China says it wants peace in Ukraine, but is it only on Russia’s terms?

Simone McCarthy

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China’s envoy for the war in Ukraine ended a nearly two-week tour through Europe with a stop in Moscow on Friday, closing out a mission that served as a key test of Beijing’s bid to broker an end to the spiraling conflict.

Beijing’s stated interest in promoting communication toward resolving the conflict has been tentatively welcomed in Europe, where Chinese special representative Li Hui met with officials in Ukraine, Poland, France, Germany, and the European Union headquarters in Brussels in a tour starting May 16.

But Li’s trip has also laid bare the divisions between China and Europe when it comes to how peace can be reached — and served to underline Beijing’s close alignment with Moscow.

Li received a warm reception during his final stop in the Russian capital — where he previously spent a decade as China’s ambassador, with Foreign Minister Sergey Lavrov on Friday praising Beijing’s “balanced position” on the war and readiness to play a “positive role” in its settlement.

But across Europe, officials stressed a different point — the need for a peace that sees Russia withdraw its invading troops and Ukraine’s legal territory restored — and their interest in seeing China throw its weight behind that vision, which it has yet to do.

Instead Li, according to readouts from Beijing, called for building “consensus” toward peace talks and strengthening Europe’s own “security architecture” — a veiled reference to China’s view that Europe should not protect itself through institutions like NATO, which include the United States but not Russia.

“The basic problem is that China does not want Russia or Putin to appear to have failed … (and) a settlement that requires Russia to relinquish territories taken in the invasion would be a defeat for Russia,” said Steve Tsang, director of the SOAS China Institute at the University of London.

Takshashila Position Paper - The China-Taiwan Saga

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Key Judgements

This Position Paper identifies the primary stressors in the China-Taiwan relations, and studies Taiwanese public opinion on cross-strait unification. Further, the paper debates the idea of ‘reunification by force’, and what India’s options are in the overall cross-strait dynamics. Finally, the paper speculates on some indicators that might be useful to potentially predict when China might be preparing to invade Taiwan. Our examination of these issues leads us to the following key judgements:

The China-Taiwan relationship continues to develop in a dynamic fashion, with the action-reaction cycle caused by recent events potentially threatening global stability.

Chinese policies to isolate Taiwan diplomatically, coerce it militarily and interfere in its domestic politics are eroding the status quo in cross-strait relations. American support for Taiwan, including through arms sales and show of force in the region, has further exacerbated tensions, with Beijing arguing that the US was crossing a red line. Taiwan has rapidly become a central issue in US-China strategic competition.

Taiwanese public opinion, meanwhile, is strongly against any alteration of the status quo, and does not favour unification with China any time soon. Taiwanese businesses too are looking to move their major operations out of the mainland. The space for creative solutions to preserve the status quo, however, is shrinking.

Even though China has not renounced the use of force, there is no indication that an invasion is imminent. In fact, “peaceful unification” is likely to remain Beijing’s preferred option. This is because the cost of conflict is likely to have severe consequences for China’s economic development goals, which require continued integration in global value chains and access to international capital, talent and markets. This is at the heart of Xi Jinping’s strategic goal of national rejuvenation.

Instability in the Taiwan Strait has direct implications for Indian interests. India must publicly call for the maintenance of peace and stability and its opposition to the alteration of status quo in the Taiwan Strait. At the same time, India must mobilise developing countries to do the same, as they too would be among the most impacted by disruptions owing to heightened tensions and/or conflict.

India should also expand its economic and maritime partnership with the island of Taiwan and countries in the region, without basing such a partnership on an anti-China sentiment.

The Brewing Crisis on Iran’s Northern Flank

Kamran Bokhari

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Astrategic storm is brewing on the frontier of the South Caucasus and the northern rim of the Middle East. It involves the cross-border ethnic Azerbaijani population that forms a majority in Azerbaijan and is the largest minority group in Iran. Baku’s victory in the 2020 Nagorno-Karabakh conflict with Armenia, resulting in Azerbaijan having a much longer border with Iran, and the unrest accelerating regime evolution in the Islamic Republic could create a crisis on Iran’s northern flank. Tehran is facing a significant challenge from its ethnic Azerbaijani citizenry which it discriminated against for decades.

Baku-Teheran relations are at a nadir after a gunman murdered the security chief of Azerbaijan’s embassy in Tehran in January. Tit-for-tat followed. Iran expelled four Azerbaijani diplomats on May 5, which itself was in response to Baku’s April 6 move to expel four Iranian diplomats in retaliation for the March 29 assassination attempt on one of its prominent lawmakers, Fazil Mustafa. Tensions between the two countries experienced another spike in the wake of the March 29 opening of Azerbaijan’s embassy in Tel Aviv. Days after Israeli foreign minister Eli Cohen’s April 19 visit to Baku, thirty-two Israeli lawmakers sent a letter to Cohen’s office expressing support for Iran’s ethnic Azerbaijani minority. Coincidentally, on April 20, Israel opened its embassy in Turkmenistan.

That last data point is noteworthy. Having made significant inroads in the Arab world, with Syria, Lebanon, and Gaza serving as a launchpad for its operations against Israel, Iran is now increasingly worried about what it perceives is a growing Israeli presence on its northern flank. This is in addition to the fact that its historic Sunni Muslim competitor, Turkey, has also made major inroads into the Trans-Caspian region, where Ankara is trying to create a strategic Turkic corridor.

For the longest time, Tehran took comfort from the fact that its regional ally Armenia served as a check on Azerbaijan, and Russia managed the balance of power in the South Caucasus. Turkey’s increasing influence in what was a Russian sphere of influence since 2020, followed by the Kremlin’s military and economic weakening in the aftermath of its 2022 war on Ukraine, is a cause of major concern for Iran.

