In Geopolitics This Week
US arms sale to Israel, Russian Duma votes to leave Open Skies Treaty, Battle for Nord Stream 2 eases, and other stories
Monday, May 17th
US Approves $735 Million Weapons Sale to Israel
As Israel continues to strike at targets in Gaza, Hamas fired back using the limited means at their disposal — rockets. The latest outpouring of violence relates directly to Israel’s more than half-century military occupation and its ever-deepening grip over Palestinian life.
All the while, the Biden administration has approved the sale of $735 million in weapons to Israel. While Congress was not notified of the weapons sale until the 5th of May, President Biden has now signed off on the hefty arms deal with Boeing agreeing to handle the logistics of delivering the arms to its ally in the Middle East. That the deal took less than two weeks to go from Congress to executive authorisation should tell you how uncontroversial arms sales to Israel are to the US government.
For those appalled by the consequences of this period of escalating violence, perhaps even hoping that the US would be an effective mediator in the conflict given its past determinations to uphold ‘human rights‘ abroad, I’ve got some bad news. As this statement by the Office of the Secretary of Defence reveals, the US government has come out in full support of its ally.
And this continual support for Israel feeds into a growing concern about the political climate in the United States regarding US-Israel relations. A survey of local authorities on twitter will lead you to witness an outpouring of support for Israel. Like the state of Arkansas “stands with Israel,” or Rep. Dusty Johnson of South Dakota “stands with Israel,” or a New York State Senator “stands with Israel.” That they’ve likely been exposed to stories which exclusively frame Israel as a victim of terror in this conflict is unfortunate, but events from the ground should be informative enough to stand with reason, which would inevitably lead to a more nuanced understanding of the conflict. After all, they’re contributing to the outcome.
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France, Japan, and the United States Hold Joint Military Drill
Dozens of Japanese, American and French troops landed from a CH-47 transport helicopter onto a grassy field at Kirishima Training Area, which is located in southern Japan. The scenario of the drill is to test the ability of participating nations at defending a small remote island from an enemy invasion. The three nations’ first joint drills on Japanese soil has been dubbed ARC21 and began on Tuesday as all participating nations seek to step up military ties amid growing Chinese assertiveness in the region.
On Saturday, the three countries were also joined by Australia as part of an expanded naval exercise involving 11 warships in the East China Sea, where tensions with China are rising around the island of Taiwan. The UK, which recently adopted a policy of deeper engagement in the region, is sending its Queen Elizabeth aircraft carrier together with its strike group, which are due to arrive in the region later this year, with Germany also set to deploy a frigate in the future.
Japan is seeking to expand its military ties beyond its traditional security alliance with the United States, and hopes to include “like-minded” countries such as France, said Defense Minister Nobuo Kishi. He said that France, the only European nation with a permanent military presence in the Indo-Pacific region, is “a like-minded country that shares with Japan the vision of a free and open Indo-Pacific.”
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Tuesday, May 18th
Taiwan at the Crossroads of Geopolitics and Technological Advancement
The United States has come to regard China’s technological ascension as a challenge to its national security and as a mechanism for enabling China’s interests to be realised beyond its borders. Beijing, meanwhile, believes that Washington seeks to constrict its resurgence. Both takes are rather accurate.
At the core of those efforts are semiconductors. Taiwan is home to the most dominant firm in the field: the Taiwan Semiconductor Manufacturing Company (TSMC). TSMC produces 84 percent of the world’s most advanced microchips. As Washington and Beijing recalibrate the terms of their economic interdependence and shift their supply chains to be less intertwined with each other, each is also looking to accelerate its domestic chip production.
In particular, the Biden administration is seeking to allocate $50 billion to semiconductor research and production, and TSMC is building a 12-inch wafer fabrication plant in Arizona. But in this sphere, the United States is playing catch-up. A September 2020 report found that its share of semiconductor manufacturing capacity had fallen from 37 percent in 1990 to 12 percent and estimated that that proportion would fall to 10 percent by 2030.
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Who Owns Australia?
The Guardian has published an analysis of land ownership in Australia. The authors find that who owns the Australian outback is a vexed question. The true answer, according to their research, is the First Nations peoples, whose supposed ownership stems back 60,000 years. But the legal answer they find is more complex. It’s a mess of titles — freehold, pastoral leases, crown leases, public land, native titles and land held by certain Aboriginal trusts.
Pastoral leases cover 44% of Australia, according to Austrade. Pastoral leases are defined by Austrade as a title issued for the lease of an area of crown land to use for the limited purpose of grazing of stock and associated activities. The researchers were able to identify the leaseholders for just over half that area, pulling together data on more than 400 owners who together hold 700 stations covering 189.5m hectares — or about a quarter of the country.
