Commentary on Political Economy

Friday, 23 September 2022

KILL PUTIN, NOW!

Just like the bad old Stalin days, Vladimir Putin’s death list grows

JACK THE INSIDER

Follow @JacktheInsider


In the bad old days of Stalin’s Soviet Union, extra-judicial killings were routine. Soviet citizens who found themselves on lists compiled by Stalin’s secret police chief, Lavrentiy Beria, were arrested and simply disappeared.


Putin’s Russia cannot be so bold. Telecommunications in the 21st century demand explanations. Prominent Russians cannot merely vanish.


A week ago, Komsomolskaya Pravda editor-in-chief Vladimir Nikolayevich Sungorkin died suddenly after appearing to suffocate, according to a report in the newspaper he had led. There’s no official cause of death although reports indicated he had suffered a stroke. He was 68 years of age.

 Three days ago, the former head of Moscow Aviation Institute, Anatoly Gerashchenko, died in a fall inside the aerospace institute in the Russian capital. Reports from Russian media claimed Gerashchenko had “fallen from a great height”, clattering down a number of flights of stairs within the MAI. He was pronounced dead at the scene.

I’ve been keeping a list of prominent Russians who have died under suspicious circumstances since Putin’s invasion of Ukraine. The list is by no means complete. There are tales of murder-suicides which at face value are improbable. All are suspect and reek of extra-judicial murder. And it is more than likely that many more, without the profiles of wealth and prominence have suffered similar fates.

On September 16, Aviation Director for Russia’s Far East and Arctic Development Corporation (KRDV), Ivan Pechorin, died in what was reported as a maritime accident, near Vladivostok with reports claiming he had fallen off a boat travelling at high speed. His body was discovered two days later. Pechorin was 39.


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On September 1, the chairman of the board of Russia’s largest private oil company Lukoil, Ravil Maganov, died after falling out of the sixth-storey window at the Moscow Central Clinical Hospital.


 I’ve been keeping a list of prominent Russians who have died under suspicious circumstances since Putin’s invasion of Ukraine. The list is by no means complete. There are tales of murder-suicides which at face value are improbable. All are suspect and reek of extra-judicial murder. And it is more than likely that many more, without the profiles of wealth and prominence have suffered similar fates.


On September 16, Aviation Director for Russia’s Far East and Arctic Development Corporation (KRDV), Ivan Pechorin, died in what was reported as a maritime accident, near Vladivostok with reports claiming he had fallen off a boat travelling at high speed. His body was discovered two days later. Pechorin was 39.


READ MORE:Putin ‘in secret plan to mobilise one million men’|UN slams Putin’s nuclear threats|Putin ‘pumping out lies’: Biden

On September 1, the chairman of the board of Russia’s largest private oil company Lukoil, Ravil Maganov, died after falling out of the sixth-storey window at the Moscow Central Clinical Hospital.The Russian oligarch had called for an end to Russia’s invasion of Ukraine.


Another executive at Lukoil, Alexander Subbotin was found dead in May in circumstances that strain credibility. According to the BBC, Subbotin was found “in the basement of a shaman’s house after consuming snake venom as a hangover cure.” As you do.


In April, a former executive at Novatek a large privately owned LNG producer in Russia, Sergey Protosenya, 55, was found hanged in a villa in Lloret De Mar, Catalonia, Spain, along with the bodies of his wife, Natalya, 53, and 18-year-old daughter, Maria.


The deaths were described as a murder-suicide but Protosenya’s 22-year-old son, Fedor, believes all three were murdered. Sergey Protosenya was known to be a good family man. His wife and daughter had been bludgeoned to death with an axe.


Sergei Protosenya, wife Natalya and teenage daughter Maria were found dead in their Spanish mansion in Lloret de Mar. Picture: social media/east2west news

Sergei Protosenya, wife Natalya and teenage daughter Maria were found dead in their Spanish mansion in Lloret de Mar. Picture: social media/east2west news

On the previous day, Vladislav Avayev, former vice-president of Gazprombank, was found dead in his Moscow apartment along with the bodies of his wife and 13-year-old daughter. The deaths also appeared to be a murder-suicide. All three died of gunshot wounds.


Vasily Melnikov, owner of a company that imports medical equipment into Russia, was found dead in his apartment in Nizhny Novgorod a city 420 kilometres east of Moscow. Melnikov, his wife, and his two sons, aged 10 and four had been stabbed to death. Another murder-suicide pact apparently.

 On February 24, the day Russia’s invasion began, Alexander Tyulyakov, deputy general of the treasury department for Gazprom, was found hanged in the garage of his home in St Petersburg. A note was found with his body leading investigators to conclude that Tyulyakov died by suicide. Tyulyakov was Ukrainian.


Fire brigade members wear green biohazard suits in Salisbury, England, after the attempted murder of Russian former double-agent Sergei Skripal and his daughter. Picture: AFP

Fire brigade members wear green biohazard suits in Salisbury, England, after the attempted murder of Russian former double-agent Sergei Skripal and his daughter. Picture: AFP

There are others, many others that pre-date the invasion. Oligarchs, dissidents, critics. Trip and falls. Poisonings. Many with the visible imprimatur of Putin and the FSB.


The chemical weapon, Novichok, was used by the FSB in an attempt to murder former Russian military intelligence agent, Sergei Skripal and his daughter, Yulia, in Salisbury, England. Both were poisoned but recovered. But the nerve agent had spread, contaminating others. Two British citizens fell ill, one later died.


What does all this tell us? Foremost is that Putin’s Russia holds international law in contempt. The FSB will commit murders on foreign soil just as freely as they will in Russia.


The spate of deaths since the invasion also points to an attempt to silence Putin’s critics. Scrape the surface and the hard man can only survive with the intervention of his secret police.

Moreover, it tells us that Putin is becoming increasingly desperate. This may be good news or it might be terrible. What we can see from his leadership is that he governs without compunction, without honour and without regard for basic human dignity.


Like Stalin, he appears to be incapable of feeling remorse or regret, any form of emotional connection to the world around him.


That makes him a very dangerous man indeed, worse still as he inherited a nuclear weapons stockpile second only to that of the United States and openly threatens to use them.


But now Putin can no longer claim the nonsense of a limited military operation in Ukraine. The announcement of an expansion of troop numbers in Ukraine exposes Putin to a much broader wave of dissent. In the two days since Putin raised the stakes, Russians of fighting age have headed to the Georgian border, the one country Russians can escape to without a visa.


And with that looming dissent, Putin will learn, just as Stalin chief Beria discovered, that there are only so many people he can kill before it’s his turn.

 


Monday, 19 September 2022

  

Lex.


{Life expectancy: US exceptionalism}


Life expectancy in the US had stalled even before the pandemic. Despite spending much more on healthcare per capita than other developed countries, Americans live shorter lives than people in France, the UK and even Chile.


The coronavirus pandemic has only sharpened the divide. US life expectancy fell from 78.8 years in 2019 to 76.1 in 2021, according to the National Center for Health Statistics. That is the largest two-year decline in almost a century. In France, the fall was half a year. In Japan, the figure rose.


Longevity matters as an indicator of the collective quality of life in a nation. It has big implications for business. Insurers and savings companies build their strategies around the life expectancies of customers.


America’s longstanding problems with obesity and opioids left a portion of its population vulnerable to coronavirus. Almost two-thirds of Americans hospitalised with Covid-19 had at least one pre-existing condition.


The outlook was bleakest for Native Americans and Alaska Natives. Their life expectancy plunged almost seven years from 71.8 in 2019 to 65.2 in 2021, around where the national average stood in 1944. Those statistics reflected the first full year of the pandemic since March 2020, but also poverty and discrimination alongside the high rates of suicide, accidents and addiction which blight marginalised communities.


These days, education is a good gauge of longevity. Research from Anne Case and Angus Deaton of Princeton University found Americans with a university degree could expect to live a decade longer than those who dropped out of high school. This cuts across the race lines. Well-educated black Americans have narrowed the gap with white peers in life expectancy. But the educational divide between and within both race groups has widened.


Between 1990 and 2018, racial disparities in life expectancy shrank by 70 per cent. Educational disparities in longevity more than doubled. During the pandemic, those without a degree suffered from higher mortality rates.


People with tertiary educations were more likely to work remotely from home. They often had comprehensive employer-provided insurance.


