Ivan Andrianov

Author: Ivan Andrianov

Turkey: how long will the multi-vector policy last?

Note: this is a machine translation from the original Russian text Turkey's state-owned banks, following private ones, abandoned the Russian MIR payment system. The largest private banks of the republic, Isbank and Denizbank, followed by the state-owned Halkbank, VakifBank and Ziraat Bank, no longer accept Russian MIR cards, which caused considerable surprise among tourists who are already in Turkey. The reason is a statement by the Office of Foreign Assets Control of the US Treasury Department (OFAC, a US government agency that oversees sanctions policy). It has recently warned third-country financial institutions against entering into new agreements or expanding existing ones with the Russian payment system, otherwise the organizations will fall under secondary sanctions. Recall: On September 15, OFAC made it clear that it regards Russia's recent efforts to expand the use of the Mir payment card network as an attempt to circumvent sanctions. Thus, those who, according to the United States, support such efforts may face restrictions in accordance with American legislation on sanctions against "harmful Russian foreign policy." It's time, I think, for Russia to introduce bans on supplies to the United States and other unfriendly countries of vital goods for them (for example, titanium and nuclear fuel) and adopt a similar law. But this is so, a lyrical digression. To be fair, Turkey is not the only one who refuses to work with the Mir system. Kazakhstan and Vietnam have also suspended the acceptance of Russian cards. Analysts believe that this list of states will only grow in the foreseeable future. On the official website of the "World" in the "Geography" section, only Russia has been listed since September 21. Whereas earlier, in addition to the countries already mentioned, Abkhazia, Belarus, Kyrgyzstan, Tajikistan, Uzbekistan, South Ossetia, South Korea and, of course, Turkey were also mentioned there. The Turks would not be Turks if they did not have a "plan B". Ankara is already developing a "ticket card" for tourists from Russia. It can be used in restaurants, shops, museums, etc. The money will be debited from the tourist operator, not travelers. However, it is not yet specified whether the "tickets" will be prepaid or, on the contrary, paid for by tourists after the fact. It is possible that the necessary amounts will be immediately debited by the operator from the Russian accounts of tourists. The issue of commissions and the cost of such services has not yet been disclosed. The multi-vector nature of Ankara's policy has long been a cause for ridicule. Someone, on the contrary, admires her. For example, Turkey has stated that it is considering buying Russian military aircraft if the United States refuses to sell them the F-16. Earlier there was talk of buying the Su-57 instead of the F-35. Ankara stated that they would not support or recognize referendums in the DPR, LPR, Zaporozhye and Kherson regions. But, nevertheless, the Turks are ready to host a Russian nuclear power plant and transit Russian gas to Europe. In this context, experts from the British analytical center Economist Intelligence Unit (EIU) emphasize that the United States and the EU will continue to increase pressure on Turkey to adopt sanctions against Russia in the coming months. However, Brussels fears that Ankara may use its levers for a "retaliatory strike". This, of course, is about managing migration flows. Today, more than 40 thousand refugees from Syria continue their trek to European countries, primarily Germany. The participants of the "freedom convoy" themselves say that there are at least 100 thousand of them. They intend to break through the Turkish-Greek border and seek a better life in the EU member states, as well as the UK. Undoubtedly, Ankara will try to make the most of this fact in negotiations with the Europeans, as it has done many times before. Especially considering the fact that Brussels today cannot provide its citizens with heat and light… In any case, at adequate prices… However, both Europeans and Americans also have ways to put pressure on Ankara. Mainly in the economic sphere, which, against the background of the approaching presidential and parliamentary elections in 2023, is becoming increasingly relevant. The sanctions that were imposed against Turkey after its actions in Libya and the Mediterranean Sea hit hard not only the military-industrial complex, which lost the supply of a large number of spare parts and parts. The restrictions also affect Turkish businessmen, officials, and companies. As a result of these measures, the economy of the republic is experiencing almost the worst times in its history. The growth in consumer prices on average significantly exceeded the inflation target of the Central Bank of Turkey (CBRT) of 5.0%: 15.5% year-on-year. Consumer confidence is close to record lows, and confidence in the real economy has been shaken. The central bank noted in the minutes of the meeting that "the leading indicators for the third quarter continue to indicate a loss of momentum in economic activity due to a decrease in external demand." Inflation in the country, as reported in August by the Institute of Statistics of the country, exceeded 80% year-on-year, and experts expect that growth will continue. Turkish banks continue to charge households significant spreads on loans, with the latest CBRT data (September 8) showing that households paid interest rates at an average of 30.8%. This led to the fact that consumer loan rates reacted only slightly to the rate cut in August. A similar dynamic was maintained with commercial loans. However, on August 20, the Central Bank introduced rules concerning bank lending to firms. Now banks must hold lira-denominated securities in the amount of 20% of the loan amount in CBRT if the loan rate exceeds the base rate of x1.4 and 90% if it exceeds the base rate of x1.8. The data show that this immediately reduced the average rates agreed on commercial loans, approximately from 26% (on August 21) to 21% (on September 8). Thus, as noted in the EIU, a reduction in the interest rate should reduce the cost of lending to firms. However, analysts are skeptical about the possibility of new incentives to help banks lend to firms at these rates. In the long run, this could lead to credit problems throughout the economy. Analysts at Business Monitor International (BMI), a structural unit of Fitch Solutions, believe that before the 2023 elections, the Turkish authorities will continue to conduct an unorthodox monetary policy, and after that the Central Bank will return to orthodox methods and start raising rates. Experts also note that in the near future, CBRT may go on a cycle of significant increases in the key rate, which will require banks to increase the cost of borrowing. The Turkish lira is also facing difficult times. However, she has been hitting one anti-record after another for a long time. The average exchange rate in 2023 is projected to be about 21.50 TRY/USD. Despite a certain increase in Turkish exports – up to 13.1% year–on-year - the trade deficit continues to grow, including due to the rise in energy prices. In August, their prices increased by 162%. Turkey's economy is one of the main problems of Erdogan and the Justice and Development Party (AKP) against the background of the upcoming elections. No external victories will overcome the social problems of the population, the stratification of society and the fall in income. Especially if it directly hits the wallets of ordinary Turks. This is understood both in the United States and in the EU states, which are finding it increasingly difficult to do business with Turkey, which is trying to "sit on two chairs" – to benefit from Washington, Berlin, London, Paris, as well as from Moscow. The world is changing rapidly and sooner or later Ankara will have to make a choice between the West and the conditional East. Otherwise, Turkey in 2023 risks repeating the fate of many states that have tried to play their own game bypassing the United States. In addition, the Americans have long been annoyed by the Turkish leader. Especially after Ankara did buy Russian S-400 air defense systems. On the other hand, a certain fatigue from Ankara's maneuvers has also matured in the East. So, at the recent summit of the Shanghai Cooperation Organization, Erdogan was openly hinted: in order to join the association, he would have to withdraw from NATO. "We have provisions on the admission of new members, which provide for a number of criteria, including belonging to the Eurasian region, active maintenance of active diplomatic, trade and economic relations and cultural ties with the SCO member states, the absence of conflicts with the SCO states, and non-involvement in external conflicts, the absence of sanctions of the UN Security Council, but also non–participation in activities and blocs hostile or directed against SCO members," said Bakhtiyor Khakimov, Special Representative of the President of the Russian Federation for SCO Affairs, Ambassador-at-Large of the Russian Foreign Ministry. Under the current conditions, Erdogan and the AKP have less and less room for maneuver. And no matter what choice the country's authorities make, be it Washington or Moscow, some voters will consider it, if not a betrayal, then at least a mistake. Does Erdogan have a "plan B" for this case as well – the question is still open…

