has a storied history of occupation and over the years multiple nations have sought control of the land for geostrategic purposes. But historic attempts to use the location have been fraught with obstacles, as the Island has no sources of fresh water, is brutally hot and dry, and the land mass itself is quite small. The UAE took control of the Island in 2015 after Gulf Arab forces swept in and successfully expelled the Houthi fighters, and the following year the Emiratis proceeded to start construction of a runway. However, the project stalled and three years later, the UAE left the Saudi-led coalition and withdrew its troops. If the UAE is behind the recent construction, it seems part of a broader Emirati strategy to amass maritime control. Last June, UAE-backed Yemeni separatists took control of Socotra, another geostrategic Island in the Gulf of Aden. The Iranian press has recently reported that the UAE brought Israeli tourists to Socotra and is possibly collaborating with the Israelis to establish intelligence bases throughout the Gulf. The Saudis have denied UAE presence or involvement strategic endeavors on Socotra.

In Other News: Egypt’s Diplomatic Role in the Middle East, Brazil’s Economy Improving & More – May 21, 2021

May 21, 2021

Egyptian President Abdel Fattah al-Sisi played a significant role in brokering a ceasefire agreement between Israel and Hamas, which have been engaged in renewed violence in the last 11 days. Egypt mediated the truce to pause the fighting between the two sides starting today, after diplomats from Egypt, Qatar, and the United Nations had engaged in diplomacy between Israel and Hamas. U.S. President Biden spoke at least six times with Israel Prime Minister Benjamin Netanyahu since the fighting began early last week and with Egyptian President al-Sisi yesterday before the deal was finalized. Egypt said it would monitor the truce between the parties and would be sending delegations to Tel Aviv and the Palestinian territories. Whether or not the ceasefire between Israel and Hamas holds – and many are skeptical – the growing prominence of President al-Sisi in the region cannot be overlooked. Egypt borders Israel and the Gaza Strip and has a vested economic and security interest in seeing some resolution to the conflict, or at least a cessation of violence. But Al-Sisi also has a political interest in being at the center of negotiations in the Middle East. Egypt has played a role mediating between Israel and Hamas for many years now, having brokered a truce that ended the last Gaza war in 2014. This latest assertion of leadership is proof that President al-Sisi is positioning himself as a regional powerbroker. If the ceasefire holds, Egypt’s position of influence in the region will most certainly increase.

Brazil’s economic forecast looks to be improving, according to the Ministry of Economy, but the Covid-19 pandemic continues to pose a threat to the country and to the political fortunes of Brazilian President Jair Bolsonaro. Brazil’s GDP forecast for 2021 was raised to 3.5%, due to improvements seen in the first quarter of the year and government predictions for a return of the services sector as the national vaccination program continues. Brazil’s National Industry Confederation has also said it expected that in 2021, the country would recover the losses suffered due to the pandemic in 2020. However, the pandemic is not over in Brazil. Last year, Bolsonaro was able to make emergency cash payments to help millions of Brazilians who had lost jobs, but the government was not able to continue the stimulus payments into 2021. Bolsonaro is hoping that the economic recovery and a significant ramping up of the vaccination program will protect him from the political consequences at the ballot box next year when he is likely to face off against former Brazilian President Luiz Inácio Lula da Silva in the presidential election. Lula da Silva has been an outspoken critic of Bolsonaro and his handling of the pandemic, recently calling Bolsonaro a “psychopath” for his mismanagement of the crisis. More than 435,000 Brazilians have died from Covid-19, and while the vaccination program is gaining momentum with more supply coming online, just one in eight Brazilian adults have been fully vaccinated so far. Brazil’s variant known as P1 has hit the country hard, as well as the rest of the region where Argentina, Bolivia, Peru, Venezuela, and Uruguay have recorded surges in the virus due to the more contagious variant from Brazil. Latin America accounts for just 8% of the global population but has one third of all Covid-19 cases in the world.

Iran and Iraq are closing in on a deal to build a short railway link between Basra and the Iranian town of Shalamcheh/Shalamjah which could connect China more closely to Iraq, and Iran to Syria. According to a statement by Iraqi Prime Minister Mustafa al-Kadhimi, negotiations to build a railway between Iran and Iraq are in their final stages, and multiple agreements and memorandums of understanding have been signed with Jordan and Egypt regarding energy and transportation lines. The project, which has been in the works for several years, is estimated to cost $150m and will be funded from Iran’s Mostazafan Foundation, described as a “semi-government charity.” While the rail line itself would only run about 30km, it holds strategic value to both Iran and Iraq, and could potentially expand the reach of Basra’s port facilities. Iranian President Hassan Rouhani praised the development as a “big change” and described the connection to Iraq, Syria and the Mediterranean as “very important.” Israel and Syrian opposition parties have both expressed disapproval of the project due to fear of Iran’s increasing influence in Syria and logistical proximity to Syria’s ports. Iran has already established rail links with Turkmenistan, Pakistan and Turkey, and in December 2020 launched its first railway with Afghanistan. In addition to increasing its access to the Mediterranean, the consistent expansion of Iranian rail efforts likely signals Iran’s intent to play a major role in the regional transport of goods, countering U.S. sanctions in the process. Already, Iran has been exporting hundreds of thousands of barrels of oil to China, Syria, the United Arab Emirates, and Malaysia despite U.S. sanctions. Oil exports from Iran have steadily increased since last summer, reflecting the nation’s efforts to overcome the negative economic impacts of both sanctions and the pandemic. Such economic activity calls into question the efficacy of U.S. sanctions on Iran and ultimately, whether they are enough to constrain Iran’s strategic and nuclear ambitions.