Education, poverty and diet go hand in hand. Distributing Covid vaccines is relatively easy. To reverse a crisis of early deaths, policymakers would need to cut poverty, obesity, drug abuse and gun violence. The cultural and political barriers to that are daunting.

America needs a plan on China decoupling

Rana Foroohar

The drumbeat of decoupling between the US and China rose to a crescendo last week as President Joe Biden issued an executive order telling the Committee on Foreign Investment in the US to boost scrutiny of cross-border deals in sensitive areas such as artificial intelligence, quantum computing and biotechnology.


The order didn’t specifically mention China but was clearly part of a growing effort by the White House to separate its supply chains and financial markets from Chinese influence.


Whether or not you agree with the move, or decoupling in general, it’s high time America had a much more complete strategy for how to deal with the reality. US-China tensions have risen to worrisome levels, particularly around the issue of Taiwan.


Last week, the Senate foreign relations committee approved a bill that would provide $6.5bn in direct military assistance to the country, as part of an effort to help the island nation — which produces 92 per cent of the world’s high-end semiconductors — defend its sovereignty.


The path to actually passing the bill and pushing through aid money is unclear. But the move, along with talk of new sanctions against China to deter a potential attack on Taiwan, are pushing geopolitical hot buttons at a time when the US has yet to develop a detailed action plan for the economic fallout from such a conflict, or even the continued decoupling of the US and Chinese economies.


In Washington, fears that Beijing is planning a military invasion are growing, and America is in danger of becoming embroiled in sparring between Beijing and Taipei in the Taiwan Strait. But what would happen if supply chains and financial flows between the US and China were cut off tomorrow? What’s the day-one plan?


Nobody I’ve spoken with in either the public or private sector has a clear and complete answer to that question. The government approach has so far fallen into two categories: a tit-for-tat response to China’s own moves, involving tariffs and sanctions, or a big-picture but still somewhat vague top-down approach about how to rebuild the industrial base at home.


Donald Trump’s administration was mostly about the former.


The Biden administration has made clear it wants to sharpen government focus on protecting national security and building more resilience and redundancy at home, and regionally with partners (“friend-shoring”), in strategic areas such as semiconductors, green batteries, key minerals and pharmaceuticals.


That’s important, and needed. But now both policymakers and businesses need to really drill down to what that means in practice.


What would it mean, for example, if China suddenly stopped shipping key drug ingredients to the US? Is there a full list of what the most important inputs are, which companies use them, where alternative supplies could be located quickly, what percentage of consumption needs they could meet, and how quickly (and at what cost) industry in either the US or allied nations could manufacture new supply?


Likewise, how would the US (and the world) meet chip demand should China invade Taiwan? Would there be a military counterstrike? Is it conceivable that foundries on the island would be destroyed? Are there any plans for which parts of the public and private sector would be prioritised in the event of a major and immediate semiconductor supply shortage?


These are terribly uncomfortable questions, and it’s no surprise that few want to raise them. But they are exactly the ones we need to be asking, particularly given that Chinese leader Xi Jinping — who is likely to be reappointed for a third term at the Communist party congress in mid-October — has made clear that national security, even more than Chinese economic growth, is his top priority.


China would have much to lose if trade and capital flows decoupled quickly. But the US has just as much to lose, if not more, and is less prepared for the possibility.


Beijing is already actively implementing a “Fortress China” strategy to become self-sufficient in the most essential goods and technologies.


The US has said it wants the same. Yet one of the realities of America’s decentralised, privatised economy is that it is difficult to map risk. The Department of Defense may have a grasp on where all the parts of an F-35 fighter jet come from. But I doubt that policymakers understand the totality of the supply chain in even the most important non-defence areas, such as electric vehicles or electronic components.


This is not to say the US should copy Beijing’s top-down approach to economic development — as I’ve argued in past columns, decentralisation is a strength for the US in terms of innovation. But in a decoupling world, it’s not a good idea to raise the security stakes without having a solid plan for what happens if there’s a war, real or economic.


The US should appoint a White House-level resilience tsar (a non-partisan figure with a logistics or business continuity background) — as I’ve also argued previously — to pose the right questions and ensure public and private sector preparedness.


We need a far better understanding of the economic implications of decoupling, whether it happens slowly or suddenly. We must not sound the drums of war without understanding what they may bring.

Sunday, 18 September 2022

Beijing-backed Chinese language schools in UK to be replaced with teachers from Taiwan

MPs in talks with Taiwan to help phase out Confucius Institutes as relations between the countries worsen

Vincent Ni

Sun 18 Sep 2022 17.00 AEST

A group of cross-party MPs is in talks with Taiwan to provide Mandarin teachers to the UK as the government seeks to phase out Chinese state-linked Confucius Institutes, the Observer has learned.


There are currently 30 branches of the Confucius Institute operating across the UK. Although controversies have existed for many years, they have continued to teach Britons Chinese language, culture and business etiquette. These schools are effectively joint ventures between a host university in Britain, a partner university in China, and the Chinese International Education Foundation (CIEF), a Beijing-based organisation.


Until recently, the Beijing-backed programme was viewed positively by the Conservative government. As education minister in 2014, Liz Truss praised the network of Confucius classrooms, saying they “will put in place a strong infrastructure for Mandarin” in the UK.


But Truss has since taken an increasingly hawkish stance on Beijing. Recent reports suggested that she was prepared to declare China an “acute threat” to the UK’s national security, placing it in the same category as Russia. As bilateral relations between China and the UK continue to deteriorate, the Confucius language learning and teaching project has been under heavy scrutiny.


Campaigners have questioned the funding and recruitment process of the Chinese language teaching initiative. They also highlighted the limit to free speech in these classrooms and called the UK’s approach to Mandarin teaching “outdated”.


Almost all UK government spending on Mandarin teaching at schools is channelled through university-based Confucius Institutes, a study conducted by China Research Group in June has shown. This amounts to at least £27m allocated from 2015 to 2024, according to estimates.


Those involved in the talks with the Taiwanese included Tory MP Alicia Kearns. Under the new proposal being seen by MPs, this funding could be redirected to alternative programmes such as those from Taiwan.


Britain’s foreign language capability has been a major topic in Westminster in recent years as the country looks for ways to implement the post-Brexit “global Britain” framework. It was revealed last month that only 14 FCDO officials are being trained to speak fluent Chinese each year. The lack of Mandarin proficiency raised concerns for British diplomacy and also put language teaching under the spotlight.


Such concerns are shared in the US, too, and Taiwan has stepped in. In December 2020, the Chinese-speaking island signed a Memorandum of Understanding with the US to expand language teaching. Taipei’s Overseas Community Affairs Council, also a government agency, has been setting up Mandarin learning centres in a number of US cities since last year, in apparent competition with Confucius Institutes.

Vladimir Putin should be worried as Kyiv seizes the momentum

PETER JENNINGS


Ukraine military forces achieved remarkable success last week in retaking around 9000sq km of territory east of the city of Kharkiv. That is about 10 per cent of the territory taken by Russia since its invasion in February.

Reports of panicked Russian troops abandoning equipment and heading for the border suggest Russian military morale continues to crumble. Russian artillery strikes on Kharkiv are reportedly lessening as units are hit by more accurate Ukrainian weapons with superb targeting. Russian air defence systems are retreating to avoid being hit, thus exposing Russian troops to Ukrainian air strikes.


The Institute for the Study of War, an authoritative Washington think tank, reports that Russian military bloggers increasingly are critical of Defence Minister Sergei Shoigu, blaming him for the defeat in the Kharkiv Oblast.


Russian defence minister Sergei Shoigu and president Vladimir Putin. Picture: Mikhail Klimentyev / Sputnik / AFP

Russian defence minister Sergei Shoigu and president Vladimir Putin. Picture: Mikhail Klimentyev / Sputnik / AFP

A close confidant of Vladimir Putin, Yevgeny Prigozhin, is being presented as the face of the Russian “special military operation” in Ukraine. Known as Putin’s Chef because that is what he once was, Prigozhin created a fortune from Moscow catering contracts that he used to finance a mercenary force called the Wagner Group.

The ISW reports that “Prigozhin gave a recruitment speech on September 14 announcing that Russian prisoners have been participating in the war since July 1 when they were instrumental in seizing the Vuhlehirska Thermal Power Plant” in Donetsk.


None of this bodes well for Russia’s campaign. Relying on prisoners, foreign mercenaries, Chechens and battalions of newly recruited volunteers funded by Russian city councils is a world away from the promise of the so-called modernised force Putin deployed around Ukraine. It would be wrong to forecast a Ukrainian victory in this conflict on the strength of the recent tactical successes, but after several months of a hard-fought stalemate in the east and south of the country the war is entering a new phase where Kyiv has the momentum.


