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Open newsletter – february 26, 2022

RUSSIA – UKRAINE (impact, reactions) 

Brookings

As in the rest of the world, Russia’s invasion of Ukraine on February 24 is casting a long shadow across Africa. Despite the geographical distance, there are important ties between Ukraine and Africa, including more than 8,000 Moroccans and 4,000 Nigerians studying in Ukraine and over $4 billion in exports from Ukraine to Africa. Danielle Resnick: What does the war in Ukraine mean for Africa?

In the early morning of February 24, Russia launched a full-scale military assault on Ukraine, bombing major cities such as Kyiv, Kharkiv, and Odesa and invading from Russia, Belarus, Crimea, and the Black Sea. The attack followed months of troop buildups, Russian ultimatums to the United States and NATO, negotiations with the U.S. and European leaders, and U.S. warnings of Russian invasion plans, and was preceded by Moscow’s recognition of two separatist enclaves in eastern Ukraine as independent. Below, Brookings experts analyze the implications of the invasion, for Europe, Russia, international order, U.S. foreign policy, and much more, and offer policy recommendations for the United States, European, and other governments. Pavel K. BaevJessica BrandtVanda Felbab-BrownJeremy GreenwoodSamantha GrossDaniel S. HamiltonBruce JonesMarvin KalbPatricia M. KimSuzanne MaloneyAmy J. NelsonThomas PickeringBruce RiedelNatan SachsConstanze StelzenmüllerCaitlin TalmadgeShibley TelhamiDavid G. Victor, and Andrew Yeo: Around the halls: Implications of Russia’s invasion of Ukraine

Reuters

Internet connectivity in Ukraine has been badly affected by the Russian invasion, particularly in the southern and eastern parts of the country where fighting has been heaviest, internet blockage observatory NetBlocks said on Saturday and : Internet in Ukraine disrupted as Russian troops advance

JPMorgan (JPM.N) said there was no immediate impact from sanctions on Russia at the month-end rebalancing of its emerging market bond indexes. No immediate impact from Russia sanctions on bond index rebalancing

A decision to cut Russia off from the global SWIFT payment system will be taken in a matter of days, the governor of a central bank within the euro zone told Reuters on SaturdayCutting Russia off from SWIFT a “matter of days” -euro zone central banker

Chinese ride-hailing giant Didi Global (DIDI.N) said on Saturday that it would continue to operate in Russia, reversing a decision announced on Monday that it was leaving that country as well as Kazakhstan. China’s Didi reverses course, will remain in Russia

The Czech government approved on Saturday sending weapons and ammunition worth 188 million crowns ($8.57 million) to help Ukraine defend itself against Russia’s attack, the Czech Defence Ministry said. Czechs to ship weapons, ammunition worth $8.6 mln to Ukraine

Russia will respond to the seizure of money of Russian citizens and companies abroad by seizing funds of foreigners and foreign companies in Russia, RIA news agency quoted Dmitry Medvedev, deputy head of the security council, as saying on Saturday. Russia to seize foreigners’ funds in retaliation -RIA

Western partners are moving closer to halting Russia’s access to the SWIFT global interbank payments system, Lithuanian Prime Minister Ingrida Simonyte said on Saturday. West moves closer to cutting Russia’s SWIFT access, says Lithuania

France has decided to send defensive military equipment to Ukraine to support the country against Russia’s invasion, a French army spokesman said on Saturday, adding that the issue of sending offensive arms was still under consideration. France to provide defensive military equipment to Ukraine – army spokesman

The Netherlands will supply 200 air defence rockets to Ukraine as quickly as possible, the Dutch government said in a letter to parliament on Saturday. Reuters: Dutch to deliver 200 air defence rockets to Ukraine -govt letter

Russia’s attack on Ukraine, which China refuses to condemn or even call an invasion, has sent Beijing into a diplomatic scramble to limit blowback while standing by a partner with which it has grown increasingly close in opposition to the West. China has repeatedly called for dialogue, with Foreign Minister Wang Yi telling senior European officials in a flurry of telephone calls on Friday that China respects countries’ sovereignty, including Ukraine’s, but that Russia’s concerns about NATO’s eastward expansion should be properly addressed and : Analysis: Russia’s Ukraine attack forces Beijing into diplomatic dance