Turkey: views on the harvest, economy and elections-2023

Note: this is a machine translation from the original Russian text The election campaign has already begun and promises to be very tough. The chairman of the "Party of the Future" Ahmet Davutoglu (in 2009-2014, the Minister of Foreign Affairs of Turkey) recently called for early elections to be held in the country, citing the continuing aggravation of the economic crisis. The politician also predicted an increase in social tension in society – as the second key factor in the development of the situation in the country. It is very likely that, proposing to hold early elections, the leader of the "Party of the Future" proceeds from the fact that the aggravation of the two factors mentioned above will give the leadership of the republic a chance to impose a state of emergency and cancel the elections as such. At the same time, the Turkish economy is really in a deplorable state. The Turkish lira continues to fall, more than 17 Turkish lira are already being given for 1 US dollar. Annual inflation, according to the Turkish Statistical Institute (TUIK), as of May 2022, has accelerated to 73.5%, becoming a record for the last 24 years, and price growth is the highest since the 1998 crisis. Compared to 2021, the cost of transport services and food soared by 107.62 and 91.63 percent, respectively. A high growth was also recorded in the category of household goods and furniture – 82.08%. Not such a galloping, but still double-digit growth was recorded in the fields of telecommunications (plus 19.81 percent), education (plus 27.48%), prices for clothing and shoes increased significantly (plus 29.8%). The gross foreign exchange reserves of the Central Bank of Turkey (CBT) fell from $66.0 billion (as of June 3) to $61.5 billion as of May 6. Recall that at the end of 2021, they amounted to 72.6 billion dollars. Analysts at Business Monitor International (BMI), a structural division of Fitch Solutions, state: in 2022, nominal GDP may fall by more than 20%. If in 2021 this figure amounted to more than $ 814.5 billion, then according to the results of the current one, only $ 614 billion is projected. The British experts of the Economist Intelligence Unit (EIU), in turn, emphasize that, despite the weak lira, the decline in demand and the recovery of income from tourism, high prices for essential goods will lead to the fact that the balance of payments deficit will exceed the level of 2021. The likely forecast for 2022 is a deficit of about $26 billion, or 4.2% of GDP. But let's return to the presidential and parliamentary elections, which are scheduled to take place on June 18, 2023, but rumors and talk about their postponement have been going on for a long time. They even call specific dates – November 2022, then spring 2023. A number of politicians opposed to the current government today state that it is the early elections that will not allow Erdogan and his Justice and Development Party (AKP) to gain the necessary number of votes to win. Nevertheless, according to polls by the research company Optimar, the AKP is currently gaining 35.9% of the vote, and its ally in the People's Alliance coalition – the Nationalist Movement Party (HDP) – 10.4% of the vote. 39.2% of voters are ready to vote for the coalition itself. In a similar scenario, if elections had happened in Turkey, even in August 2022, Erdogan and the People's Alliance would have won the parliamentary elections. The only thing that can prevent this is 20% of voters who are either undecided or do not plan to vote at all. According to the Institute of the Middle East (IBV), for such a politicized country as Turkey, this is an extremely high indicator. Among the main contenders for the presidency of the country are the mayors of Ankara and Istanbul Mansur Yavash and Ekrem Imamoglu, the leader of the "Good Party" Meral Ashkener, as well as the head of the Republican People's Party (CHP) Kemal Kilicdaroglu. IBV analysts note that businessman Cem Uzan, who lives in France, also intends to put up his candidacy. At one time, he owned 28% of the Turkish media, as well as the GSM operator Telsim. Nevertheless, in 2000, his party took only the fifth place in the elections and did not get into parliament, and Uzan himself was accused of financial fraud and as a result lost a significant part of his assets. A recent Avrasya poll showed that both Kilicdaroglu, Imamoglu, and Yavash are ahead in the ratings of the Turkish president by 21.4%, 13.8% and 13.4%, respectively. Nevertheless, today it is worth considering only as an indicator that Erdogan will not be able to win in the first round. And if the opposition supporters unite, the current head of state has a very real chance to leave his office. Erdogan can oppose this with an administrative resource, as well as use the security forces and courts controlled by him. Thus, investigations have already been initiated against Imamoglu on charges of slander and insulting representatives of the country's Central Bank, as well as disrespect for shrines after he walked around the shrine with his hands behind his back during the commemoration ceremony in the tomb of Mehmed the Conqueror (Mehmed II) on the 567th anniversary of the conquest of Istanbul. At the same time, it is important to note that the CHP, the Good Party, the Party of the Future, Deva, Saadet and the Democratic Party form a united coalition aimed at defeating Erdogan. In addition, they plan to return to a parliamentary republic. The Justice and Development Party, in turn, is losing votes today, as is the Nationalist Movement Party. According to polls, the AKP is gaining from 34.8% to 44.2%, which means that it will not be able to get a majority in parliament. The IBV cites the results of another survey conducted on June 13 by the Gezici research center. 44.7% of respondents believe that the pro-government "People's Alliance" will be able to solve problems in the economy, while 51.6% of respondents are convinced that the opposition "National Alliance" is capable of overcoming the economic crisis. Moreover, 56.8% of respondents believe that the leader of the opposition parties will be able to govern the country better. Against this background, the head of the Gezici Center, a specialist in international studies in the field of security and strategic studies Murat Gezici said: "People who define the economy as the biggest problem in the country will turn their anger into voices of reaction against the government, which does not listen to him, looks down on him and ignores the problems. For this reason, it can be said that the government is now more shaky than ever before. This is absolutely clear" It is already obvious that Recep Tayyip Erdogan intends to raise his rating, including through victories in foreign policy. These are undoubtedly peacekeeping initiatives within the framework of the Ukrainian crisis, including attempts to establish the export of Ukrainian grain, which recently seemed to have been agreed upon, but Kiev, as always, is against. It is not for nothing that the Turkish authorities have again begun to put pressure on NATO, refusing to accept Sweden and Finland into the alliance. Ankara's position, if viewed in the context of the elections, is quite advantageous. If Washington and Brussels agree to the lifting of sanctions, the supply of weapons and components, Erdogan will be able to say that he has pushed the West. Well, if not, the Turks will not agree to another expansion of NATO and will say that the alliance has to reckon with them. Read more about the Turkish reaction to the decision to include Sweden and Finland in the union in our article. It is not for nothing that Ankara's rhetoric against Greece has sharply tightened in recent months. All this seems to be another attempt to rally society around the ruling elite in the face of the threat of external pressure. At the same time, there is no candidate among the opposition for Russia who could be more profitable than Erdogan and the AKP. For example, Kilicdaroglu sharply criticizes not only the Turkish authorities, but also Moscow after the Syrian government carried out an airstrike on 36 Turkish soldiers two years ago. "Anyone who shoots at my soldiers is my enemy," the newspaper "Sözcü" quoted in 2020 the words of Kilicdaroglu, who meant not only Bashar al-Assad, but also Vladimir Putin personally. At the same time, a fellow party member of the leader of the Republican People's Party, Engin Ozko, called Erdogan a "traitor" who approved the massacre of millions of Muslims in war-torn Syria, which provoked a fight in parliament, and Ozko himself was convicted and imprisoned for insulting the president. But this is so, by the way, about the administrative resource and democracy in Turkey… Summing up, we add that today analysts agree: the Turks will most likely not elect the president and parliament ahead of schedule. On the contrary, Erdogan and the AKP will try to spend the rest of the year building up their positions and discrediting, or even eliminating competitors. The election campaign in Turkey has already begun and the confrontation promises to be brutal and uncompromising. However, there is no other way in this Middle Eastern republic.