Ethiopia’s upcoming parliamentary elections have been postponed, stoking fear of further civil unrest with implications for the region. On May 15, Ethiopia’s electoral board announced that parliamentary elections scheduled for June 5 will be delayed for at least several weeks, the second time the vote has been postponed after the initial August 2020 date was canceled due to Covid-19. Last year’s delay heightened tensions between Prime Minister Abiy Ahmed and leaders of the Tigray People’s Liberation Front (TPLF) who viewed Abiy as illegitimate and proceeded to hold a regional vote of their own, which Ethiopia deemed illegal. Since then, the political conflict has evolved into a devastating war replete with thousands of civilian deaths and atrocities like beatings and gang rape. More than 60,000 Tigrayans have fled to refugee camps in Sudan where they face increasingly challenging conditions due to flooding and malnutrition. U.S. Secretary of State Antony Blinken, who has used the term “ethnic cleansing” to describe human rights abuses carried out in the Western Tigray, recently stated that the U.S. is “gravely concerned by the increasing number of confirmed cases of military forces blocking humanitarian access” and advocating for the immediate withdrawal of Eritrean soldiers who have sided with the Ethiopian government against the Tigrayans and are reportedly preventing and stealing aid. The upcoming elections, which come at this time of logistical and security strain within Ethiopia, have been met with critical reactions; the European Union said it would not observe the vote because Ethiopia refused imported communications equipment and could not guarantee independence of its mission, while internal Ethiopian opposition parties have asserted that a national dialogue on a range of issues should come before the election. Exasperating the situation, Ethiopia and Sudan continue to have a contentious border dispute over control of al-Fashaga, an area close to the Tigray region which could be ripe territory for a proxy war between Ethiopia and Sudan should the electoral process further destabilize the nation.

In Other News: Russia Denies Ransomware Attack, Renewed Violence in the Middle East & More – May 14, 2021

May 14, 2021

Russia has denied involvement in the ransomware cyberattack on the Colonial Pipeline in the United States, which has disrupted activity and supply from the biggest U.S. gasoline pipeline. According to the FBI, the attack was conducted by a criminal network called DarkSide, which is believed to be based in Russia or Eastern Europe, prompting many to believe the Kremlin was behind the cyberattack against a critical piece of American infrastructure. U.S. President Joe Biden said on Monday that there was no evidence so far that the Russian government was involved but noted that the ransomware was from Russia. A statement from the Russian Embassy in Washington said, “We categorically reject the baseless fabrications of individual journalists and reiterate that Russia does not conduct ‘malicious’ activity in the virtual space.” The attack on the pipeline caused a shutdown which has prompted panic buying at the pumps along the East coast, particularly in the Southeast. The hackers broke into the pipeline networks on Friday, May 7, and reportedly, Colonial Pipeline paid $5 million in ransom shortly after the attack was underway. It is unclear if the Russian government was involved in this ransomware attack – a pretty typical though significant type of attack that cyber criminals have launched against a number of other American private corporations over the last several years. But it should not be discounted as a serious possibility given Russian President Vladimir Putin’s history of using cyber tactics to undermine the United States. At the very least, the shutdown of a major gasoline pipeline and the panic buying that it has caused is evidence that the U.S. energy infrastructure is vulnerable to such cyberattacks, which can have a significant impact on oil and gas in the United States.

Renewed violent clashes between Israelis and Palestinians have made it difficult for Arab states with new diplomatic relations with Israel as well as for the United States and its role in the Middle East. The renewed conflict started May 10 and so far, Hamas and Islamic Jihad have fired more than 1,000 rockets from Gaza. Some have been intercepted by Israeli antimissile defenses, but others have killed Israeli civilians, prompting a significant Israeli military offensive in Gaza. By May 12, Israelis and Palestinians were engaged in mob violence on the streets of several Israeli cities, while the Israeli military killed senior Hamas military figures. These clashes represent the latest round in the longstanding conflict in the Middle East, including a 50-day war in 2014 and several others since Hamas took control of Gaza in 2007, but the violence this week has been the worst inside Israel in decades. It is unclear how the violence will impact the political future of Israeli Prime Minister Benjamin Netanyahu, who has been blamed by opposition leaders for the spiraling situation. Meanwhile, the clashes have made it hard for Arab governments which have only just recently established diplomatic relations with Israel. The United Arab Emirates, Bahrain, Sudan, and Morocco all normalized relations with Israel last year but have criticized Israeli actions this week. The accords struck with Israel in 2020 were supposed to give the Arab world more leverage over Israel when it came to the Palestinians, but this week’s renewed violence puts this assumption in doubt and the new relations to a major test. At the same time, the situation is quickly becoming a test for the Biden administration, which may be forced to engage before having formed a coherent strategy in the region. Biden has called for de-escalation and has sent an envoy, Hady Amr, to the region. But Biden has watched several successive U.S. presidents try and fail to achieve peace in the Middle East, and at least for now, seems more eager to avoid than to engage.

