The relationship between Washington and Moscow is already near the breaking point, and early this morning, risked spinning entirely out of control, when a pair of Russian jets first harassed and then
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On December 7, 2022, Pedro Castillo sat in his office on what would be the last day of his presidency of Peru. His lawyers went over spreadsheets that showed Castillo would triumph over a motion in Congress to remove him. This was going to be the third time that Castillo faced a challenge from the Congress, but his lawyers and advisers—including former Prime Minister Anibal Torres—told him that he held an advantage over the Congress in opinion polls (his approval rating had risen to 31 percent, while that of the Congress was just about 10 percent).
Castillo had been under immense pressure for the past year from an oligarchy that disliked this former teacher. In a surprise move, he announced to the press on December 7 that he was going to “temporarily dissolve the Congress” and “[establish] an exceptional emergency government.” This measure sealed his fate. Castillo and his family rushed toward the Mexican Embassy but were arrested by the military along Avenida España before they could get there.
Why did Pedro Castillo take the fatal step of trying to dissolve Congress when it was clear to his advisers—such as Luis Alberto Mendieta—that he would prevail in the afternoon vote?
The pressure got to Castillo, despite the evidence. Ever since his election in July 2021, his opponent in the presidential election, Keiko Fujimori, and her associates have tried to block his ascension to the presidency. She worked with men who have close ties with the U.S. government and its intelligence agencies. A member of Fujimori’s team, Fernando Rospigliosi, for instance, had in 2005 tried to involve the U.S. Embassy in Lima against Ollanta Humala, who contested in the 2006 Peruvian presidential election. Vladimiro Montesinos, a former CIA asset who is serving time in a prison in Peru, sent messages to Pedro Rejas, a former commander in Peru’s army, to go “to the U.S. Embassy and talk with the embassy intelligence officer,.” to try and influence the 2021 Peruvian presidential election. Just before the election, the United States sent a former CIA agent, Lisa Kenna, as its ambassador to Lima. She met Peru’s Minister of Defense Gustavo Bobbio on December 6 and sent a denunciatory tweet against Castillo’s move to dissolve Congress the next day (on December 8, the U.S. government—through Ambassador Kenna—recognized Peru’s new government after Castillo’s removal).
A key figure in the pressure campaign appears to have been Mariano Alvarado, operations officer of the Military Assistance and Advisory Group (MAAG), who functions effectively as the U.S. Defense attaché. We are told that officials such as Alvarado, who are in close contact with the Peruvian military generals, gave them the greenlight to move against Castillo. It is being said that the last phone call that Castillo took before he left the presidential palace came from the U.S. Embassy. It is likely he was warned to flee to the embassy of a friendly power, which made him appear weak.
This article was produced by Globetrotter.
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The Kremlin spokesman Dmitry Peskov said in a TV interview in Moscow on Sunday, when asked about where the relationship between Russia and the West is moving, “Well, we are not moving. We have already arrived at a station named ‘Confrontation’, and we have to be reserved, strong, to have underlying strength, because we will have to live in the environment of this confrontation.”
There are no peace talks and no end in sight to the conflict in Ukraine. President Putin said last week that Moscow’s near-total loss of trust in the West would make an eventual settlement over Ukraine much harder to reach, and warned of a protracted war.
In such an apocalyptic scenario, Russia’s immediate neighbourhood is turning into severely contested zones of superpower confrontation, as the US and EU try to encircle Russia with a ring of unfriendly states.
Such confrontation can take different forms. In the Transcaucasian region, the Western efforts aim to replace Russia as the arbiter between Armenia and Azerbaijan. The EU has presented itself as an alternative to the Russian mediation and peacekeeping.
Moscow viewed such attempts rather complacently initially, but has lately has begun worrying that the ground beneath its feet is shifting in Transcaucasia. The western ploy is to incrementally elbow out the Russian peacekeeping force deployed to the region following the renewed conflict between Armenia and Azerbaijan last year over the breakaway region of Nagorno-Karabakh.
Moscow plays both sides in the conflict and, quite obviously, the trapeze act is very delicate and taxing. Thus, in the period since Moscow’s special military operation began on February 24, the EU has succeeded in establishing a “monitoring mission” in Armenia and is advancing its plan to establish an OSCE mission to the region, which will challenge Russia’s monopoly in peacekeeping on the Armenia-Azerbaijan border.
Another active theatre of contestation is Kazakhstan where the West is constantly working to erode that country’s close relations with Russia. Kazakhstan’s multi-vector foreign policy aimed at attracting western investment has created pro-western interest groups among the country’s elites. Kazakstan’s nationality question also creates sensitivity in its relations with Russia. Kazakhstan is a high stakes game for the West, as it borders China, too.
In comparison, the covert western role in fuelling the recent clashes between Kyrgyzstan and Tajikistan as well as in encouraging Dushanbe to provide a “transit corridor” for the anti-Taliban rebels in Panjshir Valley poses a direct challenge to Russia in the security sphere. But much to the disappointment of the US, as tensions between Tajikistan and Kyrgyzstan flared last September and soldiers from Kyrgyzstan and Tajikistan exchanged gunfire along several points of the countries’ undemarcated border, Moscow and Beijing chose to remain on the sidelines.
To be sure, the conflict was among the most serious interstate military escalations in Central Asia’s history since the dissolution of the Soviet Union in 1991. The conflict posed a big embarrassment to Moscow and Russia-led regional security organisations in Central Asia.
If the western role in the Kyrgyz-Tajik conflict was a covert one, that is not the case with its increasingly proactive moves to build up the Panjshiris in Afghanistan as a “moderate” resistance movement to overthrow the Taliban government in Kabul, which enjoys cordial relations with Russia. The Panjshiris enjoyed the patronage of the French intelligence during the anti-Soviet struggle in the 1980s and the old links have been revived. The French President Emmanuel Macron has taken a hands-on role to cultivate his Tajik counterpart Emomali Rahmon.
Quite obviously, both in the case of the Kyrgyz-Tajik hostilities and in the spectre of another round of civl war in Afghanistan haunting the region, Russia’s security interests come under profound challenge. Russia remains the dominant presence in Central Asia and at the leadership level, Moscow wields much influence in Bishkek and Dushanbe. But the intra-regional strife and instability provide fertile ground for western manipulation of the ruling elites.
However, the latest wave of unrest in Mongolia carries ominous signs of a colour revolution. As in Kazakhstan and Kyrgyzstan, the social media is active in stirring up protests. The protests began a week ago against the “coal mafia,” which has been allegedly profiteering from doing business with Chinese companies. But various conspiracy theories are spreading on Twitter, including that there would be an internal power struggle within the ruling party elites.
The government responded promptly with the cabinet deciding to put in the public domain for scrutiny nine contracts related to the state mining company at the heart of the affair and announcing that all future business deals on coal export will be with public knowledge. The government further announced that a parliamentary committee will probe the scandal.
