By the way, if anybody can think of a better system than Economically Diplomatically Military, then let me know. It was supposed to be temporarily until I found a better way but, well, I guess there’s nothing quite as permanent as a temporary solution. Even so, I wanna try and improve where I can.
‘We see a big recession in the making’: Top CEOs are fearing the worst in Europe src
European Commission To Freeze Funds Of Patriarch Of Russian Orthodox Church src
Ukraine, UK sign preferential trade deal; abolish import duty, tariff quota src
Spain’s solution to the current high energy prices may end up costing it dear src
In conclusion, this isn’t quite the deal it first appears to be. Customers with fixed price contracts will see their energy bills increase and the speed of the energy transition will be negatively impacted because no PPAs will be signed this year. For the long term prospects of Spain, and the wider region, delaying the development of renewables projects means Spain might also lose the European funds available for hydrogen deployment.
Austria Could Require Years to Cut Off Russian Gas Entirely src
Austria rules out ruble payments for Russian gas. But the article says that Austria will pay in euros. Is this according to the actual plan that Putin laid out or is this not? The media is very opaque about whether a country saying that “won’t pay in rubles” means that they aren’t literally paying in rubles but are following Gazprom’s demand, or if they aren’t even doing that and thus won’t get gas. And this is Russian state media and it’s still not all that transparent. src
Germany wants to attract chip makers with 14 billion euros of state aid. I think the main determiner of whether this will be successful is if Germany can make a snazzy backronym for it. src
Germany Will Have First LNG Import Capacity By Year’s End src
Germany begins filling western Europe’s biggest gas storage site src
Germany may face petrol shortages src
German industries struggling to replace Russian imports - it’s “not possible” to substitute supplies from Russia, Belarus, and Ukraine for almost 14% of the country’s industrial companies, and for another 16% it’s not economically viable. src
Volkswagen will prolong the use of coal to power its manufacturing plant src
Europe Is Buying Natural Gas At A Premium To Fill Up Its Storage src
UK issues grim economic forecast, as the Bank of England warns of recession as it hikes interest rates to tackle inflation. src
How Russia’s Gas-For-Rubles Scheme Is Helping Lift Armenia’s Currency src
The country’s Central Bank of Armenia suggests that an influx of Russians coming to escape their home country is what has lifted the dram. Armenia also began paying for Russian gas in rubles which could chip away at dollar demand and help lift the Armenian dram.
Belarus shifts to Russian rubles in trade with Russia src
Serbia technically cannot receive gas from LNG terminal in Greece. It’s technically impossible because technically, the pipeline hasn’t finished, so technically they can’t move gas along it. src
Russian fertilizer producers offer reducing VAT rate for them in half, but Finance Ministry does not support this due to the large shortfall in revenue it would cause. src
Energy giant Shell says the world doesn’t have systems to trace Russian oil refined overseas. This could undermine sanctions. src
Europe’s farmers stir up biogas to offset Russian energy src
Asia and Oceania
- An article by Bilaterals: Dubious benefits for Malaysia in ratifying the CPTPP. src To pick a paragraph out:
Various studies — including two by US government agencies — all found negligible trade gains from the TPP. Exaggerated claims by TPP advocates were considered grossly misleading. This came as no surprise, as the TPP was driven primarily by political considerations to “encircle” China.
- India Ramps Up LNG Imports Amid Power Crunch src
At least two Indian utilities bought LNG cargoes on the spot market this week, for same-month delivery, at prices about three times higher than the normal for spot markets amid tightening global gas supply, Bloomberg reports, citing unnamed sources.
Indian power plants are running out of coal src
Malaysia’s Petronas withdraws from Myanmar’s Yetagun gas field src
International companies doing business in Myanmar have come under pressure from rights groups and Myanmar’s shadow civilian government to review their operations and stop payments flowing to a military government that seized power from an elected government and has brutally cracked down on dissent.
Hope stirs for lifting of US tariffs on China src
China and Russia have no plans to fully abandon dollar in bilateral trade, says China’s ambassador to Russia. src
“China and Russia never announced abandonment of settlements in dollars or euros in bilateral trade, while settlements in national currencies or other settlements serve as a useful supplement to the current system of bilateral trade transactions,”
- Turkey’s inflation hits 70% due to rising energy prices src
Russia’s War On Ukraine Is Devastating Africa’s Economy src
Rwanda is investing in and constructing more resilient and sustainable transport systems, as road emissions comprise a significant portion (13%) of their total emissions. The article goes into a fair amount of depth for those interested. src
Nigeria: Price of Jet Fuel Rises Further, Hurting Nigerian Airlines src
Why fuel shortages are spreading across Africa src
In Burundi, drivers are so desperate for fuel that they sleep on forecourts of petrol stations. Senegal has so little jet fuel that Air France’s flight from the capital, Dakar, to Paris has been stopping in the Canary Islands to fill up. Johannesburg has the same problem, which has caused United Airlines to cancel some flights from New York. From Kenya, which recently suffered its worst petrol shortage in a decade, to Lagos, where queues outside petrol stations backed onto motorways, and Cameroon, where thousands of lorries have been stranded without diesel, Africa has been short of the lifeblood of modern economies. “Everywhere, everyone is scrambling for diesel,” laments Anibor Kragha of the African Refiners and Distributors Association, an industry group.
Black Agenda Report on the workers' struggle in Haiti. src
US Senators urge ocean carriers to increase agricultural export liftings src
US stocks see worst day since 2020, as the Dow and Nasdaq tumble 3-5%. src
US mortgage rates rise; 30-year at 5.27%, highest since 2009 src
The Fed hits the housing market with another economic shock—it won’t be the last src
US seeking to save economy through weaponizing its dollar hegemony, says Chinese expert src
The US authorities are seeking to save the economy, as they try to reduce payment pressure on dollar-denominated debt and grab the world’s resources and commodities, which is often followed by a hike in interest rates and the provoking of geopolitical conflicts to force capital to flow to the country, according to Dong Dengxin, director of the Finance and Securities Institute of the Wuhan University of Science and Technology. “By doing so, the US government ‘harvested’ the riches of other nations,” he told the Global Times newspaper.
A feeling of economic doom is going around. And there isn’t much we can do other than sit back and watch. It’s funny that when things get worse, the only thing that we can do is sit around and watch. Very convenient, really. Personally, I can’t wait to receive my ballot so I can vote on the economy. src
Worker productivity saw its biggest drop since 1947 in the first quarter—but experts say the headline figures don’t tell the whole story src
Non-farm productivity, which measures worker output against hours worked, sank 7.5% from January through March, the Bureau of Labor Statistics reported on Thursday. Even as overall hours worked increased 5.5%, output from the average American worker dropped 2.4%.
At the same time, business unit labor costs—how much an average business pays its workers to produce one unit of output—increased 11.6%, the most since 1982, as hourly compensation rose 3.2%.
But experts say the productivity drop wasn’t due to Americans taking more coffee breaks or phoning it in at work. The poor numbers were really a result of a 1.4% decline in Gross Domestic Product (GDP) in the first quarter.
“The key thing is productivity is actually measured by taking GDP and dividing it by hours worked. And GDP was freaking weird in the first quarter,” Heidi Shierholz, the president of the Economic Policy Institute, told Fortune. “If you dig into the GDP numbers, you actually see healthy growth, but the top-line GDP numbers are negative because of a decline in inventories and an increase in imports, which has nothing to do with workers becoming less productive.”
Immigrants Needed to Meet Anticipated U.S. Job Opening Surge: Report src
The U.S. Census Bureau has identified 2030 as the country’s “demographic turning point,” when all Americans in the baby boomer generation—and about one in five Americans overall—will have reached retirement age.
- Mexico Calls for Latin American Lithium Alliance src
“There has been communication with the president of Bolivia (Luis Arce), he, in turn, has a relationship, like us, with the president of Argentina (Alberto Fernández), who also has lithium, and with the president of Chile (Gabriel Boric), with the purpose of creating an association to help each other mutually,” said the Mexican president during his morning press conference today.