READ MORE:‘Putin’s chef’ offers prisoners freedom to fight|Shellshocked villagers say Russians left guns and fled|Kyiv eyes US-Israel pact with NATO|Ukraine wants more equipment and quicker

Russia is not making appreciable battlefield gains. Ukraine continues to show that it has superiority in manoeuvring forces around the country, better and faster intelligence systems, better targeting and, thanks to support from the democracies, better weapons.

Following the sinking of the Russian cruiser Moskva and several well-executed attacks on air bases and ammunition facilities in Crimea, the Russian navy and air force in the south seem to have largely left the fight. What Moscow has left is a dwindling number of missiles and artillery.


Russian precision missiles largely have been a failure in the war, with the US intelligence system assessing that 60 per cent fail to hit planned targets. Russia is using artillery to target cities indiscriminately, but in that role artillery is becoming less effective because Ukrainian weapons and the US-supplied High Mobility Artillery Rocket System (HIMARS) is destroying Russian artillery formations, ammunition dumps and command posts, pushing them farther away from their targets.


All of this suggests there is a plausible pathway to victory for Kyiv. I can see no such pathway for Moscow. What Russia has is weight and the capacity to grind the conflict out in a way that, Putin must hope, means the democracies lose interest in supporting Volodymyr Zelensky.


However, the longer the conflict goes on, the more Russian soldiers will be killed and equipment destroyed, the more visibly savage Russian behaviour becomes to Ukrainians and the more discontented Russian elites will be about Putin’s desperately failing gamble.

Western military, economic and humanitarian support for Ukraine is the vital factor. If the flow of weapons and ammunition stops the Ukrainian military will not be able to continue its agile campaign. I would expect European NATO countries and the US will continue providing military equipment and support.


On September 9 the US Defence Department announced a further $US675m ($1bn) in military support, including more munitions for HIMARS, four 105mm howitzers with 36,000 rounds, additional high-speed anti-radiation missiles, and 1.5 million rounds of small arms ammunition. The total American military support for Ukraine amounts to $US14.5bn.


Last week a 50-nation Ukraine Defence Contact Group, including Australia, met in Germany to consider more support. Wars are won by better logistics. It’s hardly surprising that international support is giving Kyiv the edge.


Here is an opportunity for Australia. Our Bushmaster vehicles played a role in the successful Ukrainian offensive northeast of Kharkiv. The Albanese government should double down on success by providing more Bush­masters, Hawkei protected mobility vehicles with remote weapons stations and 155mm ammunition. Anthony Albanese clearly understands the importance of the democracies working together to support Ukraine. Failure to do so hands a victory to Moscow, Beijing and quisling suppor­ters of authoritarianism in our own country.

Australia should expect no one to come to our defence if we can’t help a fellow democracy in its most desperate hour.


Russia, by contrast, has fewer options for international weapons supply. In July, the White House announced that Russia was negotiating with Iran to buy hundreds of drones. Last week Ukrainian forces shot down an Iranian Shahed-136 loitering munition or kamikaze drone in the Kharkiv Oblast.


US intelligence also has reported that Russia is buying millions of artillery rounds and rockets from North Korea. There is a 17km land border between the two countries and a single rail crossing moving freight and passengers between North Korea and Vladivostok. Using that route to avoid China and to avoid at sea UN-mandated ships enforcing sanctions on North Korea, those munitions would travel around 11,000km by train to get to eastern Ukraine. That’s one measure of Putin’s desperate efforts to sustain the war without having to mobilise his population.

China’s position on Russia’s war remains critical. Beijing appears not to have provided Russia with military equipment and is working hard not to be targeted by sanctions for supporting the war effort. By buying Russian oil and gas at discounted prices Xi Jinping is cementing a dominant position for China in the relationship.


This weekend may show some results from the bilateral meeting of Putin and Xi in Uzbekistan at a Shanghai Co-operation Organisation Summit. This is Xi’s first trip outside of China since the Covid-19 pandemic began and the second meeting of Putin and Xi this year.


China's Xi Jinping and Vladimir Putin pose together in Uzbekistan at the Shanghai Co-operation Organisation Summit. Picture: Alexandr Demyanchuk / SPUTNIK / AFP

China's Xi Jinping and Vladimir Putin pose together in Uzbekistan at the Shanghai Co-operation Organisation Summit. Picture: Alexandr Demyanchuk / SPUTNIK / AFP

Putin and Xi met in Beijing in February, just before the invasion. Presumably at the second meeting Putin will have some explaining to do about the disastrous failure of his military and intelligence agencies to read Ukraine’s determination to fight. The Uzbekistan meeting will show a much diminished Putin. Behind closed doors he may well be pleading for more support from Xi. I would not expect China to offer much beyond lip-service and willingness to buy cheap commodities.

The Chinese Communist Party’s official newspaper, the People’s Daily, presented a somewhat unusual perspective in its preview of the meeting. The paper editorialised: “As more countries have been struggling in energy crisis amid Russia-Ukraine conflict and rampant inflation, trade activities between China and the Central Asian countries have been keeping their momentum. Such close partnership also triggered some speculation from the West on whether Russia’s influence in the region has been overshadowed by China’s presence.


“This is the typical intention of sowing discord between China and Russia” the paper lukewarmly concluded. But why raise the issue at all? And note that the editorial now does not use Putin’s preferred term “special military operation”; this is a “conflict” creating an “energy crisis”. Some measured distancing is under way. Beijing is not losing an opportunity to stake its own claim to leadership in Central Asia at Russia’s expense.


At a media event prior to the talks Putin said to Xi referring to Ukraine: “We understand your questions and concerns about this. During today’s meeting, we will of course explain our position.” His words sound quite apologetic. Putin is worried about China, as he should be.

 It is difficult to escape the conclusion that the longer the war drags out, the weaker and more diminished Putin becomes, the more dependent he makes Russia on China and the less likely his forces will prevail in the war.


Will Putin ultimately resort to using chemical, biological or nuclear weapons in Ukraine? Russian military doctrine in 2014 anticipated the possibility of using nuclear weapons to “escalate in order to de-escalate” if the Russian state faces an existential threat.


Russian use of nuclear weapons is a horrendous possibility. It can’t be ruled out, but it is noteworthy that Putin has pulled his punches in other respects. He had not put Russia on a war footing and has not mobilised. The Russian military seems incapable of massing force on the ground beyond battalion-sized operations. Putin is wary of NATO and particularly US power.


Could it be that the realisation is dawning for Putin that the Ukraine war is a busted flush? If he uses nuclear weapons it will be the end of his regime and probably the end of him. Like most dictators, an instinct for personal survival is the ultimate objective.

Saturday, 17 September 2022

The Observer

What happens if Putin goes nuclear in Ukraine? Biden has a choice to make

Simon Tisdall

Simon Tisdall

Russian forces are in retreat yet Nato still holds back for fear of what a humiliated Kremlin might do. But now is precisely the time to step up the pressure


Vladimir Putin and ‘fellow gang boss’ Xi Jinping.

Sun 18 Sep 2022 00.25 AEST

There has been much excited talk of a “turning point” following Ukraine’s rapid military advances in north-eastern Kharkiv region and what Kyiv cheerily calls its “de-occupation” by fleeing Russians. Less comforting for the western democracies is an alternative theory: that the war is approaching “a moment of maximum danger”.


Worries that a cornered, desperate Vladimir Putin may resort to nuclear, chemical or biological weapons have resurfaced in the US and Europe, along with the argument, articulated by France’s Emmanuel Macron, that Russia’s president, despite his terrible crimes, should not be “humiliated” – and allowed a way out.


Speaking last week, US president Joe Biden said any use by Putin of weapons of mass destruction (WMD) in Ukraine – for example, by exploding a low-yield, tactical nuclear warhead – would “change the face of war”. Russia would become “more of a pariah in the world than they ever have been,” he said.


Yet even as he warned the US response would be “consequential”, Biden refused to say whether it would involve commensurate US or Nato military action. The tenor of his remarks suggested he has not personally raised the nuclear issue with Russia’s leader. This renewed angst about WMD reflects the trap Putin set for the west when he launched his invasion. By placing Russia’s nuclear forces on high alert, deploying nuclear-capable missiles closer to Nato states, and targeting Chornobyl and then the giant Zaporizhzhia nuclear plant, he and flunkeys such as Dmitry Medvedev deliberately played up fears of Armageddon. They hoped to weaken backing for Kyiv and deter direct Nato intervention.