Several hundred protesters gathered in the freezing cold at the city’s Sukhbaatar Square during the weekend and marched to the presidential residence with some people attempting to force their way inside the building, chanting and singing while stamping their feet to stay warm — eerily similar to the coup in Kiev in 2014.
Indeed, what lends enchantment to the view, from the geopolitical perspective, is that China is the destination of most of landlocked Mongolia’s exports of coal, cashmere, livestock and other resources.
The attempt at transforming the protests into a coular revolution proper is still work in progress. According to the Associated Press, “Economic conditions have deteriorated in the country of roughly 3.3 million as inflation has soared to 15.2% which has been exacerbated due in part to Russia’s invasion of Ukraine.”
Coincidence or not, the protests in Ulaanbaatar followed the state visit by the president of Mongolia Ukhnaagiin Khurelsukh to Beijing last month. This was the second meeting between Xi and Khurelsukh in two months. Beijing understands that it is also in the crosshairs of the West’s diplomacy in Mongolia, Kazakhstan, Kyrgyzstan, Tajikistan and Afghanistan. All these four countries fall in the first circle of Chinese interests in one way or another.
They give “strategic depth” to China; the economic ties with these resource-rich countries are not only hugely beneficial but also growing rapidly; they are irreplaceable partners from the angle of connectivity and the Belt and the Belt and Road Initiative; and, regional security and stability are common concerns.
The paradox is, despite the convergence of interests and strong political and economic interests, and although their core interests are involved, it is becoming increasingly uncertain whether Russia or China can deliver on regional security guarantees. Moscow is under western sanctions and Beijing remains extremely wary of confronting the US or the EU — although Mongolia is one country in Central Asia where the core interests of Russia and China overlap.
The US and EU are calculating that this is the best opportunity to consolidate and expand their influence in Russia’s Trans-caucasian, Caspian and Central Asian backyard. Clearly, the western powers are wading into the regional tensions and the probability of the Russian and Chinese opposition to it falling short cannot be ruled out.
The geopolitical stakes are high. Mongolia is the transit country for the proposed Power of Siberia 2 gas pipeline channeling up to 50 billion cubic meters of gas from the Yamal Peninsula in the Russian Arctic to eastern China, and the construction work is due to start in 2024. Similarly, China, Mongolia and Russia have extended the Outline of the Development Plan on Establishing the China-Mongolia-Russia Economic Corridor by five years, which will unleash great economic potential and upgrade Mongolia’s role as a transit hub.
China-Mongolia cooperation on the construction of transportation routes and corridors has been greatly boosted in recent years, which has strengthened the logistics between China and Mongolia and greatly increased their transport capacity for bulk commodities, especially mineral products. The two countries are looking to dock multiple new railway lines with Chinese ports.
The US and the EU will do their utmost to wean Mongolia away from the Sino-Russian orbit, no matter what it takes. Interestingly, a NATO military delegation from Brussels travelled to Ulaanbaatar last week and held two days of talks with the Mongolian military leaders. Mongolia presents a combustible mix where all the key elements of the US’ confrontation with Russia and China are present, ranging from NATO’s mission creep to the Asia-Pacific to the BRI and Russia’s energy exports and of course the vast deposits of rare earths in the steppe.
Visit the author’s blog at www.indianpunchline.com
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The visit of German Foreign Minister Annalena Baerbock to New Delhi had an anti-climatic ending. Baerbock waxed eloquently about Germany as a paragon of democratic values and claimed affinity with India. She hoped to persuade Modi government to disengage from strategic partnership with “authoritarian” Russia.
However, when Baerbock returned home, the cat was out of the bag — an (alleged) coup attempt in her country by the far-right nationalist group called “Reichsbuerger” movement, which denies the existence of the modern German state and its trammels of democracy.
The Reichsbürgers use elements of the antisemitic conspiracy myths propagated by the Nazis and are wedded to the notion that Germany’s borders should be extended to include territories in Eastern Europe, which were occupied under Nazi rule.
The active presence of right-wing networks within Germany’s security agencies and the German armed forces has been known for years. In July last year, then-Defense Minister Annegret Kramp-Karrenbauer disbanded an entire company of the German army’s elite Special Commando Forces after several far-right incidents, where the banned Hitler salute had allegedly been used, and where far-right music was played at parties.
It is an open secret that followers of Nazi ideology found shelter in German society in the post-World War II years. Many people with Nazi background eventually rose to high positions. And they secretly helped each other to rehabilitate themselves and re-establish their credentials and prosper. Such incestuous relationships amongst the erstwhile Nazis enabled them a kind of privileges that far surpassed those of average Germans.
The extremist ideology and revanchism found fertile soil in the 1920s and 1930s in Germany. If the economic crisis deepens in Germany, similar conditions can arise again. To be sure, extremism is on the rise in Germany.
That said, most people suspect that the crackdown on Reichsbürger is largely political theatre. Is a far-right coup possible in Germany— an armed insurrection “to eliminate the free democratic basic order” by attacking politicians, storming parliamentary buildings, overthrowing the federal government, dissolving the judiciary, and usurping the military? Impossible.
So, what is the coalition government under Chancellor Olaf Scholz up to? Frankly, creating such conspiracy myths serves to fragment the political opinion, which is snowballing against the Scholz government’s policies. Second, the crackdown on Reichsbürger can cascade into a suppression of the political party Alternative for Democracy (AfD), which is steadily improving its electoral performance and is known for its opposition to the EU and atlanticism. Third, it is a useful distraction at a time when social unrest due to the economic crisis (blowback from Russia sanctions) may trigger political unrest. There are reports that the government has put the police forces on alert.
In an article in Foreign Affairs magazine last week, Scholz openly espoused the cause of militarism. He wrote: “Germans are intent on becoming the guarantor of European security… The crucial role for Germany at this moment is to step up as one of the main providers of security in Europe by investing in our military, strengthening the European defence industry, beefing up our military presence on NATO’s eastern flank… Germany’s new role will require a new strategic culture, and the national security strategy that my government will adopt a few months from now will reflect this fact…
“This decision marks the starkest change in German security policy since the establishment of the Bundeswehr in 1955… These changes reflect a new mindset in German society… The Zeitenwende [tectonic shift] also led my government to reconsider a decades-old, well-established principle of German policy on arms exports. Today, for the first time in Germany’s recent history, we are delivering weapons into a war fought between two countries… And Germany will continue to uphold its commitment to NATO’s nuclear sharing arrangements, including by purchasing dual-capable F-35 fighter jets…” [Emphasis added.]
He writes: “Germany stands ready to reach arrangements to sustain Ukraine’s security as part of a potential postwar peace settlement. We will not, however, accept the illegal annexation of Ukrainian territory… To end this war, Russia must withdraw its troops.”
Scholz overreaches and overlooks not only Germany’s past history of aggression in Eastern Europe but also its weaknesses as a military power when he presents the country as a bulwark against Russia. Even assuming Scholz can find the money for such an ambitious militarisation programme, Germany would cause shockwaves throughout Europe if it were to go ahead with such a plan.
