In Geopolitics Today: Wednesday, April 24th
US Senate Approves $95 Billion Foreign Aid Package, Israel Prepares Invasion of Rafah, and other stories.
US Senate Approves $95 Billion Foreign Aid Package
United States President Joe Biden has signed a $95 billion foreign aid package that provides funds to arm Ukraine, Israel, and Taiwan. The package includes roughly $48 billion in Ukraine-related funding for the Pentagon, $14 billion in Israeli military assistance, and about $4 billion to arm Taiwan and other Indo-Pacific allies.
Despite the delay, the additional funding is expected to help expand munitions production lines in the US and replenish weapons sent to Ukraine, which has been rationing ammunition amid Russian attacks. The package also includes significant aid for Israel, with $3.5 billion in Foreign Military Financing and $4.4 billion to replenish munitions and air defence systems. The signing of this foreign aid package is illustrative of the ongoing debates within the US government regarding support for foreign allies and the country's global military commitments. As the funds are distributed, the impact on the conflicts in Ukraine and the Middle East, as well as the US's strategic position in the Indo-Pacific region, will be closely watched.
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EU Launches Probe into Chinese Public Procurement of Medical Devices
The European Commission has initiated an investigation into Chinese public procurement of medical devices, a move that has been met with criticism from Beijing. The probe aims to determine whether European suppliers have been granted fair access to the Chinese market. If the investigation concludes that they have not, the EU could impose restrictions on Chinese medical device companies bidding in EU public tenders.
This investigation is the first under the EU International Procurement Instrument. It follows complaints from European companies and governments regarding access to the Chinese market. The probe coincides with other EU trade actions targeting China, including investigations into Chinese electric vehicle imports, wind turbines, and solar power. In response, Chinese foreign ministry spokesperson Wang Wenbin criticized the EU for using its economic and trade toolbox and trade remedy measures to send protectionist signals and target Chinese enterprises. The investigation has invited China to submit its views and enter consultations with the Commission to address the alleged measures and practices. As both sides present their arguments, the outcome of this probe could have significant implications for EU-China trade relations.
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Russia and China Ditch the Dollar in Mutual Trade
Russia and China have almost completely abandoned the use of the U.S. dollar in their bilateral trade, with more than 90% of settlements now carried out in the two countries' national currencies, according to Russian Foreign Minister Sergei Lavrov. This move is part of a broader effort by Moscow and Beijing to reduce their reliance on the US-led economic system and circumvent the sanctions preventing Russia from conducting business on the international market following its 2022 invasion of Ukraine.
The growing economic ties between Russia and China have led to a 26% increase in trade between the two countries, reaching $240 billion in 2023. In addition to de-dollarization, Russia is also investing billions of dollars in developing new trade routes in Asia, including transport corridors linking Russia to Kyrgyzstan via the Caspian Sea and Belarus to Pakistan. These efforts aim to bypass sanctions and provide Russia with access to Asian markets. However, the success of these initiatives may be complicated by the risk of China facing consequences for its support of Moscow, as the US and European countries seek to pressure Beijing to limit its aid to Russia's military.
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Israel Prepares Invasion of Rafah
Israel's military is poised to launch a ground invasion of the southern Gaza Strip city of Rafah, planning to evacuate Palestinian civilians and assault Hamas hold-outs, despite international warnings of a looming humanitarian catastrophe. The Israeli Defence Ministry has procured 40,000 tents, each capable of housing 10 to 12 people, to relocate Palestinians from Rafah in advance of the operation. Prime Minister Benjamin Netanyahu's government confirmed that Israel was “moving ahead” with the ground invasion, though no timeline was provided.
Satellite images and videos circulating online show rows of white tents being erected in Khan Younis, a city located just 5 km from Rafah, in preparation for the mass displacement of civilians. An Israeli government source revealed that Netanyahu's war cabinet plans to meet within the next two weeks to authorize the evacuations, which are expected to take around a month. Rafah, which borders Egypt, is currently sheltering more than a million Palestinians who have fled the now half-year-old Israeli offensive in Gaza. The prospect of being forcibly displaced once again has left many residents terrified and facing an uncertain future. Israel claims that Rafah is home to four Hamas combat battalions reinforced by thousands of retreating fighters, and that defeating them is necessary to achieve victory in its war to annihilate the group.
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Intensifying Conflict in Eastern Congo Threatens Tshisekedi's Rule
The appointment of Judith Suminwa Tuluka as the Democratic Republic of the Congo's new prime minister on April 1 comes amid heightened tensions in the country's east, where intense fighting between pro-government forces and Rwandan-backed M23 rebels continues. The ongoing conflict in the east has been leveraged by allies of former President Joseph Kabila, who recently formed the Alliance of the Congo River (AFC) in partnership with the M23.
The escalating violence in eastern Congo has the potential to leader to direct military confrontation between Congo and Rwanda, as the latter has deployed around 3,000 troops to support the M23 with training and advanced weaponry. In response, the Congolese military has increasingly relied on local militias. Despite Angolan-led mediation efforts, the risk of border skirmishes remains high, as both sides have limited control over their respective proxy forces. A high-profile border incident could trigger a tit-for-tat escalation cycle, potentially leading to a broader conflict, put pressure on the European Union to pause funding for Rwanda's military, and disrupt Congo's cobalt exports.
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US Warns Pakistan of Sanctions Risk Over Cooperation with Iran
The United States has cautioned Pakistan about the potential risk of sanctions following the latter's promise of greater security and economic cooperation with Iran during a visit by Iranian President Ebrahim Raisi. The three-day trip, which concluded on Wednesday, saw the two neighbouring countries agree to increase bilateral trade to $10 billion a year over the next five years, up from the current $2 billion. They also pledged to cooperate in the energy sector, including trade in electricity, power transmission lines, and the long-stalled Iran-Pakistan gas pipeline project.
The US Department of State's warning comes at a challenging time for Pakistan, which is grappling with economic woes and seeking financial assistance from its allies, including key partners such as Saudi Arabia, the United Arab Emirates, and the US. Pakistan cannot afford to get caught in the middle of the US-Iran rivalry, as it needs the goodwill of the US and its allies to help address its economic crisis. However, Pakistan should focus on expanding trade and energy cooperation with Iran while maintaining engagement with both countries. The future of the Pakistan-Iran relationship depends on Pakistan's ability to use its limited leverage and identify what's best for its national interest while navigating the complex geopolitical landscape.