It has worked so far. The US and Nato walked into the trap from the get-go. While supplying Ukraine with ever increasing amounts of arms and materiel, Biden and his allies continue to limit the power, range and quality of such weapons to ensure Putin’s position is not so weakened that he turns to extreme measures.

As a result Nato is still not providing the tanks, missile defences and the air cover Ukrainian forces need to secure liberated areas and press home their advantage. Germany and others take their cue from Washington. Last week, Chancellor Olaf Scholz again demanded Putin withdraw from all Ukrainian territory – while withholding the Leopard tanks Kyiv says are necessary to achieve this end.

The Putin trap has other malign aspects, notably the Kremlin’s economic blitzkrieg on Europe. In effect it is using gas and oil to explode cost-of-living bombshells in every private home, shop and factory. EU politicians who thought they could reason with Putin are enmeshed in the very war-like confrontation they sought to avoid. Some are wavering.

Putin’s meeting last week with Xi Jinping does not seem to have gone smoothly, with China’s president echoing Indian criticism of the damaging global impact of the war. But their overall “no limits” partnership appears unaffected. Their shared aim: the evisceration of the post-1945, western-led rules-based order. In this context, Ukraine and Taiwan are prologue.

The uncovering in newly liberated Kharkiv of Bucha-type mass graves and apparent war crimes represents another strand of Putin’s strategy of demotivation. His message to the west: your “universal values” are meaningless in the world I am creating.

By contemptuously violating the UN’s authority, the Geneva conventions, and human rights law, he strikes at the heart of western self-belief and confidence.

Not exactly a turning point, then, but a week when other myths were also exploded. Demolished is the defeatist argument that Ukraine cannot prevail and that western military and economic aid only delays the inevitable. Ukraine is winning, for now at least, despite the humming and  nuclear plant, he and flunkeys such as Dmitry Medvedev deliberately played up fears of Armageddon. They hoped to weaken backing for Kyiv and deter direct Nato intervention.


It has worked so far. The US and Nato walked into the trap from the get-go. While supplying Ukraine with ever increasing amounts of arms and materiel, Biden and his allies continue to limit the power, range and quality of such weapons to ensure Putin’s position is not so weakened that he turns to extreme measures.


As a result Nato is still not providing the tanks, missile defences and the air cover Ukrainian forces need to secure liberated areas and press home their advantage. Germany and others take their cue from Washington. Last week, Chancellor Olaf Scholz again demanded Putin withdraw from all Ukrainian territory – while withholding the Leopard tanks Kyiv says are necessary to achieve this end.


The Putin trap has other malign aspects, notably the Kremlin’s economic blitzkrieg on Europe. In effect it is using gas and oil to explode cost-of-living bombshells in every private home, shop and factory. EU politicians who thought they could reason with Putin are enmeshed in the very war-like confrontation they sought to avoid. Some are wavering.


Putin’s meeting last week with Xi Jinping does not seem to have gone smoothly, with China’s president echoing Indian criticism of the damaging global impact of the war. But their overall “no limits” partnership appears unaffected. Their shared aim: the evisceration of the post-1945, western-led rules-based order. In this context, Ukraine and Taiwan are prologue.


The uncovering in newly liberated Kharkiv of Bucha-type mass graves and apparent war crimes represents another strand of Putin’s strategy of demotivation. His message to the west: your “universal values” are meaningless in the world I am creating.


There is little Putin won’t do when he feels it is necessary to win on the battlefield.

Daniel Davis, retired US army colonel

By contemptuously violating the UN’s authority, the Geneva conventions, and human rights law, he strikes at the heart of western self-belief and confidence.


Not exactly a turning point, then, but a week when other myths were also exploded. Demolished is the defeatist argument that Ukraine cannot prevail and that western military and economic aid only delays the inevitable. Ukraine is winning, for now at least, despite the humming and hawing.


Nor is it any longer assumed Putin’s grip on power is unshakeable. Increasing domestic criticism is heard, not least from his pro-war, nationalist supporters. Their ire is currently aimed at the military high command, but everyone knows who commands the commanders.


Now is not the time to relax the pressure for fear of what Putin might do. On the contrary, it’s time to crank it up. Because, ironically, it’s Putin who is trapped now. He must not escape the consequences of his actions.


For Europe (and the UK), this means expanding the too modest energy measures proposed by EU commission president Ursula van der Leyen last week – and end energy dependence on Moscow. It means sending more, better heavy weapons to Kyiv and redoubling efforts to inform Russians about what, truly, is being done in their name.


It means creating an international criminal tribunal for Ukraine, like that for former Yugoslavia, and the confiscation of frozen Russian sovereign assets to fund reparations, compensation and and the rebuilding of the country. It means deploying a military coalition of the willing to secure Zaporizhzhia, as Lithuania proposes.


Daunting challenges remain. Russia still has more tanks and artillery. It still controls one-fifth of Ukraine’s territory. It is mobilising 137,000 additional troops on Putin’s orders and could outnumber its opponents by spring. A ruthless campaign of indiscriminate reprisals against civilian targets has begun, following its recent setbacks.


“There is little he [Putin] won’t do when he feels it is necessary to win on the battlefield,” warned analyst Daniel Davis, a retired US army colonel. But this is not an argument for cutting him some slack.


Don’t give him an inch. Keep him on the run. Show him there’s no way out but back. And if, panicked and vengeful, Putin does indeed threaten to use a tactical nuclear weapon in Ukraine, the response must be hard and clear.


Biden must personally and formally inform him, in advance, that any such attack, breaking the global taboo on nuclear aggression and undercutting international security, would be viewed as an act of war against the US and Nato – with all the awesome, regime-toppling consequences that might entail. Perhaps Biden has already done this. Hopefully he has.


In which case, stop pulling western punches. Get on and ensure Ukraine wins, wins well, and wins soon.

Friday, 16 September 2022

The market must not become an end in itself

Larry Kramer



FT montage/Terry Kirk


The failings of the political and economic paradigm known as “neoliberalism” are now familiar. However well suited it may have been to addressing stagflation in the 1970s, neoliberal policy has since then fostered grotesque inequality, fuelled the rise of populist demagogues, exacerbated racial disparities and hamstrung our ability to deal with crises like climate change. The 2008 financial crash exposed these flaws and inspired a reassessment of how government and markets relate to society — an effort given fresh energy by the pandemic, which elicited a range of (successful) public actions at odds with neoliberal bromides.


But powerful interests remain attached to neoliberalism, which has served them well. Regrettably, the reemergence of inflation has given them a hook not merely to criticise US President Joe Biden’s spending, but to condemn efforts to change the prevailing paradigm as “socialistic” moves to destroy capitalism. Though the causes of today’s inflation are complex, we have tools to deal with it and have begun to apply them. Managing the economic fallout from Covid-19 and the war in Ukraine must not be allowed to derail a long-overdue process of adapting governance for a 21st century economy and society.


Neoliberals accomplished many things in the 50 years their ideology has been dominant, but none is more impressive than their success in equating a very particular, very narrow conception of capitalism with capitalism itself — as if any deviation from their approach to government and markets is perforce not capitalism or against capitalism.


But capitalism, properly understood, requires only that trade and industry are left primarily in the hands of private actors, something no one today seeks to overthrow. This allows room for countless different relationships among private business, government and civil society — possibilities limited only by imagination and choice. Mercantilism, laissez-faire and Keynesianism were all forms of capitalism, as was FDR’s New Deal. As, for that matter, are the social democracies of northern Europe.


In all these systems, production remains in private hands and market exchanges are the dominant form of economic activity. Since markets are created and bounded by law, there is no such thing as a market free from government. Neoliberalism limits government regulation to securing markets that operate efficiently as to price. Which is a conception of capitalism, but certainly not the only one.


The genius of capitalism has been in finding new ways to capture the energy, innovation and opportunity that private enterprise can offer, while adapting to changing circumstances. Mercantilism gave way to laissez-faire, which gave way to Keynesianism, which gave way to neoliberalism — each a capitalistic system that served for a time before yielding in the face of material and ideological changes to something more suited to the context.