Historically, much of the South Caucasus, along with parts of Dagestan in the North Caucasus, was under Persian control and was lost to the Russians in the early 1800s. Iran’s northern borders were established in three treaties with Moscow throughout much of the nineteenth century. For the better part of the twentieth century, Iran’s pro-Western Pahlavi monarchy represented a frontline state straddling the Soviet Union. Even after the ouster of the monarchy in 1979 and the establishment of the Islamist regime, Tehran was in no position to try and regain influence in the South Caucasus.

Ukrainian Sabotage Operations Could Spell Increased Confrontation Between Russian Special Services

Ksenia Kirillova

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In an attempt to resist increasingly significant Ukrainian sabotage operations, the Russian special services may shift to a new and bloodier round of interagency competition.

Recent months have shown that Ukraine has had ever-more success with sabotage and partisan operations in the enemy’s rear (see EDM, May 16). Not only Russian propagandists but also security experts admit that they are unable to cope with the new threats and lack the capability to prevent them. At a time when religious leaders are calling for maximum mobilization for victory and for a rejection of the Internet because it is “enemy territory” and an instrument for the recruitment of Russians (YouTube, May 14), military leaders want to re-create SMERSH, the repressive Soviet counterintelligence organization.

SMERSH can be translated as “death to spies” and was created under the NKVD (People’s Commissariat for Internal Affairs) during World War II. Today, authors of the Military Review website, which is close to the Russian Ministry of Defense, suggest resurrecting something similar to check not only potential dissidents but also people returning from abroad, among whom, in the opinion of the authors, are many “recruited and trained saboteurs” (Topwar.ru, May 14). Besides this, the Russian military suggests using the new SMERSH for the filtration of people into the occupied territories of Ukraine.

In this regard, they do not recommend the creation of a new structure, but rather the expansion of the powers of those already in existence, for example SOBR (Special Rapid Response Unit) Spetsnaz as part of the Ministry of Internal Affairs, as well as the counterintelligence and intelligence activities of the Russian Federal Security Service (FSB), Ministry of Defense and National Guard (Rosgvardiya). All these entities, the authors say, should use “the methods of [Pavel] Sudoplatov,” that is “destroy saboteurs in enemy territory” (Topwar.ru, May 14).

In essence, much of what the military analysts propose already exists in practice. In particular, Russian special services researchers note that, since the beginning of the war, the FSB has become significantly militarized and is actively involved in the torture and interrogation of Ukrainians in filtration camps (Agentura.ru, February 28).

Sudan’s Fratricidal Conflict: An Assessment of SAF and RSF Strategies and Tactics

Andrew McGregor

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The ongoing conflict in Sudan pits two very different wings of the Sudanese military in a struggle to control a population that would largely prefer democratic civilian rule over domination by either force after decades of political and economic stagnation under military rule. Differences in ethnic composition, training, and weapons have compelled the Sudanese Armed Forces (SAF, led by General Abd al-Fatah al-Burhan) and the rival Rapid Support Forces paramilitary (RSF, led by General Muhammad Hamdan Daglo “Hemetti”) to adopt different strategies and tactics in their search for victory (see Terrorism Monitor, April 28). Although Sudan is the third-largest nation in Africa, with an area of nearly 720,000 square miles, the main battleground between SAF and RSF is the tri-city area of Khartoum, Omdurman, and industrial Khartoum North (or Bahri), which poses a problem for the combatants.

Troublesome Terrain

Neither the SAF nor the RSF have much experience in urban warfare. Sudanese warfare is combat in the desert, the bush, and the mountains. The last sieges of Sudanese cities occurred in the Mahdist campaigns of 1881-1885. Since then, the only fighting carried out in Khartoum consists of a couple of very brief mutinies during Anglo-Egyptian rule, a failed 1976 Libyan-backed coup attempt that killed 800 people, and a day of combat (mostly in northern Omdurman) when Darfuri rebels stormed the city in 2008 (Sudan Tribune, June 20, 2008).

Initially intended to operate in the great open spaces of Sudan and remote borders of strategic significance, the RSF’s main operational equipment consists of so-called “technicals,” which are open-bed 4x4s (the Toyota Hilux is preferred) armed with a 50-caliber machine gun. Though intended for use in the desert, the technicals are nimbler in urban warfare than the SAF’s armor. The RSF began with no armor of its own, but has captured much since, including Ukrainian-made tanks, though it does not have the trained crews needed to operate this armor. [1]

Super-K: The myth of Henry Kissinger

MARIO DEL PERO

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Henry Kissinger will turn 100 tomorrow — a remarkable feat, and one among his many. Kissinger’s longevity seems to validate the very popular and quasi-supernatural representation of him: the mystic image of “super-K” of a famous 1974 Newsweek cover — in blue tights and red mantel — ready to save the world, one diplomatic move at the time.

The old sage of world politics still gives interviews and, from time to time, writes oracular op-eds, which foreign policy buffs peruse hoping to dissipate the thick fogs of global politics (or to impress their friends at the dinner table). He remains the object of the never-ending interest, if not fascination, of legions of international relations scholars, pundits, journalists, and the informed public at large.

Expect in these days a deluge of commentaries on his centenary, the vast majority celebrating his unique acumen, erudition, and sophistication. A much smaller but not insignificant critical crowd will denounce him as an unscrupulous, authoritarian-inclined schemer, if not an outright war criminal.

Both the apologists and the detractors adhere to the idea that Kissinger was, and still is, an amoral but coherent realpolitiker. For the latter, he is a cynical and unprincipled champion of high-power politics, who has constantly justified and actively promoted its worst excesses. The former considers him the honest steward of the national interest, tutoring the public on the inescapable (and brutal) nature of the relations among nations, and exposing the inner naiveté — both dangerous and hypocritical — of human rights enthusiasts, democracy-promotion visionaries, and international law-primacy theorists.

But do we really find this coherence in Kissinger’s ponderings as an intellectual, in his actions as statesman and in his policy prescriptions as a much sought-after foreign policy guru? The answer can hardly be positive. In a career in the public domain that spans seven decades, Kissinger has often followed the political and intellectual vogues of the time more than challenged them. He has adapted — in his works, ideas, and proposals — to these vogues more than he has shaped them.