While embarking on this militaristic path, Germany is decoupling France. The Franco-German axis has been the mainstay of European politics for the past several decades. But Scholz’s European Sky Shield Initiative with14 other European states on creating a joint air defence system in Europe excludes France! On defence tech issues, Germany’s cooperation with France is fast fading into the background.
Paris is also upset that Scholz’s 200 billion euro subsidy for German industry was announced without consulting France. Again, Scholz’s November visit to Beijing signalling readiness to accept Chinese investment, ignored French President Emmanuel Macron’s suggestion to plan a joint Franco-German initiative toward China.
All this signals Berlin’s ambition to assume the unification of European leadership in German hands, both in political and economic terms. A big question mark hangs over the future of the Aachen Treaty of 2018 signed by Macron and then Chancellor Angela Merkel. Scholz is espousing that the European Union should switch to majority voting instead of unanimity. Being an economic powerhouse, Germany wields immense clout and Scholz’s plan is to leverage it for establishing the country’s predominance in Europe.
But it will meet with resistance. Hungary opposes further EU sanctions against Russia. It vetoed the EU Commission’s zest to borrow money (accumulate debt) to finance Ukraine’s sagging economy and to fight Russia. The recent statement by the French President Emmanuel Macron that any European security architecture should “guarantee” Russia’s interests also highlights the fault lines.
Interestingly, the veto against the Schengen membership of Romania and Bulgaria has come from the Netherlands and Austria. The argument is that both countries have not implemented sufficiently robust systems to register refugees on their borders with non-EU countries. Refugee policy is where Europe is at its most vulnerable and divisive.
Meanwhile, the centre of gravity in European politics and geo-strategy has lately shifted toward “Mitteleuropa” — Germany and its eastern neighbours — as the conflict in Ukraine accelerates. Whereas the Franco-German tandem used to be the engine of European integration, Paris and Berlin are now faced with the need to look for new points of support within the EU, even choosing alternative interlocutors.
In the period ahead, Germany’s main focus of interests will be directed to the north-eastern borders of the European Union — Poland, the Baltic States, and Finland — which, coupled with continued military assistance to Ukraine, will mean greater “Atlanticisation” of the German strategy.
From an Indian perspective, the Zeitenwende that Scholz speaks of in his essay also implies that Germany’s approach to the Indo-Pacific will be characterised by a reluctance to seek confrontation with China.
The following article is based on the speech made by the author as the UNCTAD Secretary-General Rebeca Grynspan at the opening of the organization’s 13th Debt Management Conference.
We meet in a context of cascading crises, cascading inequalities, and chronic instability. Covid, climate change and the cost-of-living crisis are all increasing poverty and hunger at an alarming speed.
Geopolitics, not economics, is now in the driving seat of globalization.
Funding gaps for SDG investments in developing countries are increasing, and debt burdens are becoming unbearable for many countries of the Global South.
All of these issues will be tackled in this conference, including asking ourselves if we are in a systemic debt crisis, are there enough developing countries today in that distress to allow us to say that the current situation, it is a systemic debt crisis?
Well, the answer depends on the lens you choose.
Through a traditionalist lens, the risk of a systemic debt crisis may appear to be low. Developing countries, excluding China, have a government debt stock of $11.5 trillion at the end of 2021. Countries that are currently classified under the IMF as having unsustainable or distressed debt represent roughly 13 per cent of this amount. Debt distress is therefore largely contained in several highly vulnerable countries, with relatively, until now, small amounts of debt as a share of the total. Most of these countries are low-income countries, although we know that they are middle-income countries that are also suffering debt distress.
So as a result, many may be saying that the possibility of feedback loops and therefore systemic risks remain according to these traditional lenses limited. By limited, I mean for the markets it is limited for them, but not limited for the countries that are in debt distress that are going through high suffering, suffering that has been measured in a decade of loss progress, like we know very well in my region, in Latin America, where we talk about the lost decade because of the debt distress in the eighties and it took us two decades to recover the levels of social indicators that we had before the debt distress.
And we know already that we have two decades in many countries that have been lost in progress seen before COVID-19, before the climate change burden, and before the crisis of the high cost of living. So, this traditional lens could be challenged.
We at UNCTAD prefer the developmental approach that in our research we put centre to our analysis and if you do that the answer is very different. Our key point of departure is to analyze how developing countries can achieve structural transformation together with the SDGs within the bounds of the external and public debt sustainability requirements.
Our guiding principle here is that debts are unsustainable if the only way to pay for them is to compromise sustainable development, using this approach. What we see is that the combination of rising debt levels and the tightening of global financial conditions has already caused a dramatic and systematic reduction of the policy space available for developing countries. In the current context, achieving debt sustainability under the traditional approach is inconsistent with the mobilization of resources required by the 2030 agenda and the Paris Agreement.
Thus, the issue today is not whether enough countries will cease to pay their creditors in the short run, the issue today is that almost all developing countries have been left to face an impossible tradeoff in a context marred by a pandemic, geopolitical instability, and climate distress.
Three sets of figures help to illustrate this point. First, public debt levels.
Government debt levels as a share of GDP have increased in over 100 developing countries between 2019 and 2020. Excluding China, this increase is equivalent to almost $2 trillion.
These are resources that will have to be paid back by governments in developing countries to their creditors in coming years due to two systemic shocks because we are talking about between 2019 and 2021. So, this has not happened because of the bad behavior of one country. This has happened because of systemic shocks that have hit many countries at the same time because there have been global shocks.
Second, debt servicing requirements, higher debt burdens, in combination with rising borrowing costs, are placing an enormous strain on public budget around the world. Fitch Ratings estimates that if the medium increase in rated sovereigns since 2009 were fully reflected in the interest payments governments would pay an additional $1.1 trillion on the global debt stock in 2023. To place these figures in context, $1.1 trillion represents almost four times the annual estimated investment requirements for climate adaptation and mitigation in developing countries, according to the IFCCC.
Third, the impact of the currency composition on debt, on public budgets in the context of an ever-stronger US dollar.
The IMF estimates that 70 per cent of all the debts in emerging countries and 85 per cent of the debt in low-income countries is in foreign currency.
Since governments in the global south spend in local currency and borrow in foreign currency, this structure leaves public budgets highly exposed to large and unexpected currency depreciations. This year, at least 88 countries experienced a depreciation against the US dollar as of the end of November. In 31 of these countries, the depreciation has been greater than 10 per cent. The Currency Exchange Fund estimates that for most countries in Africa such a depreciation increases debt service requirements by the equivalent of public health spending in the continent.
We have also talked about this with respect to the food insecurity crisis, because, as you know, the crisis in the global market has gone down. But because of the strength of the dollar, domestic prices are still going up, precisely because of the strength of the dollar in the food markets and also because of the depreciation that the countries are suffering because of that. So, the magnitude of these figures shows the systemic nature of the problem we are facing, and systemic problems demand systemic solutions.