We are in the midst of such a transformation today — driven by vastly increased wealth inequality, global warming, demands to address racial disparities, the rise of populism and new technologies. These developments have been accompanied by alarming political and social disruption. As faith in neoliberalism crumbles, we observe leaders — from Donald Trump to Jair Bolsonaro, Viktor Orbán and Vladimir Putin — embracing ethno-nationalism, with China’s vision of state capitalism looming in the wings as an alternative. These are terrible options, but we’re not going to forestall them by exhorting people to stick with a neoliberal system in which they have already lost faith. Change is happening; the question is whether it will be change for the better.


If capitalism is to survive, it will need to adapt, as it has done in the past. We need to acknowledge how neoliberalism has failed and address the legitimate demands of those it has failed. Alternative possibilities abound: how capitalism should change is something we must debate. The only position that makes no sense is protesting that any change is “anti-capitalism”, as if Milton Friedman and friends achieved some perfect, timeless wisdom in the 1970s.


In the end, markets and governments are devices to provide citizens with the physical environment and opportunities for the material success needed to flourish and live with dignity. Neoliberals lost sight of this and began treating the market as an end in itself. They failed to see how their version of markets was not working for the majority of people. We’re now living with the consequences of their blindness, and we need to rebuild and reimagine, before it’s too late.


The writer is president of the William and Flora Hewlett Foundation

 A visit to Kyiv reveals the secret of Ukrainian success

Opinion by Fareed Zakaria

September 16, 2022 at 7:57 Sydney Time

KYIV, Ukraine — At first glance, Kyiv looked strangely normal. There were a few barricades here and there, but mostly the streets were busy, traffic was moving, shops were open and restaurants were full. You could buy French wines, American energy drinks and Swiss chocolates at the local grocery store. The city looked much as it had on my last visit a year ago, though getting there this time was far more complicated. I flew to Poland, drove to the Polish-Ukrainian border and then took a 12-hour overnight train to Kyiv.

Scratch beneath the surface, however, and find a society profoundly scarred by the Russian invasion. Every Ukrainian I spoke to had a friend or relative who had been killed or wounded or displaced. (At least 14 million Ukrainians have moved from their homes, more than half of them refugees abroad.) Millions of able-bodied men are fighting or in some way assisting the war effort. Millions of children are in foreign countries. People are experiencing fear, loss, sadness and anxiety, all at the same time.

But they are determined to carry on. Air raid sirens sounded off once or twice a day, but people paid little attention to them since they were precautionary. In contrast to the war’s early days, Kyiv is now well removed from the fighting. Ukrainians seemed determined to show that life will go on, that the Russian invasion has not brought their lives to a halt.

That is why the Victor Pinchuk Foundation decided to hold its annual Yalta European Strategy meeting on schedule as it has for 17 years. (The meeting used to be held at Yalta, but after the 2014 Russian invasion of Crimea, the venue moved to Kyiv, though the name defiantly remains the same.) Among those who attended in a show of support were Poland’s prime minister, Latvia’s president, Germany’s foreign minister and a delegation of British members of Parliament from all major parties. U.S. national security adviser Jake Sullivan spoke via videoconference.

More impressive than any of the distinguished visitors, however, were the “Ukrainian heroes” who were highlighted throughout the conference. For example, a 15-year-old boy by the name of Andriy Pokrasa explained that he used his own drone to provide the Ukrainian army with the coordinates of Russian armored vehicles and tanks — thus reportedly helping to destroy 100 of them. Or Ukraine’s rock legend, Svyatoslav Vakarchuk, who talked about going around the country and performing for free, even in the trenches, even when just a dozen soldiers were his audience.

The war in Ukraine pits a top-down attack against a bottom-up response. Russia’s invasion is largely one man’s decision. Russian society might approve but it does not appear enthusiastic. To get recruits, Russia is apparently recruiting from prisons, offering large cash bounties and employing mercenaries like the Wagner Group.

Ukraine’s response is society-wide, starting with its elected government but involving almost all the country’s citizens. One key aspect of the astonishing advance of Ukraine’s army in the east — and the astonishing collapse of Russian forces — is the gap in morale. Ukraine’s soldiers are fighting for their country and freedom. Russians are fighting out of fear and for money.

This divergence between a top-down invasion and a bottom-up defense may also apply to the wider response to the war. Vladimir Putin’s strategy is clearly to bet on the weakness of Western voters. As winter comes, he has warned that people in the European Union will freeze if he cuts off all energy supplies. He believes that at that point, Western governments will start to sue for peace.

Wednesday, 14 September 2022

Une première aide militaire directe de Washington à Taïwan franchit une étape clé au Congrès

Le projet de loi adopté mercredi par la commission des affaires étrangères du Sénat américain prévoit une aide militaire directe à Taïwan de près de 4,5 milliards de dollars au cours des quatre prochaines années.


Le Monde avec AFP

Publié hier à 23h22, mis à jour à 00h43


Une première aide militaire directe de Washington à Taïwan a franchi, mercredi 14 septembre, une étape clé au Congrès américain, ce vote risquant de provoquer l’ire de Pékin.


« Il s’agit de la plus importante refonte de la politique américaine à l’égard de Taïwan » depuis 1979, lorsque Washington a reconnu la Chine tout en acceptant de maintenir la capacité d’autodéfense de l’île, assurent les sénateurs Bob Menendez (démocrate, New Jersey) et Lindsey Graham (républicain, Caroline du Sud), à la tête de cette initiative.


Lire aussi : Pékin exige que Washington renonce à une nouvelle vente d’armes à Taïwan

Leur projet de loi, adopté par la commission des affaires étrangères du Sénat américain, prévoit une aide militaire directe à Taïwan de près de 4,5 milliards de dollars (4,5 milliard d’euros) au cours des quatre prochaines années. Il exige aussi du président américain Joe Biden qu’il impose des sanctions aux principales institutions financières chinoises en réponse à toute « escalade dans les actes hostiles envers Taïwan ».


Rapprochement significatif

Le « Taiwan Policy Act of 2022 », tel qu’il est baptisé, prévoit par ailleurs d’accorder à l’île le statut d’« allié majeur hors OTAN ».


Ce vote en commission n’est que la première étape d’un long processus législatif : le texte doit désormais être adopté en séance plénière au Sénat, puis à la Chambre des représentants, avant d’être promulgué par Joe Biden. Mais il marque malgré tout un rapprochement significatif entre les Etats-Unis et Taïwan, à l’heure où les relations entre Pékin et Washington sont à leur plus bas depuis des décennies.


Lire aussi : Article réservé à nos abonnés Derrière l’escalade militaire autour de Taïwan, la volonté de Xi Jinping d’une « réunification complète » de la Chine sous son règne

La Maison Blanche navigue donc sur ce dossier avec beaucoup de prudence. « Nous continuerons à communiquer directement avec le Congrès sur ce texte », a dit, évasive, la porte-parole de la Maison Blanche Karine Jean-Pierre mercredi. Avant d’assurer que l’administration Biden « continuerait à approfondir son partenariat avec Taïwan avec un soutien diplomatique, économique et militaire fort ».


Vente d’armes et visite de Pelosi

Ce vote au Congrès intervient quelques jours seulement après la vente par Washington pour 1,1 milliard de dollars d’armes à Taïwan, et un peu plus d’un mois après une visite sur l’île de la présidente démocrate de la Chambre des représentants Nancy Pelosi, qui avait provoqué la fureur de Pékin. La Chine avait alors lancé les plus importantes manœuvres militaires de son histoire autour de l’île.


Avant la visite à Taïwan de Nancy Pelosi, numéro trois des Etats-Unis et plus haute responsable américaine à se rendre sur l’île depuis des décennies, l’entourage de Joe Biden avait déjà discrètement fait valoir à la Chine que la speaker de la Chambre ne représentait pas la politique de l’administration, le Congrès étant un pouvoir distinct du gouvernement.


Lire aussi : Article réservé à nos abonnés Taïwan cherche à adapter sa riposte face aux manœuvres militaires de la Chine

La Chine estime que Taïwan, peuplée d’environ 23 millions d’habitants, est l’une de ses provinces, qu’elle n’a pas encore réussi à réunifier avec le reste de son territoire depuis la fin de la guerre civile chinoise (1949). En sept décennies, l’armée communiste n’a jamais pu conquérir l’île, laquelle est restée sous le contrôle de la République de Chine – le régime qui gouvernait jadis la Chine continentale et ne gouverne plus aujourd’hui que Taïwan.

