In which Russia cuts its interests rates, gas prices rise to new heights, China is trying to create a larger group of Pacific allies, Westerners progress slightly through the stages of grief in Ukraine, George Soros posts cringe, and economists wake up to the coming end of Western-led globalization.
Link back to the discussion thread.
Russia’s central bank slashes interest rates to 11% as it tries to tame the rampant ruble BusinessInsider
Ruble up slightly following Central Bank’s decision to cut key rate to 11% per annum TASS
Russia to pay foreign debt in rubles RT
Moscow plans to make foreign debt payments in rubles, Russian State Duma Speaker Vyacheslav Volodin said on Wednesday. This comes after the US blocked Russia from servicing its debt to American bondholders.
“The US and the satellites supporting Washington’s decisions should get used to the ruble,” Volodin said on his Telegram channel on Wednesday, citing Russia’s experience requiring ruble payments for gas shipments as an example of how settlements could work.
Russia’s Oil Production Has Plunged Even As Its Revenue Climbs OilPrice
British retailer Marks and Spencer exits Russia IraqiNews
Putin says he’s raising the minimum wage and pensions in Russia by 10% to counter inflation BusinessInsider
What an absolute buffoon. Has he not heard of the wage inflationary spiral?
- EU considers building new gas pipeline RT
A 700-kilometer offshore link between Italy and Spain could help reduce energy dependence on Russia, El País reports
- The EU Needs More Than $1 Trillion for Plan to Ditch Russian Oil and Gas Naked Capitalism
The $1 trillion estimate for ending EU dependence on Russian energy, which admittedly is to be spent over a period of years, nevertheless indicates that if the EU goes full steam ahead, it’s not going to have a lot left over for things like maintaining social safety nets, let alone also militarizing. Of course they may be expecting the US to pay for that. But even the New York Times editorial board has said there are limits to how much Ukraine can expect from us.
- Europeans warned of ‘permanently high’ energy costs RT
A EU commissioner, Margrethe Vestager, told Germany’s Handelsblatt newspaper on Wednesday that European consumers will have to put up with permanent price increases for energy as the continent wants to become independent from Russian imports.
“A significant part of European industry relies on ultra-cheap energy from Russia, super-cheap Chinese labor and highly subsidized semiconductors from Taiwan. Europe knew about these risks, but showed greed,” Vestager said.
According to the commissioner, European states cannot simply accept such dependencies as part of the deal. “Europe must diversify its trade and accept higher prices … Consumers would ultimately have to pay for these changes,” she said.
- Britons facing record prices at the pump RT
The average price of petrol in the UK has gone above £1.70 a liter [approximately $8.56 per American gallon] for the first time, according to the latest data revealed by the motoring organization RAC.
- German economy dodges recession as war, pandemic weigh Reuters
The German economy grew slightly in the first quarter from the previous one, data showed, with higher investments offset by the twin impacts of war in Ukraine and COVID-19 that experts predicted would weigh more heavily in the three months to June.
Europe’s largest economy grew an adjusted 0.2% quarter on quarter and 3.8% on the year, the Federal Statistics Office said on Wednesday. A Reuters poll had forecast 0.2% and 3.7%, respectively.
However, there is no upswing in sight either, and Sebastian Dullien, director of the Macroeconomic Policy Institute (IMK), predicted the effect of the war and pandemic-linked restrictions in China - Germany’s biggest trading partner last year, according to official data - would be much greater in the second quarter.
ING economist Carsten Brzeski said he was sticking with his baseline scenario of a slight GDP contraction in the second quarter after Wednesday’s reading.
- Germany: G-7 nations can lead the way on ending coal use SeattleTimes
Weren’t you talking about firing up your coal power plants yesterday because you’re unwilling to pay for Russian fossil fuels?
Asia and Oceania
Thailand will not starve, says Commerce Minister Thaiger
Global automakers face electric shock in China Reuters
If global automakers think they can extend their dominance in China into the electric era, they may be in for a shock.
Kings of the combustion age such as General Motors and Volkswagen are falling behind local players in the booming electric vehicle (EV) market in China, a country that’s key to funding and developing their electric and autonomous ambitions.
There are no foreign brands among the top 10 automakers in the new energy vehicle (NEV) segment this year, with the notable exception of U.S. electric pioneer Tesla in third place, according to China Passenger Car Association data.
- Lebanon Plagued by Social and Economic Woes NEO
Almost three years of political, economic and social problems and disastrous policies have transformed life in Lebanon, once known as the “Paris of the Middle East”, and this land of hope now looks like a textbook example of how not to run a state. In a cogent analysis, the Lebanese newspaper As-Safir blames the failures on a political system which is focused on reaching a consensus acceptable to the elites of the country’s various religious groups, and which frequently sidelines experience and competence in favor of petty compromises in a region that has, throughout its history, struggled with the idea of democratic processes.
- Yemen seeks new financing and wheat suppliers to help tackle food crisis MEE
Yemen is searching for new wheat suppliers but will need help to pay for increasingly costly imports, an official and a main importer said, as the World Food Programme warned of cuts to food aid for millions already living on the brink of famine, Reuters reports.
Ukraine and Russia are both major grain exporters and the conflict between them has seen world wheat prices soar. Yemen imports 90 per cent of its food.
- Pakistan’s mango production to fall by 50% due to heatwave, water shortage Jakarta Post
- US Shale Is Holding Back While World Clamors for More Oil Bloomberg
In a world crying out for more oil, a dusty stretch of West Texas and southeastern New Mexico is one of the only places that can deliver. But even with crude above $100 a barrel, producers in the Permian and other US shale basins are riding the brakes.