Russian forces captured the southeastern Ukrainian city of Melitopol on Saturday, Russia’s Interfax news agency reported, as Moscow launched coordinated cruise missile and artillery strikes on several cities, including the capital Kyiv.  : Russian forces capture Ukrainian city, Interfax reports, amid missile strikes

Ukraine’s Vice Prime Minister on Friday urged Apple Inc (AAPL.O) top boss Tim Cook to cut supply of its products and block access to App Store in Russia. Ukraine Vice PM urges Apple to cut products, services supply in Russia

Rating agency S&P said on Friday it lowered Ukraine’s long-term foreign and local currency sovereign credit ratings to ‘B-‘ from ‘B’, citing risks to country’s economic growth and financial stability from the Russian invasion. S&P lowers Ukraine’s long-term ratings to ‘B-‘

U.S. stocks are drawing buyers after a recent tumble, but some investors believe buying the dip this time may be a far riskier bet than in the past as markets face geopolitical strife and a hawkish Federal Reserve. David Randall: Wall Street Week Ahead: Some investors wary of ‘buying the dip’ as Ukraine, Fed gyrate stocks

Meta Platforms Inc (FB.O) is barring Russian state media from running ads or monetizing on its platform anywhere in the world, the parent company of social media giant Facebook said on Friday. Meta to bar Russian state media from running ads, monetizing on platform

Taiwan expects little impact from the war in Ukraine on the supply of key raw materials for semiconductors, the government said on Saturday. Taiwan sees limited impact from Ukraine war on chip supply chain

Fighting was under way on Saturday near the southern Ukrainian cities of Mariupol, Kherson, Mykolaiv, and Odessa, an adviser to the Ukrainian president’s office said. Reuters: Fighting under way near Kherson, Mykolaiv, Odessa – Ukrainian official

Japan is considering imposing economic sanctions on Belarus, in line with the United States, for its support of Russia’s invasion of Ukraine, two government officials with knowledge of the matter told Reuters on Saturday. Japan considering imposing sanctions against Belarus

Russia vetoed a draft U.N. Security Council resolution on Friday that would have deplored Moscow’s invasion of Ukraine, while China abstained from the vote – a move Western countries view as a win for showing Russia’s international isolation. and : Russia vetoes U.N. Security action on Ukraine as China abstains

The Russian and Ukrainian governments on Friday signalled an openness to negotiations even as authorities in Kyiv urged citizens to help defend the capital from advancing Russian forces in the worst European security crisis in decades. : Fighting reaches the outskirts of Kyiv

The Hill

Canadian Prime Minister Justin Trudeau announced Friday that Canada would impose sanctions against Russian President Vladimir Putin, the Russian foreign minister and Putin’s chief of staff for their involvement in Russia’s invasion of Ukraine. Caroline Vakil: Trudeau announces sanctions on Putin, Russian foreign minister

The Jamestown Foundation

The Russian war of aggression in Ukraine and fast-mounting tensions between Moscow and the West have spotlighted the strategic significance of Poland. As important as Poland’s political-military potential and capabilities may be, certainly it is this country’s geostrategic position that has currently proven most valuable to Ukraine as well as the United States. The US Embassy in Kyiv has relocated to eastern Poland, and the Central European republic is hosting incoming deployments of military units and equipment from the North Atlantic Treaty Organization (NATO). Poland’s geographical vicinity to the conflict zone boosts the importance of the country from both military and humanitarian perspectives. The first is vital for the security of NATO’s eastern front and efforts to support embattled Ukraine, the latter is related to the necessity of providing assistance to Ukrainian civilians fleeing their homes as a result of the Russian escalation. Jakub Bornio: Poland: Ukraine’s Crucial Hinterland

Traditionally, imperial powers sending their armies into foreign countries for purposes of conquest issued explanatory manifestoes to the invaded peoples and to their own. The Kremlin issued the equivalent of such a manifesto in the form of four lengthy television broadcasts on the eve of reinvading Ukraine on February 24. In this case, however, the message also conveys Russia’s geopolitical agenda in Ukraine as a cautionary note to the West. Vladimir Socor: Russia’s Invasion Manifesto to Ukraine

Valdai Discussion Club

On February 24, the era of Russia’s search for its place in the Western-centric world ended. In this world, all political initiatives came only from the West. The Western countries also determined the basic rules of this world and allowed, at their discretion, other participants to share in the benefits of the established order. Over the past three decades, Russia has sought to find its place in this world,  in a way that was in accordance with its interests. At first cautiously and even timidly, and then more persistently, Russia signalled that ignoring its interests would lead to a worldwide crisis. Andrey Sushentsov: Russia-Ukraine: Quo Vadis ?