Europe is facing a shipping container shortage due to the lockdowns in China and the Russia-Ukraine war, with port throughput also decreasing. src
Demolition Market Devoid of Ships src
The ship recycling market is in a lull, not because of a lack of demand, but because of a lack of supply. … Allied Shipbroking added that “despite the strong price on offer right in the ship recycling market, we have seen a real shortage in demolition candidates of late over the last few weeks due to the upward trend noted in freight rates across most sectors.
A global recession in the next two years? Why some analysts believe it is likely. There’s a paywall I can’t bypass, so I guess we’ll never know. src
Rare Earths Supply Is About To Get Much Tighter src
Jamie Dimon: “The Cold War Is Back” And Commodity Turmoil Could Get “Much Worse”. I don’t think it ever truly ended. src
Oil rises, defying stock market falls as supply concerns persist src
Higher Inflation, Rates Will Stick Around as Economies Go Green src
Diplomatically and Politically
Involving Ukraine or Russia
Legislature proposes to ban Russian ruble in Ukraine src
Putin issues an apology to Israel over Lavrov’s comments. src
“The President of Russia recalled that of the six million Jews tortured in ghettoes and death camps and killed by the Nazis during punitive operations, 40 percent were Soviet citizens,” the Kremlin press service noted. “In turn, Naftali Bennett highlighted the Red Army’s decisive contribution to Victory over Nazism.”
US refuses to admit that its actions provoke food crisis, says Russian ambassador. src
Hostilities in Ukraine can be over within week, but West does not want this, says Lukashenko. src
Zelenskyy has launched a crowdfunding campaign to fund Ukraine’s war effort against Russia src
Black Agenda Report on the UK’s immigration policy, in relation to their latest decision to send asylum seekers to Rwanda. src
Serbia must push on with reforms to join EU, says Scholz src
German thinkers’ war of words over Ukraine exposes generational divide
The war in Ukraine is laying bare a generational divide over what lessons Germany should draw from its own history of waging bloody conflicts, as some of the country’s leading artists and intellectuals line up in favour of or against supplying Kyiv with weapons in a series of open letters. src
A younger generation, personified to Habermas by Germany’s 41-year-old foreign minister, Annalena Baerbock, had been “raised to exhibit sensitivity on normative questions” and only managed to “view war through the lens of victory or defeat”, he said. His own generation, the 92-year-old philosopher seemed to suggest, “know that a war against a nuclear power cannot be ‘won’ in the traditional sense of the word”.
Skipping forward again…
In a radio interview, Kluge, 90, announced that he had been happy to see US troops march into his home town in 1945 and that there was therefore “nothing evil about capitulation if it ends the war”. The interview was met with widespread disbelief for muddling up the historic lessons of an aggressor nation and those of states that had come under German attack.
“One of the lessons of German history has to be that you cannot defeat fascism with appeasement,” Kehlmann said. The novelist, whose grandparents were Jewish, added: “It is noticeable that the argument for a strictly pacifist foreign policy is rarely brought forward by Germans whose relatives died in the Holocaust.”
Given which side of the conflict has exponentially more Nazis - what a fucking self-own. Man, that sucks.
Asia and Oceania
India begins the privatisation of its huge life-insurance company src
The Diplomat has posted an interview with ex-CIA Erin Murphy on Myanmar relations. src
‘Our home is disappearing’: Pleas from ex-president of sinking island nation, Kiribati src
Domestic health declaration for Covid-19 no longer required across Vietnam src
According to the health ministry, COVID-19 has been put well under control across the country, with caseload and fatalities down significantly – the average number of deaths reported daily has stayed below 10 for several weeks now, while 96 per cent of the population aged 12 and older have been fully vaccinated against COVID-19, with the inoculation of children aged five to 11 underway.
- Why the Philippine election could be a win for China src
For the US, close ties with the Philippines, including American troop rotations there under a two-decade-old agreement, are critical to its strategy in the region, where Washington seeks to counter Beijing’s growing footprint.
The Philippines has been on the front line of those Chinese ambitions in the South China Sea, with Manila in recent years accusing Beijing of trying to intimidate its coast guard vessels and assembling a “maritime militia” to crowd out its fishing boats. Beijing claims large swaths of the resource-rich waters as its own, even after Manila challenged that in an international court of arbitration and won.
Sanctions only make world economy worse, says Chinese Foreign Ministry spokesperson src
Beijing’s next steps to halt Covid outbreak: close offices and stop construction src
Xi Jinping says China’s Covid policies will ‘stand the test of time’ in Shanghai src
Hong Kong Arrivals Jump Most in Two Years Amid China Lockdowns src
Search for survivors of China building collapse ends, 53 confirmed dead, 10 rescued. src
Australia wants calm in ties with Solomon Islands after ‘invasion’ claim src
Australia-China relations: ‘No doubt’ that Beijing wants to influence May 21 election, PM Scott Morrison’s defence minister says src
A piece by NEO: The Middle East, the US and the Ukrainian Crisis src
America’s Gulf ‘allies’ are now Putin’s enablers. This article has the EXACT tone of a 15-year-old writing in their journal about their “best friend” who just started hanging out with somebody who they hate because they refused to invite them to their birthday party and called their 3-month partner a rude word. Have that mental image in mind while you read this. src
The U.S.-led effort to thwart Russian President Vladimir Putin is being actively undermined by America’s supposed Persian Gulf allies, Saudi Arabia and the United Arab Emirates. The dictators who run these petrostates are raking in profits from oil sales while sky-high prices are filling Putin’s coffers and hurting the U.S. and European economies. With friends like these, who needs enemies? And why is the Biden administration playing along?
Dictators? That’s a strong word. I’ll have you know that Saudi Arabia has let some women drive, occasionally.
CIA Director William J. Burns’s secret trip to Saudi Arabia last month, revealed this week, is only the latest example of the Biden administration going hat in hand to beg MBS to turn on the taps. This raises an obvious question: Who do these Gulf monarchs consider their true ally — the United States or Russia?
“Saudi Arabia and the United Arab Emirates today are Russia’s allies in the Persian Gulf, by virtue of laundering Russian money and refusing categorically and deliberately to increase oil production,” Rep. Tom Malinowski (D-N.J.) said at the McCain Institute’s Sedona Forum last weekend. “This is a moment where we need more countries to face a choice: Whose side are you on?”
MBS is happy to talk with Putin. But both the Saudi ruler and his Emirati counterpart reportedly refused to take a phone call in March from Biden, even though both countries live under the U.S. security umbrella. MBS is holding out for Biden to meet him in Riyadh — or invite him to the White House. Biden is reportedly resisting, knowing that such a display would be a public humiliation, after Biden promised to make the Saudi regime a “pariah.”
Meanwhile, MBS is actively romancing Republicans. He has given Donald Trump’s son-in-law, Jared Kushner, $2 billion in a private equity fund with zero transparency — a war chest that Trump World could use against Biden in 2024.
The Biden team is acting as though the Gulf oil producers have the upper hand. But that’s only true if the United States fails to understand who really holds the power in these relationships.
“The U.S. has leverage. But they are not willing to use it,” said Ali Al-Ahmed, founder and director of the Institute for Gulf Affairs. “They are not willing to change the relationship, so now MBS controls the relationship.”
Apologists for these Gulf monarchies make familiar arguments. They say that Saudi Arabia and the UAE represent stability and reform in a region threatened by terrorism and Iran. They say that the United States can’t change these regimes, so taking a harder line would just push them into the waiting arms of Russia and China.
But does anyone really believe that MBS’s regional policies are stabilizing? Can any dictator engaged in a brutal domestic crackdown and war crimes in Yemen honestly be called a reformer? Does Saudi Arabia really want to buy Russian weapons and depend on China for its security? If so, good luck with that.
