Thursday 28 April 2022

Opinion Russian aggression may have a new target

 Image without a caption

A soldier holds the Moldovan flag during a ceremony in Chisinau, Moldova, on Tuesday. (Vladislav Culiomza/Reuters)

Even casual observers of Russia’s aggressive moves leading up to its invasion of Ukraine cannot fail to recognize the eerie — and alarming — parallels with what has been happening over the past few days in the Eastern European nation of Moldova.

Situated between Romania and Ukraine, this poor, militarily weak former Soviet republic has been partially occupied since 1992 by Russian troops. They intervened during a brief civil war, purportedly to “protect” ethnic Russians in a territorial sliver next to Ukraine, and, like the forces President Vladimir Putin sent into the Crimea and Donbas regions of Ukraine in 2014, never left. In recent days, Russian state media have trumpeted several bombings and shootings aimed at key targets in the breakaway region, known as Transnistria, including an immense Soviet-era weapons depot just a mile and a half from the Ukrainian border. The “attacks” purportedly emanate from Ukraine, but it’s far likelier Russia engineered them itself as a pretext for widening its war. The violence, which fortunately left no fatalities, was in fact preceded by a Russian army general’s public claim, on April 22, that his country intended not only to seize southern Ukraine but also to link it up territorially with Transnistria, so as to stop “oppression of the Russian-speaking population.”

It’s far from clear that Russia actually has the military capability to make good on such a threat, though an attempt certainly can’t be ruled out. Two Russian objectives are likely, though: first, to justify wider attacks on Ukraine’s so-far mostly unscathed western region, including Odessa, a port city near Moldova; and, second, to pressurize and destabilize Moldova, which — like Ukraine before it — has signaled its desire to escape Moscow’s orbit definitively in favor of a more Western orientation. In July 2021, a pro-Western party swept into office, backed by 52 percent of Moldovan voters, on a promise to pursue European Union membership and a strategic partnership with the United States.

Russia has no legitimate reason to fear any of this, of course. NATO membership, the Kremlin’s bugaboo, couldn’t happen for Moldova in part because Moscow’s troops are still on Moldovan territory. Moldova has dealt gingerly with Moscow, which also controls its energy supply, since the war in Ukraine began, declining to join sanctions or to permit weapons to transit its territory. What the government of President Maia Sandu admirably has done is take in some 100,000 Ukrainians, making this nation of 4 million the world’s largest haven for the war’s refugees on a per capita basis.

For that reason alone, Ms. Sandu’s government deserves American and European gratitude, sympathy and support. Evidently, Moldova also faces an imperial Russian challenge that is highly reminiscent of the one that faces Ukraine, as the fearful flow of thousands of people out of Transnistria this week vividly illustrates. Western policy failed to respond strongly enough, soon enough, to deter Moscow’s machinations against Ukraine after it took Crimea and Donbas in 2014. Hence the disaster now unfolding across Europe and, indeed, the world. There would be no excuse for making the same mistake twice.

Opinion | In Ukraine war, Moldova may be Russia's next target - The Washington Post



Tuesday 26 April 2022

A major recession is coming, Deutsche Bank warns

 New York (CNN Business)Deutsche Bank raised eyebrows earlier this month by becoming the first major bank to forecast a US recession, albeit a "mild" one.

Updated 1913 GMT (0313 HKT) April 26, 2022


3 reasons why Deutsche Bank is forecasting a recession

Now, it's warning of a deeper downturn caused by the Federal Reserve's quest to knock down stubbornly high inflation.
"We will get a major recession," Deutsche Bank economists wrote in a report to clients on Tuesday.
    The problem, according to the bank, is that while inflation may be peaking, it will take a "long time" before it gets back down to the Fed's goal of 2%. That suggests the central bank will raise interest rates so aggressively that it hurts the economy.
      "We regard it...as highly likely that the Fed will have to step on the brakes even more firmly, and a deep recession will be needed to bring inflation to heel," Deutsche Bank economists wrote in its report with the ominous title, "Why the coming recession will be worse than expected."