Iran has enriched uranium to a higher purity than previously believed, according to the UN atomic watchdog agency. The International Atomic Energy Agency Director General Rafael Grossi reported this week that inspections from late April confirmed that Iran is enriching uranium at up to 60% purity at its Natanz plant. According to the UN agency, this was thought to be the result of “fluctuations” in the process. Iran had announced that it would seek 60% enrichment and the report now confirms this to be the case. It is also further evidence that Iran continues to violate the restrictions as laid out in the 2015 Iran Nuclear Deal, which the United States pulled out of in 2018 during the Trump administration. Diplomatic talks to bring the United States back into the agreement have only just started, with representatives in Vienna now. This new revelation about Iran’s latest violations of the deal will make American reentry into the agreement that much more difficult. So far, Iran’s government in Tehran has said it would reverse such violations if the U.S. government would remove all sanctions instituted during the Trump term. The timing of talks has been further complicated by another incident in the strait of Hormuz this week (when a U.S. coast guard ship fired 30 warning shots on Iranian fast boats speeding toward U.S. navy vessels) and Republican Senators demands that Biden call off nuclear talks with Iran over its funding of Hamas and amid ongoing clashes between Israelis and Palestinians.

In Other News: India’s Covid Crisis, Post-Brexit Complications & More – May 7, 2021

May 7, 2021

India’s current Covid crisis could become a global economic crisis if the situation continues to deteriorate. India is suffering from a staggering surge of Covid-19 cases with multiple variants of the virus in circulation across the country. According to the Indian Health Ministry, the country recorded 412,262 cases of Covid-19 in a single day on May 6 – the new single-day record for India. This came just two days after the U.S. government began to restrict travel from India to the United States “in light of extraordinarily high Covid-19 caseloads and multiple variants circulating in India.” The U.S. Embassy in New Delhi urged American citizens to leave the country out of concerns for the availability of medical care. So far, the government of Prime Minister Narendra Modi has not instituted a national lockdown, despite the surge and calls from the opposition to do so. Instead, Modi has continued to support targeted, local restrictions to try to stop the spread of the virus. India’s economy suffered greatly from the severe national lockdown last year with a contraction of about 10%, but the current crisis may create economic dislocations nonetheless – not just for India, but also for the global economy. India makes up a sixth of the world’s population, is the fifth largest economy, and contributes significantly to global economic growth. A decline in Indian growth will impact the global recovery, as noted by the U.S. Chamber of Commerce which expressed concern that a contraction in India could create “a drag for the global economy.” At the same time, India produces 70% of the world’s vaccines, and the halt in vaccine exports to deal with the domestic crisis has impacted the World Health Organization’s Covax program designed to vaccinate 64 low-income countries. Without the vaccine, economic recovery in these countries also remains in doubt.

In the most recent post-Brexit complication, England and France both sent in the navy to deal with a fishing dispute off the coast of Jersey. British Prime Minister Boris Johnson announced the situation resolved May 6 after French fishing vessels departed waters they had occupied this week in protest to new fishing restrictions near Jersey, which is one of three British crown dependencies. The new trade agreement negotiated by the UK and the European Union as part of Brexit puts new limits on French fishing near Jersey and required new licenses, which were issued last week. The British deployed naval vessels in a show of strength against the French fishing boats, to which the French navy responded in kind. It was a dramatic escalation in a short period of time, complete with “act of war” headlines in the British press this week. England and France were hardly on the precipice of war over a fishing dispute in the English Channel, but it is the latest episode in the post-Brexit era. Other dramas playing out include the possibility of Scotland leaving the UK and a return to sectarian violence in Northern Ireland. The timing of the naval confrontation was not lost on observers, however, who noted that Johnson and his Conservative Party had much to gain from the public relations move just as Brits were heading to the polls in local elections across the country – the biggest set of votes since the 2019 general election, the coronavirus crisis, and negotiations for the post-Brexit trade deal with the EU.

Colombia is the latest country in Latin America to erupt in protests as the region faces increased risk of unrest coming out of the pandemic. Protests in Colombia started last week in response to President Ivan Duque’s proposed tax reforms designed to address the budget shortfall resulting from the last year of Covid-related economic declines. The protests were not just about taxes though, as Colombians of all ages took to the streets for marches and “die-ins” to express their discontent for the growing inequality and corruption in the country. In the past year, the Colombian government has taken a number of steps to increase liquidity and help those suffering from job losses due to the pandemic, but still, Colombia’s economy contracted 6.8% in 2020. The region as a whole contracted by about 7% last year. There is little doubt the pandemic has exacerbated existing problems in Latin America, including the large gap between the wealthy and poor in the region. The poor and middle class perceive the political elite to be corrupt, manipulating the system against them, and hampering their social mobility. Joblessness resulting from Covid-19 and the economic dislocations of the past year have thus increased this sense of helplessness and lost opportunity for many Latin Americans, who do not have access to the vaccine and have also lost loved ones to the virus in this past year. But protests in Latin America are not new, and in many ways, the protests in Colombia are similar to protests the region in 2019 in Chile, Bolivia, Nicaragua, and Peru. The country may be different, but grievances are largely the same.