The new de facto alliance among Putin, MBS and MBZ is understandable: All three dictators see the spread of freedom, democracy and human rights as existential threats to their holds on power. But the entire rationalization for U.S. partnerships with these Gulf countries is based on their role as important players in maintaining energy stability. If they aren’t doing it, what exactly are we getting in return for our investment?
MBS’s defenders often point out that his 86-year-old father is not long for this world — meaning that MBS is likely to rule Saudi Arabia for several decades, whether we like it or not. In reality, though, that’s the best argument for taking a tougher line with him now. If Saudi Arabia still wants to be a U.S. ally, it ought to start acting like one.
US Senate adopts measure against efforts to revive nuclear deal src
Senators voted late Wednesday to endorse a Republican-led measure stating that any nuclear agreement with Tehran should also address what they claimed Iran’s support for terrorism in the region, and that the U.S. should not lift sanctions on a branch of the Iranian military, the Islamic Revolution Guard Corps (IRGC).
16 Democrats voted with almost all Republicans to approve Sen. James Lankford’s (R-Okla.) motion.
While the measure itself was non-binding, the vote was hailed as a modest victory for Republicans who have pushed the Biden administration to walk away from the talks in Vienna.
Lawmakers from both parties said it was a warning shot to Biden’s negotiating team, who have all but acknowledged in private that an agreement that goes beyond curtailing Iran’s nuclear program is no longer possible, according to multiple people familiar with classified Hill briefings on the subject.
“We want a longer and stronger deal,” Sen. Cory Booker (D-N.J.) said when asked why he supported the measure. “[I want] the best deal possible that secures the region and prevents Iran from having a nuclear weapon.”
The President of Togo has agreed to mediate in the Mali crisis, where the military junta is under international pressure to establish civilian rule after taking power in 2020. src
Somalia sets date for long awaited presidential elections - May 15th. It is 15 months behind schedule. src
DRC: Impact of the state of siege in the provinces src
The état de siège has been prolonged no fewer than 22 times. But violence continues to worsen: abductions have more than doubled and destruction of property has trebled over the last year, according to the Kivu Security Tracker project coordinated by Human Rights Watch.
Journalists protest to demand for press freedom in Tunisia src
South Africa: Mining unions extend strike over pay rise demands src
Thousands of workers have been demanding a 63 US dollars which is about 1000 rands monthly increase for two months.
- West African defence chiefs meet over rising insecurity src. Also: Ecowas Criticized Over West African Coups src
Mali, Burkina Faso and Niger are grappling with jihadist insurgencies and neighbouring states such as Ghana, Benin and Côte d’Ivoire are worried about spillover to their borders.
How Mali’s military fell out with its French ally src
South Africa: What’s Driving Hunger in Gauteng, South Africa’s Economic Power House. src Literally exactly what you’d expect. Unemployment, large families, race, gender, education availability, age, etc. But it’s a new study and liberals like that sort of thing. Not doing anything with the results, of course, but data? Hell yeah.
Naked Capitalism: No, Biden Can’t Just Sell Off Seized Russian Yachts and Central Bank Assets to Help Aid Ukraine – International Law and the US Constitution Forbid It. src Bit idea: the US changes its constitution just for this specific thing, and ignores abortion rights due to a “lack of bipartisan support” or whatever.
Biden Makes America’s Militarized Southern Border Wall Even Bigger Business src
More than 2,200 dams are in poor condition, posing danger to communities src
- US Coup Specialist Victoria Nuland Visits Brazil src The article mentions this, but I would just like to say that Victoria Nuland was essentially the architect of the current situation in Ukraine, organizing the 2014 coup, and had a leaked phone call after the election discussing which leader they were going to hand-pick. The amount of evil this person has unleashed, and has yet to unleash as global conditions deteriorate, really puts her in the pantheon of the most evil US ghouls.
In an official statement, the visit was called a “diplomatic mission” that aims to bring Brazil closer to US foreign policy.
- Lula Criticizes World Leaders for Not Doing Enough to ‘Help Create Peace’ in Ukraine src
“What was the reason for the Ukraine invasion? NATO? Then the U.S. and Europe should have said: ‘Ukraine won’t join NATO,'” Lula said. “The conversations were very few. If you want peace, you have to have patience. They could have sat at a negotiating table for 10, 15, 20 days, a whole month, trying to find a solution. I think dialogue only works when it is taken seriously.”
- ‘Painful’ mine protests reflect years of broken promises in Peru src
The head of Peru’s biggest mine says a swift solution to rising social unrest in the country is within reach if authorities and politicians agree to address the central problem: management of public funds.
Blinken signals zero change from failed Trump Venezuela policy src
Chile to Recognize Indigenous Territories in New Constitution src
Ecuadorian Indigenous Lawmakers Introduce Agrarian Reform Bill. Careful, Ecuador, you’ve just activating the blaring alarm at the US intelligence agencies’ headquarters that just blares “A country is trying to do land reform!” over and over. src
On Thursday, 18 lawmakers of the Ecuadorian Indigenous movement Pachakutik presented a reform bill to the Rural and Indigenous Lands Act to guarantee these communities’ full ownership of their territories.
Iran’s Oil Minister Owji Visits Nicaragua src
Mexican president slams US on tour of Central America src
Western financial, military aid to Ukraine already totals $12 billion src
Netherlands assessing whether to supply more heavy weapons to Ukraine src
Pentagon denies sharing intel with Ukraine to ‘kill’ Russian generals. Is this just trying to avoid heightening nuclear tensions any further, or something else? src
US Provided Intel on Russian Cruiser Moscow src
Moon of Alabama: Ukraine’s Forces Are Told To Hold The Line Where Russian Artillery Is Pulverizing Them src
The United States assessed last week that Russian troops were making “slow and uneven” progress in the Donbas, often of no more than “several kilometers … on any given day, just because they don’t want to run out too far ahead of their logistics and sustainment lines,” one senior U.S. official told journalists.
[N]o matter what the central feature of the enemy’s power may be — the point on which your efforts must converge — the defeat and destruction of his fighting force remains the best way to begin, and in every case will be a very significant feature of the campaign. Basing our comments on general experience, the acts we consider most important for the defeat of the enemy are the following:
Destruction of his army, if it is at all significant; Seizure of his capital if it is not only the center of administration but also that of social, professional, and political activity.; Delivery of an effective blow against his principal ally if that ally is more powerful than he.
Russia is using the best available means to destroy the Ukrainian military. On the ground that means ruthless systematic mass use of artillery.
In World War II and other modern mechanized wars some 65% of all casualties were caused by artillery strikes. The recent rate on the Ukrainian side will likely be higher.
“Viking”, a 27-year-old staff sergeant who fought in Kreminna said his comrades are exhausted and waiting for the order to pull back. “If it was a war between infantry forces, we would have a chance. But in this area, it’s first and foremost an artillery war and we don’t have enough artillery,” he says. “For every 300 shells they fire, we fire three.”
“Their artillery never, never stops,” says the deputy commander of Ukraine’s Donbas Battalion, a major who only gave the nickname Kot (Cat). He spoke in Sloviansk with a balaclava covering his face, as an air raid siren wailed across the city.
“They are changing their strategy, but it is still what we would expect from Russia,” says Major Kot. There are no more long, vulnerable columns: “They are sending recon units, then shell with artillery, and then send tanks,” he says. “If those tanks are destroyed, they send more tanks.”
“When Russia sends incoming 200 shells, we send back 10 shells,” says Sergeant Davydov, who wears sunglasses, a pistol on his thigh, and a skull shoulder patch in the blue and yellow colors of the Ukrainian flag.
Are we the baddies?
