In Geopolitics Today: Tuesday, May 2nd
UN Conference Ends with No Recognition for Taliban Rule, Indian Nationals Detained in Qatar over Spying for Israel, and other stories.
European Countries Importing Russian Oil via Third Parties
A recent report by the Center for Research on Energy and Clean Air (CREA) has revealed that European countries that have banned Russian oil imports are importing large amounts of oil commodities from other countries, such as India, China, United Arab Emirates, Singapore, and Turkey. The report claims that this is allowing these countries to act as "laundromats" for Russia's oil industry.
This practice, known as laundering, effectively undermines the impact of sanctions on Russia and offers a backdoor for imports of Russian oil into western countries. According to the report, India is leading the group of countries in this trend, with diesel exports to Europe tripling in March 2023 compared to the previous year. While technically legal, this loophole in the sanctions regime is concerning Ukraine and its allies for its potential to indirectly fund Russia’s war effort.
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UN Conference Ends with No Recognition for Taliban Rule
The United Nations organised an international conference on Afghanistan in the Qatari capital with representatives from around 20 countries participating in the closed-door event. The meeting aimed to coordinate with international players on issues such as humanitarian crisis, women's rights and counterterrorism in Afghanistan. However, UN Secretary-General Antonio Guterres said it was not the right time to recognise the de facto Taliban authorities.
Guterres condemned the Taliban's attacks on women's rights, including the ban on school and university education. Since the Taliban took over Afghanistan in September 2021, they have imposed strict conditions on women in the country. The UN chief said the international community was worried about the stability of Afghanistan under the Taliban and persistent terrorist organizations' presence in the country, posing a risk to the region and beyond. The only concrete outcome of the conference was the announcement of another meeting to be convened possibly three to six months from now.
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Indian Nationals Detained in Qatar over Spying for Israel
Reports have emerged that eight Indian nationals have been detained in Qatar for several months on charges of spying on a submarine programme on behalf of Israel. The former officers of the Indian Navy were arrested in August 2022, with New Delhi attempting to secure their release as Doha claims there is evidence they passed on intelligence to Israel. The individuals had their first trial in March, and another session is expected to be held this month.
The case highlights the growing importance of the submarine race in the Middle East, with Qatar seeking to acquire high-tech Italian-made submarines that could evade radar detection. The country signed an MoU with Italian shipbuilding firm Fincantieri SpA in 2020 to build submarines as part of a larger project involving the construction of a naval base and maintenance of its military fleet. However, the MoU has reportedly not been implemented, and Qatar has shut down Dahra Global Technologies and Consulting Services, a company advising on the Qatari submarine programme. As countries like Qatar, India and Pakistan continue to compete for strategic advantages, the role of new military technologies like submarines will only grow more significant.
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Russia's Eastward Economic Turn to China Faces Hurdles
As Russia continues to face economic sanctions from Western nations, it has turned to China for potential economic opportunities. However, while the Chinese-Russian trade relationship has been growing on paper, Chinese firms have been hesitant to do business across the Amur river due to the possibility of secondary sanctions imposed by the United States.
This has resulted in Chinese companies having little incentive to invest in relationships with Russian businesses, raising doubts about the success of Russia's eastward economic turn. Compounding the situation is the fact that Russia's classification of its trade data has made it difficult to accurately assess China's support for Russia. Despite the much-touted pivot toward China, Russia's oil and gas sales to China are not at a large discount, and China is seeking a diverse range of energy providers. As such, it appears that Russia's turn toward China may not be as successful as previously thought.
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China Faces Labour Challenges as Population Ages
China is facing a significant challenge as its population ages and shrinks during its transition from a middle-income country to a high-income one. This demographic change has brought about an acute labour problem, particularly in its labour-intensive manufacturing sector. The demand for value-added products is increasing as younger generations of workers are choosing to work in less labour-intensive service sector jobs, which has led to a growing need for upskilling existing manufacturing workers as China can no longer rely on new generations to fill conventional roles.
China is facing a mismatch between the skills employers need and the skills Chinese workers have. Investing in higher education no longer ensures a good return as many college graduates struggle to find work that is suited to their education upon entering the workforce. China's labour mismatch is apparent in the manufacturing sector, which young graduates increasingly avoid. However, bringing down unemployment for China's educated youth would require a more advanced labour market in the form of high-tech manufacturing and high-end services jobs. China's success in transitioning to a developed economy will depend on its ability to optimally allocate labour, reskill and upskill its workforce, automate more jobs with robotics and AI, and allow more fluid labour movement into lower-tier cities.