ABKHAZIA

The Jamestown Foundation

When Russian President Vladimir Putin recognized the so-called Donetsk and Luhansk “people’s republics” (DPR, LPR) and ceremoniously signed association treaties with these Moscow-backed separatist Ukrainian regions on February 21 (see EDM, February 22), Georgia’s own Russian-occupied territories—South Ossetia and Abkhazia—quickly welcomed the decision (Mfa.rsogov.orgMfaapsny.org, February 22). Tskhinvali and Sukhumi have obediently supported Moscow’s months-long manufactured crisis around Ukraine and full-scale invasion that began on February 24. Yet throughout this time, as the Kremlin’s attention has been focused on Ukraine and, temporarily, turbulence in Kazakhstan, the political situation in Abkhazia went through its own series of spasms, thus creating a vulnerability in a strategic area of Russia’s southwestern flank. Zaal Anjaparidze: Protests and Political Infighting in Abkhazia: Turbulence on Russia’s Southwestern Flank

AZERBAIJAN – RUSSIA

The Jamestown Foundation

On February 22, just two days before Russian tanks and missiles started crossing the Ukrainian border, President Ilham Aliyev of Azerbaijan and President Vladimir Putin of Russia signed a declaration in Moscow vowing to upgrade their bilateral relations to an allied level (Azertag, February 22). The 43-article document promotes their cooperation in a wide range of areas, from humanitarian and economic ties to coordination in critical security issues (Mfa.gov.az, February 22). The document came on the heels of Azerbaijan’s establishment last summer of an allied relationship with Turkey via the Shusha Declaration (see EDM June 23, 2021) and recently reinvigorated relations with the European Union, which are expected to result in the signing of a new framework agreement in the near future (APA, February 4, 2022; see EDM, February 23, 2022). Hence, the Moscow Declaration is widely seen in Azerbaijan as a delicate balancing act to maintain relations with Russia at a friendly level—which is increasingly important against the backdrop of war in the former Soviet space. Vasif Huseynov: Azerbaijan and Russia Sign Declaration on Allied Cooperation

CHINA

The Jamestown Foundation

Chinese President Xi Jinping has identified the recruitment and retention of top-notch human capital as key to the People’s Liberation Army’s (PLA) transformation into a “world-class military” by mid-century. In late January 2022, under Xi’s guidance as chairman, China’s Central Military Commission (CMC) issued its “Decision on Strengthening Military Talent Work in the New Era” (关于加强新时代军队人才工作的决定, Guanyu jiaqiang xin shidai jundui rencai gongzuo jueding), which calls human talent “a key element driving the Chinese military’s high-quality development and for winning the initiative in military competition and future warfare.” The decision calls on the PLA to develop high quality, professional talent in key areas—joint operations command, new-type combat forces, science and technology innovation, and strategic management—and for these individuals to provide “firm support” for achieving the Chinese Communist Party’s (CCP) military-strengthening goal and building the PLA into a world-class military (Xinhua, January 26). Brian Waidelich: Gay in the PLA: Chinese Military Views on Homosexuals Serving in the Armed Forces

In November 2021 and January 2022, the Macau Special Administrative Region (SAR) Judiciary Police arrested 13 individuals involved in operating two separate casino VIP customer “junkets” for engaging in illegal gambling activities, running a criminal syndicate, and money laundering (Macau Judiciary Police, November 29, 2021January 31). The criminal groups used their VIP junket business in Macau casinos to recruit mainland Chinese residents to engage in illegal online gambling on overseas platforms, and illicit side-betting. The proceeds of the syndicate were then laundered and transferred through the junket accounts of the casinos using underground banks. These developments underscore how gambling in Macau has grown from small beginnings, as tolerant Portuguese administrators did not want to unduly antagonize local Chinese, to a multi-billion dollar business that has been infiltrated by organized crime groups for much of its modern history. Martin Purbrick, City of Vice: Macau, Gambling, and Organized Crime in China