No Ukrainian counter-offensive expected before mid-June, presidential adviser says. If Ukraine only waits 8 months, they’d have a whole new crop of soldiers to be fed into the meat grin– I mean, advance on Moscow. src
Dipshittery, Cope, and Acceptance
How millions of Russians are tearing holes in the Digital Iron Curtain. In which an author discovers that VPNs exist and that the populaces of countries use them sometimes. I assume that WaPo sees the widespread adoption of VPNs in America and advertisements for them as a similar act, for Americans to tear through their country’s brutal censorship? src
The Economist: Russia’s economy is back on its feet src
In early April we pointed to preliminary evidence that the Russian economy was defying predictions of collapse, even as Western countries introduced unprecedented sanctions. Recent data further support this view. Helped along by capital controls and high interest rates, the rouble is now as valuable as it was before Russia’s invasion of Ukraine in late February (see top chart). Russia appears to be keeping up with payments of its foreign-currency bonds.
The real economy is surprisingly resilient too. True, Russian consumer prices have risen by more than 10% since the beginning of the year, as the rouble’s initial depreciation made imports more expensive and many Western companies pulled out, reducing supply. The number of firms late on their wage payments seems to be growing.
But “real-time” measures of Russian economic activity are largely holding up. Total electricity consumption has fallen only a smidge. After a lull in March, Russians seem to be spending fairly freely on cafés, bars and restaurants, according to a spending tracker run by Sberbank, Russia’s largest bank. On April 29th the central bank lowered its key interest rate from 17% to 14%, a sign that a financial panic which began in February has eased slightly. The Russian economy is undoubtedly shrinking (see bottom chart), but some economists’ predictions of a GDP decline of up to 15% this year are starting to look pessimistic.
Even before the invasion Russia was a fairly closed economy, limiting sanctions’ bite. But the biggest reason for the economy’s resilience relates to fossil fuels. Since the invasion Russia has exported at least $65bn-worth of fossil fuels via shipments and pipelines, suggests the Centre for Research on Energy and Clean Air, a think-tank in Finland. In the first quarter of 2022 the government’s revenues from hydrocarbons rose by over 80% year on year. On May 4th the European Commission proposed a ban on imports of all Russian oil that would come into full force by the end of the year. Until then, expect the Russian economy to continue to trundle along.
China wants to increase its military presence abroad: How concerned should America and its allies be? America has over 700 foreign military bases. src
China still has just one military base abroad, a naval facility opened in 2017 in Djibouti. But it is accelerating and broadening its quest for more. American and allied officials believe it has approached at least five countries since 2018 and considered a dozen others as potential hosts (see map). Whether the Solomons deal translates into a Chinese base remains unclear. And if it does, the strategic value of such an isolated outpost is debatable.
As China seeks to protect its worldwide interests and challenge American military dominance in Asia, it can already rely to some extent on a global network of over 90 ports that are partly or wholly owned or operated by Chinese firms.
China also appears to have adjusted its tactics, abandoning attempts to convince America and its allies that such deals don’t threaten their interests, and targeting countries of more strategic importance to America. Before opening its base in Djibouti, China insisted that it would only be a “logistics hub” to support Chinese forces involved in UN peacekeeping, anti-piracy and humanitarian operations. It made no such effort to sell the Solomons deal.
Another difference about the Solomons deal is the reference to Chinese forces quelling local unrest. Chinese proponents of overseas bases often argue that they are needed to help protect Chinese citizens abroad, citing evacuations from Libya in 2011 and Yemen in 2015. Still, they rarely, if ever, suggest intervening in the host’s domestic affairs, which would violate what China says is a pillar of its foreign policy.
Europe should call Russia’s bluff on energy src
Russia’s announcement last week that it was halting all gas deliveries to Poland and Bulgaria may have sounded like a bombshell, perhaps even presaging a complete suspension of gas flows to all of Europe. This certainly was Russian president Vladimir Putin’s intent: to strike fear into the European countries that are upping their economic and military aid to Ukraine and, in the same stroke, drive a wedge into the Western alliance.
But Russia’s bombastic move is a bluff that, should the European Union play its cards right, will backfire spectacularly.
“Yeah, that dude just stabbed your friend over there in the side, and they’re profusely bleeding. HOWEVER, I reckon if you just like, did a really cool flip to disarm him then you’ll be fine. Go on, do it."
The EU shouldn’t blink – or let itself be caught on its backfoot again. It should implement a full-scale oil embargo, as European Commission president Ursula von der Leyen has proposed, which will damage Russia much more than Europe. It would not only hinder the war effort by slamming the Russian economy — it would send the unequivocal message that the West stands behind Ukraine and is willing to pay a substantial price to thwart Russian aggression in Europe.
And the sooner it happens, the better.
Corporations Finally Mobilized Against Putin. What Took Them So Long? src
Companies can no longer ignore that Putin smashes every rule and threatens the rule of law itself. And corporate exits are widely popular across different levels at organizations: Recognizing the grave threat Putin poses to the future of free markets, executives, employees, investors and customers are aligned against Putin.
Putin defies the argument that doing business in a dictatorship is efficient. In Putin World, investments are seized on ludicrous charges or looted by cabals of judges, police and tax authorities. Bill Browder’s Hermitage Capital was plundered that way in 2007, a decade before the major industries of Russia had been carved up by the same men who are Putin’s closest cronies today. With the passing years, Putin has heightened the lawlessness by presiding over a pyramid scheme of bribery that requires each beneficiary to pay off the person above them to protect their corrupt turf.
With his invasion of Ukraine and contempt for civilian lives, Putin has raised his lawlessness to a higher power. Companies that, for decades, accommodated his venal impulses can now clearly see that those efforts have backfired. Putin has no respect for sovereignty in the same way he has no respect for property, for law or for human life. And he has finally reduced Russia to an environment too dangerous and hostile for legitimate business.
While they don’t always invade sovereign countries, there is no shortage of dictators looking to co-opt the private sector into doing their bidding. The private sector must recognize that appeasing autocrats is always dangerous and always diminishes the rule of law, and that the unilateral whims of dictators reduce the stability and predictability of the global business environment. The lesson to the corporate West must go beyond the sentiment that Putin is monstrous—CEOs, investors and boardrooms must reduce their tolerance of autocrats worldwide.
I’m assuming this exact same type of article was written about Pinochet, right?
The Hill: Why sanctions against Russia may not work. src A few days old but I think I missed this.
The unprecedented U.S.-led Western sanctions against Russia have been likened to economic weapons of mass destruction (WMDs) that would ultimately destroy the Russian economy. In reality, the sanctions are like a double-edged sword — they inflict pain on Russia but also impose costs on their imposers.
The West, in fact, is caught in a trap: The sanctions and the deepening conflict, by helping to raise global commodity and energy prices, translate into higher revenues for Moscow in spite of a significant decrease in its exports. And the higher international prices, by fueling inflation, mean political trouble at home for those behind the sanctions.
Look at another paradox: Despite Russia being cut off from the world’s financial arteries, the Russian ruble has dramatically recovered through state intervention. But, as if to signal that Japan is paying a price for following the U.S. lead on Russia, the Japanese yen (the world’s third-most-traded currency) has sunk to a 20-year low against the U.S. dollar, ranking this year as the worst performing of the 41 currencies tracked — worse than the ruble.
Meanwhile, the runaway inflation and supply-chain disruptions are threatening Western corporate profits, while the interest-rate hikes to rein in inflation make a bad situation worse for consumers. With economic trouble looming large, April became the worst month for Wall Street since the pandemic-triggered March 2020 plunge. The S&P 500 fell 8.8 percent in April.
In the first two months of the war in Ukraine, those imposing the sanctions ironically helped Russia to nearly double its revenues to about €62 billion from selling fossil fuels to them, according to a report of a Finland-registered think tank, the Centre for Research on Energy and Clean Air. The top 18 importers, with the sole exception of China, were the sanctions imposers, with the European Union (EU) alone accounting for 71 percent of the purchases of Russian fuels in this period.
While Turkey, South Korea and Japan also remain reliant on Russian energy supplies, the EU’s imports of gas, oil and coal from Russia totaled around €44 billion in this two-month period, compared with about €140 billion for the whole of 2021.