      Behind the curve

      Consumer prices spiked by 8.5% in March, the fastest pace in 40 years. The jobs market remains on fire, with Moody's Analytics projecting that the unemployment rate will soon fall to the lowest level since the early 1950s.
        To make its case, Deutsche Bank created an index that tracks the distance between inflation and unemployment over the past 60 years and the Fed's stated goals for those metrics. That research, according to the bank, finds that the Fed today is "much further behind the curve" than it has been since the early 1980s, a period when extremely high inflation forced the central bank to raise interest rates to record highs, crushing the economy.
        History shows the Fed has "never been able to correct" even smaller overshoots of inflation and employment "without pushing the economy into a significant recession," Deutsche Bank said.
        Given that the job market has "over-tightened" by as much as two percentage points of unemployment, the bank said, "Something stronger than a mild recession will be needed to do the job."
        The good news is that Deutsche Bank sees the economy rebounding by mid-2024 as the Fed reverses course in its inflation fight.

        Goldman Sachs: Recession is not inevitable

        Of course, no one knows precisely how this will play out. Although Deutsche Bank is pessimistic -- it's the most bearish among major banks on Wall Street -- others contend this gloom-and-doom is overdone.
        Goldman Sachs concedes it will be "very challenging" to bring down high inflation and wage growth, but stresses that a recession is "not inevitable."
        "We do not need a recession but probably do need growth to slow to a somewhat below-potential pace, a path that raises recession risk," Goldman Sachs economists wrote in a report Friday evening.
        UBS is similarly hopeful that the economic expansion will continue despite the Fed's shift to inflation-fighting mode.
        "Inflation should ease from current levels, and we do not expect a recession from rising interest rates," Mark Haefele, chief investment officer at UBS Global Wealth Management, wrote in a report on Monday.

        War and Covid lockdowns pressure inflation

        Deutsche Bank said the most important factor behind its more negative view is the likelihood that inflation will remain "persistently elevated for longer than generally anticipated."
        The bank said several developments will contribute to higher-than-feared inflation, including: the reversal of globalization, climate change, further supply-chain disruptions caused by the war in Ukraine and Covid lockdowns in China and coming increases to inflation expectations that will support actual inflation.
        "The scourge of inflation has returned and is here to stay," Deutsche Bank said.
          If inflation does stay elevated, the Fed will be forced to consider more dramatic interest rate hikes. The Fed raised interest rates by a quarter-percentage point in March and Chairman Jerome Powell conceded last week that a half-point hike is "on the table" at next week's meeting.
          "It is sorely tempting to take a go-slow approach hoping that the US economy can be landed softly on a sustainable path. This will not happen," Deutsche Bank said. "Our view is that the only way to minimize the economic, financial and societal damage of prolonged inflation is to err on the side of doing too much."

          https://edition.cnn.com/2022/04/26/economy/inflation-recession-economy-deutsche-bank/index.html

          Friday 8 April 2022

          Expect a War Between Russia and China in the 2020s

           EXECUTIVE SUMMARY: Notwithstanding the seeming friendship between Chinese president Xi Jinping and Russian president Vladimir Putin, and the growing congruence of both countries’ interests in undermining the US-led international order, relations between Russia and China remain at their core as brittle and prone to mutual suspicion and distrust as they have in the past. It is not unreasonable to expect that that underlying animosity will erupt into violence in the relatively near future.

          By July 18, 2019

          Vladimir Putin and Xi Jinping, photo via Office of the President of Russia

          BESA Center Perspectives Paper No. 1,230, July 18, 2019

          During his state visit to Russia earlier this month, President Xi Jinping of China effusively hailed President Vladimir Putin of Russia as his “best friend and colleague.” Putin, not to be outdone, replied by affirming his personal respect for Xi, and suggested that Sino-Russian relations have progressed not only to an “unprecedentedly high level” in recent years, but are now increasingly based on a “truly comprehensive partnership and strategic interaction.”

          But whatever Putin means by “strategic interaction,” and despite the undeniable progress in Sino-Russian relations over the past decade, it is easy to fall into the trap of exaggerating what some fear is an emerging Sino-Russian “axis” in world politics. Notwithstanding the Xi-Putin friendship and the growing congruence of both countries’ interests in undermining the US-led international order, relations between Russia and China remain at their core as brittle and prone to mutual suspicion and distrust as they have in the past.

          It is, after all, only 50 years since the two Eurasian giants nearly stumbled into a cataclysmic war following a series of unprovoked Chinese attacks on Soviet troops garrisoned along the then-contested river boundaries in Russia’s Far East. Although Moscow stayed its hand from an all-out military assault on China, the border clashes of 1969 continue to rankle historical memories and military thinking in Russia to this day.

          Such territorial jostling along the vast expanses of Eurasia has, in fact, defined Russo-Chinese relations historically, and will continue to do so in the future.