CHINA – EUROPE

The Jamestown Foundation

Trade is the most important element of the relationship between China and the European Union (EU). Although the COVID-19 pandemic has weakened the global economy, the EU remains China’s largest trading partner and China is the EU’s second-largest trade partner. In 2021, bilateral trade reached $828.1 billion, a 27.5 percent increase on the previous year (China Org, February 2). However, the China-EU divide over democracy and human rights, as reflected in the increasingly open differences between European countries and China on Taiwan and the One-China principle, appears likely to endure. Anita Inder Singh: Extensive China-EU Economic Linkages Persist Despite Growing Divide on Democracy and Human Rights

CHINA – SOLOMON ISLANDS

The Jamestown Foundation

What began as a peaceful protest in the Solomon Islands against the government’s decision to switch formal diplomatic recognition from Taiwan to China turned deadly in late November. The demonstrations morphed into a violent expression of overall dissatisfaction with Prime Minister Manasseh Sogavare’s government. Frustrated by high unemployment and crowded housing, rioters set buildings ablaze over three days of deadly unrest. In response, China dispatched six police officers to train the Royal Solomon Islands Police Force and provided equipment such as shields, helmets, and batons to “further enhance Police ability in confronting future threats” (Global Times, December 23, 2021; Australian Broadcasting Corporation, December 23, 2021). “China firmly supports the government of Solomon Islands in defending the country’s stability, resolutely safeguards the relations between China and Solomon Islands and the legitimate rights and interests of Chinese citizens there, and strongly condemns any illegal and violent action,” stated Foreign Ministry spokesperson Zhao Lijian (Ministry of Foreign Affairs of the People’s Republic of China (FMPRC), December 23, 2021). William Yuen Yee: Trouble in Paradise: China’s Influence and Unrest in the Solomon Islands

CHINA – TONGA

The Jamestown Foundation

On January 31, the eve of the Chinese New Year national holiday, two People’s Liberation Army Navy (PLAN) vessels departed Guangzhou province to provide Humanitarian and Disaster Relief (HADR) to Tonga, which was struck by a massive tsunami earlier in the month (Xinhua Net, January 31). The relief efforts, which involved the Wuzhishan– a Type 071 amphibious transport dock ship and the Chaganhu– a supply ship, provided mobile homes, construction equipment, food and medical supplies to the Pacific Island nation. Days earlier, the PLA Air Force (PLAAF) dispatched a Y-20 heavy transport plane to Tonga laden with drinking water, food, tents and other emergency supplies (Global Times, January 31). John S. Van Oudenaren: Military Operations Other Than War: Antidote to the PLA’s “Peace Disease”?

FUTURE DEVELOPMENT

Brookings

Over the past few years, with more than 100 experts from the World Bank, UNHCR, and universities around the world, we conducted several studies on the economic aspects of refugee arrivals and returns. The studies focused on large-scale displacements in Iraq, Jordan, Kenya, Lebanon, and Syria. Harun Onder: 10 economic characteristics of refugee arrivals and returns

For much of the past half-century, a key piece of the global machinery for preventing sovereign-debt crises in developing economies has been governed by a somewhat antique set of ideas: that government lenders trump commercial lenders in the pecking order for who gets repaid, that commercial lenders can be swayed by appeals to morality, and that informal “principles” are sufficient to get the job done. Indermit Gill: It’s time to end the slow-motion tragedy in debt restructurings

GERMANY

Reuters

Intel has chosen the east German city of Magdeburg as the site for a new multibillion-euro European chip factory and will make the decision public on March 4, a person familiar with matter told Reuters. Intel picks Magdeburg in Germany for new European chip factory

INDIA – AFRICA

Brookings

India and Africa’s historical links have experienced a revival in recent years, and there are strong reasons for optimism that the partnership could be mutually beneficial. In fact, in recent years, and especially during the COVID-19 pandemic, Prime Minister Narendra Modi’s government has made moves that indicate its intention for India to become Africa’s biggest partner. Stephen Karingi and Laura N. Naliaka: The future of India-Africa relations: Opportunities abound