At UNCTAD our focus is centered around promoting multilateral solutions in the areas of obviously, policy, capacity-building, debt transparency and debt crisis resolution and relief.
On capacity building, UNCTAD is committed to providing support to countries through our debt management and financial analysis program, what we call DMFAS, one of our most successful technical assistance initiatives. DMFAS offers countries a set of proven solutions for managing debt and producing reliable Data for policymaking purposes. Since its establishment over four decades, DMFAS has supported those 116 institutions in 75 countries. Today 61 countries are using DMFAS software to manage their public debt daily of which nearly three quarters are either low or lower-middle-income countries.
Regarding debt transparency, UNCTAD supports the establishment of a publicly accessible registry of debt data for developing countries following the UNCTAD Principles on Responsible Sovereign Borrowing and Lending. This registry would allow the integration of debt data by both lenders and borrowers at the level of specific transactions. Transparency would strengthen debt management, reduce the risk of debt distress, and improve access to financing.
Finally, UNCTAD aims to create a multilateral legal framework for debt restructuring and relief to facilitate timely and orderly debt crisis resolution with the involvement of all creditors building on the G20 common framework.
Participation in this framework should be incentivized through the provision of debt relief link to a debt sustainability assessment that incorporates long-term financing needs, including for the achievement of the SDGs and the Paris Climate Agreement.
At the same time, we are proposing to the G20 in the UN Presidency an independent review of the G20 debt agenda, which can boost the promising but stalled discussions around the Debt Service Suspension Initiative and the Common Framework for their treatment.
Your Excellencies, distinguished delegates,
We are at a systemic debt crisis that has become unsustainable because they have become too onerous and have compromised our sustainable development. Debt cannot and must not become an obstacle for achieving the 2030 agenda and the climate transition the world desperately needs.
These three days will be instrumental in providing solutions to our pressing problems, and I therefore wish you productive, engaging and above all, impactful sessions ahead.
A lot depends on these policy solutions to have a systemic intervention, to have systemic integrated policy options for these crises will be key to avoiding decades of lost progress in many developing countries.
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June 6, 2021, was a day which shocked many in Peru’s oligarchy. Pedro Castillo Terrones, a rural schoolteacher who had never before been elected to office, won the second round of the presidential election with just over 50.13% of the vote. More than 8.8 million people voted for Castillo’s program of profound social reforms and the promise of a new constitution against the far-right’s candidate, Keiko Fujimori. In a dramatic turn of events, the historical agenda of neoliberalism and repression, passed down by former Peruvian dictator Alberto Fujimori to his daughter Keiko, was rejected at the polls.
From that day on, still in disbelief, the Peruvian oligarchy declared war on Castillo. They made the next 18 months for the new president a period of great hostility as they sought to destabilize his government with a multi-pronged attack that included significant use of lawfare. With a call to “throw out communism,” plans were made by the oligarchy’s leading business group, the National Society of Industries, to make the country ungovernable under Castillo.
In October 2021, recordings were released that revealed that since June 2021, this group of industrialists, along with other members of Peru’s elite and leaders of the right-wing opposition parties, had been planning a series of actions including financing protests and strikes. Groups of former military personnel, allied with far-right politicians like Fujimori, began to openly call for the violent overthrow of Castillo, threatening government officials and left-leaning journalists.
The right-wing in Congress also joined in these plans and attempted to impeach Castillo on two occasions during his first year in office. “Since my inauguration as president, the political sector has not accepted the electoral victory that the Peruvian people gave us,” Castillo said in March 2022. “I understand the power of Congress to exercise oversight and political control, however, these mechanisms cannot be exercised by mediating the abuse of the right, proscribed in the constitution, ignoring the popular will expressed at the polls,” he stressed. It turns out that several of these lawmakers, with support from a right-wing German foundation, had also been meeting regarding how to modify the constitution to quickly remove Castillo from office.
The oligarchic rulers of Peru could never accept that a rural schoolteacher and peasant leader could be brought into office by millions of poor, Black, and Indigenous people who saw their hope for a better future in Castillo. However, in the face of these attacks, Castillo became more and more distanced from his political base. Castillo formed four different cabinets to appease the business sectors, each time conceding to right-wing demands to remove leftist ministers who challenged the status quo. He broke with his party Peru Libre when openly challenged by its leaders. He sought help from the already discredited Organization of American States in looking for political solutions instead of mobilizing the country’s major peasant and Indigenous movements. By the end, Castillo was fighting alone, without support from the masses or the Peruvian left parties.
The final crisis for Castillo broke out on December 7, 2022. Weakened by months of corruption allegations, left infighting, and multiple attempts to criminalize him, Castillo was finally overthrown and imprisoned. He was replaced by his vice president, Dina Boluarte, who was sworn in after Congress impeached Castillo with 101 votes in favor, six against, and ten abstentions.
The vote came hours after he announced on television to the country that Castillo was dissolving Congress. He did so preemptively, three hours before the start of the congressional session in which a motion to dismiss him for “permanent moral incapacity” was to be debated and voted on due to allegations of corruption that are under investigation. Castillo also announced the start of an “exceptional emergency government” and the convening of a Constituent Assembly within nine months. He said that until the Constituent Assembly was installed, he would rule by decree. In his last message as president, he also decreed a curfew to begin at 10 o’clock that night. The curfew, as well as his other measures, was never applied. Hours later, Castillo was overthrown.
Boluarte was sworn in by Congress as Castillo was detained at a police station. A few demonstrations broke out in the capital Lima, but nowhere near large enough to reverse the coup which was nearly a year and a half in the making, the latest in Latin America’s long history of violence against radical transformations.
The coup against Pedro Castillo is a major setback for the current wave of progressive governments in Latin America and the people’s movements that elected them. This coup and the arrest of Castillo are stark reminders that the ruling elites of Latin America will not concede any power without a bitter fight to the end. And now that the dust has settled, the only winners are the Peruvian oligarchy and their friends in Washington.
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China is dealing with a number of serious issues. After decades of economic growth its trajectory is stalling. The people are openly rebelling against COVID-19 policies, clampdowns on freedom of speech, the treatment of minorities, and President Xi Jinping’s insistence on serving an unprecedented third term.
Those setbacks are not in question.
Here’s a real question: Do these developments imply that China is going to miss its goal of replacing the United States as the world’s economic superpower?
That certainly is not what I’m hearing from my friends in Latin America. According to an Ecuadorian cabinet minister who asked to remain anonymous
Latin American countries possess many natural resources, but we don’t have the technological or financial capabilities to exploit them. China offers hope. We would rather accept help from China than the States. After all, China has never invaded a Latin country or backed coups and assassinations against our elected officials; the US has a history of doing both.