          And therein lies the existential rub, especially for Russia. From the perspective of a strategic planner in Moscow, China – which contains a billion-and-a-half people – not only dwarfs Mother Russia in population, national power, and economic might. It has also – much more worryingly – become a near military equal, prone to intimidation and throwing its weight around its periphery at will. Witness, for example, Beijing’s swift and brazen conquest of the South China Sea, the unrelenting probing into Vietnamese, Philippine, and Japanese maritime spaces, and to its west, the frequent incursions, stand-offs, and aggressive territorial claims against India.

          None of these acts of Chinese belligerence will have escaped the notice of Russian planners who, despite the paradox of Moscow’s shared strategic interests with Beijing to counter America’s power and influence in world affairs, are nonetheless bound to view China’s rapid and inexorable rise to the front rank of global powers with acute concern.

          But despite any apprehensions Moscow may quietly harbor, Russo-Chinese relations in the short term – over the next four or five years – are likely to remain largely in harmony. This is mainly because Putin’s carefully tended relationship with Xi enables him, among other things, to maintain the pretense of Russia as a great power, attract Chinese investment, and, more generally, project an image of himself as a world-class statesman.

          And Xi, though leading an immeasurably more powerful country than Russia except in terms of offensive nuclear firepower, tactfully grants Putin the appearance and status of an equal through elaborately choreographed summit meetings, the bestowing of high level state and friendship awards, and personal respect, in order to secure at least tacit deference by Moscow to the Sino-centric Eurasian geopolitical order currently being planned in Beijing.

          Yet beyond the apparent bonhomie and geopolitical dalliance between Xi and Putin, the historic and atavistic tensions deeply rooted between the Slavic and Han civilizations represented by Russia and China are bound to emerge again, probably in violent form, in the next decade.

          In fact, signs already abound of Russian nervousness as China relentlessly pushes its Silk Road initiatives, coercive economic practices, and diplomatic blandishments deep into the entire former Soviet space in Central Asia. Although the Chinese have so far refrained from asserting strategic-security rights in the geopolitical arc along Russia’s southern periphery, it is only a matter of time before some hyper-nationalist general in Beijing does so. The Russians can be relied upon to react with unrestrained fury.

          But what will likely drive Russia to a defensive war with China before the next decade is out is the growing probability of Chinese territorial encroachment into Russia’s sparsely populated far eastern region bordering the Pacific. The Russian territories north of the Amur and east of the Ussuri Rivers in eastern-Central Asia, which currently demarcate the agreed boundaries between the two countries, are historically and insistently claimed by China. Chinese military maps even show these areas as Chinese territories.

          These territorial claims, combined with the sheer population disparities – over 130 million people live in three Chinese provinces bordering Russia’s Far East, where the population is estimated at less than 8 million – and the need to secure long-term access to living space and natural resources almost preordains that Beijing will sooner or later demand revisions to what it calls “unequal” border treaties with Czarist Russia dating back to the mid-19th century. And although the Russians are equally bound to resist, it is not inconceivable that China at some point will demand access or land-lease rights to parts of Russia’s Far East, or, failing that, that the Chinese army will simply march across the border into Vladivostok, Russia’s only warm water access to the Pacific, to stamp China’s historic claim and rights to the region.

          It is not clear at this juncture how Russia and China can step back from a conflict in the coming decade. But as China appears unlikely to relinquish its expansive territorial claims against its neighbors, including Russia, the onus for deterring China from seizing Russian territories will fall upon Putin or his successors in the 2020s.

          The question of whether China really can be deterred as its geostrategic ambitions grow across Eurasia remains to be seen. If the current Xi-Putin bromance fails to tamp down Chinese expansionism, expect a war between the two nuclear armed states in the 2020s.

          View PDF

          Pravin R. Jethwa is a consultant on defense and international security in London.

          https://besacenter.org/expect-war-russia-china/

          Thursday 7 April 2022

          Analysis: China needs to drop Putin now, scholar insists

          Government adviser says Beijing needs to be on the right side of history

          KATSUJI NAKAZAWA, Nikkei senior staff writer



          Xi Jinping is running out of time to make a decision that would abandon Vladimir Putin and put him on better terms with Joe Biden. (Nikkei montage/Reuters/Getty Images)

          Click on the link to read the article:

           https://asia.nikkei.com/Editor-s-Picks/China-up-close/Analysis-China-needs-to-drop-Putin-now-scholar-insists



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