Bakhmut and the Ukrainian path to victory

JONATHAN SWEET

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For the last 11 months, Russian President Vladimir Putin pressed Wagner Group CEO Yevgeny Prigozhin and General Valery Gerasimov to bring home a win in time for the May 9 Victory Parade in Moscow. That win was supposed to be the capture of Bakhmut.

When they failed, Prigozhin cast blame on the Kremlin. Putin was forced to turn to Chechen leader Ramzan Kadyrov and to his own Main Intelligence Directorate of the Armed Forces of the Russian Federation, to deploy more manpower near to the border and inside Ukraine.

Putin’s obsession with Bakhmut bears some semblance to the 1998 American romantic comedy There’s Something About Mary. Much like the obsession that movie’s male characters had for Cameron Diaz, Putin, his Defense Minister Sergei Shoigu, Gerasimov, Prigozhin, and Kadyrov share a similar obsession with Bakhmut. They have been willing to send tens of thousands of soldiers and mercenaries to their deaths to capture a city of little strategic value. Putin and his disciples simply cannot escape the lure of pride and ego.

There is something about Bakhmut though, that once-quaint little salt mining city in eastern Ukraine. Whether it’s the riches of the natural resources that lay beneath its surface, the best chance at a win and perceived pathway to victory, or a simple hatred of the Ukrainian people — it has become the focal point of the war. Currently, as Ukrainian President Volodymyr Zelensky described the city while attending the G7 Summit, Bakhmut looks more like ground zero in Hiroshima after an atomic bomb destroyed the city during World War II. The old Bakhmut is gone, prompting Zelensky to say, “today Bakhmut is only in our hearts.” Gone, but not forgotten, for Zelensky has vowed to rebuild the city, “Now Hiroshima has rebuilt their city, and we dream of rebuilding our cities.” In time.

Despite Prigozhin’s claim on May 20 that once again Bakhmut had fallen, as he stood in front of the ruins of the city’s train station alongside his band of mercenaries, the battles continue to rage around the city and throughout the Donetsk Oblast. Occupying an abandoned and destroyed city is not winning; rather, it is simply presenting oneself as a target. Russian unity of command has long since been broken, and Prigozhin cannot be assured that Shoigu, Gerasimov and Kadyrov will come to his defense, should Ukraine launch a counterattack to re-capture the city.

U.S.’s political madness takes place against a backdrop of astonishing strength

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The United States’ debt ceiling crisis is, once again, provoking the usual commentary about the country’s presumed dysfunction. But the truth is that this unprovoked madness, causing self-inflicted wounds, is taking place against a backdrop of astonishing strength.

The facts cannot be disputed. The United States has recovered from the coronavirus pandemic faster than any major economy in the world. As Bloomberg’s Matthew A. Winkler recently pointed out, unemployment is stunningly low. Gross domestic product growth has grown at three times the average pace as under President Donald Trump, real incomes are rising, manufacturing is booming, and inflation has eased for 10 straight months. Even the budget deficit, which was at 15.6 percent of GDP at the end of the Trump presidency, has dropped to 5.5 percent of GDP at the end of last year.

Russia's economy is at China's mercy. Here's why that won't be changing anytime soon.

JENNIFER SOR

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Russia's economy is becoming dependent on China and it could soon be a vassal state of Beijing, experts say.

The two nations have ramped up trade and deepened ties as sanctions isolate Russia from the West.

Russia's economy has been battered by Western sanctions since its invasion of Ukraine last year – and that's putting it increasingly at the mercy of one of its biggest partners: China.

Observers have pointed to Moscow's growing dependence on Beijing for months, with their two economies becoming more intertwined in trade and finance as Russia becomes further isolated. But it isn't an equal partnership, and Russia may be on its way to becoming a vassal state of China.

That assessment comes from French President Emmanuel Macron, and even sources close to the Kremlin have said that Russia is destined to become a Chinese resource colony. While Russian officials dispute that characterization, experts say it has merit.

"To me, Russia is not [a vassal] yet with China, but it's clearly headed there," Jay Zagorsky, a markets professor at Boston University told Insider, pointing to Russia's growing reliance on China as a trade partner. Russia has predicted trade volume with China will notch a new record of $200 billion this year, and other statistics show that Russia will export around 26% of its goods to China, Zagorsky said. That's double the amount before the Ukraine war, when Russia exported only 13% of its goods.

Zagorsky predicts that Russia would be considered a vassal state once imports and exports to and from China reach 50% – making it so reliant on Chinese trade that its foreign interests would be dominated by those of China.

"If China cuts them off, they're like, the west has already cut us off. [They're] basically at the mercy of China. And when you're at the mercy of somebody, they have control over you," he said.

Russia-Ukraine WarAnti-Kremlin Group Involved in Border Raid Is Led by a Neo-Nazi

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A group of fighters aligned with Ukraine, who had participated earlier this week in the most intense fighting inside Russia’s borders since the invasion, gathered the foreign and local press in an undisclosed location on Wednesday to celebrate, to taunt the Kremlin and to show off what they called “military trophies” from their incursion into their native land: Russia.

Their leader, Denis Kapustin, was proud that his force of anti-Putin Russians at one point controlled, he said, 42 square kilometers, or 16 square miles, of Russian territory.

“I want to prove that it’s possible to fight against a tyrant,” he said. “That Putin’s power is not unlimited, that the security services can beat, control and torture the unarmed. But as soon as they meet a full armed resistance, they flee.”

It was the rhetoric of a dissident freedom fighter, but there was a discordant note that emerged as clearly as the neo-Nazi Black Sun patch on the uniform of one of the soldiers: Mr. Kapustin and prominent members of the armed group he leads, the Russian Volunteer Corps, openly espouse far-right views. In fact, German officials and humanitarian groups, including the Anti-Defamation League, have identified Mr. Kapustin as a neo-Nazi.