After Russia invaded Ukraine in late February, crude prices surged to a 13-year high. Gasoline is above $4 a gallon in every US state for the first time. Jet fuel in New York spiked to a record last month. Yet shale explorers show no sign of riding to the rescue. Their business model has fundamentally changed, reshaped by pressure to curb growth and divert cash to investors with dividends and buybacks. Inflation is also taking a toll. US oil output this year is expected to expand by less than half the amount it did in 2018, when crude traded around $65. That means more pain for consumers, with JPMorgan Chase & Co. predicting US gasoline at $6.20 a gallon by August.
“The US oil and gas supply system remains very potent, but at any given price, growth will be smaller and slower,” said Raoul LeBlanc, vice president for North American upstream oil and gas at S&P Global. “Without the subsidy that shale shareholders provided, consumers can expect to pay higher prices.”
Natural gas surges above $9, hits the highest since 2008 as inventories stay low CNBC
Venture Global to Build US LNG Export Plant as Demand Booms Bloomberg
Venture Global LNG is moving ahead with a second liquefied natural gas export terminal on the Gulf Coast after arranging $13.2 billion of financing, a move that will help support the position of the US as one of the biggest suppliers of the fuel as demand booms.
Gas prices have soared so high that the US is now seeing demand destruction ahead of the summer driving season BusinessInsider
The Fed Is in No Mood to Take a Break on Inflation Bloomberg
Investors who are thinking that the Federal Reserve is about to blink in its fight against inflation should start bracing for disappointment after the release of minutes from the central bank’s May policy meeting offered them little support.
- High inflation will persist into next year, CBO projects WaPo
High inflation is expected to persist for the rest of the year, saddling Americans with higher costs as price hikes continue, the Congressional Budget Office said on Wednesday.
The nonpartisan budget office estimated that key measures of inflation will show signs of easing this year relative to last year, but will remain uncomfortably high as demand continues to outstrip supply, putting upward pressure on prices.
The worst of inflation is over, Congressional Budget Office says BusinessInsider
Biden is ‘obsessed’ with lowering ‘outrageous’ gas prices, but presidents don’t control prices, says Energy Secretary CNN
Sorry jack, I don’t control the numbers at the gas station! What, relieve your debt instead? What do I look like, a piggy bank?! I don’t go oink!
- Record high U.S. house prices, rising mortgages depress new home sales Reuters
- Peru’s Ministers Assess Decree To Strengthen Labor Safety TeleSUR
Pedro Castillo, Peru’s President, held a meeting Wednesday with the Council of Ministers intended to evaluate a supreme decree to strengthen the organization and functions of the National Superintendence of Labor Inspection (Sunafil).
Ukraine-Russia War Is Fueling Triple Crisis in Poor Nations WSJ
China’s ‘Zero Covid’ Mess + Ukraine Crisis = Global Recession Forbes
China’s ‘Zero Covid’ Success + Idiotic Western Sanctions on Russia = Global Recession.
Diplomatically and Politically
Involving Ukraine or Russia
On Washington’s Request, Ukraine has Now Turned against Turkey as Well NEO
Ukraine’s Richest Man Demands Russia Repay Him for Destroyed Steel Plants Newsweek
Zelensky condemns Kissinger idea for negotiations with Russia as 1938-style appeasement CNN
In a video message Wednesday, Zelensky said, “No matter what the Russian state does, there is someone who says: ‘let’s take into account its interests.’ This year in Davos, it was heard again. Despite thousands of Russian missiles hitting Ukraine. Despite tens of thousands of Ukrainians being killed. Despite Bucha and Mariupol, etc. Despite the destroyed cities. And despite the ‘filtration camps’ built by the Russian state, in which they kill, torture, rape and humiliate like on a conveyor belt. “Russia has done all this in Europe. But still, in Davos, for example, Mr. Kissinger emerges from the deep past and says that a piece of Ukraine should be given to Russia.”
“It seems that Mr. Kissinger’s calendar is not 2022 but 1938, and he thought he was talking to an audience not in Davos but in what was then Munich,” he said. “By the way, in the real year 1938, when Mr. Kissinger’s family was fleeing Nazi Germany, he was 15 years old.”
- ‘Never going to happen’: Ukraine blasts trading land for peace Al Jazeera
President Volodymyr Zelenskyy angrily denounced suggestions that Ukraine should cede control of territory to Russia in order to reach a peace agreement, comparing such a move with the appeasement of Adolf Hitler’s Nazi Germany.
- Russia says it would let ships carrying food exports leave Ukraine if some sanctions were lifted BusinessInsider
“We have repeatedly commented on the matter and said that a resolution of the food problem would require a comprehensive approach, including the lifting of sanctions imposed on Russian exports and financial transactions,” Russian Deputy Foreign Minister Andrei Rudenko said on Wednesday, as reported by Interfax news agency.
However, Ukraine needs to demine the waters before the safe corridors can be used, Nebenzia said, per Reuters. “They mined the ports, not us,” he said. “There is a corridor which exists, which they don’t use.”
Asia and Oceania
- China Wants 10 Pacific Nations to Sign a Major Cooperation Agreement The Diplomat. Also: China’s Pacific plans leaked RT
China wants 10 small Pacific nations to endorse a sweeping agreement covering everything from security to fisheries in what one leader warns is a “game-changing” bid by Beijing to wrest control of the region.
A draft of the agreement obtained by The Associated Press shows that China wants to train Pacific police officers, team up on “traditional and non-traditional security,” and expand law enforcement cooperation.
China also wants to jointly develop a marine plan for fisheries — which would include the Pacific’s lucrative tuna catch — increase cooperation on running the region’s internet networks, and set up cultural Confucius Institutes and classrooms. China also mentions the possibility of setting up a free trade area with the Pacific nations.
Wang is visiting seven of the countries he hopes will endorse the “Common Development Vision” — the Solomon Islands, Kiribati, Samoa, Fiji, Tonga, Vanuatu, and Papua New Guinea.