During my time as an EHM, one of our primary goals was to defeat the Soviet Union for world superpower domination. The US supported brutal dictators like Chile’s Pinochet, Indonesia’s Suharto, and Iran’s Shah if they pledged allegiance to the US and allowed our corporations to exploit their nations’ resources. We justified coups and assassinations under the pretense that we were defending democracy and capitalism – when in fact we were promoting a predatory system that made the rich and powerful richer and more powerful.
Then all that changed. My new book describes what China’s economic hit men have learned from the successes and failures of the US’s EHMs. China has beaten the US to become the largest investor and/or largest trading partner in Africa, Asia, Europe, Latin America, and the Middle East. China took advantage of the US’s mistakes. From the new book:
The US and its allies won the Cold War, the Berlin Wall crumbled, and the Soviet Union collapsed in 1991. Lacking the leverage of an alternative superpower, lower-income country leaders grew more vulnerable to US EHM tactics. Neoliberalism proliferated. Resentment grew as these leaders felt exploited by Washington’s hawkish politics and corporate greed and their impotence to counteract it.
Although the Soviet Union had collapsed, the US EHM strategy continued in full force. In what can only be described as misguided arrogance, the US fumbled. China grabbed the ball. The book continues:
It occurred to me that I and my fellow EHMs had been overly confident that the world wanted us, our corporations, and our military. After the dissolution of the Soviet Union, that high level of confidence became hubris. China’s EHMs were not about to make the same mistakes. They were playing to the pride of other countries and promoting the prosperity that would accompany the interconnected trade routes (touted as China’s New Silk Road).
US media pundits are quick to point out that China has suffered setbacks. Following the pandemic, China’s economy has faltered. Beijing has been heavily criticized for its treatment of minorities and its aggressive actions toward Hong Kong, Tibet, and Taiwan. Many of the projects it has financed and built in other countries have been poorly engineered and constructed. President Xi’s consolidation of power during the 20th Congress in October 2022 has raised serious concerns among many countries that China is becoming an Orwellian, militarized dictatorship. The list goes on and on. However, at the same time, China has quietly continued to establish itself as the globe’s newest economic power center.
The New York Times cited China’s recent diplomatic activities as one example:
China’s foreign minister, Wang Yi, a dapper man in well-pressed suits, keeps up a relentless travel schedule, more than 30 countries so far this year, to places big and small: island nations in the Pacific, Central Asia on China’s western periphery and, often, Africa.
He is the campaigner for the global ambitions of his boss, China’s leader, Xi Jinping, carrying the message that Beijing will not be pushed around, least of all by the United States. . . .
In a not-so-subtle way, Mr. Wang is setting up a fight for Asia, with China in one corner and the United States in the other.
“China’s argument is that Asian problems should be solved by Asians,” said Bilahari Kausikan, former foreign secretary of Singapore, who has been with Mr. Wang in closed-door diplomatic meetings. “The argument also says that the U.S. is an unreliable troublemaker.”
Regardless of whether China or the US wins the war for global hegemony, the fact is both countries are promoting a degenerative Death Economy that is consuming and polluting itself toward destruction. There are no winners on a dead planet. The US and China can compete on many levels and disagree about many issues, but we must stop ravaging our mutual home, Earth.
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The ongoing unrest in Iran since mid-September following the death of a Kurdish woman in police custody shows no signs of abating as of now. The unrest has drawn support from all social strata and assumed anti-government overtones. The efficacy of suppressing the unrest is doubtful. Iran is entering a period of turmoil.
Indeed, the government faces no imminent threat but seems cognisant of the imperative need to address the hijab policy to pacify the protestors. As the protests continue, many women are walking on the streets of cities across Iran, especially in Tehran, without head coverings.
There is a long history of Western countries fuelling public unrest in Iran. Regime change agenda must be there in the western calculus but, curiously, Washington is also signalling interest in reaching an accommodation with Tehran under certain conditions relating to the regime’s foreign and security policies in the present international milieu.
Iran’s Foreign Minister Hossein Amirabdollahian stated explicitly on Monday that the US and a number of other Western countries have incited riots, because “one of the US’ objectives was to force Iran to make big concessions at the negotiating table” for the revival of the JCPOA. Amirabdollahian’s remark followed some megaphone diplomacy by Rob Malley, the US special envoy on Iran last weekend.
Speaking in Rome, Malley connected the dots and outlined the linkages in the matrix. He said: “The more Iran represses, the more there will be sanctions; the more there are sanctions, the more Iran feels isolated. The more isolated they feel [isolated], the more they turn to Russia; the more they turn to Russia, the more sanctions there will be, the more the climate deteriorates, the less likely there will be nuclear diplomacy. So it is true right now the vicious cycles are all self-reinforcing. The repression of the protests and Iran’s support for Russia’s war in Ukraine is where our focus is because that is where things are happening, and where we want to make a difference.”
In effect, Malley admitted that the Biden Administration is a stakeholder in the ongoing protests in Iran. Importantly, he also hinted that although Iran has taken a series of fateful decisions that make a full revival of the nuclear deal and a lifting of some economic sanctions a political impossibility for now, the door to diplomacy is not shut if only Iran’s leadership changed course on relations with Russia.
In further remarks to Bloomberg on Saturday, Malley said that “Right now we can make a difference in trying to deter and disrupt the provision of weapons to Russia and trying to support the fundamental aspirations of the Iranian people.”
As he put it, Washington now aims to “disrupt, delay, deter and sanction” Iran’s weapon deliveries to Russia, and any supplies of missiles or assistance in the construction of military production facilities in Russia “would be crossing new lines.”
In sum, Malley has linked the US approach toward Iran’s protests with Tehran’s foreign and security policies in regard of Russia and its war in Ukraine.
The first signs that the US intelligence was focusing on Iran-Russia military ties — in tandem with its Israeli counterpart, of course —appeared in late July, when the US National Security Advisor Jake Sullivan made an allegation during a media briefing at the White House that Iran wanted to sell weapons-capable unmanned aerial vehicles to Moscow.
Sullivan claimed that Iran was already training Russian personnel in using the drones. Within the week, Sullivan doubled down on that allegation.
The timing of Sullivan’s disclosure must be noted carefully — coinciding with a visit to Tehran by Russian President Vladimir Putin on July 19. Putin’s talks with the Iranian leadership messaged a strategic polarisation under way between Moscow and Tehran with far-reaching consequences for regional and international politics.
Putin’s discussions ranged from the ongoing conflicts in Ukraine and Syria to the legality of Western-led sanctions regimes, de-dollarisation, geopolitics of energy, the International North-South Transport Corridor, defence cooperation and so on, anchored on the congruent interests of the two countries on a number of important strategic and normative issues.
Following up Putin’s discussions, Iran’s armed forces Chief of Staff, General Mohammad Bagheri travelled to Moscow in mid-October. Gen. Bagheri met Russian Defense Minister Sergei Shoigu, which signalled that the military relations between the two countries was acquiring an irreversible momentum.
A fortnight after Gen. Bagheri’s visit, Russian Security Council secretary Nikolai Patrushev came to Tehran to discuss “various issues of Russian-Iranian cooperation in the field of security, as well as a number of international problems,” according to Interfax news agency.