Mr. Kapustin, who has long used the alias Denis Nikitin but typically goes by his military call sign, White Rex, is a Russian citizen who moved to Germany in the early 2000s. He associated with a group of violent soccer fans and later became, “one of the most influential activists” in a neo-Nazi splinter group in the mixed-martial-arts scene, officials in the German state of North Rhine-Westphalia have said.

Mr. Kapustin has reportedly been banned from entering Europe’s visa-free, 27-country Schengen zone, but he has said only that Germany canceled his residency permit.

Storm Shadow Disappoints, Ukraine’s Counter-Offensive Sputters As Russian Jets Decimate Zelensky’s Troops

Vijainder K Thakur

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Ukraine’s much-hyped counteroffensive appears to be sputtering, if not already dead, under relentless Russian pounding of Ukrainian weapons and ammunition stockpiles; and troop staging points.

For the counteroffensive to succeed, what is happening to Ukrainian forces should have been happening to Russian forces.

The Russian Aerospace Force (RuAF) has displayed good judgment and dexterity in the use of their resources – striking sprawling industrial facilities with Geran-2 kamikaze drones while using air/sea-launched low observable Kh-101 and Kalibr cruise missiles for pinpoint attacks.

When there is a need to punch hard, Russian forces strike with Onyx (BrahMos analog) supersonic missiles or Iskander-M quasi-ballistic missiles using land-based mobile launchers. All the while, Russian decoy drones force Ukrainian AD systems to wastefully expend their ammunition.

Missing The Kherson Magic

Ukraine’s counteroffensive should have started with fierce strikes against Russian logistics facilities, as was the case when Ukraine successfully forced Russian forces to retreat from the right side of the Dnieper River in the Kherson sector in the Autumn of 2022.

On that occasion, Ukrainian forces brilliantly used US-supplied HIMARS MLRS systems to choke Russian supply routes to an extent where it became untenable for Russia to continue supporting its forces on the right bank.

Unfortunately for Ukraine, following the withdrawal of Russian forces from the Dnieper right bank, the wily Russian military leadership reconfigured the deployment of their forces, storage depots, and Air Defence (AD) in a manner that greatly reduced the destructive potential of the 80 km range of HIMARS rockets.

The Coming Air War: Ukraine's F-16s vs. Russia's Su-27, MiG-29 & Su-35

KRIS OSBORN

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(Washington DC) Export variants of the combat-tested allied variants of the US F-16 fighter jets are at last “on the way” to Ukraine, an extremely significant development likely to greatly impact the strategic, tactical and combat dynamics in the ongoing war.

Many months ago, Deputy Secretary of Defense for Policy Colin Kahl made it clear that Western fighter jets were not “off the table,” and sure enough that is happening now. This is not a moment to soon for supporters of Ukraine, and a Pentagon report says the decision to deliver European F-16 received unanimous international support

"That training will take place outside of Ukraine at sites in Europe," DoD Press Secretary Air Force Brig. Gen. Pat Ryder said May 23 Pentagon report on the F-16s. "But in terms of ... when that training will begin, how those jets will be provided, who will provide them, we're continuing to work with our international partners on that front."

As for the decision to support the arrival of European F-16s, Ryder said US Defense Secretary Lloyd Austin responded to ongoing request from Ukraine and its Eastern European allies at the most recent multi-national Ukraine Defense Contact Group.

"He (Autsin) subsequently took that matter, introduced it into our national security council policy process as part of a conversation about how we support Ukraine in the mid- to long-term in terms of their defense needs, and there was unanimous agreement that this was something that we should and need to support," Ryder said.

Ryder explained in further detail that the training, and any eventual transfer of F-16 aircraft to Ukraine is meant to support mid- and long-term defense needs, rather than defense in the short term for an expected counter-offensive against Russian forces.

"F-16s for Ukraine is about the long-term commitment to Ukraine," Ryder said. "These F-16s will not be relevant to the upcoming counter offensive."

While Ryder was unclear about timing, perhaps in part for security reasons, he was clear that allied F-16s will not support the upcoming, near-term Ukrainian counteroffensive.

US DoD to maximise cyber capabilities through 2023 Cyber Strategy

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The US Department of Defense (DoD) has announced the new classified 2023 DoD Cyber Strategy to further advance the defence priorities of the nation.

The DoD transmitted this strategy to the US government last week.

The department will also launch an unclassified summary of this strategy in the upcoming months.

The new strategy supports 2023 National Cybersecurity Strategy and is a part of the 2022 National Security Strategy (NSS) and the 2022 National Defense Strategy (NDS).

It aims to operationalise the concepts and defence objectives for cyberspace specified under the 2022 NDS.

Besides, this strategy builds on the 2018 DoD Cyber Strategy and draws learnings from the years of real-world instances, such as the Russia’s invasion of Ukraine last year.

All such real-world experiences will help the DoD to understand the significance of boosting cyber capabilities to counter large-scale, conventional conflicts.

Under the 2023 Cyber Strategy, the DoD has decided to maximise cyber capabilities to support integrated deterrence and to campaign in/through cyberspace “below the level of armed conflicts”.

The department will further identify the US’ international allies and partners network to register its foundational advantage in the cyber domain.

The strategy includes four main line of efforts for the US DoD to meet the existing and future requirements of the cyber adversaries.

The first effort is ‘Defend the Nation’ campaign that will help in creating insights about ‘malicious cyber actors’ to further deter and degrade their capabilities and ecosystem.

Ukraine’s Big Spring Counteroffensive: Is It Happening Or Not?

James Holmes

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That it’s springtime in the Black Sea is not enough reason to go on the march. Military reality—not the passing of the seasons—has to prevail in Ukrainian decisionmaking circles. And maybe it is prevailing.

Ukraine's military firing artillery. Image Credit: Creative Commons.