Wang is also holding virtual meetings with the other three potential signatories — the Cook Islands, Niue, and the Federated States of Micronesia. He is hoping the countries will endorse the pre-written agreement as part of a joint communique after a scheduled May 30 meeting in Fiji he is holding with the foreign ministers from each of the 10 countries.
But Micronesia’s President David Panuelo has written an eight-page letter to the leaders of other Pacific nations saying his nation won’t be endorsing the plan and warning of dire consequences if others do.
Among other concerns, he said, is that the agreement opens the door for China to own and control the region’s fisheries and communications infrastructure. He said China could intercept emails and listen in on phone calls.
In his letter, Panuelo said the Common Development Vision is “the single most game-changing proposed agreement in the Pacific in any of our lifetimes,” and it “threatens to bring a new Cold War era at best, and a World War at worst.”
- Laos People’s Court President Visits President of Cuba Laotian Times
- U.S. Sees Chances Of Iran Nuclear Deal As Slim OilPrice
The chances of the world powers reaching a deal with Iran on its nuclear activities that would pave the way toward the removal of the U.S. sanctions on Iranian oil exports “are, at best, tenuous,” Robert Malley, Special Envoy for Iran, told the Senate Foreign Relations Committee on Wednesday.
- Syria says any Turkish incursion amounts to ‘war crimes’ MEE
Israel, Morocco sign 13 technology, agriculture, climate deals MEE
South Africa: EFF protesters march demanding France leave Africa AfricaNews
St. Vincent and the Grenadines PM Begins Visit to Cuba TeleSUR
The 200 So-Called ‘Pro-Life’ Republicans Who Voted to Let Babies Starve Common Dreams
- Brazil’s Bolsonaro to attend Americas Summit after doubts WaPo
- Saudi Arabia in talks to buy Turkey’s Bayraktar drones MEE
The reports were alluded to in local media, including the daily Milliyet headlining, “Another candidate for Bayraktar”
“The number of countries that the TB2 drones have been exported to has reached 20,” the daily wrote on Monday.
Turkish unmanned combat drones gained international acclaim over their widespread use in several conflicts, including Syria, Libya, the Nagorno-Karabakh conflict between Armenia and Azerbaijan and most recently in Ukraine following Russia’s invasion and on-going military operations there.
Acclaim is certainly one word to describe it.
- Russian parliament votes to scrap military age limit Al Jazeera
Russia’s parliament has passed a law scrapping an upper age limit for people signing up to join the army, in a sign Moscow may be looking to recruit more troops for its military campaign in Ukraine.
Under current legislation, Russians aged 18 to 40 and foreign nationals aged 18 to 30 have the right to sign their first military service contract.
The total number of Ukrainian prisoners of war on the territory of the DPR and LPR as of May 26 is about 8,000 people, according to a statement by the LPR Ambassador to the Russian Federation Miroshnik. Ukraine doesn’t have enough Russian prisoners to exchange these people for, so they’ll likely be held captive until the end of hostilities.
Russian forces battle to surround Ukrainians in east Reuters
Russia shelled more than 40 towns in Ukraine’s eastern Donbas region, destroying nearly a dozen high-rise buildings, authorities said on Thursday, as Moscow’s forces sought to surround their Ukrainian foes, outnumbering them in some places.
- Naval coalition to escort Ukrainian grain dubbed a risk RT
Moscow has warned against putting together an international naval coalition to make sure ships with grain leave Ukrainian ports amid a claimed Russian blockade in the Black Sea.
The arrival of a foreign naval coalition “would seriously escalate the situation in the Black Sea,” Russian Deputy Foreign Minister Andrey Rudenko said on Wednesday.
Climate and Space
- One Billion People Are At Risk Of Rolling Blackouts This Summer OilPrice
This summer, power grids worldwide won’t produce enough electricity to meet the soaring demand, threatening more than one billion people with rolling blackouts. Grids are stretched thin by fossil fuel shortages, drought and heatwaves, commodity disruptions and soaring prices due to the war in Ukraine, and the failed green energy transition where grid operators retired too many fossil fuel generation plants. Combine this all together, and a perfect storm of blackouts threatens much of the Northern Hemisphere.
- BP and Abu Dhabi sign two green hydrogen projects MEE
The United Arab Emirates energy companies, Abu Dhabi National Oil Company (ADNOC) and Masdar, will join British energy giant, BP’s H2Teesside and HyGreen Teesside hydrogen projects, Bloomberg reports.
These two projects could deliver 15 per cent of the UK government’s recently expanded ten-gigawatt target for hydrogen production in 2030, the report added.
- The Middle East’s $13 billion sandstorm problem is about to get worse CNN
The skies from Dubai to as far away as Syria turned an apocalyptic orange as dust and sand whirled through the air this month.
Thousands of people in the Middle East flooded hospitals, unable to breathe properly. In Syria, medical units stockpiled canisters of oxygen. Businesses and schools were shut in Baghdad, while Tehran suspended flights and Kuwait halted maritime traffic.
Experts are warning that the phenomenon is only getting worse. It’s driven partly by climate change that’s making the region’s landscapes hotter and drier, and warping weather patterns to create more intense storms.
Home to three strategic waterways and almost half the world’s known oil reserves, the Middle East is crucial to global trade and energy supply.
- Iraq’s Foreign Minister, Iranian counterpart discuss climate change IraqiNews
Both officials addressed important regional challenges related to climate changes such as dust storms, drought, desertification, biodiversity decline, and possible ways to face these challenges to reduce the impact of climate change and to provide a healthy environment suitable for humanity.
Sunshine by day, water by night: Indonesia could pair its vast solar and hydro storage to decarbonise the country The Conversation
The butterflies we may never see again in Britain BBC
A report by Butterfly Conservation warns that 24 of 58 species may soon disappear from our shores.
Five more species are threatened with dying out than when the charity last compiled a Red List, 11 years ago.