Russian state media said Patrushev discussed the situation in Ukraine and measures to combat “Western interference” in both countries’ internal affairs with his Iranian security counterpart Ali Shamkhani. Patrushev also met with Iran’s president Ebrahim Raisi.
Meanwhile, Washington senses that there is disharmony within the Iranian establishment on how to handle the protests, and, in turn, this is sharpening the internal Iranian debate about the wisdom of growing alliance with Russia vis-a-vis re-engaging with the West in a fresh attempt to revive the nuclear deal.
Clearly, Malley’s remarks hinted that amidst the US’ support for protests in Iran, it still remains open to doing business with Tehran if the latter rolls back its deepening strategic partnership with Moscow and refrains from any involvement in the conflict in Ukraine.
In fact, head of the International Atomic Energy Agency Rafael Grossi (who holds Washington’s brief) also chipped in with a remark on Monday that the UN watchdog has no evidence that Iran is pursuing a nuclear weapon programme, implying that the resumption of negotiations in Vienna faces no “systemic” block.
That said, Tehran’s cooperation with Moscow on foreign and security policy policies is of long-term consequence to Iran and there is no question of the Iranian leadership putting all its eggs in the American basket. For Russia, too, the partnership with Iran is of strategic importance in the conditions of multipolarity.
Significantly, Iranian media has reported that Iran’s nuclear negotiator and deputy foreign minister Ali Bagheri Kani visited Moscow last weekend and met his Russian counterpart Sergei Ryabkov in Moscow to “discuss the prospects of full-scale implementation” of the JCPOA (2015 nuclear deal) “in order to strengthen the approach of multilateralism and confront unilateralism and adhere to the principles contained in the United Nations Charter” as well as the two countries’ “efforts to prevent instrumental political abuse and selective treatment of human rights issues by Western powers.”
The official news agency IRNA later reported from Tehran quoting Bagheri Kani that the two sides “reviewed bilateral relations over the past months and created frameworks and mechanisms in agreement with each other for developing relations.” He mentioned Syria, South Caucasus and Afghanistan as areas of cooperation between Tehran and Moscow.
Most certainly, the latest round of Iran-Russia consultations was noted in Washington. On Saturday, the Director of National Intelligence in the Biden Administration Avril Haines held out a veiled threat that while Iranian leaders may not see the protests as a threat now, they could face more unrest because of high inflation and economic uncertainty. She said, “We see some kind of controversies even within them about exactly how to respond — within the government.”
On the other hand, Bagheri Kani’s consultations in Moscow would have taken into account the large-scale US-Israeli air exercises last Tuesday simulating strikes on the Iranian nuclear program. The Israeli military said in a statement that joint flights of four Israeli F-35i Adir stealth fighter jets that accompanied four US F-15 fighter jets through Israel’s skies simulated “an operational scenario and long-distance flights.”
The statement added, “These exercises are a key component of the two militaries’ increasing strategic cooperation in response to shared concerns in the Middle East, particularly those posed by Iran.”
The US-Israeli exercises underscores the criticality in the situation surrounding Iran. Tehran’s shift to enrichment at 60% causes disquiet in Washington. But a military strike on Iran is fraught with unpredictable consequences not only for West Asian region but also the global oil market, which is facing uncertainties due to the US attempt to put a price cap on Russian oil.
The bottom line is that the protests in Iran are assuming the proportions of a casus belli. The US has internationalised Iran’s internal upheaval.
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Immediately after the Russian invasion of Ukraine in February 2022, the U.S., the UK, and the EU placed major sanctions on Russia to constrict its economy and restrain its war effort. Having been updated several times since, these sanctions have compounded the effects of the previous sanctions placed on Russia in 2014 after it annexed Crimea.
The Russian “economy contracted for the second quarter in a row,” according to a November 16 article in the Financial Times, which attributed this downturn to the Western sanctions. Undermining the sanctions through a variety of methods, including cooperating with other countries with sanctions evasion experience, has become an even greater priority for the Kremlin.
Russia has decades of history in helping other countries evade sanctions. In recent years, Russia has exported oil to North Korea and employed its laborers in Siberia in violation of international sanctions, while Russian entities have also been sanctioned for aiding North Korea’s weapons programs.
The Kremlin is now calling in its own favors. Weeks after North Korea and Russia pledged “to strengthen ties” in August 2022, North Korea is believed to have supplied Russia with millions of rockets and artillery shells, undermining Western attempts to isolate the Russian military-industrial complex.
Using North Korean laborers to help rebuild Donetsk and Luhansk—Russian-supported eastern Ukraine breakaway republics—has also been proposed. Additionally, Moscow has recently shown greater enthusiasm toward cryptocurrencies to evade sanctions, and may also look to emulate North Korea by mining bitcoin to increase its access to fiat currencies and facilitate underground trade.
Iran has faced heavy Western sanctions since 1979, aimed at restricting its economy and curbing its weapons programs. In November, Iran was suspected of asking Russia for aid with nuclear energy materials, which could significantly shorten the “breakout time” needed to create a nuclear weapon.
Russia will likely acquiesce, having received significant drone and missile shipments from Iran since September. With the “price cap on Russian seaborne oil” coming into effect from December 5 (and the ban on most petroleum products expected to take place by February 5, 2023), Iran’s assistance in evading oil sanctions will be greatly appreciated in Moscow.
Iranian oil exports, for example, plummeted by 90 percent following the reintroduction of sanctions after former President Donald Trump’s administration pulled out from the Iran nuclear deal, the Joint Comprehensive Plan of Action, in 2018. However, a mix of tactics has allowed Iranian oil exports to rebound in the years since.
These included sanctioned ship-to-unsanctioned ship transfers, changing ship names and other identification markers to disguise Iranian oil tankers, turning off Automatic Identification Systems to make sanctioned ships completely vanish off the radar, and blending Iranian oil with bulk cargoes from other countries to disguise its origin.
Oil giant Shell faced criticism in April for undermining sanctions by purchasing “Latvian blend” oil, almost half of which (49 percent) originated from Russia. The UK has also received hundreds of millions of dollars of Russian oil since its invasion of Ukraine, even as some of this oil “was registered as imports from Germany, Belgium, and the Netherlands.”
Russian and Iranian officials have also discussed using Iran as a “backdoor” to allow Russian oil products to enter global markets, which will become easier should a renewed nuclear deal between Iran and Western states go through.
Russian entities have similarly shown effectiveness in getting sanctioned Venezuelan oil to global markets in recent years. After Russian oil giant Rosneft was sanctioned in 2020 for doing so, the Kremlin quickly created a new oil company, Roszarubezhneft, to continue operations after Rosneft left Venezuela.
With Russian assistance, Venezuela’s oil exports doubled from December 2020 to December 2021, finding many other facilitators and buyers in the global market. In 2021, the U.S. Treasury sanctioned several European oil traders who were working with a Mexican network that was shipping Venezuelan oil to companies in China, Indonesia, and other countries in Southeast Asia.