In Other News: Russian Moves Against Opposition, Venezuela to Receive Humanitarian Aid & More – April 30, 2021

April 30, 2021

Russian authorities have suspended the activities of jailed opposition leader Alexey Navalny’s political organization the Anti-Corruption Foundation and is expected to label it extremist. This would put the organization in the same legal category as Al Qaeda and could portend prison sentences for its supporters. Many of Navalny’s aides and staff have already been arrested, and Navalny himself is facing another two years and six months of his own sentence in a notoriously harsh penal colony northeast of Moscow. Authorities have not made evidence in the case public, claiming that it includes “state secrets”. However, the steadily intensifying crackdown on Navalny and his supporters, triggered in part by a strong show of opposition to Kremlin actions targeting Navalny – both at home and abroad – reads as the product of political weakness and fear. Navalny’s supporters number in the thousands, at least, making the likelihood of the state making good on its threat to jail them all seem dubious at best. Recent constitutional changes put Vladimir Putin on track to remain president until 2036, having been initially elected in 2000 (with a hiatus from 2008-2012 while he was Prime Minister). Decades-long rule by the same strongman has been a feature of many post-Soviet states, as have worsening inequality and political repression, and growing discontent – all of which are visible in Russia now. Furthermore, Putin’s aspirations of a Russian return to great power status, and the associated extraterritorial adventurism (invasion, poisonings, spying, election interference, blowing up weapons depots), have led to growing international backlash, including a steady tightening of sanctions on some of the country’s wealthiest and most influential individuals. Strong man rule is not always toppled by popular opposition, and in any case, the opposition does not appear to be strong or organized enough to unseat the current denizens of the Kremlin. But the popular support Putin enjoys at home is looking increasingly shaky, western powers are hardening their positions against his aggressive actions, and opposition movements like Navalny’s are finding increasing purchase among ordinary Russians.

Turkish President Recep Tayyip Erdogan has demanded that U.S. President Biden reverse a decision to recognize the Ottoman killing of as many as 1.5 million Armenians in World War I “genocide”. The first U.S. president to do so was Ronald Reagan called it genocide in a 1981 statement on the Holocaust, but this did not constitute a formal recognition. Biden’s decision reflects both his administration’s focus on human rights as a core policy issue and a recalibration of the U.S. relationship with Turkey, which has suffered in recent years for variety of reasons. These include Turkey’s decision to disregard NATO objections and purchase Russian missiles (though Turkey is a NATO member) and the U.S. imposition of sanctions on Turkey’s state-owned Halkbank for violation of sanctions on Iran. Thus far, Erdogan has not followed up on his demands for a reversal with threats of concrete retaliatory action. Rather, Turkey appears to be mindful that the bilateral trade relationship with the U.S. can be a powerful tool to help reverse some of the more severe economic impacts of the Covid-19 pandemic. There is some concern, however, that retaliation against the designation could target Armenia directly, especially considering Turkey’s alleged involvement on behalf of Armenian neighbor Azerbaijan when fighting broke out between the two countries in late 2020 over the status of contested enclave Nagorno-Karabakh. However, this latest move by the Biden administration seems to indicate that it is prepared to be more confrontational with Turkey on select issues. However, this won’t sit well with Erdogan, whose aggressive actions – in any theater – would likely further complicate our relationship with Turkey and hinder Erdogan’s efforts to get Turkey’s economy back on track.

Venezuela’s President Nicolás Maduro has agreed to receive humanitarian aid from UN organizations. For months, Maduro has rejected humanitarian aid from several global aid agencies offering to help the Venezuelan people, seeing the offers as an affront to Venezuelan sovereignty and an example of American “imperialism” aimed at destabilizing his government. However, with the economic crisis in Venezuela now much worse as a result of the Covid-19 pandemic and U.S. sanctions on the oil sector, Maduro has agreed to allow for the UN World Food Program to provide school lunches for approximately 1.5 million Venezuelan children. The Maduro regime has also brokered an agreement for Venezuela to receive vaccines through the UN program known as COVAX. But the $64 million payment to COVAX was made possible only because opposition leader Juan Guaidó, who the United States and over 50 other countries have recognized as the legitimate interim leader of the country since 2019, requested the release of a portion of Venezuela’s frozen funds for this purpose. Prior to the agreement, Maduro had been seeking vaccines from Russia and China. While it is welcome news, some observers see Maduro as posturing with the UN in an attempt to regain international legitimacy as well as some lost popular support at home, particularly in a time when there are reports of growing lawlessness along the borders and a lack of state presence in the Venezuelan hinterlands.