The person who holds the most land in this pastoral-lease data, by far, is the Western Australian mining magnate Gina Rinehart, who controls 9.2m hectares, or 1.2% of Australia’s landmass, through three different corporate entities. The biggest corporate landholder is the ASX-listed Australian Agricultural Company. AAC’s biggest shareholder is the Bahamas-based AA Trust, controlled by the British billionaire Joe Lewis, who is also the owner of Tottenham Hotspur.
And about 40% of Australia is covered by native title, in both exclusive and shared lands. Australian government reports state that Indigenous communities hold the freehold title to 17% of the country, mainly in the Northern Territory and South Australia.
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Wednesday, May 19th
Japan Should Not Be Overlooked in the Coming Indo-Pacific Tussle
An increasingly common residual effect stemming from the US-China drama that is escalating across the Indo-Pacific is a lack of appreciation among commentators and policymakers of other important regional actors. What this simplistic lens of an exclusively superpower rivalry tends to overlook is the role of so-called “middle powers.”
And this is especially the case when it comes to Japan, perhaps the most well positioned of all regional players to advance its interests. This particularly rings true in Southeast Asia, where Japan is a leading source of infrastructure investments and where the country enjoys tremendously good relations with most other countries in the region.
While a recession at the turn of the century may have undercut Japan’s global standing and facilitated the emergence of China as the preeminent power in Asia, and Article 9 of the post-war Constitution proscribed Japan from offensively projecting military power or adopting an aggressive defence policy, Japan is still a force to be reckoned with.
It possesses the world’s third largest economy, the most advanced navy in Asia and among the largest manufacturing bases in history. In the past decade alone, the Shinzo Abe administration has overseen the country’s transformation into a preeminent middle power in the region and beyond, casting aside old assumptions about a purely inward-looking Japan.
In recent years, Japan has played an integral role in the region on three fronts. Firstly, its distinct brand of subtle and personal diplomacy has allowed Tokyo to cultivate and maintain functional ties with a broad range of regimes in Southeast Asia. Secondly, Japan is providing a viable alternative to China’s Belt and Road initiative by kickstarting multiple infrastructure projects across the region. Thirdly, Japan has become a key defence partner for Southeast Asian countries by working with smaller powers such as the Philippines, Vietnam, Malaysia and Indonesia, thereby helping them develop their maritime surveillance and defensive capabilities.
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Putin and Xi Plan to Power Chinese Nuclear Plants with Russian Reactors
Chinese Premier Xi Jinping and Russian President Vladimir Putin held a meeting today via a videoconference to initiate a series of nuclear energy projects that would see Russian nuclear reactors installed at two nuclear facilities in China.
“Russian and Chinese professionals are setting in motion a truly signature, flagship joint project,” Putin said during the ceremony, describing the technology as “powerful state-of-the-art Russian-made nuclear reactors compliant with all the safety regulations and the highest of ecological standards.”
The projects come at a time when China is seeking to reduce its dependence on energy imports, particularly those imported via shipping, as it has justified fears that a blockade by US forces would seriously threaten the development plans of the CCP. This combined with an overreliance on coal for electricity, further compounded by the fact that the majority of its coal is imported from Australia — an ally of the United States — means that China must intensify its drive for energy independence. Failure to do so may lead to China being strangled via the seas, a domain where the United States remains without equals.
But it is not just a one-sided relationship. China is also a key market for Russian oil and gas, and has in the past made major purchases of Russian warplanes and other military technology. Russia is also a major customer for Chinese machinery and consumer goods.
In all, this presents yet another example of the increasingly overlapping interests of China and Russia, and the deepening of ties between two key adversaries of the United States.
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Thursday, May 20th
Following US Withdrawal, Russian Lower House Votes to Exit Open Skies Treaty
Last year, the Trump administration pulled out of the Treaty on Open Skies, a late Cold War-era agreement designed to enhance mutual understanding and confidence between adversaries by giving all participants a direct role in gathering information via overhead flights about military forces and activities of concern to them.
Secretary of State Mike Pompeo said at the time that “Russia has flagrantly and continuously violated the treaty in various ways for years. This is not a story exclusive to just the treaty on Open Skies, unfortunately, for Russia has been a serial violator of many of its arms control obligations and commitments.”
Yesterday, the Russian State Duma, following in the footsteps of the United States, voted to withdraw from the international treaty. Moscow has often vocally deplored the US withdrawal, warning that it will erode global security by making it more difficult for governments to interpret the intentions of other nations, particularly amid heightened US-Russia tensions.
Moscow’s attempts at obtaining guarantees from NATO member states that they wouldn’t hand over data collected from observation flights to the US as a condition for staying in the pact have been unsuccessful, which has paved the way for the Russian withdrawal. The withdrawal will have to be approved by the Federation Council of Russia before the country’s exit from the treaty is confirmed.