Russia, even as its economy takes a hit from the Western sanctions, is doing its bit to keep international energy and commodity prices high, including by cutting off gas supplies to Poland and Bulgaria. Moscow could raise prices further through broader counter-sanctions and yet manage to cushion its export earnings.
The fact is that Russia is the world’s richest country when it comes to natural resources, including serving among the world’s largest exporters of natural gas, uranium, nickel, oil, coal, aluminum, copper, wheat, fertilizers and precious metals such as palladium, which is more precious than gold and used largely in catalytic converters.
Through no fault of theirs, the real losers from the Russia-NATO conflict, sadly, are the poorer countries, which are bearing the brunt of the economic fallout. From Peru to Sri Lanka, rising fuel, food and fertilizer prices have triggered violent street protests, which in some states have spiraled into continuing political turmoil. The debt woes of many poor nations have deepened.
In employing the full range of its economic weaponry, the West sought to unleash “shock and awe” on Russia, as if to underscore that sanctions are a form of war. But like armed conflict, as Russia’s invasion of Ukraine illustrates, sanctions are unpredictable in shaping outcomes and often lead to unintended or undesirable consequences.
Squeezing a major power, especially one that has the world’s largest nuclear-weapons arsenal, with a raft of harsh sanctions is fraught with danger, especially as increasingly sophisticated and heavier Western weapons pour into Ukraine, with the United States also supplying battlefield intelligence, including targeting data.
Almost every day brings a fresh reminder that this conflict is not just about the control of Ukraine or its future status. Rather, this is a full-fledged new Cold War between Washington and Moscow, with Europe as the theater of the growing confrontation. President Biden’s strategy of Containment 2.0 against Moscow is designed to ensnare Russia in a military quagmire in Ukraine, trigger the collapse of the Russian economy and bring about the overthrow of President Vladimir Putin.
As the war has progressed, Biden has become bolder, including deepening America’s involvement in it. Biden’s implicit call for regime change in Moscow and his administration’s publicly declared goal of a “weakened” Russia, however, run counter to what the president said about two weeks into the war: “Direct confrontation between NATO and Russia is World War III, something we must strive to prevent.”
Unfortunately, there has been little American debate on whether sanctions can weaken Russia or whether the generous military assistance to Ukraine can really bog down the Russian military in a protracted conflict. What if, instead of a weakened Russia, a nationalistic backlash spawns a more militarily assertive, neo-imperial Russia?
After its initial missteps that resulted in heavy Russian casualties, Russia is now militarily focused on consolidating its control in the resource-rich east and south of Ukraine. Russia has carved out a land corridor to Crimea and gained control of regions that hold 90 percent of Ukraine’s energy resources, including all its offshore oil and much of its critical port infrastructure. The Ukrainian ports on the Sea of Azov and four-fifths of Ukraine’s Black Sea coastline are now with Russia, which earlier established control over the Kerch Strait that connects those two seas.
Can the flood of weapons the West is sending to Ukraine undo these new military realities? If Russia stays focused on narrow military objectives centered on establishing a buffer zone in the occupied parts of Ukraine’s south and east, it could avert a quagmire, while remaining free to continue systematically targeting military infrastructure across that expansive country.
Let’s be clear: Sanctions historically have worked better against small, vulnerable states than large or powerful ones. But they have rarely produced timely change. The current Western sanctions could take years to seriously hurt the Russian economy.
The irony is that, despite employing all possible coercive economic instruments against Russia and making it difficult to negotiate an end to the war, the Biden White House doesn’t believe that sanctions alone will work, which explains why it has increasingly turned to weapons supply, including asking Congress for a staggering $33 billion in additional military and economic funds to fuel the conflict and stymie Russian war objectives.
But the sanctions, by signaling the advent of a new era of U.S.-led unilateralism, are likely to weaken and ultimately even undermine the Western-controlled global financial architecture that they are meant to defend. The sweeping sanctions, by spurring broader concerns about the weaponization of finance and its implications for any country that dared to cross a U.S. red line, have created a new incentive for non-Western states to explore establishing parallel arrangements. China will not only lead this process but also is set to emerge as the real winner of the NATO-Russia conflict.
Biden’s belief that “this war could continue for a long time” is backed by Chairman of the Joint Chiefs of Staff General Mark Milley, who testified that he expects it to last years. But as the conflict drags on and the boomerang effects of the sanctions deepen the cost-of-living crisis, the divides in the Western camp will widen and “Ukraine fatigue” will set in.
The West will be left with little choice but to negotiate with Putin to end the conflict, as predicted by Javier Solana, a former NATO chief who also served as Spain’s foreign minister. Such negotiations will be vital to halt Ukraine’s destruction and avert Europe from paying the main price.
Scholz, Biden agree to not acknowledge Russian territorial gains. To be fair, so has the media. Well, it DOES acknowledge them when it’s trying to emphasize how 1984 animal farm it is in Kherson or whatever, but they’ve managed to convince themselves that, contrary to almost every war ever waged, it’s not actually a victory if you permanently hold your enemy’s territory, whether via annexation or by puppet government. src
A race against time in Ukraine as Russia advances, West sends weapons. Do you reckon the media ever tiring of publishing the exact same article every day? src
A slowly regenerating Russian army is making incremental gains in eastern Ukraine against valiant but underequipped Ukrainian forces. The United States and its allies are racing to deliver the enormous quantities of weaponry the Ukrainians urgently need if they are to hold the Russians at bay.
Slowly regenerating? Ah, yes, they’ve fortified in friendly territory, healing 10 health per turn, whereas in hostile territory it’s only 5 health per turn, more than outpaced by Ukraine’s units' combat strength.
Both sides are fighting furiously, both sides are suffering heavy casualties, and for both sides it has become a race against time.
If the Ukrainians can hold out long enough for the new weaponry to arrive, there is a good chance they can not only reverse Russia’s gains but inflict a decisive defeat that could inhibit Russian ambitions in Europe for years, analysts and U.S. and Western officials say.
The Russians are under pressure to make gains before the new weapons arrive and before their own exhausted troops and depleted armor reach the limits of their capacity to advance. The Russian military is in the process of reviving and resupplying their forces, resurrecting units that were depleted or destroyed in the first weeks of fighting, and slowly but steadily funneling them into eastern Ukraine.
The Russians are also stepping up missile strikes against fuel and ammunition storage depots and critical infrastructure such as railway lines used for the delivery of weapons. A growing shortage of fuel across Ukraine has stirred concerns about its ability to sustain supplies of fuel to the front lines.
“The question is, can we crush the Russians before the Russians get back on their feet,” said Ben Hodges, a former commanding general of the U.S. Army in Europe. “If we are not able to deliver enough of the things Ukraine needs to disrupt and destroy Russian artillery, Russian rocket fire and Russian forces before the Russians complete their reconstitution, then this could drag on for a very long time.”
“Then they’ll consolidate and wait for us to lose interest,” he added.
By aiming for a Ukrainian victory, the United States and its allies are casting a vote of faith in the Ukrainian military, whose performance has far exceeded initial expectations, as well as recognizing that Russia’s army is far less capable than had been assumed. It’s a major strategic shift from the first weeks of the war, when the Biden administration was making plans for a Ukrainian government-in-exile to be based in Warsaw.
The goal now is what Defense Secretary Lloyd Austin called a “weakened” Russia, one that won’t be able in the future to “do the kinds of things that it has done in invading Ukraine.”
But first the supplies of weaponry, notably long-range artillery, have to be delivered, and the Ukrainians have to be trained to use new Western systems, a process that is underway but will take weeks more. The United States and its allies are speeding up the deliveries they’ve promised. But transferring them from Eastern Europe into Ukraine is going to require an unprecedented logistical effort at a time when the main supply lines are increasingly being targeted by Russian missiles, Hodges said.