Humans are driving the loss of butterflies by destroying wildlife rich habitats, says Head of Science for Butterfly Conservation Dr Richard Fox.“They’ve literally been destroyed, been ploughed up, covered in fertilisers and used to grow crops or for housing,” he told BBC News.
Boeing’s Starliner capsule returns to Earth WaPo
InSight lander’s final selfie on Mars shows why its mission is ending CNN
This is the last time we’ll ever see a selfie from NASA’s InSight lander on Mars. And judging by the amount of dust coating the lander’s solar panels, it’s easy to see why.
The stationary spacecraft captured the image on April 24 using its robotic arm, which will soon be placed into a final resting position called “retirement pose” this month. In order to take a selfie, the arm has to move several times, and that won’t be possible anymore.
Dipshittery and Cope
- Is George Soros Right About Xi Jinping’s Third Term? Bloomberg, by Shuli Ren.
China’s government is not a big fan of George Soros. During the Asian financial crisis, the billionaire investor tried but failed to break the Hong Kong dollar peg. In 2016, when China was experiencing massive capital outflows, the People’s Daily warned him not to short the yuan. Last summer, he wrote an op-ed that President Xi Jinping “does not understand how markets work,” at a time when global investors were jittery about Chinese tech stocks being targeted by Beijing’s regulatory crackdowns. In a fiery speech delivered at this week’s World Economic Forum in Davos, Soros made his most sensational claim yet — that Xi may not get re-elected to a third-term at the 20th National Congress this fall:
“Contrary to general expectations Xi Jinping may not get his coveted third term because of the mistakes he has made. But even if he does, the Politburo may not give him a free hand to select the members of the next Politburo. That would greatly reduce his power and influence and make it less likely that he will become ruler for life.”
According to Soros, Xi made two fatal mistakes this year. First, persisting with Covid-zero pushed the economy into free fall and drove Shanghai, which entered a full lockdown on April 1, “to the verge of open rebellion.” Second, Xi’s alliance with Vladimir Putin did not serve China’s best interests. In the last two years, strong exports were the Chinese economy’s trump card. Now, China has alienated its two largest buyers — the US and the European Union. Its companies are fearful of getting snagged by secondary sanctions.
Soros is not alone in thinking that Xi may be losing his grip on power. With the economy poised to grow at the slowest pace since the Cultural Revolution, speculation is rife that there’s a power struggle going on and possibly even gridlock among the political elite.
The marketplace seems to have priced some of that in. In mid-March, when Liu He, Xi’s childhood friend and a member of his inner circle, produced a statement vowing to “actively introduce policies that benefit markets,” the stock market cheered.
The mood soured just a little over a month later. On April 26, when Xi personally called for an “all out” infrastructure push to boost the economy, skeptical traders shrugged it off. Building roads, railways and water-treatment plants require the enthusiasm and cooperation of local government officials. Last year, municipalities funded over half of China’s infrastructure spending, up from around 40% in 2003, according to estimates by CLSA Ltd. The concern is: Perhaps, after so many policy flip-flops, local officials are no longer keen about central government directions and will choose to lie flat.
No doubt, Xi is China’s most powerful politician in decades. In 2018, he managed to remove the two-term limit on the presidency, thereby paving the way for a third-term this fall. A year ago, through a revision in the law, he won the power to appoint or dismiss vice premiers on the seven-member Politburo Standing Committee, where he is the top ranking official. It used to be done only on the authority of the National People’s Congress, which convenes every March.
Sorry, Mr. Soros. Procedurally, it’s highly unlikely Xi will lose a third term.
Nonetheless, Xi now has a very narrow path to form a cabinet of his liking. He still appears to respect an unwritten rule that senior officials should retire when they are 68 and over. (Xi already passed that threshold but this rule does not apply to him.) If that is the case, the Politburo will be in flux this fall: At least 11 of the 25 current members will need to step down.
For Xi, even more worrying is the future composition of the Standing Committee, where we are likely to see at least three openings. In recent days, Premier Li Keqiang, the second highest ranking politician at the Committee, has re-emerged as the economic fixer and a force in his own right. Li is trying to influence the selection of his replacement as a counterweight to Xi, according to the Wall Street Journal. Xi will also lose his right-hand man Li Zhanshu, chairman of the Standing Committee, and Han Zheng, who is in charge of Hong Kong affairs.
Meanwhile, Xi’s own bench is emptying. Li Qiang, the party secretary of Shanghai who had once served as Xi’s chief secretary during his time in Zhejiang province, had been on track to join the Standing Committee, or even be nominated as the next premier. That career fast-track has now been derailed because of Shanghai’s extended Covid lockdown. “It is well known that there is dissension within the Communist Party,” Soros asserted in his Davos speech.
Proponents of the strongman argument will say Xi should be able to withstand opposition because, after all, Putin is still standing despite an embarrassing stalemate in Ukraine. But China is not Russia, which has been economically stagnant for decades. Putin’s power is based on his mastery of his country’s politics. The Chinese Communist Party’s legitimacy depends on its ability to deliver economic prosperity — and that’s now a stumbling block.
Some observers also say that Xi isn’t in trouble because the discontent and dissent is coming mainly from China’s urban elites. Indeed, Xi was popular among China’s poor. Since 2015, the People’s Bank of China showered over 3.3 trillion yuan on shanty-town redevelopments. As much as 60% of that money came as cash settlements to poorer households. But that blue-collar coalition may be disintegrating too. The 178 million migrant laborers in big cities working at factories, as delivery workers and restaurant servers, are suffering the most from the harsh Covid-zero lockdowns.
Less than half a year away from the all-important National Congress, Xi now has tons of headaches, from soaring youth unemployment, ballooning local government debt, to economic hardship all around. He’s still going to get his third term. But to retain his influence, he will have to try very hard to win the hearts and minds of his comrades this fall.
- China Heads for a Big Miss on Its Economic Growth Target Bloomberg, by Malcolm Scott and Tom Hancock.