In Other News: Russian Aggression, Cuba without the Castros & More – April 23, 2021

April 23, 2021

Russia appears to be seeking out a middle ground between overt aggression and plausible deniability in its western-facing foreign policy, likely in response to the U.S. ratcheting up the rhetoric around and response to Kremlin transgressions in the U.S., UK, and elsewhere. President Putin warned the U.S. and other Western countries in a state-of-the-nation speech that crossing unspecified “red lines” would bring an “asymmetric, fast and tough” response. But on the same day, Russia’s defense ministry announced plans to pull back troops back after amassing forces at the Ukrainian border in what the U.S. and allies had seen as an alarming display of sabre rattling. The Kremlin must show its domestic audience that it will respond in kind to recent U.S. moves to penalize Russia for election interference, adventurism in Ukraine, and the poisoning and imprisonment of opposition leader Alexey Navalny. At the same time, Russia’s president and his circle are under increasing strain from the economic impact of previous sanctions, Covid, and low oil prices, along with rising public discontent over the Navalny issue and punitive actions taken by other countries that object to Russian hacking, spying, and other transgressions. More than 10,000 people in cities across Russia have turned out to protest Navalny’s detention – despite a ban on protests – and at least 1,700 were arrested. Separately, NATO member the Czech Republic expelled dozens of Russian diplomats over evidence that the Kremlin had had a hand in an attack on a Czech weapons facility in 2014. Evidence is building that while the West has been focused on other threats, Russia has continued with Cold War-era tactics and strategies intended to weaken its erstwhile Western adversaries (and suppress dissent at home), and as more of that evidence comes to light, the fallout is growing more severe. With its pullback of forces from the Ukrainian border, Russia is signaling that it recognizes the value of limited compromise in maintaining a civil (if chilly) relationship with those adversaries, and thus may prove amenable to agreeing to a new set of Moscow Rules.

Raúl Castro has stepped down from power in Cuba, leaving the island without a Castro at the helm for the first time since the 1959 Cuban Revolution. Miguel Díaz-Canel will take over as the hand-picked successor to lead the Communist Party. He is already Cuba’s current president and considered a party loyalist and faithful to the tenets of the Cuban Revolution, which include economic controls and a one-party political system. The news of Castro’s retirement was not surprising. If anything, the changing of the guard has been slow and methodical, just like the opening of the Cuban economy has been to private investment and entrepreneurship. The Cuban Communist Party has managed to maintain control over the country for decades now, even amid deep economic contractions felt in the mid-1990s after the fall of the Soviet Union and in the last year as a result of the coronavirus pandemic. To address the economic pain caused by the pandemic and a halt in tourism, the Cuban government has sought to make minor adjustments to the types of private sector jobs legally licensed to Cubans. They include many service sector-type jobs designed to give Cubans an ability to make dollars on the island, but even still, the main sectors of the economy such as sugar, tobacco, and nickel mining are not on the list and remain state-controlled industries. And despite Raúl Castro’s departure from government, it is unlikely that Cuba will see any major political changes in the near term. The legacy of the Cuban Revolution – its successes in education, healthcare, and maintaining Cuba’s cultural identity – remains important to the political elite in power like Díaz-Canel, and they seem more inclined to hang on to that power and control rather than institute meaningful political or economic change in Cuba.

Idriss Deby, President of Chad, was killed in a clash with rebels on Saturday after three decades in office and having just been elected to a sixth term as president. Chad had long been a critical ally to France in the fight against Boko Haram, Al Qaeda in the Islamic Maghreb, and other terrorist groups active in the Sahara-Sahel region of Africa. Deby’s death may mark the end of that base of support as well as a period of growing instability in the region. A number of terrorist groups active in Chad, Nigeria, and other countries in the Sahara-Sahel have been aligned or otherwise linked, even if loosely, with transnational terrorist organizations, and pockets of instability in any region can offer a safe haven in which those groups can plan, train, and flourish. The rebel group responsible for Deby’s death, the Front for Change and Concord in Chad (FACT), reportedly trained in Libya, yet another country struggling with instability after the long rule and violent death of its former dictator Muammar Gaddafi. The U.S. is currently grappling with the potential implications of a complete pull-out of troops from Afghanistan by September 11 of this year, and what that may mean for the locale as a renewed training ground for extremists. However, the problem is not limited to Afghanistan. The potential implications of terrorist breeding grounds are likely to be felt far beyond the regions in which those breeding grounds are located – attacks can and do happen far from where the planning and training take place.

In Other News: Sanctions on Russia, Iran Nuclear Deal & More – April 16, 2021

April 16, 2021

The Biden Administration imposed a robust round of sanctions against Russia for a litany of transgressions, targeting 32 entities and individuals involved in disinformation, Russian interference in the 2020 presidential election, and Russia’s occupation of Crimea. The sanctions aim to stifle lending to the Russian government, barring U.S. financial institutions from the primary market for rouble-denominated Russian sovereign bonds from June 14. The U.S. has also publicly identified the SVR as the entity responsible for the SolarWinds cyberespionage effort discovered at the end of 2020 and expelled 10 Russian diplomats believed to be intelligence agents from the Russian Embassy in Washington, DC. These are the visible facets of the U.S. response to Russian aggression. What’s more, the U.S. has stressed that there will be “unseen” components, as well. This announcement comes at a difficult moment for the Kremlin, which is contending with a faltering economy and a high-profile hunger strike by jailed opposition figure Alexey Navalny. These sanctions are also designed to cool down the saber rattling by Russia, which is amassing military forces along the border with eastern Ukraine and Crimea. Putin will not back off and is likely to respond to the new sanctions by countering in a measured way to match these actions, including the use of cyber operations and disinformation. These maneuvers leave room for miscalculation, but both sides have a good understanding of the risk. That said, this is a necessary step to set the stage for serious negotiations on a new set of Moscow Rules. Putin is a realist and has an appreciation of power in negotiations. Neither side can afford to begin discussions from a position of weakness. We have been drifting into a new Cold War in recent years, which is why it is necessary for the two sides start the arduous process of establishing rules of the road on both the use of cyberattacks and interference in each other’s internal politics. President Biden has offered Putin the possibility of a summit in coming months, and the upcoming Summit on Climate on April 22 and 23 may offer a natural opportunity to begin that dialogue, coupled with sidebar discussions among national security officials. This could be a critically important first step.