Will the EU be able to produce its own semiconductors and chips?

Note: this is a machine translation from the original Russian text The European Commission has submitted amendments to the Chip Law aimed at expanding the capacities involved in the production of semiconductors. It is planned to allocate about 34 billion euros for project financing and regulatory incentives. Industry experts reacted positively to the news, although they noted that at least in the short term, the authorities will continue to attract foreign players, rather than intensively create their own production facilities. According to the amendments published back in February 2022, Europe intends to solve the problem of a shortage of semiconductors in the context of a global supply chain crisis and geopolitical turmoil by expanding the capacity of its own enterprises. At the same time, Brussels' plans coincide with the EU's long-term development goals, implying an expansion of the level of European technological sovereignty. As part of this goal, Europeans aim to make up 20% of the value of the global semiconductor manufacturing market by 2030. Of the planned funding, 11 billion euros will be allocated in the form of public investments for the Chips for Europe initiative. It is also expected that the EU authorities and member states will create an investment pool, known as Chips Fund, worth more than 2 billion euros to support startups, scalable and other companies integrated into the semiconductor supply chain. However, these amounts only seem exorbitant, in fact, everything is not quite so. This area is one of the most high-tech and, therefore, expensive. So the German Bosch alone intends to invest in 2022 not a little 400 million euros in the production of microchips, most of which will be intended for the automotive industry. And microchips are needed in almost all industries today. In addition to these initiatives, the European Investment Bank (EIB) will cooperate with the Commission to provide equity financing to support scalable enterprises, small and medium-sized businesses that develop and commercialize semiconductor technologies. The chip Law will also provide a number of incentives to firms that eliminate untapped gaps in the market, such as logic chip foundries. It is expected that companies will receive priority access to pilot financing lines and will see that their requests and needs are quickly answered by the authorities. The development of the Chip Law will allow the EU to improve monitoring of the availability of semiconductors, create tools to solve current and future problems of their shortage. The core of this mechanism will be the European Group of Experts, which will act as a coordination platform between Member States to advise and assist them in the event of shortages and other market failures. Participants will have the opportunity to coordinate the procurement of critical semiconductors at the level of the entire Union. A number of experts note that the actions of the Europeans are due not only to problems with logistics, but also to the growing confrontation between the United States and China. Moreover, not only in the EU have taken care of the production of semiconductors. South Korea plans to radically increase its investments up to $450 billion by 2030 to increase the country's chip production capacity. The constant growth of demand plays its role against the background of the development and introduction of 5G technologies, artificial intelligence, cloud computing. Brussels' initiatives are aimed, among other things, at creating a platform for the implementation of a project capable of competing with the main semiconductor manufacturers today – Taiwan, China, South Korea. The law will allow developing a stronger semiconductor ecosystem at the European level, increasing the advantages of the region's industry, as well as eliminating its disadvantages. A base is being created for increasing research and development work. However, a number of experts today agree that by 2030 the EU will not be able to create a truly competitive industry capable of producing advanced products with a five-nanometer technological process or less. Even despite increased funding and ongoing regulatory support. For example, in 2021, the German Bosch opened a plant in Dresden for the production of power semiconductors on plates with a diameter of 300 mm. The company has equipped the facility with automated devices and integrated AI processes. Bosch produces special-purpose integrated circuits (ASICs) and technical processes from 130 nm to 65 nm, which is very far from the indicator of 5 nm. However, the EU benefits from the local production capacity of the main semiconductors that power the manufacturing and automotive industries. Companies such as Infineon, NXP and STMicroelectronics already play a key role in deliveries. Brussels also benefits from the presence of the Dutch company ASML, which provides key ultraviolet lithographic machines similar in characteristics to the products of Taiwan's TSMC. Analysts emphasize that, given the complexity and high cost of implementing a full-fledged industrial semiconductor industry, the EU will eventually focus its efforts on attracting foreign firms to the region, rather than creating its own production cluster from scratch. Skepticism about the prospects of such European import substitution was expressed back in the fall of 2021, when the coronavirus pandemic dealt a huge blow to global supply chains. The head of the European Union on Competition Issues, Margrethe Vestager, then said that the region would not be able to become completely independent of semiconductor production due to the large volume of necessary investments. Judging by how much Europeans spend today on arms supplies to Ukraine, as well as on their own armies, we would venture to assume that Brussels simply will not have the necessary amounts for the production of high-tech microchips.