Russia is running out of missiles; Russia is lobbing missiles en masse to pummel sites in Ukraine.

Russia is tottering and about to implode; a wily Russia is using the war to exhaust NATO arms stockpiles, defeating the Atlantic Alliance without direct fighting. And then there’s the impending Ukrainian spring counteroffensive.

Several thoughts come to mind. Look at the question through the lens of surprise. Surprise is a principle of war, although the greats of the strategic canon differ on its efficacy. For the ancient Chinese warrior-scribe Sun Tzu, deception and surprise constitute the essence of effective and efficient warmaking. They dislocate a foe’s efforts, making it a straightforward matter for the field general with an astute sense of timing to strike—breaking the foe’s back like a hawk felling its prey.

Carl von Clausewitz, the sage of Prussia, is less sanguine than his Asian forbear about such oblique measures. He pronounces strategic surprise—the proverbial bolt from the blue that stuns an enemy—desirable but unrealistic in modern warfare. By contrast, he deems efforts to spring a tactical surprise worthwhile, but he sees them as indecisive. Clausewitz tenders the verdict that such stratagems are seldom “outstandingly successful.”

To the extent they have the classics on their mind, Ukrainian political and military chieftains seem to be in Clausewitzian mode rather than hewing to Sun Tzu. If Kiev is contemplating a strategic surprise, it has handled things in the clumsiest manner possible. It has done little to pooh-pooh the notion that an offensive is coming. It’s the most open of open secrets. In fact, Ukrainian leaders have used the upcoming offensive as leverage to keep Western armaments and supplies flowing.

Is the Dollar Still King? Yes.

Nazar Mohamed

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The global financial landscape has long been shaped by the supremacy of the U.S. dollar. Yet, in the wake of western sanctions against Russia and economic uncertainty in the U.S., emerging markets are increasingly motivated to reduce their reliance on the dollar and explore avenues for financial independence. This plan, led by the so-called BRICS countries – Brazil, Russia, India, China, and South Africa – is well-intentioned but is not the right answer.

BRICS countries increasingly clamor to challenge the dollar's dominant role as the world’s reserve currency. The reserve currency is held in great quantities by Central Banks and is used by financial institutions for international trade. Until World War II, the British pound served as the reserve currency. Since then, the U.S. dollar has.

Russian leader Vladimir Putin said last June that the BRICS countries are developing a new reserve currency for member countries. Brazil’s president, Luiz Inácio Lula da Silva, also expressed support for a common currency. China, too, is in favor of challenging what its ministry of foreign affairs calls U.S. “dollar hegemony.” The group has announced their intention to discuss the matter at a late-August summit in Johannesburg.

Russia has already ramped up its use of the Chinese yuan to cope with the Western sanctions imposed on it. After Russia invaded Ukraine in February 2022, the G-7 group of nations retaliated with onerous economic punishments on Russia. That forced Moscow to seek alternatives to the dollar and euro. Some BRICs backers have floated ideas, such as expanding the use of the Chinese yuan in transaction settlements, but few have yet embraced as far-reaching a proposal as a common BRICS reserve currency.

That wouldn’t be easy to implement. The dollar’s dominance in the global market cannot be overstated. The dollar is the preferred currency of governments, accounting for about 60 percent of Central Bank reserves in late 2022 compared with the euro’s 20 percent and the Japanese yen’s six percent. The U.S. dollar is used in 84.3 percent of cross-border trade compared to the yuan’s 4.5 percent. The pound, the Chinese yuan, and the Canadian and Australian dollars represent less than five percent of government reserves. The dollar is also dominant, although less so, in private markets.

Facing Off With the West on Ukraine, Russia Reshapes World Order in Africa

TOM O'CONNOR 

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As the United States and Western allies seek to isolate Russia over its ongoing war in Ukraine, a senior Moscow diplomat tells Newsweek he is leading the charge to strengthen partnerships across Africa.

Washington has sought to expand its own influence across the continent, but a series of high-level interactions past and upcoming appear to show the Kremlin's campaign is gaining ground.

Oleg Ozerov, Russian ambassador-at-large and head of the Russia-Africa Partnership Forum, argues this is a reflection of vast changes in the international order.

"The world has entered an era of powerful transformations, which have influenced inter alia, Russian-African relations," Ozerov told Newsweek. "The pace of these developments has gained an unprecedented momentum."

A Russian flag hangs on the monument of the Russian instructors in Bangui, Central African Republic, on March 22, during a march in support of Russia and China's presence in the country. It's one of several African nations in which Western influence is being supplanted by security ties with Russia and economic links with China.

Specifically, Ozerov pointed to two major developments in Moscow demonstrating this trend this past March. The first was the Russia-Africa Interparliamentary Conference which drew representatives from 40 out of the 54 nations of the continent. The second was the visit paid by Chinese President Xi Jinping, who has intensified his own nation's decades-long focus on bolstering ties with Africa.

Ozerov said that these two events "shattered the myth of Russia's alleged isolation due to the events in Ukraine, persistently promoted in the West." When it comes to African officials, he said that "most of them did not need explanations as to the rationale of Russia's actions in Ukraine."

"People in Africa understand very well that the former Soviet republic has turned into an arena of confrontation between the new and the old world paradigms, between different visions of the future, not just a trivial feud between neighbors," he said.

A Surplus of Strategists—But A Lack of Good Strategy

Josh Kerbel Jake Sotiriadis

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If you happened to be waiting for your morning coffee at the Starbucks in the Pentagon, you might not be aware that you are surrounded by what is probably the world’s highest density of strategists. Every year, without fail, thousands of mid-level and senior military officers as well as their civilian counterparts will complete some form of professional education that prepares them to be strategists or emphasizes strategic thinking. But what is the true payoff of all the money the U.S. government spends on “strategic education” aside from all those fancy certificates on office walls in Washington DC? A quick look at the last two decades of American global strategy suggests strategic education may simply have become a rite of passage instead of something to be put into practice.