Should you be interested in probing deeper into the U.S. dynamic with Russia today, check out Spymaster’s Prism: The Fight Against Russian Aggression, by Jack Devine.

Iran and co-signatories to the 2015 nuclear agreement resumed negotiations in Vienna yesterday in a continued attempt to revive the deal, despite an attack on the Natanz nuclear facility earlier this week. The attack, widely believed to have been carried out by Israel, caused damage that was initially reported to be extensive (but has since been downplayed by Iran) and put the negotiations on shaky ground. In the immediate aftermath, Tehran pledged to increase uranium enrichment – in further violation of its commitments under the 2015 nuclear deal – but Ayatollah Khamenei later signaled Iran’s intent to move forward with nuclear deal negotiations despite the attack. The talks will be an uphill battle for a variety of reasons, not least years of deep mistrust between the U.S. and Iran. However, events of this week suggest that even robust commitment to reaching an agreement on both sides cannot control for external factors. Israel has consistently opposed the deal, saying that the terms will not prevent Iran from developing nuclear weapons, and has displayed its willingness to take action it deems necessary to sabotage Iran’s nuclear program, even at the risk of disrupting a key foreign policy goal of one of its staunchest allies. This is even more reason for Tehran to see a deal as being in its interest. Sacrificing the country’s economic health for the sake of nuclear weapons was never a trade-off that made sense, and it may well be that its neighbors will, by hook or by crook, prevent a nuclear-armed Iran from ever coming to pass.

Prime Minister Narendra Modi appears mindful of politics and economics even as India faces a second, more deadly wave of Covid-19. The surge of new cases is causing migrant workers to pour out of cities like Mumbai, which are going into varying degrees of lockdown again. The number of infections has increased to more than 13.5 million confirmed cases, with the daily count now over 200,000. This figure puts India second to the United States. But even as migrants crowd stations to get out of the cities, reminiscent of scenes from the large-scale lockdowns in 2020, large gatherings continue throughout the country. From the farmers’ protests in the north that continue on after six months to the thousands of Hindus gathering on the banks of the Ganges for a religious festival to the large rallies held by Prime Minister Narendra Modi’s political party facing upcoming local elections – it seems that the Indian government is loath to address the virus on a national scale. India’s economy shrank nearly 24% under the national lockdowns in 2020, causing deep suffering among India’s poorest segments of society. So far, the Indian government has been pushing for targeted lockdowns, or “micro containment zones,” in the cities and for the ongoing efforts of the national vaccination program, which is behind schedule and further complicated by reports of vaccine shortages. At the current inoculation rate, India would need more than two years to vaccinate 70% of its population and reach herd immunity. With the pace of vaccinations in India still vexingly slow at a time when cases are spreading rapidly, it seems unlikely India will get the virus under control any time soon.

In Other News: Potential Lifting of Sanctions on Iran, China Flexing Maritime Muscle & More – April 9, 2021

April 9, 2021

The U.S. has announced that it is prepared to lift some sanctions on Iran in coordination with steps by Tehran to come back into compliance with the 2015 nuclear deal’s stipulations on uranium enrichment. The announcements are the result of bilateral communications, carried out via intermediaries, at meetings this week in Vienna between Iran and the UK, France, Germany, Russia, and China, with a U.S. delegation working nearby. The Biden administration has publicly committed to reengaging in the nuclear deal, which promised Iran economic benefits in exchange for limitations on further development of its nuclear program. With the U.S. departure from the deal in 2018 – and the imposition of hundreds of punitive economic sanctions on Iran – other signatories, including the EU, were unable to deliver on their economic commitments, and Iran embarked on highly visible efforts to violate its own commitments on uranium enrichment. The U.S. has estimated that at this point, Iran is only a few months away from having sufficient enriched uranium to build a nuclear weapon. While these announcements hint at progress on a revived nuclear deal, the two sides remain far from agreement on a number of issues, including which comes first – the U.S. lifting sanctions or Iran putting the brakes on uranium enrichment. Tehran has proved over and over again that it is a tough and demanding negotiator and may seek to exploit the U.S.’s commitment to returning to the nuclear deal as a means to extract greater concessions. However, its regime should bear in mind that the U.S. is not the only country that will take issue with a nuclear-armed Iran – concern about Tehran as a source of regional instability has created some strange bedfellows, helping to spur the establishment of diplomatic relations between Israel and some of its long-hostile neighbors. Iran has more to lose by going nuclear and triggering a forceful, multilateral response than by reengaging with the international community and reestablishing its trade links.