Coup in Pakistan: causes, risks, prospects

Note: this is a machine translation from the original Russian text On April 3, the Parliament of Pakistan was dissolved just moments before a decision was to be taken on a vote of no confidence in the country's Prime Minister Imran Khan. However, such a radical measure did not save him – the Supreme Court restored the National Assembly. Khan's Tehreek-e-Insaf (PTI) party has lost support in parliament from coalition allies, and the former prime minister himself, apparently, has lost the support of the armed forces - one of the key forces in the country. As a result, Imran Khan was dismissed, and PTI resigned from parliament shortly before the scheduled election of a new prime minister. On April 11, Parliament elected a new prime minister – Shahbaz Sharif, the younger brother of former Prime Minister Nawaz Sharif, who is known for being sentenced to ten years in prison on corruption charges in 2017. However, now the punishment is likely to be reviewed. Apparently, Sharif will serve as prime minister until the next elections, which are scheduled for August 2023. All this shows that there is a deep political crisis in Pakistan, which has been brewing for a long time. During almost the entire term of Khan's tenure, double-digit inflation was observed in the country, and the decision to lower domestic prices for fuel and electricity only increased the budget deficit and exacerbated problems with the balance of payments. The rupee has fallen to a historic low. Moreover, in the future, the Pakistani rupee will face further devaluation pressure. Moreover, if the new government fails to resume the country's participation in the IMF program, which provides for expanded financing and ensure the remaining payments, this may lead to the termination of external financing. In addition, if the US Federal Reserve tightens its monetary policy even more than markets expect, this could increase the volatility of the already weakened rupee. Pakistan's GDP per capita is very low and stands at about US$ 1,500 as of fiscal year 2021. Income inequality is high both vertically (that is, between different segments of society) and horizontally (at the regional level, between different provinces). The illiteracy rate of the population is very high, especially in rural areas and among women, and, accordingly, the level of education is extremely low. As for the foreign policy vector, Islamabad under Khan significantly distanced itself from Washington. The attempt to establish a neutral foreign policy and the recent negotiations with Moscow probably became the last straw for the United States and the pro-American elites in Pakistan itself. Experts of the Institute of the Middle East (IBV) believe that despite the fact that Prime Minister Khan's trip to Moscow met with approval from the military, it did not become an important argument in their attitude towards Khan. Disagreements between the Prime Minister and the military have worsened against the background of the COVID-19 pandemic, as well as the controversial appointment in October 2021 of the former commander of the Baloch Border Regiment and army headquarters in Karachi, Lieutenant General Nadim Anjum, to the post of head of the Interdepartmental Intelligence of the Armed Forces (ISI). On March 27, Khan showed a letter claiming that the United States had sent a diplomatic warning to Pakistan about his removal from the post of prime minister. However, such a loud accusation did not help. For example, retired Major General Atar Abbas said that "the reaction [in the armed forces - ed.] to the question of whether his [letter – ed.] use to intervene in a situation with a vote of no confidence, ambiguous." The military also accused Khan of discrediting the image of the army in society during his reign. Many experts note that regardless of whether the United States is taking part in the political crisis in Pakistan or not, the economic situation in the country will continue to deteriorate, which in turn may provoke new large-scale protests. With the escalation of the confrontation, the likelihood that the military will still intervene increases. And given the fact that the opposition parties seem to have abandoned anti-war rhetoric in their criticism of Khan, most likely they no longer perceive the security forces as supporters of the former leader of the country. This means that the military will not intervene to ensure Khan's political survival. However, American analysts from IHS Global Insight emphasize that there are real risks that the military may go for a direct seizure of power in order to maintain shaky stability in the country until the next early elections. However, this is not the most likely scenario for today. It is much more likely that the opposition, which has gained power, will try to keep it until the next elections in order to further legitimize its rule. There is another risk that is not being actively considered today. The Pakistan Institute for Peace Studies (PIPS) reported that in the coming months, Tehrik-e Taliban Pakistan (TTP, a terrorist organization banned in the Russian Federation) is likely to intensify attacks on the Pakistani military. On March 30, TTP announced a new offensive against the country's security forces during Ramadan after claiming responsibility for an attack on a military complex that killed at least six Pakistani soldiers. Speaking about the long-term prospects for Pakistan, we note that the unfolding political crisis may last for years, including due to problems in the economic and security spheres. The situation with the clan structure of the political life of the country is also getting worse. Although the main parties have ideological differences, they are mostly dominated by individuals or families, which has led to accusations of nepotism, patronage and corruption and is also a reason for protests and riots. American analysts emphasize in their reports that the best scenario for Pakistan will be the preservation of civilian power, provided that the military bloc continues to restrain radicalization and Islamist militancy. At the same time, it is noted that the country must maintain its pro-Western course, which confirms, if not direct, then indirect US participation in the overthrow of Khan. Especially considering that in their forecasts they regularly use the words "separatism", "democracy", "values", etc. Americans consider the coming to power of a radical Islamist regime that has no sympathy for the United States to be an unfavorable scenario. At the same time, Washington's ability to put pressure on Islamabad will be significantly limited by the presence of the latter's nuclear weapons. However, experts also state that there is no leader in Pakistan today who is similar in level to the Iranian leader of the Islamic Revolution, Khomeini, or his closest ally, the Great Ayatollah Khamenei. For Moscow, the events in Pakistan pose risks mainly from the point of view of the implementation of major projects between the two countries. First of all, this is the "Pakistani Stream". Despite the fact that its capacity is relatively small, only 12.4 billion cubic meters of gas per year (for comparison, the capacity of the Turkish Stream is 31.5 billion cubic meters per year) in conditions when it is necessary to redirect blue fuel to the east, any pipelines are important. So it is not surprising that during Khan's visit to Moscow, the "Pakistani Stream" was expected to become one of the key topics of negotiations.