In recent days, the pace of what the Pentagon has described as “anemic” Russian advances of about a mile a day has slowed. The Ukrainians, meanwhile, are retaking territory in some areas, notably around the northeastern town of Kharkiv, where military officials said Thursday they have launched a counteroffensive.
Russia has not yet demonstrated it can overcome the multiple shortcomings that thwarted its attempt to seize Kyiv, including logistics problems, poor command and control and the low morale of its troops, officials say.
But the Russians have adapted their tactics to the open, flat terrain of the Donbas region, which gives them an advantage over the nimbler but less heavily armed Ukrainian military. The Russians’ slow pace appears to be a deliberate effort to mitigate the heavy casualties they suffered in the first weeks of the war, when armored columns surged down tree-lined roads and became easy prey for Ukrainian ambush teams.
Now the Russians are standing back from Ukrainian lines, pounding towns and villages with artillery, then moving in when the Ukrainians are forced under withering fire to withdraw.
In some instances, the Russians are then abandoning the villages and the Ukrainians are simply moving back in, U.S. officials say. With territory changing hands on a daily basis along a 300-mile front line, it is hard in some places to discern which side has the advantage.
It’s a punishing, scorched-earth warfare that takes a heavy toll on civilians. Videos posted on pro-Russian social media show Russian forces moving into destroyed, depopulated villages, rendered uninhabitable by the force of the fire rained down on them.
It’s also taking a toll on the Ukrainian military, which is starting to feel the strain of more than two months of continual fighting on multiple fronts, Ukrainians have acknowledged.
The Ukrainians have refrained from issuing their own casualty figures, but for the first time they are admitting that they are suffering heavy losses.
The Russians are losing soldiers at a higher rate than the Ukrainians, “but we are not super people. We have casualties as well,” Oleksandr Danylyuk, a defense and intelligence adviser to the Ukrainian government, said in an interview.
The Ukrainians’ most urgent need is heavy caliber, long-range artillery to let them strike deep behind Russian lines, he and other military experts say. The first of the 155 mm Howitzers promised by the United States have reached the front lines and are being used, Austin told a Senate hearing on Tuesday.
Further U.S. deliveries will include Humvees, M-113 armored personnel carriers, Mi-17 helicopters, along with hundreds of thousands of rounds of ammunition, and other allies have pledged additional supplies.
The fighting is so ferocious that Ukraine is burning through huge amounts of everything it needs, from ammunition to armored vehicles, drones and fuel, Danylyuk said. “We are so far from actually reaching our needs it is difficult even to comment,” he said.
The Russians have “changed their strategy to a much better one. They’ve started treating Ukrainian forces as a serious opponent, which is not good for us,” he added. “Our troops still have superiority in terms of professionalism and knowledge of the terrain. But the price of that success is very high.”
Ukraine’s backers are watching anxiously yet hopefully. “Probably, these hours for the Ukrainian army are the darkest and most decisive hours of all,” said Kusti Salm, the permanent secretary in the Ministry of Defense of Estonia, which has been one of Ukraine’s staunchest supporters.
He said he is confident the Ukrainians “can hold the front.” Then, once the weapons arrive, he said, “there will be a turning point where it will become easier for the Ukrainians to achieve their goals.”
In some ways, they already have. By forcing the Russians to undertake a humiliating retreat from the battle for Kyiv, the Ukrainians have secured their capital and their sovereignty, and the war has turned into a fight over how much Russia will have to show for its effort to capture the country, said Rob Lee, a former U.S. Marine who is now with the Foreign Policy Research Institute.
In narrowing their goals to the Donbas area and the southeast of Ukraine, the Russians are able to bring greater force to bear in those places than they did when they were still fighting around Kyiv. The Russian force, though heavily depleted by massive casualties in the first weeks of the war, still has offensive capability. If the Russians are able to continue to amass forces, it is likely they will make further gains, Lee said.
But Russia also will eventually run out of personnel, said Phillips O’Brien, professor of strategic studies at Scotland’s St Andrews University. There is speculation that President Vladimir Putin will announce a mass mobilization that would potentially bring hundreds of thousands of recruits into the army. But it would take up to a year to train and equip them for the battlefield, O’Brien said.
“They have to get what they want and hold it relatively soon,” he said. “In the immediate period the Russians have more force. At some point the Ukrainians will start redressing that balance as they receive supplies.”
U.S. and Western officials have not clearly defined what a Ukrainian victory would look like, but Austin and other U.S. officials have repeatedly said that Ukraine “can win,” while stressing that the coming weeks will be critical.
British Foreign Secretary Liz Truss stated last month that the ultimate goal is to eject Russia entirely from Ukraine, including all the areas it captured in 2014, but most military experts think that is unfeasible. A more achievable outcome would be to roll Russian lines back to where they were when Russia launched the February invasion, but that also will be tough, experts say.
“What’s important is that Putin is seen to fail,” said a Western official, who spoke on the condition of anonymity to discuss sensitive issues. “What that looks like might vary.”
Ukraine Is Holding its Own in the Skies Against Russia, But it’s Giving Up the ‘Ghost of Kyiv’ src
Russia’s forces have performed far worse than anticipated and, 70 days after the start of the country’s invasion of neighbor Ukraine, Ukraine’s air force is still holding its own – thanks, in part, to American military equipment supplying the country with anti-air defenses.
Ukraine’s forces have destroyed at least 26 Russian planes and 39 helicopters since the beginning of the invasion, according to Oryx, an open-source intelligence blog that keeps tabs on Russian military losses.
That success led to media reports of a legendary flying ace dubbed “The Ghost of Kyiv,” a mythical pilot whose supposed exploits downing dozens of Russian aircraft spread like wildfire in the early days of the campaign when Ukrainian forces were looking for signs of hope.
But after reports began to surface this week that the Ghost had been shot down and killed in combat, the country’s air force was forced to confess that he was never real.
“The information about the death of the The Ghost of #Kyiv is incorrect,” Ukraine’s air force wrote on Twitter. “The #GhostOfKyiv is alive, it embodies the collective spirit of the highly qualified pilots of the Tactical Aviation Brigade who are successfully defending #Kyiv and the region.”
Ukrainian Maj. Stepan Tarabalka was identified as the “Ghost of Kyiv'' by multiple media outlets last week, but the news was later clarified by the country’s air force. He was a pilot who died in combat March 13 and was posthumously awarded the title Hero of Ukraine, but he was not the mythical flying ace.
But even without the Ghost, Ukraine’s ability to hold its own against Russia’s massive fleet has been notable.
One Ukrainian pilot interviewed by CNN on Wednesday, identified only by the call sign “Moonfish,” told the news organization he believes Ukraine’s pilots have had to get clever to push back against Russia’s modern aircraft in the skies.
“We’re still operating freely in the airspace that we control and, even though they are a massive fleet of more advanced aircraft, we’re able to keep them away from the area we maintain,” the pilot told CNN. “We did learn a couple of tricks on how to fight with that technological advancement.”
Russia has been touting its Sukhoi SU-57 stealth fighter jet and has more than 120 SU-34 bombers, 360 attack helicopters and hundreds more jets in its fleet, according to a report from CNA, a nonprofit research organization that tracks military strength for the U.S. Navy.
But Russia has not been utilizing its full force, focusing less on air-to-air warfare and opting for long-range missiles to attack stationary targets.
In part, this has to do with the surge of anti-aircraft weapons the U.S. has given to Ukraine to aid in its fight against Russia.
So far, weapons approved to send to Ukraine include more than 1,400 Stinger anti-aircraft missiles, upward of 5,500 Javelin anti-tank missiles, 700 Switchblade drones, and more than 120 Phoenix Ghost tactical drones.
The war is shifting to a new phase, with tough fighting expected in the east of the country as Russia tries to solidify its claims to separatist regions. How Russia’s air strategy will change isn’t yet clear, but Ukrainians don’t appear to be relying on myth anymore. Their pilots are seeing real-world success in what continues to be a brutal, hard-fought campaign.