China’s commitment to Covid zero means it’s all but certain to miss its economic growth target by a large margin for the first time.
Economists’ median forecast for GDP growth this year has dropped to 4.5%, according to the latest survey compiled by Bloomberg, well below the official target of about 5.5%.
China’s President Xi Jinping has laid the groundwork for treating the GDP target as one goal among several for officials to aim at, writing into a key Communist party document last year that it should no longer be a “sole criterion of success.” Beijing hasn’t mentioned the growth target since March. Instead, officials have repeatedly stressed stabilizing employment.
With the growth goal seemingly unattainable, China’s propaganda machine has begun to rev up. Major state-run newspapers, including the People’s Daily, Shanghai Securities and Economic Daily, all carried a report in their front page Wednesday about Xi’s priority on economic growth and the country’s economic achievements under his leadership.
While Beijing may be reconciled to missing the target, that doesn’t mean it has given up on growth entirely. If China’s slows too dramatically, it could be outpaced by the US for the first time since 1976 — a development Washington would be likely to seize on as part of a competition over economic models.
- The Best Outcome for Ukraine in This Conflict Bloomberg, by Andreas Kluth.
The cope keeps coming and it don’t stop coming.
Three months after Russia’s unprovoked attack on Ukraine, the war is entering a new phase. This change requires all involved — the Kremlin as well as Kyiv and its supporters in the West — to rethink scenarios, goals and strategies.
For the aggressor, it appears, all possible outcomes are shades of terrible — a sign of just how colossally Moscow miscalculated. For the defenders, most scenarios are also dire. But one offers a glimmer of hope.
Phase 1 of the war, starting on Feb. 24, might be called Shock Without Awe. Russian President Vladimir Putin ordered his army to invade, bomb and destroy Ukraine from all sides, and to kill his counterpart in Kyiv, Volodymyr Zelenskiy. By shocking Ukrainians, Putin was expecting to awe them into submission.
Instead, they became a nation of heroes, from Zelenskiy (“I need ammunition, not a ride”) to all the men, women and children who sacrificed and stood together against the Russian onslaught. The symbol of the country’s will to resist became Azovstal, a steel plant in the now-destroyed city of Mariupol that the Ukrainians, for a time, defended against all odds.
This month, that phase ended. Understanding that this war will be neither quick nor easy, Putin commanded his forces to concentrate on taking “only” Ukraine’s east and south. In Mariupol, the last remaining Ukrainians evacuated Azovstal. Russia is massing its firepower for a new and more focused assault. Ukraine, receiving guns and ammo from the West, is preparing to fight back.
Phase 2 therefore looks likely to be less kinetic and more grinding — less like a Blitzkrieg and more like a war of attrition evoking the trenches of World War I. My guess is that each side will gain, lose and retake territory in an interminable clash of wills that only makes the rubble bounce.
What, then, could Phase 3 eventually look like, and ultimately the war’s end? A decisive military outcome seems unlikely — and possibly even undesirable.
If the Russians “won” — that is, if they routed the Ukrainian army — they would dismember or eliminate Ukraine as a country and subjugate much of its population. But the Russians won’t succeed in that way, because Ukraine is getting more and better weapons by the day and will hold out.
If the Ukrainians “won,” they would drive the Russians back at least beyond the frontlines as they stood on Feb. 23. But that would amount to a catastrophic failure that Putin couldn’t hide from his population. He would fear for his political and physical survival, which he would redefine as an existential threat to the Russian state. This is the scenario in which he might “escalate to de-escalate” by launching tactical nuclear strikes until Ukraine surrenders.
This would be the worst of all outcomes, possibly even drawing in the West. But I don’t think it’ll come to that, because the Ukrainians probably can’t expel the Russian forces anyway. For that, Russia can still mobilize too much conventional military might.
In a likelier scenario, therefore, the war drags on and increasingly looks like a stalemate. This, too, would be disastrous, for both sides.
Large parts of Ukraine would be destroyed, while other regions couldn’t start rebuilding. The millions of Ukrainian refugees — mostly women and children — couldn’t return, and would settle into new lives in western Europe and elsewhere. Eventually, fathers and husbands at home would seek to join them. Ukraine, even with billions in Western aid, would be permanently stunted.
Russia, meanwhile, would indefinitely remain the international pariah it now is. The rest of Europe will gradually wean itself from its fossil fuels, turning off the Kremlin’s money tap. Components and technologies won’t enter Russia, while talented people will keep leaving it. The country will become an impoverished and totalitarian dystopia.
Sooner or later, therefore, sheer exhaustion will prod both sides to negotiate. As ever, each will try to show up at the talks holding as much territory as possible, which will make the lead-up even more barbarous and bloody. But then there’ll be give and take.
Whatever Kyiv says now, it can’t expect to get back Crimea, Luhansk or Donetsk. Putin annexed the former and recognized the latter two as “People’s Republics,” with the obvious aim of gobbling them. He couldn’t give them up and still claim victory at home. But Kyiv should insist on keeping its coastline on the Black Sea, lest Ukraine become landlocked and indefensible in the long run.
Wherever the final line of confrontation runs, the real question is what the ceasefire, truce or armistice will look like. One possibility is a Korean model. As on that peninsula since 1953, there would be no peace treaty, just mutual despair yielding a cessation of fighting along some sort of demilitarized zone.
But such an outcome would be much less promising for Ukraine than it proved for South Korea. Both are permanently threatened by totalitarian neighbors with nukes. But South Korea, unlike Ukraine, had the explicit protection of the US, and gradually became the glittering economic and cultural power it is under that American aegis. Ukraine will just as explicitly lack NATO protection, because the West wants to avoid a Third World War.
Another scenario is the Finnish model. In the Winter War of 1939-40, Finland fought a Soviet invasion to a standstill and kept its independence in return for ceding some territory to the USSR. But this success came at the cost of compromising its sovereignty: It became a neutral buffer state that coordinated its foreign policy with Moscow — a quasi-independence pejoratively called “Finlandization.”