Creating shell companies has also historically blunted the effectiveness of sanctions. Syrian officials have created countless shell companies to blur ownership of economic assets in recent years, and Iranian clearing houses and foreign-registered front companies have conducted tens of billions of dollars in sanctions-evading trade annually, according to Politico.
Western banks, like Germany’s Commerzbank AG and Deutsche Bank AG, and the U.S.’ Citigroup, often unknowingly, helped Iran conduct underground export transactions and may face Russian attempts to use these banks to facilitate similar transactions—“either wittingly or unwittingly.” Russian oligarchs also have plenty of connections to Western financial actors and the ability to expand their economic empires in other countries.
Nonetheless, the ambitious Russian oil price cap that has been introduced on December 5 has worried some in Moscow as “About 95 percent of the world’s tanker liability coverage is arranged through a City of London-based insurance organization called the International Group of Protection and Indemnity Clubs.” Russia will struggle to export large volumes of oil without the insurance coverage required to secure its transport options, and Western officials hope Moscow will accept shipping oil at a reduced price rather than find other alternatives.
Lifelines, however, exist for the Kremlin. Former Russian President Dmitry Medvedev stated in June 2022 that the Russian government would “replace commercial insurance and reinsurance cover of oil exports by sea and the vessels that carry them in a bid to counter the European Union ban on companies providing services.” This would be similar to the measures the Japanese government took in 2012 when it provided “a sovereign guarantee of up to $7.6 billion in liability for a tanker carrying Iranian oil” to maintain trade with the country.
Additionally, “There are probably insurers in Russia capable of writing third party liability and reinsurance programs that could then be backed by a sovereign fund from China or Russia,” according to Mike Salthouse, chairman of the International Group’s sanctions subcommittee.
Indian companies also agreed to certify Russian tankers in June, raising suggestions of “a non-Western fleet with sovereign Russian or Chinese insurance and financing, and Indian certifications for the vessels.” Shipping companies and maritime services based in India, China, and the Arabian Gulf would be essential for Russia to successfully achieve this.
Russia is also using former Soviet states to bypass sanctions. In May, Ukraine accused Georgia, Armenia, and Azerbaijan of helping Russia reexport its products to international markets after more than 200 companies were established and tens of thousands of Russians settled in these countries in the months after the February invasion.
Smuggling routes through Central Asia have historically facilitated the northern drug trade route to Europe. But these routes have also allowed Central Asian states to emerge as integral entry points for Western technology sought by Russia in recent months, including microcircuits and semiconductors.
Five Russian nationals were charged with sanctions evasion in October for shipping military technologies, including semiconductors, radars, satellites, and other equipment, from U.S. manufacturers to Russia. Tens of millions of dollars were spent to supply U.S.-origin technologies for use in Russian fighter aircraft, missile systems, smart munitions, and other systems. The deals were facilitated through a mix of real and fake companies and falsified documents, while cryptocurrencies were used for the transactions and to launder the proceeds afterward.
Three Latvian and Ukrainian nationals were also charged in October for attempting to ship U.S. technology for use in Russia’s nuclear and defense industries, in violation of U.S. export controls. Though unsuccessful, the brazenness of Russian networks attempting to penetrate the U.S. points to greater success in other countries with higher bribery rates and laxer inspection policies.
Isolating Russia will also require the assistance of other major economic centers. But China has received resources from Iran, Venezuela, and North Korea in recent years in violation of U.S. sanctions, and is already pursuing the same policies with Russia. Small refiners in China are able to ignore the risk of U.S. penalties since they are “hard to reach with sanctions,” according to Anders Corr, founder of Corr Analytics.
In July, India set up a framework to conduct international trade in rupees. Vostro accounts required to facilitate this trade have been opened by Russia’s Gazprombank (with India’s UCO Bank), VTB Bank, and Sberbank, with six more Russian banks in talks to do so. A major gas pipeline deal with Pakistan, an agreement to use local currencies in trade with Egypt, and increased energy exports to Brazil in recent months have further demonstrated Russia’s attempts to diversify its economic options.
Beijing will also look to use Russia’s isolation to increase Eurasian trade through its Belt and Road Initiative, as well as use other economic mechanisms to undermine traditional U.S. dominance. After Russian banks were blacklisted from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment-verification system, China and Russia have taken greater steps to develop their own alternatives.
This includes Russia’s System for Transfer of Financial Messages (SPFS) and the National Payment Card System (now known as Mir), as well as China’s Cross-Border Interbank Payment System (CIPS) and UnionPay.
Russia’s economy will continue to face significant hurdles, particularly with the imposition of the oil price cap. While U.S. officials have stated that the aim of sanctions is to change Moscow’s behavior, Russia and other countries may double down on developing rival official trade mechanisms to the West and expanding a globalized black market with other rogue states.
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The state visit by French President Emmanuel Macron to the United States stands out as a signpost of the alignments taking place against the backdrop of the historic churning in the world order. The two leaders went to extraordinary lengths to display bonhomie but how far that impressed the two statesmen — Macron, an erudite mind and the most vocal European statesman on his continent’s integration and strategic autonomy vis-a-vis the US, and Biden, a veteran of international diplomacy — time will show.
Macron already marked his profound difference with the US stance on Ukraine, a topic that dominated his visit, in a remark in Paris on Saturday after his return, during an interview for the French channel TF1. Macron said,
“We must think about the security architecture, in which we will live tomorrow. I am talking, in particular, about Russian President Vladimir Putin’s words that NATO is approaching Russia’s borders and deploys weapons that could threaten it. This issue will be a part of the peace discussions, and we must prepare for what will come after [the Ukrainian conflict], and think how we could protect our allies and, at the same time, provide Russia with guarantees of its own security, once the sides return to the negotiation table.”
Macron made the above remark as the countdown begins for an expected large-scale Russian winter offensive in Ukraine.
While the Joint Statement issued after Macron’s visit shows that the US and France are on the same page in their criticism of Moscow’s conduct of the war in Ukraine, the nuances in the respective articulation by the two leaders during their joint press conference cannot be missed.
Biden, of course, tore into Putin, personally holding him responsible, but Macron held back. Interestingly, German Chancellor Olaf Scholz also may have marked his distance from Biden by initiating a call with Putin on Friday, his second in a row in successive months.
The readout from Moscow highlighted that while Scholz criticised Russia’s conduct of the conflict, he went on to discuss other issues with Putin and they agreed to keep in touch.
Both France and Germany are greatly concerned about a possible escalation of the war in Ukraine whereas the US is focused on supporting Kiev “for as long as it takes.”
Macron highlighted France’s 3-pronged approach: “Help Ukraine resist”; “Prevent any risk of escalation in this conflict”; and, “make sure that, when the time comes, on basis of conditions to be set by Ukrainians themselves, help build peace.” But Biden was categorical that “there is one way for this war to end the rational way: Putin to pull out of Ukraine.”