Kadyrovites suffer daily, heavy losses in the war, but they are hiding it Russian media. src
Russian journalists claim that units subordinate to the head of Chechnya, Ramzan Kadyrov, are suffering daily losses in terms of dead and wounded soldiers, but this is well hidden by PR strategies. The real losses of Russian troops in the war against Ukraine, including Kadyrov’s security forces, are carefully hidden by the authorities. However, the death of 13 Chechen fighters during the fighting in Ukraine has already been officially confirmed.
The One Mistake Putin Is Dying for Us to Make. Most of the article is just boring nonsense, so I’ll just get to the “one mistake”. src
In fact, rather than look to the Chechnya analogies, Russia’s military and civilian leaders should ponder what happened in Nazi Germany on the eve of World War II. After the war, some top generals claimed that in 1938, when Hitler began threatening Czechoslovakia, they were planning to oust him if it looked like he was about to plunge Germany into a war with the West that it was not prepared for at that point. Whatever the accuracy of their accounts, any resolve they may have had evaporated when British Prime Minister Neville Chamberlain and French Premier Edouard Daladier acquiesced to the dismemberment of Czechoslovakia by signing the infamous Munich agreement that September.
For the West today, the lesson of Munich should come through loud and clear: It must remain firmly committed to helping the Ukrainians in their fight against the invaders, providing them with every piece of weaponry that can be turned against them. That is the only way to save Ukraine, and to prevent Putin from targeting his next victims. A new Munich-like agreement, which would allow Putin to cement his gains, would signal another colossal failure of nerve.
There is an equally important lesson for those Russians, especially in high circles, who can still think for themselves. It is also up to them to take action to stop a broader war, which will be the inevitable outcome if Putin is allowed to succeed in his current venture. Such a success would be a disaster not only for Ukraine and the West; it would be a disaster for Russia. They cannot afford to repeat the mistake of Hitler’s generals of letting an increasingly desperate leader stampede his army and his people over a cliff.
I think Yahoo News just advocated that Putin’s generals should assassinate him. Huh. They really are getting desperate.
How market failures are holding Africa back. I think the thing that pisses me off the most about articles like these are when they do this “Hmm, what a mystery that this is happening! Let’s quickly go through several potential factors that we’ll disregard for idiotic reasons and then go to our main point that we wanted to explain all along.” And then it’s inevitably some kind of phrenology but shrouded in enough economic terminology that most people don’t notice it or don’t care. Like, it’s as if everybody watched somebody fire an RPG into somebody’s house and then an hour later they went in and were like “Hmm, this place seems rather dusty and wrecked! I have a number of hypotheses for this, including potentially mismanagement, or maybe this hasn’t been inhabited in several years…” while the family cowers in the corner.
Ghana has a curious problem: it produces too much electricity. Under the terms of opaque contracts with generating companies, the government has been paying over $500m a year for power that is never used. That is odd, because the country is hardly awash with energy. The average Ghanaian uses as much electricity in a year as an American does in a fortnight. Although access has expanded rapidly, more than a quarter of rural households are not connected to the grid.
The biggest obstacle to economic development is often inadequate resources. But not always. In Ghana, generating power has proved much easier than distributing it. So, too, in several east African countries, including Uganda, where installed capacity is nearly double peak demand—and your correspondent sits writing this in a blackout. Electricity is not the only industry where resources are sometimes plentiful, and needs are obvious, but demand does not join up with supply. Call it the paradox of untapped riches: surplus and shortage, existing side by side.
This riddle is most apparent in parts of the economy where the market ought to link up supply and demand. Yet in many cases lorries sit idle on roadsides, even as traders cannot find vehicles to carry their goods. Or factories run short of supplies even though the resources they need seem plentiful. Ethiopia has more livestock than anywhere else in Africa and the tanneries to turn hides into leather. Yet some of its shoe and glove makers import leather from as far afield as China. “Most of the raw hides and skins are supplied from household backyard slaughter,” explains Tesfaye Birhanu of the Leather Industry Development Institute in Addis Ababa, the capital. These can be ruined by bacteria within six hours of slaughter if not treated properly.
Even Aliko Dangote, Africa’s richest man, cannot escape the paradox. In 2016 his conglomerate opened a tomato-processing plant in northern Nigeria to turn the country’s vast crop of fresh fruit—half of which rots each year because of poor handling and storage—into the tinned paste that is currently imported. But a shortage of tomatoes forced the factory to shut down within months because of a crop failure caused by a voracious moth. Several years later the factory was still operating at a fraction of its capacity because of problems in getting enough tomatoes of the right quality.
A different variation of this paradox also arises in state-managed markets, like electricity, where governments have struggled to forecast supply and demand, and to build the infrastructure linking the two. It also appears within government institutions themselves. Because of poor management, health ministries in Africa fail to use about a fifth of the budget they are allocated, despite hospitals running short of medicines. The underspend is similar in agriculture ministries, sometimes for the simple reason that money for farm inputs such as subsidised fertiliser is released after crops have been planted.
Another mismatch is in infrastructure. Governments and investors often have money to spend. And demand for roads, ports and the like continues to grow. But bankable projects—the link between the two—are in short supply. “There is funding, a large pipeline, and a need for spending, but not enough money is being spent,” argue analysts at McKinsey, a consultancy. They reckon 80% of African infrastructure projects fail at the feasibility and business-plan stage; fewer than 10% reach the point of funding. Even high-profile schemes can stutter. By 2020, at the end of the first eight-year phase of the Programme for Infrastructure Development in Africa, an initiative led by the African Development Bank, construction had started on fewer than half the planned projects.
In a survey by the European Investment Bank, more than 60% of African banks say that a lack of “bankable” projects significantly constrains their lending to small businesses; a similar proportion of entrepreneurs tell World Bank researchers that they cannot get a loan when they need one.
What do these diverse examples have in common? One obvious theme is broken connections—quite literally, in the case of power grids. A quarter of the electricity that is sold in Ghana is lost due to derelict distribution infrastructure and theft, estimates Theo Acheampong, an energy economist at Aberdeen University. Bad roads and grasping middlemen stand between farmers and buyers.
Sometimes the missing link is information, such as the credit histories that would help banks assess the riskiness of would-be borrowers. A second lesson is that quality trumps quantity. Yes, Ethiopia has a lot of cows, but they need to be kept healthy and slaughtered skilfully if their hides are to be turned into brogues.
None of these obstacles is insurmountable. Farmerline, a Ghanaian firm, uses technology to connect farmers, their suppliers, lorry drivers, warehouses and buyers. “We know how much food people are growing ahead of time, we know the location,” says Alloysius Attah, its co-founder. “It gives us an edge on how we plan our supply chain.” Tomato Jos, a startup in central Nigeria, is trying to crack the tomato-paste conundrum. It spent years talking to and then training farmers before its first tin rolled off the production line. “It’s not as simple as just setting up a factory and mopping up supply,” says Mira Mehta, its American founder. “Roads are horrible, market information is bad, tomatoes are perishable. You have to actually control your supply chain.”
Unclogging bottlenecks is often unglamorous, costly work that businesses are loth to do on their own because it will benefit free-riding competitors. “There has to be an intentional effort from government to support the market,” says Ed Brown of the African Centre for Economic Transformation, a think-tank in Accra, Ghana’s capital. In farming that may mean enforcing standards, or providing support and credit to help build up a whole supply chain. Mr Brown notes the success of Ethiopia and Kenya in developing cool storage at airports, which allows farmers to export flowers and fresh vegetables to Europe.
Economists have long known that resources alone do not make a country rich. African economies already have many of the pieces of the growth jigsaw. What matters is how they slot together.