The Fed must avoid Volcker’s inflation error

Frederic Mishkin



Paul Volcker is considered to be a Goat (greatest of all time) central banker as he and the US Federal Reserve broke the back of inflation in the early 1980s. However, less talked about is the serious policy mistake the Volcker Fed made in 1980. The result was a more prolonged period of high inflation that required even tighter monetary policy, which then resulted in the most severe US recession since the second world war up to that time.


There are many parallels between the current situation of Jay Powell’s Fed and what happened then, so it is imperative we learn from history to avoid repeating the error.


By the time Volcker became Fed chair in July 1979, the central bank’s credibility on inflation had been destroyed by the disastrous policies of the previous chairs, Arthur Burns and G William Miller, with inflation climbing to more than 12 per cent by October 1979.


At a surprise press conference on October 6 1979, Volcker announced that the Fed would allow the benchmark federal funds rate to “fluctuate over a wider range”. The federal funds rate climbed to more than 17 per cent by April 1980.


Pressure on the Fed to reverse these rate increases began to build, with farmers blockading the Fed headquarters in Washington with their tractors and car dealers sending car keys in little coffins to the Fed. Politicians of both parties then piled on and strongly urged the Fed to scale back interest rates.


With the unemployment rate rising by more than a percentage point to more than 7 per cent in May after a recession began, the Fed decided to reverse course and sharply lower the federal funds rate by more than 7 percentage points. This action was taken despite the fact that inflation reached a peak of 14.7 per cent in April.


The Fed had blinked and Volcker’s credibility as an inflation fighter took a hit. Inflation expectations stayed stubbornly high and actual inflation remained above 12 per cent through to the end of 1980.


With the recession ending in July 1980, the Fed got back into the inflation fighting business and started to raise the federal funds rate again. But this time, to re-establish its credibility, the Fed had to raise the federal funds rate to a crushing level of nearly 20 per cent by the middle of 1981. Volcker finally had the courage to take out the baseball bat to slam the economy and slay inflation. The ensuing recession that started in July 1981 became the most severe downturn since the second world war.


Only after clobbering the economy, and keeping the federal funds rate near 15 per cent until the middle of 1982, did inflation expectations and the inflation rate start a steady, but slow, decline to about the 3 per cent level in 1983.


This review of history tells us that the loss of credibility from reversing policy before the inflation task was completed required much higher interest rates and a far larger cost to the economy of lost output and high unemployment than if the Volcker Fed had stuck to its guns.


There are many parallels to what happened during 1979-82 with what the Fed is facing now. The Fed’s credibility to keep inflation under control was weakened by its policy mistakes, abandoning a pre-emptive policy to control inflation in 2021 and the flawed execution of a new strategy framework targeting an average inflation rate in late 2020.


The Fed has now appropriately reversed course and is raising the federal funds rate at the fastest pace for more than 40 years. The Fed’s loss of credibility, I think, will lead it to raise rates much more than Fed projections or market forecasts suggest. The likelihood of a soft landing is therefore quite low and a recession is increasingly likely.


So far, the rhetoric from Powell and his colleagues is encouraging, with most of them saying that a recession will not deter them from keeping interest rates high until inflation is heading back towards the 2 per cent inflation target. However, it is easy to take this stance when the economy is doing well and when political pressure to lower interest rates remains moderate. This is likely to change when workers can’t find jobs and interest rates on mortgages and car loans rise even further.


When the going gets tough, the Powell Fed needs to stick to a plan of keeping interest rates sufficiently high for long enough to achieve their inflation objectives. It must continue to raise rates to uncomfortable levels and maintain them there.


The mistake that the Volcker Fed made in 1980 must not be repeated.


Frederic Mishkin is the Alfred Lerner Professor of Banking and Financial Institutions at Columbia Business School and is a former governor of the Federal Reserve

UN human rights agency wracked by internal conflict over Uyghur report

OHCHR staff are believed to have clashed with high-level officials before release of anti-Beijing findings


It was 12 minutes to midnight in Geneva on the last day of UN human rights chief Michelle Bachelet’s tenure when her office released a landmark report concluding that the Chinese government had committed “serious human rights violations” in Xinjiang.


The August 31 report described “large-scale” arbitrary detention of Uyghurs and other Muslims in the north-western region of China and said Beijing’s actions could constitute “crimes against humanity”. It set the stage for probably intense debate on China’s conduct at the autumn session of the UN’s Human Rights Council, which opened on Monday.


But human rights experts and activists who engaged with the Office of the High Commissioner for Human Rights said its working-level staff had to overcome resistance to publishing the report from Bachelet herself, who did not want to alienate China, believing engagement was more likely to improve conditions in Xinjiang, the experts said.


Bachelet, a former Chilean president, was under pressure from Beijing to block publication of the report, which it denounced as “disinformation and lies fabricated by anti-China forces”.


“The office staff were the ones trying to get [the report] out despite all the barriers. Without them, it would not have been released. Bachelet was the gatekeeper, delaying it,” said Rushan Abbas of the Campaign for Uyghurs, who gave evidence to the UN on her sister’s disappearance.


Another activist who spoke to Bachelet’s office said some OHCHR staff wanted the report to be published sooner. “There was a lot of willingness from the team to actually do something right, but the delay was coming from a higher level,” said the activist.


The activists’ accounts highlight Beijing’s growing influence in multilateral organisations, as well as the UN’s difficulty balancing tension between China and other member states.


Asked about the claim that she resisted publication of the report, Bachelet said: “I had pledged to put it out before the end of my mandate and I did so. The report covers serious human rights violations and speaks for itself.”


The OHCHR’s conclusions were a long time coming. News reports of massive abuses in Xinjiang emerged around 2017. In September 2018, Bachelet, in her maiden speech to the Human Rights Council, referred to “deeply disturbing allegations of large-scale arbitrary detentions”, reiterating her predecessor’s request to visit China.


Evidence gathered by the UN’s independent experts was also mounting. In August 2018, UN committee co-rapporteur Gay McDougall referred to “credible reports” that China was treating Xinjiang’s Muslim minorities as “enemies of the state”. Chinese delegates denied the allegations. Months later, independent UN experts wrote to China’s UN delegates concerned over new “de-extremification” regulations that legalised detention centres for Muslim minorities.


As early as May 2019, Beijing invited Bachelet to visit China, including Xinjiang. No UN human rights chief had successfully negotiated a visit since 2005. But one human rights worker who engages with the OHCHR believes this and later invitations were in bad faith.


“The Chinese government would provide the invite, staff would respond then the government would say, ‘Are you sure you want to visit after all?’” the worker said, adding that this delayed the report.


The Chinese said Beijing had “engaged and co-operated with the OHCHR with the utmost sincerity”.


By the end of 2019, OHCHR working-level staff were stepping up research on Xinjiang, according to a human rights expert. In March 2021, Bachelet announced that an independent assessment relating to Xinjiang was needed.


In September 2021, she said the report was being finalised and in December her office announced it would be published within weeks. But in March this year, with work on the report “well advanced”, Bachelet finally reached agreement with Beijing for a visit.


“The visit was crucial for me that we engage with the government and work constructively to try to help effect real change on the ground,” said Bachelet. She finally visited China in May.


“There was general frustration within the OHCHR about the trip, dismay that it even happened and that it was undertaken without guarantees of unimpeded access or improved conditions,” said a person with knowledge of internal conversations.


After her return, Bachelet’s office continued to review the report and Beijing heightened its campaign to bury it. In a joint statement to the Human Rights Council, China and 68 other countries urged Bachelet not to interfere with “Xinjiang, Hong Kong and Tibet-related issues”. Bachelet later confirmed that China and other member states had also directly asked her to drop the report.


In her final press conference six days before her term ended, Bachelet said she had “been under tremendous pressure to publish or not to publish”, but her office was “trying very hard” to release the report. European officials also stepped up a push for her to publish, people involved in the talks said. European nations saw the report as key leverage in efforts to respond to the human rights violations.


“In the UN, China’s influence is massive. They are so powerful there and more sophisticated than, say, the Russians, who are only really able to spoil things. They know how to work the system,” said a senior European diplomat.


The OHCHR mandate is conflicted. Some obligations, such as diplomacy, require working with member states. Others require the high commissioner to speak out on serious rights violations.


After the report was released, Bachelet said dialogue and engagement were about trying to build trust. “The politicisation of these serious human rights issues by some states did not help,” she said. “I appeal to the international community not to instrumentalise serious human rights issues for political ends.”