Biden leaves Afghanistan without money

Note: this is a machine translation from the original Russian text On February 11, US President Joe Biden signed an order according to which the assets of the Central Bank of Afghanistan – about seven billion dollars - will be seized. At the same time, about half of these funds, or rather $3.5 billion, are planned to be spent on providing humanitarian assistance to the Afghan people, and the remaining funds will be sent as compensation to the families of the victims of the September 11, 2001 terrorist attack. It is assumed that after the blocking of all assets of the Afghan Central Bank, the money will be transferred to the accounts of the Federal Reserve Bank of New York. Thus, the Americans intend to actually deprive the Taliban ruling in Afghanistan today (a terrorist organization banned in the Russian Federation) of any financial reserves. The US administration reported: "The United States has imposed sanctions against the Taliban and the Haqqani Network (a terrorist organization banned in the Russian Federation), including for actions that threaten the security of Americans, such as taking our citizens hostage." Recall that the previous Afghan authorities placed more than $ 7 billion in foreign currency, gold and bonds in the Federal Reserve Bank of New York even before the Taliban came to power in August 2021 after the flight of the US military from the country. At the same time, about $9 billion in Afghan international reserves were initially stored in Western financial structures (mainly in the United States) and have been frozen until now, given the countries' refusal to de jure recognize the Taliban government. The blocking of finances by the United States is not the first such precedent, it is worth remembering at least how in 2019 the Americans imposed sanctions against the state-owned Venezuelan company PdVSA, prohibiting American firms from transferring funds to its accounts. Then, according to Washington's estimates, Venezuela also had to lose about $ 7 billion, and in the future, as a result of the loss of the market, another $ 11 billion annually. Experts of the British analytical center Economist Intelligence Unit (EIU) believe that Biden's decision is aimed at trying to find a solution to the humanitarian catastrophe that broke out in Afghanistan due to the collapse of the banking system, the lack of flows of foreign aid and investment, which previously made up most of the annual financial budget. At the same time, the Americans, as analysts note, do not intend to deal with the Taliban today. However, today it is still very early to say that the initiative of "sleepy Joe" is close to implementation. To begin with, such a decision in American realities will have to overcome a long legal quagmire, since the right of the US government to seize the reserve assets of another country in this way will be the subject of litigation. And this is at least months, or even more. However, it is worth noting here that the first "round" of judicial delays has already been won, when 150 US citizens, relatives of the victims of the September 11 terrorist attack, said that the government owed them about $ 7 billion, and a federal judge approved such withdrawal of funds against this background. The decision to allocate 3.5 billion US dollars – which for a moment is about 17-18% of Afghanistan's GDP in 2019 – to compensate for the 2001 attacks is highly controversial. Former Afghan President Hamid Karzai called it an "atrocity" against the Afghan people. Afghan groups living in the United States described it as "theft of public funds." At the same time, the EIU expresses doubt that the seized funds, as well as the money collected for Afghans by various organizations, will be used in a timely manner to help the population in a difficult winter. However, some of this money can be used to support agriculture later this year, which will help to stabilize the situation to some extent. At the same time, it is expected that the EIU does not notice that the United States initially became the reason for the Taliban coming to power, and today the administration's refusal to have at least some contacts with the radicals, as well as blocking the funds of the previous Afghan authorities, primarily hits ordinary residents of this state, and not the leadership of the terrorist group. Against the background of the non-recognition of the Taliban government, further delaying and postponing aid to Afghanistan means that food shortages in the country will only worsen, and millions of people will be on the verge of starvation. The Institute of the Middle East (IBB), in turn, notes that most of the money of the Central Bank of Afghanistan consists of receipts from various foreign exchange funds during the period when the United States controlled the situation in the country and tried to stimulate the economy with various payments. As a result, although the funds formally belong to Kabul, but it must pay them to commercial banks. About half a billion dollars more is the savings of ordinary Afghans. As a result, there may be a situation in which money was taken from Afghanistan, but debts remained, and commercial organizations are unlikely to write them off of their own free will. Especially considering the fact that the Taliban have repeatedly stated that they claim the money of the former authorities of the country. Withdrawing money from Kabul, the United States at the same time notes that American taxpayers and private companies have already spent more than 516 million dollars, only since August 2021, and in January 2022 announced the allocation of another 308 million to help Afghanistan. Moreover, a whole network of various organizations has already been created to support the Afghans, which is used to distribute humanitarian donations – from water and food to health and sanitation services. We should add that after the Taliban came to power, the Afghan economy, according to various estimates, has already lost about 30%, and there is no one to restore it – engineers, officials, experts, economists and a lot of other specialists simply fled the country in the summer of 2021. As a result, the UN reports that about half of the total population, that is, about 19 million people, faced the problem of food shortages. The Taliban even officially stated that if large-scale humanitarian assistance is not provided to Afghanistan, most likely many will decide to leave the country, creating a new migration crisis in the world. However, as IBV analysts note, referring to a number of American experts, even if the United States unfreezes all $7 billion of the past Afghan authorities, this will not help the country cope with deep structural problems and contradictions.