Why China Is Sticking With Its ‘Covid Zero’ Strategy src
Two years ago, China was being lauded by the World Health Organization for its success in beating the coronavirus. But its insistence on adhering to a so-called Covid Zero policy is leaving it increasingly isolated as other countries, most of which suffered far worse outbreaks and higher death tolls, wean themselves off harsh countermeasures and return to a semblance of pre-pandemic life. Their populations have built up a large degree of protection through previous infections and more effective vaccines. Chinese officials have said vaccines alone aren’t enough and stringent curbs aimed at wiping out the virus are needed to avoid a health care calamity. President Xi Jinping has pledged to try to reduce the economic impact of the strategy, which Hong Kong also follows. But continued flareups, including an extended one in the financial capital Shanghai, are putting it to the test as never before, prompting a more defensive tone from the top.
Does Covid Zero mean zero cases? Ideally, but it’s not that simple. Beijing’s perception of Covid hasn’t changed much since the virus first emerged in the central Chinese city of Wuhan: It’s a public health threat that must be eliminated at all costs. That’s why China requires at least two weeks in quarantine for anyone arriving from abroad. Any outbreak domestically is met with a barrage of targeted testing, contact tracing and quarantines to try to nip it in the bud, with citywide lockdowns as a last resort. That approach, which has become known as “dynamic clearing,” acknowledges that infections occur but aims to stop onward transmission. The highly infectious delta and omicron variants have made it more difficult for China, which hasn’t gone a day with zero new local cases reported since October. In early April the daily tally topped 20,000 – surpassing the opening days of the pandemic in China, when testing wasn’t readily available – before falling back.
Why is China sticking to it? In its calculus, the benefits outweigh the costs. The government estimates the strategy has avoided 1 million deaths and 50 million illnesses. It has acknowledged fewer than 5,000 deaths from Covid on the mainland, mostly early in the pandemic. That compares to almost 1 million in the U.S., which has a population less than a quarter the size of China’s. Beijing has used those figures to portray its system of governance as superior. Covid Zero also allowed the Chinese economy, the world’s second biggest, to grow while other major economies contracted in 2020. Growth continued last year and 2022 got off to a stronger-than-expected start, although the outlook has been clouded not only by Covid but the global repercussions from Russia’s invasion of Ukraine. That worry hasn’t led to any easing, however. Xi said in March that China would “strive to achieve the maximum prevention and control effect at the least cost and minimize the impact of the epidemic on economic and social development.” But by May top leaders had dropped pledges to reconcile the two goals and warned against any questioning of Xi’s Covid Zero strategy.
What’s the domestic impact been? As the virus has become more contagious, it’s led to more frequent outbreaks, some of which have resulted in hardcore lockdowns, where most people are required to stay home. A handful have dragged on for more than a month, such as in Shanghai and the northeastern industrial province of Jilin, leading to economic and social hardship and distress for people with chronic medical conditions. In the western city of Xi’an, one woman suffered a miscarriage and a heart attack victim died after difficulty accessing emergency care. On the other hand, the giant tech hub Shenzhen emerged from just a week of lockdown relatively unscathed, with some factories continuing to operate under a new closed-loop system. Workers are effectively put in a bubble, ferried between their company-run dormitories and the plant – or sleeping on the floor at work – with regular testing and temperature checks. Authorities in Beijing and other cities including Hangzhou, home to tech giant Alibaba Group Holding Ltd., sought to avoid full lockdowns by initiating testing blitzes and other restrictions immediately after the first cases turn up. All the disruption and fear of infection have weighed further on the economy. People have avoided travel, shopping and dining out. Even partial lockdowns have snarled industrial supply chains. Economists have been steadily downgrading their growth forecasts, with Morgan Stanley cutting its projection for this year by 40 basis points to 4.2%, well below the government’s target of around 5.5%.
What are the hurdles to getting back to normal?
While nearly 90% of the population has been vaccinated and a growing number received boosters, the rates are lower for the elderly: 82% for those between 70 and 79 and about 51% for those over 80, health officials said in mid-March. (In Hong Kong, which had similar problems vaccinating the elderly, people 65 and older accounted for more than 90% of the more than 9,000 Covid-related deaths in the city this year through April.)
Many analysts point to the lower efficacy of vaccines developed in China. The most widely used are inactivated shots, which offered less protection against infection caused by the original strain of the virus in clinical trials than the mRNA vaccines developed by Pfizer Inc., BioNTech SE and Moderna Inc. The mRNA shots are the backbone of immunization in much of the world but are unavailable in mainland China.
The inactivated vaccines also appear to produce fewer protective antibodies against the omicron variant than those induced by shots developed in the West after three doses, though the Chinese vaccines do appear to protect against severe disease and death.
Chinese health officials have made it clear that vaccination alone isn’t enough, since breakthrough infections are common even with Western vaccines. Researchers at Peking University estimated China would face a “colossal outbreak,” with more than 630,000 infections a day if it were to reopen in a similar manner to the U.S. – and that was before the more-infectious omicron became predominant.
The run on hospitals across the world, both in under-resourced places like India and in the developed world, is a constant reminder about how China’s patchy hospital network could easily crash under a sudden spike in infections.
Switching tactics to let the virus infect a large swath of the population could create bad optics ahead of the national congress of the ruling Communist Party slated for later this year, where Xi is expected to try to extend his power.
What’s the cost to the rest of the world? Covid Zero has sent ripples through the global supply chain. Outbreaks have led to temporary production halts at the China-based factories of top carmakers in the northern port city of Tianjin for people to undergo mass testing. Foxconn briefly suspended operations at its Shenzhen sites, one of which produces iPhones. The monthlong lockdown of Xi’an caused disruption for leading chipmakers Micron Technology Inc and Samsung Electronics Co., while Toyota Motor Corp. and Volkswagen AG had to suspend production at factories in Jilin. But abandoning the policy could cause far greater disruptions, at least temporarily, if workers were too sick to show up at work, given how much the world relies on China for everything from raw materials to finished consumer and industrial products. In the worse-case scenario of omicron spreading out of control and China imposing a national lockdown, Bloomberg Economics and Bloomberg Intelligence estimated that could slow China’s economic growth to 1.6% this year – the lowest in more than four decades – and send shock waves through the world economy. Among the likely results: lower commodity prices, and a more gradual pace of Federal Reserve interest-rate hikes.
What’s the endgame for China? Government officials haven’t explicitly said how or when they expect the pandemic to end. In the meantime, China has given no sign of backing away from its strategy of trying to contain each flareup as quickly as possible. While local lockdowns cause economic disruption and spur complaints on social media, people in the rest of the country can generally carry on with normal life. The country’s top virus expert said in March that China should stick to its strategy, while fine-tuning some measures to be more targeted and deployed quicker to deal with omicron. Ma Xiaowei, head of China’s National Health Commission, called in April for “a clear-cut stance in opposing the wrongful thoughts of living with virus.” Some experts think the strategy will eventually crumble as the virus becomes too transmissible to control. Another possibility is a new variant may emerge that’s mild enough for the government to relent without harming the population. Some outside experts think the policy will be dismantled gradually, rather than in one fell swoop.
What’s the outlook for Hong Kong? The financial hub and gateway to China has prioritized aligning its policy with the mainland in an effort to reopen the border. Successive outbreaks on both sides have kept that from happening. As omicron swept through Hong Kong early this year, public hospitals became overcrowded and the government’s priorities shifted to vaccinating the elderly and reducing fatalities. In March, after acknowledging that public tolerance was fading, city leaders suspended a plan for mandatory citywide testing and instead sent kits to all residents and asked them to test themselves at home. With daily case numbers falling, the city eased social-distancing restrictions in mid-April and again in May. But officials said talks on reopening borders would have to wait, even as it tries to make life easier for travelers.
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Growing African mangrove forests aim to combat climate woes src
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I Thought I’d Mention
14.9 Million Excess Deaths Associated With the Covid-19 Pandemic in 2020 and 2021 src
Does US really have world’s highest Covid death toll? I don’t know enough to know whether this is Dipshittery or not. src