Finland eventually became the success story it is today. It has a strong national identity, loves freedom and is prepared to fight for it. After the Cold War, it entered the European Union. This year, at last, it will almost certainly join NATO. In the long run, the Finnish model is, therefore, more promising for Ukraine than the Korean or any other.
And yet, Ukrainians, like the Finns during the Cold War, would probably have to wait decades for their bliss. That’s not an easy proposition for Zelenskiy or anybody else to sell to a traumatized population yearning for justice.
The devastating reality of Putin’s war is that, for the foreseeable future, it can lead only to outcomes that are messy and tragic. Little or nothing will be resolved. Success, such as it is, will be merely the avoidance of even worse catastrophes.
- Putin Pulls Shameless Hospital PR Stunt as His Troops Drop Like Flies Yahoo, by Shannon Vavra.
Russian President Vladimir Putin visited a Russian hospital Wednesday to meet with soldiers that have been injured in the war in Ukraine, in what is believed to be the first time he has met with wounded service members since launching the war in Ukraine over three months ago.
Putin’s first visit to his wounded soldiers comes as his war in Ukraine enters its fourth month, with his military continuing to bleed hundreds of soldiers each day, according to some estimates. Although the Russian Defense Ministry has only issued casualty estimates up until March 25—where it said 1,351 were killed and 3,825 were wounded in Ukraine—so far, 29,450 Russian troops have died, according to tallies by the General Staff of the Armed Forces of Ukraine shared Wednesday.
Ukrainian President Volodymyr Zelensky, on the other hand, visited his wounded troops in hospitals much earlier in the war. Zelensky visited wounded soldiers in March, just days after Putin kicked off the war, and has since visited soldiers fighting Russian forces.
The Kremlin’s PR stunt, which took place in clean, brightly-lit hospital rooms, glosses over the dirtier details about the war in Ukraine. Russian troops for months have been complaining about the government’s treatment of their ranks, and in particular, how the Kremlin is trying to cover up the details about soldiers that are wounded or dead. There are so many dead Russian troops that Putin’s cronies have been shipping their corpses back to Russia in small groups in the dead of night in order to avoid making a big show of just how many losses they’re suffering in Ukraine, according to Russian fighters who were caught speaking of the hush-hush transports in intercepted phone calls Ukraine’s Security Service (SBU) shared early this month.
Despite the PR stunt from Peskov and Putin, though, Russian soldiers are seeing right through the Kremlin’s efforts to punch up morale around the war effort. On the ground, the amount of support troops are getting from Moscow is quite different. Some soldiers have complained they don’t have sufficient first-aid supplies to save each other’s lives. In a recent battle in the Black Sea, Russian troops and their family members phoned each other to complain about their realization that the Russian government was not providing enough air support to back them up in the fighting.
Putin sent in a commander in another case to admonish, tie up, and cart away a group of fed-up troops after they were caught complaining about Putin’s war, according to recordings shared by Ukrainian intelligence.
Latest Ukrainian intelligence states that a group of Russian soldiers were complaining about the war, so Putin drew a realistic mountain tunnel on an otherwise flat cliff, and then the soldiers drove into it while trying to escape, and they and their cars were squashed flat, and bounced back and forth while making accordion noises, and then Putin rolled them all into a rug and rolled the rug back on the front lines.
- Russian Forces Expand Donbas Assault, but at Steep Cost WSJ, by Ian Lovett.
But at what cost?
Russian forces were pushing to encircle two cities in eastern Ukraine on Wednesday, part of an all-out assault to take control of the Donbas region that is making progress, but at a cost for Moscow.
Russia’s focus on Severodonetsk, a city of 100,000 people, shows just how much its ambitions have been scaled back since the start of the war.
Russian forces are making progress in that region. Ukrainian military units have pulled out of Svitlodarsk, another city in Donbas. And earlier this week, Ukrainian President Volodymyr Zelensky said that up to 100 Ukrainian soldiers could be killed each day in the battle for Donbas.
But Russia is paying a steep price for the gains it has made. The Kremlin is sending units from southern Ukraine to fight in Donbas, according to Ukrainian officials, and losing so many men that continued Ukrainian resistance could eventually force it to shift strategies again.
- Putin’s Elite Soldiers Getting Wiped Out as Russia Makes Mistakes Newsweek, by Brendan Cole.
Mistakes made by Russia’s airborne forces, the VDV, in the invasion of Ukraine show how Vladimir Putin’s investment in his military has resulted in an “unbalanced overall force,” Britain’s defense ministry said.
In its daily assessment, U.K defense officials said that since the start of the war, the VDV has been involved in “several notable tactical failures.”
- Former NATO general says Putin has 9-month window to win war Al Jazeera, by John Psaropoulos.
A resurgent Russian army has refocused its hitherto lumbering efforts to claim Ukraine’s east, making its first significant advances there in the 13th week of the war.
Finally, a “significant” advance!
The article describes the progress of the war, then:
Ukraine has fought valiantly and driven the Russians back from the northern cities of Kyiv, Chernihiv, Sumy and Kharkiv in recent weeks, but its counteroffensive has not been sustained because Ukrainian forces need time to assimilate Western military equipment, a retired NATO commander said.
“Tanks and armoured vehicles need an initial stage of personal training and team training for the driver, gunner, reloader and commander,” said Lt-Gen Konstantinos Loukopoulos, who has taught tank warfare at military academies in Kyiv and Moscow.
“They need tactical training, including test firing and exercises, which cannot be done in a few weeks. The training cycle is at least six months, and that doesn’t change in wartime,” he said.
“After [Russian President Vladimir] Putin’s illusions about winning the war in 96 hours, the illusions began on the Western side,” he added.