KAZAKHSTAN

East Asia Forum 

The main result of the January 2022 Kazakhstan protests was to solidify the transfer of power from Nursultan Nazarbayev to Kassym-Jomart Tokayev that began with the latter’s assumption of the Kazakh presidency in 2019. While there are still many unknowns relating to the protests, which led to at least 225 deaths, President Tokayev responded by initiating a crackdown against top Nazarbayev supporters and promising to enact major economic reforms. Gennady Rudkevich: Tokayev wins the battle but the war is not over in Kazakhstan

MARKETS

Reuters

At the start of the year, the notion that investors would be scrambling to protect themselves from a bear market on Wall Street was unlikely, fanciful even. Now? Not so much. “Out-of-the-money” options activity suggests that is exactly what investors have done recently amid the swirl of volatility kicked up by fears over higher U.S. and global interest rates, and rising tension between Russia and Ukraine. : Column: Wall St flocks to cheap options for protection

TAIWAN STRAIT

Reuters

A U.S. warship sailed through the sensitive Taiwan Strait on Saturday, part of what the U.S. military calls routine activity, which nonetheless irritates China. U.S. warship transits sensitive Taiwan Strait

UAE

Reuters

E& (ETISALAT.AD), the UAE telecoms group formerly called Etisalat, is looking to expand into new markets in Africa, Europe and Asia and in areas outside telecoms such as financial technology as its seeks to drive growth, its CEO told Reuters. : UAE’s e& looks to expand in telecoms and other areas, including via M&A

USA

Brookings

For weeks, President Joe Biden’s first State of the Union address was viewed as an opportunity to change the conversation around the economy and communicate to the American people how a recovering economy is getting stronger. But the opportunity to change the domestic narrative has been upset by Russian President Vladimir Putin. And now, Biden’s speech must balance critically important messages on dramatically different topics. John Hudak: Putin pushes Biden to walk a State of the Union tightrope

Stoked by social, political, and economic and conflict, trust in our government institutions has fallen to historic lows. Fewer than six in ten Americans (54%) have confidence in the judiciary system, according to a Gallup poll published last year, and just 37% trust Congress. Andre M. PerryMakada Henry-NickieAnthony Barr, and Regina Seo: Ahead of the State of the Union, a Biden to-do list for 2022

President Biden has just announced Judge Ketanji Brown Jackson as his Supreme Court nominee to replace Justice Stephen Breyer. In 2022, 160 years after the Emancipation Proclamation, we are on the verge of having our first Black female Associate Justice. Judge Ketanji Brown Jackson is extraordinarily accomplished and should be on any president’s list of highly qualified, exemplary High Court candidates, not because of her gender or race but because of her resume and her qualifications. Camille Busette: Why a Justice Ketanji Brown Jackson will make a difference

Reuters

Prominent business leaders in the U.S. shale industry have been proselytising about their newfound commitment to restricting output growth to protect prices and profit margins. John Kemp: Column: U.S. oil drilling rises in response to higher prices

The Biden Administration’s one-year review of U.S critical mineral supply chains came with some headline-grabbing announcements. Andy Home: Column: US green metals push needs a revamp of gold-rush mining law

Uber Technologies Inc (UBER.N) is testing a new driver earnings algorithm in 24 U.S. cities that allows drivers to see pay and destinations before accepting a trip and raises the incentives for drivers to take short rides in an effort to attract more drivers. Tina Bellon: Uber revamps driver pay algorithm in large U.S. pilot to attract drivers

USA – SOMALIA

Reuters

The United States barred on Friday travel by Somali officials and other individuals to the United States, accusing them of “undermining the democratic process” in Somalia. U.S. restricts visas for Somali officials accused of undermining democracy

VIETNAM

East Asia Forum 

Vietnam began 2021 in a relatively strong position, having successfully kept COVID-19 at bay. The only major impact on domestic economic activity in Vietnam was a reduction in international tourism, while the rest of the global economy was suffering from the effects of rolling lockdowns. Vietnam’s economy was one of few with a positive year-on-year growth of 2.9 per cent at the end of 2020. Suiwah Leung: COVID-19 distracts from Vietnam’s long-term development plans