Macron maintained that “We need to work on what could lead to a peace agreement, but it is for him [Ukrainian president Zelensky] to tell us when the time comes and what the choices of the Ukrainians are.”
Macron indirectly stressed the need for flexibility, saying, “If we want a sustainable peace, we have to respect the Ukrainians to decide the moment and the conditions in which they will negotiate about their territory and their future.”
Curiously, Biden never once mentioned Zelensky, whereas, Macon openly commended “the efforts of President Zelensky to try and find a way, a path to peace while leading the heroic resistance.”
Macron stressed, “I believe, very much need to continue to engage with him [Zelensky] because there is a genuine willingness, on behalf of Ukraine, to discuss these matters. And we acknowledge it, and we commend it.”
Apart from Ukraine, as expected, Macron’s main concern was the recent Inflation Reduction Act, a $369 billion package of subsidies and tax breaks enacted by the Biden Administration to boost American green businesses, which, from a European perspective, constitutes a protectionist measure that encourages companies to shift investments from Europe and incentivises customers to “Buy American”.
Only a month remains before the final provisions of the US law enter into force on January 1. Germany and France have hit back by joining forces to back a French push for a more subsidy-based EU industrial policy.
At the White House talks with Macron, Biden conceded that there were “glitches” in the roll-out of America’s multi-billion-dollar package of green subsidies. To quote Biden, “There’s tweaks that we can make that can fundamentally make it easier for European countries to participate and, or be on their own, but that is something that is a matter to be worked out.”
The remark, perhaps, allows Macron to claim a takeaway from his visit. But how far Biden’s words get turned into practice remains to be seen, as chances of Congress amending the law is debatable, especially as Republicans are set to take narrow control of the House.
Clearly, the Biden-Macron meeting does not include a breakthrough on Europe’s concerns. Biden’s basic stance is that “United States makes no apology,” since the IRA legislation aims to “make sure that the United States continues… not to have to rely on anybody else’s supply chain. We’re — we are our own supply chain.”
Macron noted that he had “some very frank discussions.” He stressed, “France simply did not come to ask for an exemption or another for — for our economy but simply to discuss the consequences of this legislation… We will continue to move forward as Europeans. And we’re not here simply, really, to ask for ‘proof of love’.”
The Americans are making a fortune from the Ukraine war — selling more gas to Europe at vastly higher prices and boosting arms exports to NATO countries who have supplied military hardware to Ukraine. The EU countries are suffering when the war in Ukraine is tipping them into recession, with inflation rocketing and a devastating squeeze on energy supplies threatening blackouts and rationing this winter.
The greening of America at the cost of European industry casts shadows on the Indo-Pacific strategy. The recent visits by Scholz and Charles Michel, president of the European Council, to Beijing in quick succession underscores that the tensions in the transatlantic alliance as a fallout of the Ukraine war have a spillover effect.
Macron’s visit to Washington showed that France’s main interest lies in “building resilience in the Pacific Islands.” Apropos China, the Biden-Macron joint statement had nothing new to announce. It resorted to a balanced formulation that the US and France will “continue to coordinate on our concerns regarding China’s challenge to the rules-based international order, including respect for human rights, and to work together with China on important global issues like climate change.”
On Taiwan, the joint statement simply reaffirmed “the importance of maintaining peace and stability across the Taiwan Strait.” Conceivably, the crushing defeat Tsai Ing-wen suffered in the recent Taiwanese local elections had a sobering effect.
At any rate, in their respective opening remarks at the press conference on the Indo-Pacific strategy, while Biden limited himself to an anodyne remark or two, Macron simply glossed over the subject.
Beijing must be quietly pleased that Michel picked Thursday for his visit. President Xi Jinping appreciated the EU’s ‘“goodwill of furthering relations with China.” Xi noted that the more unstable the international situation becomes and the more acute challenges the world faces, the greater global significance China-EU relations take on.
The EU’s foreign policy is at a juncture on whether to confront or cooperate with China. Global Times wrote that Michel’s visit “sent a signal that represents rational voices, that is, refusing to follow the US and treat China primarily through a political and ideological perspective…What the US wants is hegemony, but Europe wants survival, and the EU cannot achieve that without China.”
The bottom line is that as the conflict in Ukraine escalates, the neocons in the Biden Administration may feel elated, but the incipient tensions in the transatlantic relations can only aggravate.
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On November 27 morning, Cuban President Miguel Díaz-Canel, walked into a voting station in the Playa neighborhood to vote in Cuba’s municipal elections. He had landed in Havana an hour earlier from an intense tour of Algeria, Russia, Turkey, and China.
The tour, which started on November 16, was both a journey into the past of the nonaligned world that Cuba played an integral role in building and an essential step into the future toward the establishment of a multipolar world. Each stop also served as a reminder of the strong relationships based on cooperation and mutual respect that Cuba has been cultivating since 1959. Undoubtedly, the Cuban Revolution and its internationalism placed Cuba on the map and gave it an outsized role in world politics.
Yet this tour took place against a complex backdrop. The country’s recent economic and financial situation has been characterized by crisis since the intensification of the United States blockade under former President Donald Trump and President Joe Biden, with the imposition of 243 unilateral sanctions and the inclusion of Cuba on the state sponsors of terrorism list. Add to this the impact of COVID-19 over the past three years, several natural disasters, and a series of unfortunate accidents that have negatively impacted Cuba.
Díaz-Canel also traveled abroad to explore with Cuba’s strategic partners the state of multilateralism and development in a rapidly changing world in the wake of the war in Ukraine, NATO aggression, and the growing fragility of U.S. hegemony. Cuba’s achievements and potential, despite being besieged, served as the basis for discussions during the tour relating to areas of mutual interest such as renewable energy, biotechnology, health care, communications, and industry.
During the tour of these countries, several new agreements were signed that pointed to a desire to help Cuba. From offers of setting up renewable energy power plants to more regular oil shipments and plans to modernize Cuban industries, it’s clear that Algeria, Russia, Turkey, and China do not want Cuba to fall under the weight of Washington’s sanctions regime. “It is obvious that sanctions have an effect on the fact that our relations remain below their true potential,” Turkish President Recep Tayyip Erdoğan pointed out during a press conference with his Cuban counterpart in Ankara on November 23.
This 11-day tour ended in China, where perhaps the most challenging yet essential conversations were held. Under the weight of an intensified U.S. blockade and severe limitations to its foreign currency reserves, Cuba has been unable to service its debt with China. “There is enormous sensitivity in the Chinese leadership, particularly in President Xi Jinping,” commented Díaz-Canel afterward. “There is an express will in him, even with indications in official talks, that a solution must be found to all of Cuba’s problems, regardless of the problems with the debt.” Against the United States’ efforts to restrain Cuba, Díaz-Canel asserted how China is “betting on the development of the country based on the cooperation that they can give us.”
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