Marc Limon, executive director of the Universal Rights Group think-tank, said Bachelet had struggled to shift the OHCHR from the “campaigning and condemning” approach of her predecessor, Zeid Ra’ad Al Hussein, towards “engagement and diplomacy”.


China’s envoy to the UN said last Friday the report meant Beijing would not co-operate with the OHCHR. Incoming high commissioner Volker Türk inherits the rift and many in the Uyghur diaspora fear for the families still there.

The China-Russia alliance is pushing Ukraine toward Taiwan

By Josh Rogin

Columnist

September 14, 2022 at 10:41 a.m. EDT


Almost seven months into the Russia-Ukraine war, China is still claiming to be a neutral party, despite the evidence. And when Vladimir Putin meets Xi Jinping this week, the falsity of that claim will come into full and dramatic view. China’s increasing support for Russia is driving some in Ukraine to push for closer cooperation with Taiwan, a fellow democracy under threat.


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The Ukrainian government has been careful to walk a fine line in its relations with Beijing and Taipei. Even though Xi and Putin pledged a partnership with “no limits” when they last met in February, the idea that Ukraine should develop closer ties with Taipei has been controversial in Kyiv. Now, a leading Ukrainian lawmaker is publicly calling for just that, arguing it’s in the interest of both democracies. And what’s more, he’s right.


Oleksandr Merezhko, the chairman of the Ukrainian parliament’s foreign affairs committee and a member of the ruling party, told me in an interview that although Beijing is not directly supplying weapons to Russia, Beijing is aiding Moscow’s war effort in many ways. China, he said, is helping Russia evade sanctions; purchasing Russian food, energy and gold; and promoting Russian disinformation about Ukraine through its state-run propaganda machine. Given that, Beijing’s offer to be a peace mediator is a nonstarter.

“I view China as an ally of Russia, an ally of the enemy. They are not neutral,” Merezhko told me. “They are working in support of Russia. How can they be honest brokers? I don’t see it.”


The Ukrainian government’s resistance to calling out Beijing and explicitly embracing Taiwan is understandable. China remains Ukraine’s largest trading partner, and Beijing often uses economic coercion to punish countries that move closer to Taiwan. But the usefulness of that policy is now outweighed by the need for Ukraine and Taiwan to work together, Merezhko told me.


In Kyiv, Merezhko has started a Taiwan friendship caucus for Ukrainian lawmakers, prompting complaints and pressure from the Chinese Embassy there. That’s the least Ukraine can do, he said, considering how much Taiwan has supported Ukraine since the war began. Taipei has applied sanctions against Russia and provided Ukraine with money, food and medical supplies.

Some Ukrainian leaders fear that China could begin to arm Russia if Kyiv moves closer to Taiwan, but Merezhko said that that fear is misplaced. Beijing is restrained by the threat of U.S. sanctions, not because it is militarily neutral. In fact, more than 2,000 Chinese troops are training with the Russian military right now.


Also, several other European countries maintain relations with both China and Taiwan, he pointed out, so why should Ukraine (as an aspiring European Union member) be any different? Ukraine can’t claim to be fighting to defend global democracy but then leave Taiwan to be preyed on, he said.


“If you don't stand up for democracy when it is threatened in other countries, eventually all democracies will lose,” he said. “We should stick together.”


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Merezhko is in Washington this week for the first U.S.-based summit of the Inter-Parliamentary Alliance on China, a grouping of international lawmakers who want to coordinate the democratic world’s response to China’s rise. Senate Foreign Relations Committee Chairman Robert Menendez (D-N.J.) and Sen. Marco Rubio (R-Fla.) are Congress’s top representatives to the group.

Menendez and Rubio are supporters of the Taiwan Policy Act, a new bill meant to bolster U.S. diplomatic and military support for Taiwan. The Biden administration is reportedly concerned that the legislation could inflame already tense relations between Washington and Beijing. But Rubio said time is running out to save Taiwan from a brutal attack that will have global reverberations.


“If the Chinese Communist Party is successful in subjecting the people of Taiwan to living under tyranny, it will be a moment that will steer the course of human events for generations,” he said at the summit.


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While in Washington, Merezhko is also trying to convince U.S. policymakers that Ukraine should be provided with greater numbers of advanced weapons, especially considering the remarkable success of the Ukrainian army’s current counteroffensive. Congress is about to consider a spending bill that would include a new Ukraine aid package totaling $13.7 billion. Some GOP lawmakers and political groups have expressed concerns about the funding.

“We have proved that we cannot only survive, but we can defeat the enemy. But we need more support,” Merezhko said. “We are very grateful. We are alive because of your support. But please give us more heavy weaponry.”


National security adviser Jake Sullivan told the Aspen Security Forum in July that giving Ukraine additional advanced weapons could further provoke Putin and spark World War III. Merezhko rejected that argument, calling it a Russian narrative meant to stop the West from helping Ukraine more.


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“World War III has already started; it’s just that it has taken hybrid forms,” he told me. “We are already in this global war between democracies and authoritarian regimes.”


As the authoritarian bloc organizes against the West, the democratic side can’t afford to straddle the fence between China and Taiwan. Ukraine is moving slowly but surely to recognize and treat Taiwan as the ally that it is. All other democracies should follow suit.

Market meltdown is an ominous sign for interest rates

Stephen Bartholomeusz

One glance at the reaction of financial markets and it was instantly obvious that the US August inflation numbers were not what the markets expected or wanted.


The US sharemarket plunged 4.3 per cent – its biggest fall since June 2020 in the earliest days of the pandemic – and interest rates in the bond market shot up. The yield on 10-year bonds rose six basis points to 3.42 per cent and two-year Treasury note yields 19 basis points to 3.76 per cent. The two-year yields are now at their highest level since October 2007.


Wall Street plunged after the release of the inflation data.

Wall Street plunged after the release of the inflation data.CREDIT:AP


Expectations in the market in the lead up to the release of the data had been quite optimistic, drawing on some positive recent economic data to believe that the inflation rate in the US, while still high, had peaked and was subsiding and therefore the moment when the US Federal Reserve ended this cycle of rising rates was not that far distant. The data dashed those hopes.


Headline inflation of 8.3 per cent was 10 basis points higher than in July, albeit 20 basis points lower than the 8.5 per cent posted in August last year. The core inflation rate, which strips out some of the more volatile inputs like fuel and food costs, rose 0.6 per cent from July and was 6.3 per cent higher than a year earlier – a 40-year high.

Those aren’t data points consistent with a peaking of inflation and the headline number is actually worse than it looks given that the oil price – and fuel prices in the US – have fallen quite materially. In August, fuel prices were 10 per cent lower than in July.


Its rents, food and healthcare costs are rising aggressively, along with wages that are increasing in a very tight labour market (albeit not at the rate of inflation). It is the breadth of the increases as much as the overall rate that is disturbing.

US stock market takes major dip 

Where, ahead of the release of the data, most in the market were confident that the Federal Reserve Board’s next rate rise would be 50 basis points, the disclosure of stubbornly persistent inflation caused an immediate reappraisal.


There is now an expectation that, when the Fed’s Open Market Committee meets next week, it will raise the federal funds rate by 75 basis points, its third consecutive outsized move, with the odds on an ultra-aggressive 100 basis point hike rising to more than one in three.


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Stephen Bartholomeusz

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There is a strong argument for that larger move and for further (perhaps not quite as large) rises at the remaining committee meetings in November and December.


The Fed needs to get ahead of expectations and make a significant dent in consumer and investor confidence – and probably economic growth in the process – if it is to drive the inflation rate down. It is also probably going to have to keep raising rates faster and further than it might itself have envisaged.

Where those in the markets saw rates peaking either late this year or early next year around 4 per cent, it now looks likely that peak will occur well into next year and solidly above 4 per cent, although this is, of course, a volatile environment.


The data, self-evidently, wasn’t good news for investors in either equities or bonds in what has been a horrible year thus far for investors.


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Guidance, not a promise. RBA Governor Philip Lowe’s prediction for interest rates wasn’t quite on the money.

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No rate rises until 2024? Behind the RBA’s ‘best guess’

Jessica Irvine

Jessica Irvine

Senior economics writer


The US sharemarket is down about 18 per cent this year and bond market investors are experiencing their first bear market in decades. Worst-hit have been investors in technology and other high-earnings multiple stocks, with the tech-laden Nasdaq index down 5.2 per cent in response to the inflation numbers and now down 27 per cent from its peak late last year.