“Under the present balance of forces, the general trend is in favour of the Russians. Right now nothing can change that,” he said. “Whether we like it or not, Russia has the political and military initiative. The West is reacting to what Putin is doing.”
- Give Me Your Educated Migrant Workers, Not More Relatives Bloomberg, by Allison Schrager.
The solution to some of our biggest economic problems is staring us in the face. Or more accurately, it’s beating on our door.
Among the many aspects of US immigration policy that need rethinking, one of the most urgent is how we handle migrants on temporary work visas. Focusing on a more sensible approach to that program would not only ease the pressure of illegal immigration at the border, but provide some price relief in our overheated economy, as well.
Currently, there are two types of migrants: permanent migrants (the people who get green cards and can eventually become citizens) and temporary migrants whose visas will one day expire. Some permanent migrants start out as temporary migrants; this is typically the case for people who get a green card for jobs. But most people offered permanent status get their visa through family reunification. They are related to a US citizen, and about half lived in the US before they got their visa. The figure below shows the number of permanent migrants in 2019 and 2021 by category.
Family reunification is the overwhelming reason why migrants get permanent residency status. But this population also tends to be less skilled and is less likely to fill our economic needs. Other developed countries, including Canada, Australia and the UK, offer admission based on a points system that reflects economic priorities, with higher points awarded for more education or skills in high-demand areas.
America needs to start being similarly strategic in its immigration policy. We need more well-educated migrants with backgrounds in science, technology, engineering and math. Sadly, American training in secondary school falls short of what many students get overseas, which may be one reason why foreign-born students dominate STEM degrees at the college and graduate school level. Maintaining our competitive edge as a tech-driven global economy will require more skilled STEM workers. New immigrants with STEM background are some of the most innovative people in America and are more prone to entrepreneurship — they include Tesla’s Elon Musk and Google co-founder Sergey Brin.
Elon Musk, lmfao.
But we also need more unskilled migrants to help relieve the labor shortage we are still grappling with, as many work in hospitality and construction. Our need for less-educated immigrants will become more apparent as the population ages and we need more healthcare workers.
Hang on, do we need unskilled migrants through family reunification or not then? Or do we need just enough to form an underclass that white people can either ignore or who they can make conspiracies about a Great Replacement about?
- Gas prices a much bigger factor than covid for summer travel, poll finds WaPo, by Hannah Sampson, Emily Guskin, and Scott Clement.
A majority of Americans say they are likely to travel for summer vacation this year, but high prices for gas, hotels and flights are weighing on those plans, a Washington Post-Schar School poll finds.
Less of a concern for this year’s travelers: coronavirus, which fewer than 3 in 10 Americans say is a major factor in their summer vacation plans.
- George Soros says Russia’s gas storage is almost full — and Europe should hold its nerve CNBC, by Silvia Amaro.
Russian President Vladimir Putin’s bargaining position is “not as strong as he pretends” and Europe has leverage against him, according to billionaire investor George Soros.
In a letter to Italy’s Prime Minister Mario Draghi, Soros said Putin was “obviously blackmailing Europe” by threatening to — or actually — withholdinging gas supplies.
“That’s what he did last season. He put gas in storage rather than supplying gas to Europe. This created a shortage, raised prices and earned him a lot of money, but his bargaining position is not as strong as he pretends,” Soros wrote Monday.
Good Takes that are Dope
Turkey Shows What NATO Really Is NYT, by Cihan Tugal.
In April, as the world was occupied with Vladimir Putin’s invasion of Ukraine, a NATO member launched an attack on two of its neighboring territories. In a bombing campaign, Turkey targeted the camps of Kurdish militants in Iraq and Syria, inflicting damage on shelters, ammunition depots and bases.
The irony went largely unnoticed. That’s hardly a surprise: For a long time, the Western world has turned a blind eye to Turkey’s heavy-handed treatment of the Kurds. Across decades, the Turkish state has persecuted the Kurdish minority — about 18 percent of the population — with devastating zeal. Thousands have perished and around a million have been displaced in a campaign of severe internal repression. But Western nations, except for a brief spell when Kurdish resistance was holding back an ascendant Islamic State, have rarely seemed to care.
Turkey’s treatment of the Kurds is now center stage — but not because allies have woken up to the injustice of Kurds’ systematic oppression. Instead, it’s because Turkey is effectively threatening to block the admittance of Finland and Sweden to NATO unless they agree to crack down on Kurdish militants. For President Recep Tayyip Erdogan, seeing an opportunity to further cement his nationalist agenda, it’s a bold gambit. The tepid response from NATO allies so far suggests he might be successful.
However the situation shakes out, it’s deeply revealing. For Turkey, it underlines once again the vigor with which Mr. Erdogan is keen to stamp out the Kurds while asserting the country as a regional power. For the alliance itself, the impasse brings to light facts currently obscured by its makeover as a purely defensive organization. NATO, which has long acquiesced in the persecution of the Kurds, is far from a force for peace. And Turkey, a member since 1952, proves it.
Turkey’s conflict with the Kurds goes back at least to the late 19th century, when Ottoman centralization led to tribal uprisings. The initial two decades of the Turkish Republic, founded in 1923, involved the denial of Kurdish identity, autonomy and language, all of which were mainstays of the Ottoman Empire. Rebellions ensued but were forcibly put down. After remaining largely dormant in the 1940s and 1950s, Kurdish militancy then experienced a revival, under revolutionary banners. The Kurdistan Workers’ Party, or P.K.K., emerged in this atmosphere.
The organization is designated a terrorist group by Turkey, the United States and the European Union — and its methods are indeed violent. Across four decades of conflict, the P.K.K. has contributed to the bloodshed and is responsible for the deaths of civilians as well as security officials. Yet Turkey’s militaristic approach to the Kurdish issue has left little room for other, more conciliatory Kurdish organizations.