Japan and Australia have signed a major security agreement (machine translation)

On January 6, Australian Prime Minister Scott Morrison and his Japanese counterpart Fumio Kishida signed the Mutual Access Agreement (RAA), a defense and security treaty aimed at strengthening the alliance between the two countries. As members of the US-led Quad group (along with India), both countries (Australia and Japan) already considered themselves allies in the region. So, back in 2007, Tokyo and Canberra signed a joint declaration on security cooperation, seeking to coordinate issues such as border security, counter-terrorism operations and defense missions abroad. Nevertheless, according to British experts from the Economist Intelligence Unit (EIU) analytical center, the RAA is aimed at developing these relations, allowing the armed forces of Australia and Japan to use each other's military bases without any problems and ensuring that the military of the two states will be able to conduct more complex exercises in the region. It can be stated that the RAA establishes a legislative framework to increase compatibility and capabilities between the Australian Defense Forces (ADF) and the Japan Self-Defense Forces (JSDF) during military exercises and disaster relief operations. After coming into force, the agreement will allow to increase the number and scale of bilateral exercises between Australia and Japan in the Asia-Pacific region, as well as facilitate Australia's participation in multilateral exercises, for example, in the annual naval exercises "Malabar", in which the United States, Japan and India participate. The Mutual Access Agreement became the second major defense document implying joint military access, which Japan signed after the country reached agreements with the United States (the Status of Forces Agreement with the United States), under which the Americans can keep warships, troops and weapons on the territory of the Asian state. At the same time, the EIU adds that Japan is still guided by its pacifist constitution, which sets strict restrictions on the development and deployment of its armed forces. However, it is worth noting here that such a constitution did not appear because of the peaceful views of Japanese politicians, but as a result of the defeat of the country in World War II and does not fully reflect the real intentions of the authorities in Tokyo. The desire to regain the Kuril Islands is a vivid example of this. Like Japan, Australia views the United States as its main security partner – a fact that was confirmed by the signing of the AUKUS agreement in 2021. Moreover, on January 7, Japanese Foreign Minister Yoshimasa Hayashi and Defense Minister Nobuo Kishi held a virtual 2+2 meeting with U.S. Secretary of State Anthony Blinken and Pentagon Chief Lloyd Austin to discuss regional security issues. "The Ministers expressed their concern that China's continued efforts to undermine the rules-based order are creating political, economic, military and technological challenges for the region and the world. They decided to work together to deter and, if necessary, respond to destabilizing activities in the region," the joint statement on the results of the meeting said. More importantly, even before the start of negotiations, Anthony Blinken said that the United States and Japan plan to conclude a new defense agreement and stressed that the alliance of Washington and Tokyo "should not only strengthen existing tools, but also develop new ones." However, back to the RAA. According to British analysts from the EIU, the impetus for this deal was "China's ambitions in the region." At the same time, the reason is called "Beijing's alleged aggression against Taiwan, as well as ongoing disputes with Asian countries in the South China Sea." Political ties between Australia and China have been deteriorating for several years, with the former criticizing the latter's policies in Hong Kong, as well as Beijing's "connection" with the COVID-19 pandemic. Meanwhile, Beijing says that Australian politicians are guilty of "abuse of authority." Together with the signing of AUKUS and the tightening of domestic legislation, including regulating foreign investment, Australia is laying the foundation for long-term distancing from its largest export market. In general, the British version is confirmed by American experts from IHS Global Insight, who state that although the RAA does not directly mention mainland China, Morrison and Kishida in a joint statement issued after the summit expressed "serious concern about the situation in the South China Sea", and also confirmed their "strong objection to illegal maritime claims and China's actions" As a result, the EIU states that the signing of the RAA confirms the existing forecasts of their analysts that anti-Chinese sentiment in Asia will grow in the coming years among countries loyal to the United States. In turn, Global Insight believes that in 2022, the Kishida administration will continue to strive to improve bilateral security cooperation with various partners and work on new interstate documents on the transfer of military equipment, as well as further agreements aimed at strengthening practical cooperation in the field of security. The RAA does not need the approval of the Australian Parliament, but is likely to receive the approval of the parliament in Japan during its regular session starting in mid-January 2022. And although the agreement itself is unlikely to trigger retaliatory actions by the Chinese government against Australia and Japan, but if the agreement is followed by increased participation of the two countries in issues that Beijing considers its "red lines", for example, increased presence in the South China Sea or joint military exercises with Taiwan, Beijing will be forced to take retaliatory actions. Most likely – economic, or rather – to introduce trade restrictions. The new agreement between Japan and Australia is undoubtedly aimed, among other things, at deepening Tokyo's integration with the new American alliance – AUKUS, which should be considered primarily as a counterweight to Chinese influence and military power in the region. It is no secret that currently the main priority of American foreign policy is the confrontation with the Middle Kingdom. For the sake of concentrating forces in this direction, Washington is weakening its presence in the Middle East, an example of which is the withdrawal of troops from Afghanistan. Even the beginning of negotiations with Russia on security issues is considered by many experts precisely in the context of the American buildup of forces in the Chinese direction. The introduction of Tokyo into the AUKUS defense alliance and the signing of the RAA should be considered precisely in the context of the consolidation of US forces in the confrontation with Beijing. And the rhetoric of the participants during the negotiations on January 7, as well as after them, only confirms such a scenario.