To be sure, every student who attends a strategic education program is undoubtedly familiar with Prussian military strategist Carl von Clausewitz, who famously wrote that “war is a continuation of politics by other means.” But it seems that two decades of American strategists have forgotten (or worse, never truly absorbed) Clausewitz’s prescient admonition that politicians and military commanders must “recognize the kind of war they are undertaking, neither mistaking it for, nor attempting to turn it into something it cannot be because of the nature of the circumstances.” Our track record certainly leaves much to be desired. Over the past twenty years, the $6 trillion Afghanistan and Iraq debacles were followed by more regime change in Libya, plunging that country into a civil war (and subsequent proxy war) that rages to this day. Western attempts to overthrow Syria’s Bashar al-Assad were blunted by Russian support, ensuring Assad remains firmly in control. American strategy failed to deter Russia from invading Georgia in 2008 or Ukraine in 2014 and again in 2022. Finally, the hawkish consensus emerging in Washington (i.e. a “New Cold War”?) that conflict with China is increasingly likely—if not inevitable—risks excessively securitizing every aspect of the U.S.-China relationship.

How did we get here? The United States, at least since industrialization, has won its wars (when it’s won them) through the overwhelming application of force and firepower. We have essentially churned out awe-inspiring amounts of war material that we brought directly to bear on clearly identified and traditional (nation-state) opponents who could not match or withstand it. While not necessarily pretty, it was effective. This highly linear approach (action “x” will lead to predictable/intended effect “y”) to warfare became our default strategic playbook.

Joe Biden wants a ‘new economic world order.’ It’s never looked more disordered.

GAVIN BADE

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U.S. Trade Representative Katherine Tai drove a nail into its coffin in January, telling the world’s one percent at Davos that the Biden administration would try to shape a “new economic world order” around protecting workers. And National Security Adviser Jake Sullivan sought to deliver last rites in April, promising the White House would forge a “new Washington consensus” to replace the one that had governed the globe for over a generation.

“I remain convinced that through all of this disruption we’re moving towards a new economic order,” Tai told POLITICO in an interview. “I’d really like to fill that gap with a positive vision that we will be prepared for it.”

The goal is to replace the old paradigms of globalization — free trade and a reliance on markets — with a “worker-centered” trade policy that raises wages not just for Americans, but around the world.

But building a new world economy is proving more difficult than eulogizing the old one. While the pro-globalization consensus has shown cracks for years — from the financial crisis to the election of former President Donald Trump — Biden’s team has struggled to outline how it will shape new rules and institutions to replace those that governed the world for the last half-century.

Biden’s team is moving slowly to transform a paralyzed World Trade Organization, once the premier facilitator of globalization, into a new-look economic club that reflects its progressive values. As those efforts crawl along, Biden has sought to forge new economic partnerships in Asia and Latin America, but the nascent efforts pale in comparison to China’s trillion-dollar infrastructure program for developing nations and risk replicating the corporate-friendly trade policies of the old system. Meanwhile, Biden’s quest to counter China’s technological growth risks sparking a new Cold War and dividing the world into two or more global trading blocs — a fate the White House insists it is trying to avoid.

The European Union’s Enlargement Conundrum

Max Bergmann , Otto Svendsen , and Sissy Martinez

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Membership in the European Union is critical for Ukraine’s reconstruction and future prosperity. A clear path to membership could serve as a catalyst for investment and growth given the European Union’s strong regulatory framework and history of economic integration. But the European Union is suffering from “enlargement fatigue” and has essentially slammed the door for new members. Incorporating Ukraine will likely also require the European Union to reform itself to enable greater decisionmaking flexibility, a new distribution of funds, and the ability to discipline member states for democratic backsliding and rule of law violations.

This report examines the question of Ukraine’s EU accession and explains why enlargement, seen as the European Union’s most successful policy, has stalled. It explores past examples of EU enlargement and what lessons can be learned for both Ukraine and the European Union. It also examines what role, if any, the United States can play in Ukraine’s potential accession. EU enlargement is critical, not just to Ukraine but to the Balkans and European security, and is therefore of paramount importance to the United States. While enlargement will always be an internal EU process, this report argues there are diplomatic, economic, and military steps the United States can take to help encourage the process from a distance.

This report is made possible by general support to CSIS. No direct sponsorship contributed to this report.

In Gold We Trust: Zimbabwe’s Gold-Backed Digital Currency

Arman Sidhu

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In response to economic instability and ongoing currency depreciation, Zimbabwe has recently launched a gold-backed digital currency. This innovative approach uses blockchain technology to issue tokens linked to the value of physical gold. The aim is to provide a reliable and secure value holder in a country suffering from frequent hyperinflation and a significantly depreciated local currency.

The situation in Zimbabwe carries substantial geoeconomics significance, demonstrating an effort to use digitization to combat economic instability. Zimbabwe’s decision is also emblematic of a trend among policymakers in supporting digital assets backed by tangible commodities to shore up public trust in the local currency.

In the late 2000s, Zimbabwe experienced a severe bout of hyperinflation that culminated with the suspension of the Zimbabwean dollar in 2009. During this period, a multi-currency system was introduced, and Zimbabweans saw their savings wiped out with severe shortages of basic goods and services. Nearly a decade later, Zimbabwe launched the real time gross settlement (RTGS) dollar, a move that was followed up with a ban on the US dollar to support adoption of the new currency. Nevertheless, efforts to revive public trust in the currency have faltered, leading to the current initiative of a gold-backed digital currency to combat depreciation and offer a stable, non-fiat alternative.

While the concept of a digital currency backed by gold sounds promising, doubts arise when considering Zimbabwe’s institutional weaknesses and its poor track record in restoring public faith in the government’s management of the economy. Zimbabwe’s political environment is fraught with challenges that pose obstacles to successful implementation and acceptance of the gold-backed digital currency. As demonstrated in the country’s experience with the reintroduction of the Zimbabwean dollar, the absence of reforms or policies tackling the underlying economic challenges, such as the government’s fiscal deficit, and lack of productive investment, suggests the new currency is unlikely to encourage scaled adoption.