The country experienced a spring of Kurdish activism in the late 1960s and 1970s, when many left-wing Turkish movements and organizations also expressed solidarity with the Kurds. But a coup d’état in 1980 heavily crushed these forces, with the exception of the P.K.K., most of whose camps were already outside Turkey. In the years after the coup, the heavy torture suffered by Kurdish activists of various organizations swelled the ranks of the P.K.K. More embittered against the Turkish state than ever, many activists saw no other effective home for their struggle.
Things today aren’t much better: Peaceful forms of Kurdish activism — such as those organized by the legal Peoples’ Democratic Party, or H.D.P. — are under constant attack, accused of affiliation with the P.K.K. The government also claims that the P.K.K. is in cahoots with the Gulen movement, a former ally of the ruling party the government accuses of orchestrating a failed coup attempt in 2016. It is members of these two groups who Mr. Erdogan is demanding Sweden and Finland give up.
Where was NATO in all of this? The 1980 military intervention, at least passively endorsed by the alliance, was led by Kenan Evren, a commander in NATO’s counter-guerilla forces. Western countries kept on providing ample support for campaigns against the Kurds in the following years, even during the exceptionally violent clashes of 1993-95. As hostilities resumed in the 2010s, the West largely neglected internal waves of repression and Turkey’s recurrent incursions into Syria and Iraq, where Kurds have long sought refuge.
If such enabling silence is so persistent, why did Mr. Erdogan choose this particular time to ramp up military adventures? The answer is simple: Elections are around the corner, and the government, overseeing the country’s worst economic crisis in two decades, is counting on jingoism as a remedy for national ills. The ruling party has accordingly ratcheted up its moves against the Kurds, with imprisonment of politicians and journalists, military campaigns abroad and bans on concerts and plays at home.
Russia’s invasion of Ukraine has apparently further emboldened Mr. Erdogan. It has allowed Turkey to pose as a friend to the West, earning praise for its early blockade of the Black Sea while continuing to pursue its repressive agenda. What’s more, by pushing Sweden and Finland — perceived to be longtime harborers of Kurdish militants — toward NATO, the war has handed Turkey a golden opportunity.
If the United States were to pressure the two countries to accept Turkey’s demands, as Secretary of State Antony Blinken has suggested might happen, it would be more than a policing victory. It would be a rare symbolic triumph. Bombings and cultural bans would be nothing compared with an international admission, sealed by the world’s most powerful country, that Kurdish rights can be waved aside.
It’s tempting to see Turkey as an exceptionally bellicose state. Labeled the “sick man of Europe” in the final days of the Ottoman Empire, the country now appears to be the continent’s belligerent man. But it’s wrong to look at the country in isolation. Mr. Erdogan’s aggression is not his alone. It is enabled, encouraged and buttressed by Western countries, as well as Russia.
In Turkey, this is a provocative claim: The authorities want their citizens, and the world, to believe that “foreigners” and “outside powers” have always supported Kurdish separatism. This quite popular but highly twisted perception of reality says nothing about the weapons, logistical support and consent other countries have abundantly provided in the killing of Kurds.
The United States supplied weapons to Syrian Kurds during their fight against the Islamic State, it’s true. But that’s dwarfed by the sophistication and amount of military equipment that Turkey, home to NATO’s second-largest military, secures thanks to being part of the Western alliance.
The truth is that Turkey’s aggression has gone hand in hand with NATO acceptance, even complicity. It’s no use Western countries lecturing Turkey, or Turkey complaining of Western hypocrisy: They are in it together. Whatever happens with the alliance’s expansion — whether the Kurds are sacrificed on the altar of geopolitical expediency or not — this should be a moment of clarity. In a world of war, no country has a monopoly on violence.
Bloomerism and Hope
- RIP Davos Man, long live globalization Politico
Once upon a time globalization was mostly about economics: intensifying trade, falling tariffs, outsourcing and the rise of multinational brands.
It was Western-led, financialized and championed by global institutions like the World Trade Organization — and assumed. In the glory days of the post-Cold War world, this was the good and natural order of things according to the CEOs and political leaders that mingle at the World Economic Forum.
No longer. Today political risk is multiplying and power is decentralizing, changing globalization with it.
Sure, there’s fretting about cracks in the global economy induced by Covid lockdowns and Russia’s war in Ukraine: a new Accenture study found that supply chain disruption could cost Eurozone economies more than $1 trillion this year, up to 7.7 percent of GDP.
There’s also a real risk that parts of globalization stall or go backwards long-term, delivering a world split into democratic and authoritarian political blocs, riven with sanctions and tariffs and powered by regional internets.
González is confident that globalization, though changing, will continue because a world beset by global challenges needs cooperative frameworks. “I don’t see a reduction in interconnection. For me globalization is interconnection, and that is increasing, not reducing,” she said.
Former Danish Prime Minister Helle Thorning Schmidt agrees. “We have to find a way to work with China. We [in democracies] have to find ways of working with countries that don’t fully share our values,” she said.
U.K. Trade Secretary Anne-Marie Trevelyan told POLITICO she would continue to raise concerns, but said “we have a very substantial bilateral trade relationship with China, and our businesses want to continue to grow that.”
Columbia University’s Adam Tooze rejected the idea that globalization is ending. “It’s B.S. Ending globalization? Life as we know it would cease to exist,” he told POLITICO. “When people say this, they’re either naive or apocalyptic,” he said, adding “it’s a bad way of thinking about the problem.”
Alexander Stubb, the peppy former prime minister of Finland who now leads the European University Institute’s School of Transnational Governance, warns of a complicated future. “It’s too simplistic to say we’re moving towards some kind of a new Cold War, with a liberal world order and an authoritarian world order,” he said. “I think we’ll have more regionalization of globalization, but it’s not going to go away.”
Instead, the West will need to adjust: “If we want to work for a rules-based order, it’s not necessarily going to be us setting the rules anymore.”