Elections in Libya: risks and prospects

Note: this is a machine translation from the original Russian text Only about a month remains before the elections in Libya scheduled for December 24, which many analysts and experts call nothing less than "fateful" for the state torn apart by the civil war. At the same time, there are more and more unexpected turns. So, on November 16, the leader of the Libyan National Army (LNA) Khalifa Haftar officially registered as a candidate for the presidency of the country in the eastern city of Benghazi. In this context, British experts from the Economist Intelligence Unit (EIU) note that this initiative of the Field Marshal may fail, and it's not even that at one time he was declared a war criminal by the Government of National Accord (PNC). The problem is that, according to the legislation of Libya, which, however, is incomplete today, a person with a criminal record or dual, triple, etc. citizenship cannot run for president. Recall that Haftar, who at one time had ties with the National Front for the Salvation of Libya and the CIA, planned an invasion of Libya, but Muammar Gaddafi then prevented such a course of events by staging a coup in Chad, where Haftar was. As a result, the Americans evacuated the Field Marshal and 350 of his supporters to the States, where he was granted American citizenship. After that, Haftar lived for about 20 years in the city of Vienne, West Virginia. However, the EIU adds in this context that since the election rules are still unclear, Haftar may have some leeway. For example, a field marshal may abandon his military role in the Libyan crisis, which is provided for in the electoral legislation procedures proposed by the Libyan House of Representatives. In addition, on November 14, it became known that the son of former Libyan leader Muammar Gaddafi, Seif al–Islam Gaddafi, who has not been an active political figure in the country for the past ten years, also registered as a presidential candidate. However, despite his strong ties with local tribes, he is subject to an arrest warrant issued by the International Criminal Court (ICC) in 2011, according to which he was not convicted. Despite the extreme politicization and, I'm sorry, the uselessness of such an organization as the ICC, for Gaddafi, this may prove to be a serious legal obstacle. In addition, in the same 2011, Seif al-Islam Gaddafi was arrested by militias from the city of Zintan while heading towards Niger. Already in 2015, the Court of Appeal in Tripoli handed him a death sentence, which, however, was never carried out, since the Zintans refused to extradite him. Moreover, after a certain time, Gaddafi was released altogether. The Institute of the Middle East (IBV) emphasizes that the return of Seif al-Islam to Libyan politics is due, contrary to a number of statements by various analysts, not because he is a "Western project", but because he has established contacts among the Muslim Brotherhood (a terrorist organization banned in the Russian Federation) and other jihadists. As well as a significant amount of compromising material on their local figures. In addition, he has control over the extensive foreign holdings of the family of the former Libyan leader, enjoys the support of his Gaddaf tribe. But the most important thing, as noted in the IBV — "it was Seif al-Islam who at one time was behind the project of incorporating moderate and not-so-Islamists into the political structure of the Jamahiriya at the last stage of his father's rule." It should also be noted that the Libyan military prosecutor, in turn, also complicated the situation for both candidates by officially asking them to suspend their candidacies, emphasizing the significant risk that the elections will be disrupted as the election campaign begins. At the same time, the country's Supreme National Election Commission announced that after completing the registration process, the electoral body will check the credentials of candidates, and then announce who is eligible to run. In this regard, analysts at the Economist Intelligence Unit believe that both Haftar and Gaddafi will eventually be banned from running. And this forecast has really already begun to come true, albeit partially so far. On November 24, Gaddafi's son Seif al-Islam was excluded from the electoral lists for "legal reasons". Abdel Hamid Dbeiba, the Prime Minister of the Interim Government of National Unity (PNE), became another unexpected candidate for the elections for some. This decision was probably a surprise because he had repeatedly stated earlier, and also had a number of agreements that he would not run for the presidency. But even his inability to keep his own word is not the main problem. Analysts from the Institute of the Middle East note that, firstly, at the beginning of 2021, his appointment to the post of head of the Government of National Unity implied that Dbeiba was to become a neutral figure whose main task was the unification and integration of institutions and authorities. Which, of course, he couldn't handle. Neither the political nor the economic split in the country has been eliminated. Moreover, the LNA, led by Haftar, still controls most of the east of Libya. Secondly, in order to run for the presidency, Dbeiba had to leave the post of prime minister, as well as refuse to perform state functions at least three months before the elections. The IBV notes that all the other candidates, who are already more than 23, have fulfilled this condition, but Dbeiba has not. Thirdly, the very appointment of Dbeiba to the post of Prime Minister was very ambiguous. At the hearings within the framework of the Libyan Political Dialogue Forum under the auspices of the UN, a number of participants directly accused the politician and a former businessman from Misrata of corruption. Nevertheless, he became a compromise figure, which satisfied most of the participants. At the same time, it would not be superfluous to add that another presidential candidate, Akil Saleh, ex–speaker of the House of Representatives, even expressed a vote of no confidence in Prime Minister Dbeiba for misuse of budget funds, as well as for a skew in the distribution of funding in favor of Tripolitania and to the detriment of Cyrenaica. Speaking about the elections in general, we note the fact that the situation in Libya has been more or less stable over the past year. Moreover, investors and international observers even suggested that after the election campaign, a government could be formed as early as early 2022, which would allow for the implementation of post-war reconstruction projects in the country. Moreover, all major investors and countries with their interests in the African state, including Russia, China, the EU, as well as Turkey, Egypt, Tunisia, etc., will fight for them. EIU analysts even forecast real GDP growth of about 12%, which will be facilitated by high oil prices and, as a result, high export revenues. And according to Fitch Solutions estimates, real GDP will grow by another 4.6% in 2022, and by 6% in 2023. At the same time, nominal GDP in 2021 will amount to 10.3 billion dollars, in 2022 – 11.9 billion, and in 2023 – 13.3 billion. The population will also continue to increase. According to forecasts, this year it will reach 6.96 million people, and in 2023 it will reach 7.12 million. The growth of nominal and real GDP, the creation of a stable government and government in general – all this could really create conditions for the influx of large investments and, as a result, the beginning of the revival of a once prosperous African state. In this context, the elections scheduled for December 24 should be considered as a key risk to the stability and prospects of Libya. If controlled elections are held in the country, which will not lead to protests or a new round of civil war, then there will be chances for the implementation of positive scenarios, and if the situation in the country heats up, there will be no talk of economic growth, attracting foreign investment and at least some prosperity. At the same time, a significant number of factors can provoke a new crisis. Including the non-admission to the elections of any of the candidates, be it Haftar, Gaddafi, which has already happened, as well as Saleh or Dbeib. A number of analysts, including from the Economist Intelligence Unit, believe that the rather tense political situation in Libya may lead to the postponement of elections to 2022, even despite the fact that the process of registering candidates has already begun. The IBV, in turn, also emphasizes that today it is not clear how the security of polling stations will be ensured in Libya, whether the judiciary will be able to promptly and fairly resolve disputes related to elections, as well as how likely punishments will be carried out. Can election organizers guarantee that independent observers will have access to polling stations, even in remote areas? Has the Supreme National Election Commission organized an independent external audit of the voter register? All these questions suggest that if the elections take place, their results will be extremely doubtful and each of the candidates will try to challenge them. In Libyan realities – probably with the use of weapons. Such a scenario is also a significant risk that will remain on the agenda regardless of whether the elections are postponed or not.