It’s Time for the United States to Adopt a New Strategy to Combat Ransomware

Kyle Fendorf Natasha White

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Offensive cyber operations have become an increasingly large part of doctrine among Five Eyes members in recent years, as states have grappled with how to deal with the threat of state-backed hackers and increasingly capable ransomware groups. A recently released strategy from the UK National Cyber Force, or NCF, discusses how London is taking a new approach to conducting offensive cyber operations with a focus on disrupting information environments. This new strategy introduces what the NCF calls the “doctrine of cognitive effect,” aims to “change adversary behavior by exploiting their reliance on digital technology,” and conduct offensive cyber operations with the goal of limiting an adversary’s ability to collect, distribute, or trust information.

As the FBI and other U.S. agencies seek to tamp down the threat of ransomware, they should adopt cognitive effect as part of their campaign against operators and affiliates.

Successes to Date

Over the past few years, Washington has tried a number of strategies in a bid to slow the growth of ransomware but has nonetheless struggled to find an effective deterrent. It has indicted individual hackers and sanctioned firms and organizations that supported criminal gangs. These efforts, however, have largely failed either because they were not applied consistently, ransomware groups easily adapted to the measures, or, most importantly, because said groups operated beyond the reach of Western law enforcement agencies. In response, the United States and some of its allies have taken a new tack against ransomware groups by pledging to use offensive cyber capabilities.

The turn to offensive operations manifested itself recently as the U.S. Department of Justice (DoJ) and the FBI announced in late January that they discretely gained access to the systems of Hive—a ransomware group that stole over $100 million from organizations across the globe in its first year of operation alone and ranks among the most prolific such outfits over the last two years. The DoJ and FBI’s successful intrusion into Hive’s systems went on for over a year, allowing government operators to seize decryption keys and distribute them to victims. Likewise, the authorities also took down the dark web site used by Hive to shame victims and leak stolen data when organizations refused to pay a ransom.

Who is Behind the North Korean Nuclear Curtain?

Peter Huessy

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North Korea’s nuclear capability poses a serious danger to the Republic of Korea (ROK). Such is the South Korean fear that, according to some polls, more than 70 percent of South Koreans want Seoul to develop its own nuclear weapons capability—a military option that is prohibited by the 1969 Nuclear Non-Proliferation Treaty.

As an alternative, South Korean president Yoon Suk Yeol recently suggested that the United States deploy theater nuclear forces at a U.S. military base in South Korea while also enhancing joint Seoul-Washington military planning and cooperation. The threat from Pyongyang is, after all, an incentive for Seoul to secure a stronger U.S. deterrent commitment. Washinton rejected the former idea but worked to implement the latter.

This, however, does not touch the root of the problem: what are the chances the North Korean nuclear capability can be rolled back? Many observers continue to believe the North Korean nuclear programs were developed to protect Pyongyang from what the North refers to as a “hostile policy” of U.S. antagonism. The continued U.S. military presence in the ROK and the annual military exercises Seoul and Washington direct on and around the Korean peninsula is also often cited by the North as justifying their continued nuclear deployments. In addition, Pyongyang sees the cooperative military relations between Japan and the ROK as evidence of a joint effort by the two countries to harm North Korea.

In short, to the extent the United States and its allied military presence in the region is scaled back, the conventional wisdom is North Korea will be more susceptible to making concessions.

But what if such assumptions are incorrect? What if a more in-depth examination of the origin of this North Korean nuclear military capability produces a much different answer? After all, the North’s nuclear weapons are only one of the two net additional nuclear weapons states that have emerged since 1962. Did North Korea, an impoverished country with little advanced technology, get nuclear weapons because it feared being attacked by the United States? Or was the North Korean nuclear program part of a strategy to push the United States out of the region, initiated by China in 1982 as part of its one-hundred-year plan to be the world’s number one military and economic hegemon?

China’s Longstanding Nuclear Proliferation Endeavor

The US Debt Ceiling Debacle Is Not Over

KENNETH ROGOFF

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CAMBRIDGE – The tentative deal that was just struck to raise the United States’ debt ceiling won’t make the problem go away. Partisan standoffs over the federal debt limit have become a predictable feature of American political life. And while some blame an ill-conceived rule, that argument misses the point.

The real source of the problem is that politicians today have little incentive to compromise. In an environment of gerrymandered electoral districts and ideologically-siloed traditional and social media (amplified by bots, algorithms, and economic incentives), the instability will only worsen in the foreseeable future. That could mean more frequent government shutdowns or more restrictions on central bank independence. With former US President Donald Trump very much in the mix to return to the White House after the 2024 election, who knows what else.

The idea that hitting the debt limit will force the US to immediately default on its bond obligations is a canard. The government takes in more than enough tax dollars to pay the interest on debt, and the debt ceiling creates no obstacles to rolling over maturing debt as it comes due.

Of course, the government would be constrained from spending above its income, because there would be no way to do that without issuing new debt. So, the Treasury would be pushed into hard choices. Since no one wants to touch Social Security or Medicare, it would become necessary to delay or scale back payments on other items, possibly leading to a partial government shutdown (which would not be the first time).

Nothing would force the US Treasury to stop honoring existing US debt and thrust the global financial system into chaos. This could happen only if the stalemate went on for so long (months?) that political pressures simply exploded.

A.I. Poses ‘Risk of Extinction,’ Industry Leaders Warn

Kevin Roose

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A group of industry leaders warned on Tuesday that the artificial intelligence technology they were building might one day pose an existential threat to humanity and should be considered a societal risk on a par with pandemics and nuclear wars.