Hundreds of Chinese commercial fishing boats dropped anchor off the Spratly Islands in late March, ostensibly to shelter from a coming storm, but in what is a transparent ploy to press its claims to South China Sea territory that both Vietnam and the Philippines also claim as their own. While many of the boats departed, roughly 40 remained in the area. This overt display of maritime muscle – it is the largest fleet of nominally civilian boats that Beijing has used thus far to intimidate its neighbors in the region –puts the U.S. and its Asian and Western allies under pressure to craft a response, and may have been intended partly as a test for the Biden administration. The administration has publicly criticized China’s actions and affirmed that the U.S.’s bilateral defense treaty with the Philippines includes attacks in the South China Sea, and the U.S. (and allies like the UK and Australia) will likely ratchet up freedom-of-navigation operations in the area as it has done in the past. However, its options beyond these are otherwise limited. While too sedate a response sends a signal to Beijing that its regional aggressions will be met with little more than harsh words, too strong a response risks maritime escalation in the South China Sea involving the world’s two largest navies. None of the major players in the South China Sea has an interest in escalation – on the contrary, the U.S. and its allies’ responses to each new incident are carefully calibrated to avoid such an outcome. However, future aggressions by Beijing (which are a near-certainty) and continued failure of these careful responses to elicit a change in behavior will elevate the risk that a misstep by one party will trigger a larger confrontation.

Jordanian Prince Hamzeh, the younger half-brother of Jordanian King Abdullah, was detained along with more than a dozen others in what has been widely described as a coup attempt backed by foreign interests. Without going into specifics, Jordan’s foreign minister publicly accused Prince Hamzeh of working with a former finance minister and another royal family member to damage the country’s security and stability. Prince Hamzeh has since released a letter affirming his allegiance to the king, though not before making a public statement that appeared to hold him responsible for governmental incompetence and corruption. Also making the rounds on social media is a recording of the head of the Jordanian Army warning Prince Hamzeh to cease social media use that criticizes the king (criticizing the king is illegal in Jordan). The events in Jordan would appear to be strictly an internal, albeit dishy matter. However, the threat of disruption would have broader implications. Jordan is a U.S. ally – the U.S. has troops and aircraft stationed there – and a partner in combating terrorism. Amman provided U.S. forces overland access to Iraq during the Iraq War, provided support to the U.S. in its campaign against ISIS, has long-established diplomatic ties with Israel, and stands in alignment with other Sunni-majority neighbors in opposition to Iran. The crisis appears to have passed, and that is good news. Jordan is a bastion of stability in a volatile region, and powers with strong interests there – such as the U.S. and Israel – want to make sure that remains the case.

In Other News: China’s Lack of Transparency, Brazil’s Bolsonaro & More – April 2, 2021

April 2, 2021

China’s refusal to provide earlier, more transparent access to data to World Health Organization investigators appears to be strengthening suspicions that Covid-19 was the result of a leak from a Chinese lab, rather than transmission from animal to human in a market, as both China and the WHO have asserted. The Director of the World Health Organization, General Tedros Adhanom Ghebreyesus, along with more than a dozen governments (including the US), have taken Beijing to task for its failure to provide greater access to information surrounding the origins of a pandemic that has now infected more than 127 million worldwide and killed more than 2 million. A new WHO report released on Tuesday concluded that the market’s role in the initial jump from animal to human is not clear and was not conclusively found to be the source of the virus, even if it was the site of one of its earliest outbreaks. The report found no link between the earliest reported case, on December 8, and the market, and Tedros stated publicly this week that the investigation did not adequately assess the potential role of a laboratory incident as the pandemic’s origin. The US has criticized the Chinese government for denying investigators access to data and issued a joint statement with more than a dozen other countries – including Canada, the UK, South Korea, and Japan – voicing concern over the lack of transparency on the part of the Chinese. The WHO’s investigation team found it highly unlikely that Covid-19 was released accidentally from a lab. However, China’s lack of transparency in handling the issue, and what is commonly understood to be a lack of transparency by the Chinese government generally, has undermined any confidence the international community might have otherwise had in the findings. Paradoxically, it is this feature of Beijing’s methods that may be a contributing obstacle to its efforts to establish itself as a global leader in pandemic response, including vaccine diplomacy.

Brazilian President Jair Bolsonaro is facing increased criticism for his handling of the pandemic from the public and Brazil’s former president Luiz Inácio Lula da Silva – who now seems likely to run against Bolsonaro in 2022. Bolsonaro has responded to the growing outcry over the pandemic with a cabinet shakeup this week, announcing the departure of six cabinet-level officials on Monday. The move came a week after Bolsonaro appointed his fourth health minister since the start of the pandemic. Following the announcement, the commanders of the armed forces resigned in protest on Tuesday, deepening the crisis currently engulfing the president. With Covid-19 deaths close to 4,000 a day and hospitals across Brazil running out of beds and oxygen, Bolsonaro’s popularity has fallen and his political adversaries are seeing an opportunity. Da Silva, the 75-year old leftist from the Workers Party popularly known as “Lula,” has urged Brazilians to get vaccinated and not listen to Bolsonaro’s “foolishness” anymore. Lula has said Brazil is experiencing “genocide” due to Bolsonaro’s lack of leadership during the crisis and called on the United States to convene the G20 to address global vaccine equity. Until last week, Lula had been fighting corruption charges, but on March 23, he finally won vindication when Brazil’s Supreme Court ruled that former judge Sergio Moro was biased in his oversight of Lula’s trial and that his conviction should be overturned. The ruling has tarnished Moro’s record as an anti-corruption crusader, but more significantly, it has paved the way for Lula to run for president against Bolsonaro next year. Polling data out of Brazil suggests Lula defeating Bolsonaro in a presidential contest.