The data, and the Fed’s likely response, is also ominous for markets and economies outside the US given that the Fed’s chairman, Jerome Powell, has made it clear that the Fed will be driven by the data and do what it takes to bring inflation under control.

Not only does the US Treasury market act as a benchmark for all other bond markets but rate differentials between the US and other economies drive currency movements.


As the Fed has moved faster and harder than the other major banks this year, the US dollar has strengthened almost 15 per cent against the basket of its major trading partners’ currencies. If they want to avoid destabilising capital outflows and depreciation of their own currencies (and higher inflation as a result) other central banks are under increasing pressure to emulate the Fed.


The strengthening of the dollar has particularly unpleasant impacts of economies that need to import commodities (most of which are priced in US dollars) and which have high levels of US dollar-denominated debt.


The Fed is struggling to rein in US inflation. 

The Fed is struggling to rein in US inflation. CREDIT:AP


Those are generally the emerging market economies, although the energy crisis in Europe and Europe’s mad scramble to secure supply at any price to replace gas that used to flow from Russia means the eurozone, too, will now be under even greater pressure.

While the European Central Bank recently increased its policy rate by a record 75 basis points, at 1.25 per cent the ECB is well behind where the Fed is today let alone where it might be next week and is in the uncomfortable position of knowing it has to raise rates to kill of surging eurozone inflation rates and avoid being crushed by dollar strength even as the zone heads almost inexorably towards recession.


The Reserve Bank doesn’t confront the ECB’s challenges but it has always been very conscious of the implications of the Fed’s decisions for the value of the Australian dollar and the flow-on effects of currency weakness on inflation and growth.


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A surging US dollar risks rattling the global economy

Mohamed A. El-Erian

The only brighter spots in the macro settings are the falls in oil prices – the price is now down below $US94 a barrel from a peak earlier in the year of almost $US130 a barrel and OPEC is cutting rather than increasing supply – and signs that the disruptions to global supply chains that have bedevilled the global economy and played a major role in igniting the breakout of global inflation are gradually disappearing.


Those positives, however, only serve to stress how challenging and stubborn the current high-inflation environment is and make it more likely than not that central banks will be forced into far more aggressive action than they, or those in the market, were anticipating even in the days leading up to the latest release.

 Tik Tok May Be More Dangerous Than It Looks

Ezra Klein

By Ezra Klein


Opinion Columnist


At the core of the frenzied interest in Elon Musk’s acquisition of Twitter is an intuition that I think is right: The major social media platforms are, in some hard-to-define way, essential to modern life. Call them town squares. Call them infrastructure. They exist in some nether region between public utility and private concern. They are too important to entrust to billionaires and businesses, but that makes them too dangerous to hand over to governments. We have not yet found a satisfying answer to the problem of their ownership and governance. But some arrangements are more worrying than others. There are fates worse than Musk.


TikTok, as we know it today, is only a few years old. But its growth is like nothing we’ve seen before. In 2021, it had more active users than Twitter, more U.S. watch minutes than YouTube, more app downloads than Facebook, more site visits than Google. The app is best known for viral dance trends, but there was a time when Twitter was 140-character updates about lunch orders and Facebook was restricted to elite universities. Things change. Perhaps they have already changed. A few weeks ago, I gave a lecture at a Presbyterian college in South Carolina, and asked some of the students where they liked to get their news. Almost every one said TikTok.


TikTok is owned by ByteDance, a Chinese company. And Chinese companies are vulnerable to the whims and the will of the Chinese government. There is no possible ambiguity on this point: The Chinese Communist Party spent much of the last year cracking down on its tech sector. They made a particular example out of Jack Ma, the high-flying founder of Alibaba. The message was unmistakable: Chief executives will act in accordance with party wishes or see their lives upended and their companies dismembered.


In August 2020, President Donald Trump signed an executive order insisting that TikTok sell itself to an American firm or be banned in the United States. By the fall, ByteDance was looking for a buyer, with Oracle and Walmart the likeliest suitors, but then Joe Biden won the election and the sale was shelved.


In June, Biden replaced Trump’s executive order, which was sloppily written and being successfully challenged in court, with one of his own. The problem, as Biden’s order defines it, is that apps like TikTok “can access and capture vast swaths of information from users, including United States persons’ personal information and proprietary business information. This data collection threatens to provide foreign adversaries with access to that information.”


Let’s call this the data espionage problem. Apps like TikTok collect data from users. That data could be valuable to foreign governments. That’s why the Army and Navy banned TikTok from soldiers’ work phones, and why Senator Josh Hawley wrote a bill to ban it on all government devices. 

TikTok is working on an answer: “Project Texas,” a plan to host data for U.S. customers on U.S. servers, and somehow restrict access by its parent company. But as Emily Baker-White of BuzzFeed News writes in an excellent report, “Project Texas appears to be primarily an exercise in geography, one that seems well positioned to address concerns about the Chinese government accessing Americans’ personal information. But it does not address other ways that China could weaponize the platform, like tweaking TikTok algorithms to increase exposure to divisive content, or adjusting the platform to seed or encourage disinformation campaigns.”


Let’s call this the manipulation problem. TikTok’s real power isn’t over our data. It’s over what users watch and create. It’s over the opaque algorithm that governs what gets seen and what doesn’t.


TikTok has been thick with videos backing the Russian narrative on the war in Ukraine. Media Matters, for instance, tracked an apparently coordinated campaign driven by 186 Russian TikTok influencers who normally post beauty tips, prank videos and fluff. And we know that China has been amplifying Russian propaganda worldwide. How comfortable are we with not knowing whether the Chinese Communist Party decided to weigh in on how the algorithm treats these videos? How comfortable will we be with a similar situation in five years, when TikTok is even more entrenched in the lives of Americans, and the company has freedom it may not feel today to operate as it pleases?

Imagine a world in which the United States has a contested presidential election, as it did in 2020 (to say nothing of 2000). If one candidate was friendlier to Chinese interests, might the Chinese Communist Party insist that ByteDance give a nudge to content favoring that candidate? Or if they wanted to weaken America rather than shape the outcome, maybe TikTok begins serving up more and more videos with election conspiracies, sowing chaos at a moment when the country is near fracture.


None of this is far-fetched. We know that TikTok’s content moderation guidelines clamped down on videos and topics at the Chinese government’s behest, though it says its rules have changed since then. We know that other foreign countries — Russia comes to mind — have used American social networks to drive division and doubt.


It is telling that China sees such dangers as obvious enough to have built a firewall against them internally: They’ve banned Facebook and Google and Twitter and, yes, TikTok. ByteDance has had to manage a different version of the app, known as Douyin, for Chinese audiences, one that abides by the rules of Chinese censors. China has long seen these platforms as potential weapons. As China’s authoritarian turn continues, and as relations between our countries worsen, it is not far-fetched to suspect they might do unto us what they have always feared we would do unto them.

“No analogies are perfect, but the closest analogy I can think of is to imagine if the Brezhnev-era Soviet Union had decided to plow some of its oil export profits into buying up broadcast television stations across the U.S.,” my former colleague Matthew Yglesias wrote in his newsletter, Slow Boring. “The F.C.C. wouldn’t have let them. And if the F.C.C. for some reason did let them, the Commerce Department would have blocked it. And if a judge said the Commerce Department was wrong and control over the information ecosystem didn’t meet the relevant national security standard, Congress would have passed a new law.”


As analogies go, I think that’s a good starting point. But if the Soviet Union had bought up local television stations across the nation, we’d know they had done it, and there’d be an understanding of what those stations were, and what they were attempting, just as was true with Russia Today. The propaganda would be known as propaganda.


TikTok’s billion users don’t think they’re looking at a Chinese government propaganda operation because, for the most part, they’re not. They’re watching makeup tutorials and recipes and lip sync videos and funny dances. But that would make it all the more powerful a propaganda outlet, if deployed. And because each TikTok feed is different, we have no real way of knowing what people are seeing. It would be trivially easy to use it to shape or distort public opinion, and to do so quietly, perhaps untraceably.

In all of this, I’m suggesting a simple principle, albeit one that will not be simple to apply: Our collective attention is important. Whoever (or whatever) controls our attention controls, to a large degree, our future. The social media platforms that hold and shape our attention need to be governed in the public interest. That means knowing who’s truly running them and how they’re running them.


I’m not sure which of the social network owners currently clear that bar. But I’m certain ByteDance doesn’t. On this, Donald Trump was right, and the Biden administration should finish what he started.