“Mitigating the risk of extinction from A.I. should be a global priority alongside other societal-scale risks, such as pandemics and nuclear war,” reads a one-sentence statement released by the Center for AI Safety, a nonprofit organization. The open letter was signed by more than 350 executives, researchers and engineers working in A.I.

The signatories included top executives from three of the leading A.I. companies: Sam Altman, chief executive of OpenAI; Demis Hassabis, chief executive of Google DeepMind; and Dario Amodei, chief executive of Anthropic.

Geoffrey Hinton and Yoshua Bengio, two of the three researchers who won a Turing Award for their pioneering work on neural networks and are often considered “godfathers” of the modern A.I. movement, signed the statement, as did other prominent researchers in the field. (The third Turing Award winner, Yann LeCun, who leads Meta’s A.I. research efforts, had not signed as of Tuesday.)

The statement comes at a time of growing concern about the potential harms of artificial intelligence. Recent advancements in so-called large language models — the type of A.I. system used by ChatGPT and other chatbots — have raised fears that A.I. could soon be used at scale to spread misinformation and propaganda, or that it could eliminate millions of white-collar jobs.

A New Generation of Chatbots

A brave new world. A new crop of chatbots powered by artificial intelligence has ignited a scramble to determine whether the technology could upend the economics of the internet, turning today’s powerhouses into has-beens and creating the industry’s next giants. Here are the bots to know:

Releasing AI into the wild ‘like open-sourcing the Manhattan Project’: Nobel laureate Maria Ressa

Raul Dancel

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Artificial intelligence (AI) is exponentially magnifying the fear, anger and hate that social media has already weaponised, journalist and Nobel laureate Maria Ressa has warned.

“If the first generative AI was (about) fear, anger and hate – weaponising those – this one now leads to weaponising intimacy,” Ms Ressa, who won the Nobel Peace Prize in 2021 with Russian journalist Dmitry Muratov for standing up to authoritarian regimes, told The Straits Times on Saturday.

Ms Ressa, who founded the Philippine online news site Rappler, was in Singapore this weekend for the New.Now.Next Media Conference organised by the Asia chapter of the Asian American Journalists Association.

It was hosted at Google’s Singapore office from Thursday to Saturday.

She said the first iteration of AI – seen in machine-learning programmes – was meant to get users addicted to scrolling through social media, so that companies such as Facebook and Twitter could make more money from targeted advertisements and harvested data.

But what these programmes learnt was that lies “spread six times faster than really boring facts”, she said, adding that the algorithms that power social media platforms keep churning out lies.

“What that does to you is that… it pumps you with toxic sludge – fear, anger, hate – and when you tell a lie a million times, it becomes a fact,” Ms Ressa told ST.

This, she said, has helped populist and autocratic leaders rise to power.

Ms Ressa and Rappler had been in the crosshairs of a strongman, Mr Rodrigo Duterte, who was elected president of the Philippines in 2016. He was aided by a massive social media campaign that pushed his populist platform, anchored by anti-crime rhetoric.

When Artificial Intelligence Goes Wrong

BOB GOURLEY

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This special report is a guide into some of the darker sides of AI deployments.

When fielded incorrectly, AI can do more harm to your business than good. Rogue AI can damage brands, invoke bad decisions and cause your organization to unintentionally fall out of compliance with regulations or potentially even break the law. It is important to remember that whenever we enter into a period or advanced innovation, adversaries also seek to exploit those innovations. In the case of AI, adversaries are already using this technology for nefarious ends.

This guide is part of a series of OODAloop member reports. Also see the OODA Loop Guide to AI and our research report on AI for Business Advantage.

When AI Goes Wrong

AI has already proven itself as a hugely valuable technology. That is why it is here to stay and will keep evolving in service to just about every sector of the economy. We remain absolute believers in the importance of AI to our future.

Unfortunately, this acceleration of AI solutions causes many to overlook critically important cybersecurity and business risk considerations. And the very nature of these solutions is bringing new risks.

Here are key concerns:Self-Corruption: Algorithms that can teach themselves can corrupt themselves. Code that learns and modifies itself has been shown to introduce the risk of brand damage. Code that modifies itself can also cause harm to employees and introduce other risks to the firm.

A Change Of Era: Boards Of Directors Can’t Afford To Be Complacent About Today’s Geopolitical Threats – OpEd

Jordi Canals

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Due to the trade conflict that has grown between the U.S. and China since 2016, many U.S. and European companies have started to shift away from China as a key sourcing country and build alternative, more diverse global supply chains. This is a painful process led not by economics and business interests, but by the reality of conflicting governmental policies. It is also a very complex process for many companies. It is particularly difficult for firms such as Apple, BASF, TSMC and Volkswagen, for whom China has become the key market in terms of either sourcing or sales, or both.

New industrial policies launched by the U.S. government in 2022 — particularly the CHIPS and Science Act and the Inflation Reduction Act — seek to reduce U.S. companies’ dependence on China and position the U.S. as the natural location for manufacturing and R&D. Huge incentives offered by the U.S. government to domestic companies have sparked a reaction in the EU, with the European Commission planning to offer similarly lavish incentives to European companies.

China’s new industrial policy has triggered a clash of industrial approaches. The invasion of Ukraine and the energy crisis have exacerbated the situation. Although the accumulated experience of industrial policy calls for a healthy skepticism of the potential effect of these policies on companies, jobs and investment, these events certainly create important distortions in international trade and define a clear and significant step toward deglobalization and a more fragmented world. The outcome for companies, large and small, will be that the international context will become more uncertain over the next few years, and firms can no longer count on international expansion to increase sales or reduce costs.

These developments put additional pressure on boards of directors. They are responsible for companies’ long-term orientation and value creation. Geopolitics has joined the list of major disruptions affecting companies and their business models, along with technology, climate change and social activism, among others. Suddenly, the assumption of relative stability in international relations and global interactions, based on free trade, comparative advantage and global economic integration, has been erased — for the time being anyway.