Italy has expelled two Russian diplomats over espionage charges, alleging that they paid an Italian defense official, Walter Biot, ~$5,800 for classified documents. Police separately recovered NATO documents that they believe Biot gave them on a previous occasion. This news comes just days after a series of headlines regarding a Russian spy ring that was broken up in Bulgaria. Six Bulgarians were arrested on suspicion of supplying Russia with Bulgarian state secrets, as well as information on NATO and the EU. Russia has grown increasingly alienated from the West following its invasion of Ukraine, the poisoning and arrest of Kremlin political opponent Alexey Navalny, and attempts to influence elections in the US and the UK among other countries. Though its military might is severely diminished from the Soviet era and its finances are suffering from low oil prices and international sanctions, Russia’s intelligence capabilities have remained robust and well-funded, and these incidents, while unsurprising, should serve as reminders that Russia’s intelligence apparatus is a persistent threat that should not be underestimated.

For more on Russia, listen to TAG President Jack Devine’s March 29 interview on Bloomberg Radio hosted by Paul Sweeney and Matt Miller. Jack Devine, former chief of CIA’s worldwide operations, talks about Russia as the number one threat to U.S. security and democracy and his new book, Spymaster’s Prism: The Fight Against Russian Aggression.

In Other News: US-China Bilateral Meeting, Suez Canal Traffic & More – March 26, 2021

March 26, 2021

A contentious start to a bilateral U.S.-China meeting in Alaska, in which senior diplomats from both sides exchanged heated words in full view of the press, has sparked concerns that Washington and Beijing are heading inexorably toward conflict. Just days later, U.S. Secretary of State Antony Blinken called on NATO to join U.S. efforts to counter Beijing in an address to the organization in Brussels. These outward-facing statements suggest a new and more confrontational U.S. approach to China, one that emphasizes issues such as human rights (specifically as pertain to China’s Muslim Uighur minority) and Beijing’s continual buying of Iranian and Venezuelan oil in violation of U.S. sanctions. U.S. officials have reported that Beijing is actually upping oil purchases from the two countries and is expected to take around 1 million barrels per day from Iran alone this month. These are worrying signs of more trouble to come. At this stage, the U.S. and Chinese economies remain inextricably linked – the U.S. is the world’s largest buyer of Chinese exports and the source of specific goods with strategic value to China, namely products like natural gas and semiconductor technology. That link will likely stave off a bigger confrontation in the near term. However, over a longer time horizon, both countries are taking steps to reduce their reliance on the other, which may offer more wiggle room for riskier behavior, such as confrontation over Taiwan or the South China Sea. Neither the U.S. nor China has an interest in such a confrontation, which would undermine global stability, as well as the benefits of the trade relationship. That said, U.S. efforts to build a coalition against Chinese aggression are a prudent bit of contingency planning that will hopefully ensure that if Beijing crosses a red line, it does so at very high cost.

Suez Canal traffic ground to a halt this week when poor visibility caused by a sandstorm and high winds caused a 200,000-ton container ship to get stuck sideways in the channel, highlighting the risk of chokepoints to the smooth functioning of global trade. Roughly 12% of all global trade (including around a million barrels a day of oil and 8% of global liquefied natural gas shipping) transits the 120-mile canal, and the blockage has delayed passage of more than 100 ships. This in turn is affecting shipping times, extending them in some cases by more than a day, with knock-on effects in availability of goods as basic as food, clothing, and furniture. Threat analysis of chokepoints like the Suez Canal and the Strait of Hormuz often focuses on the potential for military action – around a fifth of the world’s oil flows through the Strait of Hormuz, which sits at the southern coast of Iran, whose regime has frequently threatened to block it amid disputes with oil-importing countries (including as the U.S.). However, this is the second time this year that weather has caused a major disruption to activity, with the first being a freeze in Texas that knocked out power to thousands for several days. While cyber and military threats to the functioning of critical infrastructure dominate headlines, everyday occurrences can prove just as disruptive if steps are not taken to develop plans and systems to ensure continuous, reliable operations under a host of circumstances. As we shift our national security focus to efforts to penetrate the cyber systems underpinning our critical infrastructure, we must also maintain a strong focus on ensuring physical system reliability, wide-ranging contingency planning, and redundancy.

North Korea launched four short-range ballistic missiles into the Sea of Japan this week, in another provocation from Pyongyang. Japanese Prime Minister Yoshihide Suga issued a statement condemning the action this week and noting that it “threatens the peace and security of Japan and the region.” The missiles landed in the sea between North Korea and Japan and were the first tests since March 2020 by the North Koreans and considered to be smaller than previous tests. Observers believe that North Korea is looking for concessions from the United States – as well as attention – while also fueling tensions ahead of the Tokyo Olympics scheduled for this summer in Japan. North Korea launched the missile tests this week after refusing recent overtures for dialogue with the Biden administration and citing “U.S. hostility.” It is noted that North Korea has a history of missile launches at the start of a new administration in the United States and South Korea. The international community condemned the action by North Korea as a violation of UN Security Council resolutions, but it is unclear what more the United States, South Korea, or Japan can do without assistance from China.