The concept of mutual aerial observation was initially proposed to Soviet Premier Nikolai Bulganin at the Geneva Conference of 1955 by US President Dwight D. Eisenhower, but didn’t materialise until 1989, when it was negotiated by the then-members of NATO and the Warsaw Pact, with the agreement signed in Helsinki, Finland, on March 24, 1992. More than 1500 flights aimed at fostering transparency and allowing for the monitoring of arms control and other agreements have been conducted under the treaty since it took effect in 2002.
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Drought in Brazil Impacts Commodities Market
In central Brazil, heat and dryness have been the running theme over the last couple of weeks, forcing a drastic decrease of subsoil moisture across the region. Rainfall was disastrously low for many areas in Sao Paulo and Minas Gerais from January to April. The worst hit areas received less than half of normal precipitation at a critical time when coffee plants need moisture for the beans to grow. This has had an adverse effect on the supply of a few key commodities and there appears to be no end in sight as poor weather conditions continue in central Brazil.
While a dry spell is typical for this time of year in Brazil, it’s expected to last longer than usual. Regular rains will return to the region between October and November, instead of September, said Celso Oliveira, a meteorologist at Somar Meteorologia. About 30% of Brazil’s orange crop and 15% of arabica coffee fields are irrigated, and this drought will heavily impact a significant portion of Brazil’s exports.
And the markets have reacted to the supply shortages caused by the drought. The price of corn, which makes up for $179 million in annual exports for Brazil, have surged over the last month, hitting a peak of $7.56 per bushel — a price not seen since 2013. Coffee prices, which make up a far larger $416 million in annual exports, have also been heavily impacted by the drought, with the price of Coffee reaching a high of $1.52 — a price not seen since 2017.
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Friday, May 21st
Battle Over Nord Stream 2 Eases as Biden Administration Waives Sanctions
Axios reported on Tuesday that the Biden administration will waive sanctions on entities involved in the construction of Nord Stream 2. The decision is indicative, at least for the moment, of a shift in US policy toward the project, and perhaps even of the importance of the US-German relations to the Biden administration going forward. That the US is not willing to compromise its relationship with Germany over this pipeline underscores the difficulties President Biden may face in matching his actions to his tough rhetoric on Russia.
Biden’s change in stance from Donald Trump’s fierce opposition to the pipeline means Nord Stream 2 will likely get finished as soon as this year. But there are still certain sanctions in place, and those left in place could make it hard to gain all the necessary approvals to start operations.
The waiver avoids escalating a confrontation with Chancellor Angela Merkel’s government, which has long argued that the gas link will increase the security of Europe’s energy supply. Officials told Axios that the waiver actually “establishes leverage” over those involved in the project, since they know that the US could impose sanctions at any moment.
Some commentators, however, see this as a huge mistake. They argue that the project risks depriving Ukraine of a major source of revenue as Kiev, supported by arms from the US, Turkey, and Israel, continues its grueling fight against Moscow-backed separatist forces in the eastern part of the country.
Others see it differently, arguing that there is a certain absurdity in the United States’ trying to use sanctions to bully Europeans out of importing Russian gas while the United States spent every day of 2020 importing, on average, 538,000 barrels of Russian oil.
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Chairmanship of the Arctic Council Passes From Iceland to Russia for 2-Year Term
This week saw the rotating chairmanship of the Arctic Council, a major intergovernmental forum for Arctic affairs, pass from Iceland to Russia for a two-year term. Russia will take over the chairmanship at a time when the organization grapples with multiple challenges, not least of which are the tense nature of relations between Russia and other Arctic powers such as Norway, Canada and the United States.
Military build-up in the Arctic, coupled with the emerging narrative of great power competition, pose serious difficulties to cooperation through the platform of the Arctic Council. Whether cooperation or great power rivalry will characterize Arctic relations in the years ahead will largely be decided by the attitudes and actions of the major Arctic players — the US and Russia.
The Trump administration’s focus on great power competition and the need to display hard power in the region to counter Russia and China was, to some, a harmful distraction from the looming environmental degradation faced by Arctic communities. The election of Biden, who has placed a renewed emphasis on climate action and multilateral engagement suggests greater cooperation and less confrontation in the region. But with relations between the two key actors in the Arctic at an all-time low, it remains to be seen if meaningful cooperation can be achieved.
But there is also cause for optimism. During its chairmanship, Russia will have an opportunity to lead an Arctic Council program and constructively engage with the new US administration on areas of mutual interest. Biden’s vow to work with Russia on carbon removal efforts and Moscow’s listed interest in international cooperation to address climate change through the Arctic Council is a signal that common ground for meaningful engagement on climate is still possible.
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