Coup in Sudan: causes and consequences

Note: this is a machine translation from the original Russian text A new round of internal political crisis in Sudan led to a military coup. On October 16, the situation escalated to the limit when thousands of soldiers and their supporters staged a sit-in at the presidential palace, provoking clashes between supporters of the army and civilian authorities amid a significant shortage of bread and fuel across the country. Among the demonstrators were both the military themselves and their supporters from the rebel group of the Sudan Liberation Movement (SOD/M), whose leader Minni Arko Minnawi is also the current governor of Darfur, and the Movement for Justice and Equality (JEM), led by Finance Minister Jibril Ibrahim. Against this background, negotiations were held between the military and civilians on the dissolution or at least a significant change in the Cabinet of Ministers of Sudan. The civil bloc in Sudan is represented by a coalition consisting of the Party for Freedom and Change (FFC), the Sudanese Professional Association (SPA), resistance committees, trade unions and other civil society organizations. On October 25, all entrances to Khartoum, the capital of the African state, were blocked, as well as strategic roads and bridges of the city. The military surrounded the airport, and major airlines stopped flights to the air harbor. Against the background of how the city was blocked, supporters of the civil forces took to the streets, calling for "resisting the attempts of the military to usurp power in the country." As a result, after the meeting of the head of the ruling Sovereign Council Abdel Fattah al-Burhan and Prime Minister Abdullah Hamdok, mass arrests began in Khartoum. The head of the government and his chief adviser were detained. Several ministers, members of the Sovereign Council who were civilians, as well as the Governor of the capital were arrested. According to the Institute of the Middle East (IBV), after some time, reports began to arrive that many leaders of political parties were arrested in Sudan. Recall that the crisis in the country has been going on since 2019, when the Sovereign Council came to power after the overthrow of President Omar al-Bashir. According to the agreements reached between the representatives of the civilian bloc and the military, the Council was to govern Sudan for 39 months, and after that – to pass parliamentary elections. However, after a peace agreement was reached with the rebels and the authorities from South Sudan in 2020, the elections were postponed as far as 2024. As a result, there is a situation in the country when there is simply no legislative authority and it will appear no earlier than in 3 years. That is, there will be no one to certify the most important documents, agreements and laws for the country. Moreover, the constitutional declaration implied that General al-Burhan was to hand over the leadership of the Council to a civilian after 21 months, that is, back in May 2021. The IBV emphasizes that the reason for the coup was the desire of Prime Minister Hamdok to carry out a radical reform of the armed forces, which would significantly weaken the positions of the military leadership and "actually put an end to any serious influence of the power bloc on the country's politics and economy with a clear prospect for its representatives to soon be arrested by the ICC in The Hague." Such prospects did not contribute in any way to the continuation of the joint rule of the military and civilians, effectively putting an end to the agreements of 2019. Experts note that it is the fact that the military was "pushed to the wall" that explains why they took such a risky and unpopular step, which is likely to lead to negative consequences, including from the West. The American analytical center IHS Global Insight, in turn, notes that the protests are most likely largely organized by the military and the leadership of the security service to demonstrate their growing support of the population, mainly in rural areas, in contrast to the stronghold of democracy in the capital. Experts also emphasize the high organization of the protests, their planning and logistical support. For example, a Global Insight source in Khartoum confirmed local reports that buses were unloading passengers from other regions, including Eastern Sudan, at protest sites. Another indicator of concerted efforts to put pressure on the civilian leadership is the ongoing blockade of roads and key infrastructure in Eastern Sudan, including Port Sudan and the Khartoum-Port Sudan highway, by influential tribes associated with the army leadership, in particular the head of the Sovereign Council, General Al-Burhan. The ongoing month-long blockade of Port Sudan has resulted in an estimated $83 million in losses for the already weakening Sudanese economy. At the same time, blocking the transport infrastructure may lead to an even greater shortage of key goods, including fuel, wheat and medicines. The Americans also note that since the signing of the agreement on the Sovereign Council in 2019, the military has been actively trying to maintain power over civilian authorities and institutions during the transition period. At the same time, the possible departure from the post of head of the council of al-Burhan, most likely, will put him at risk of lawsuits from the civil government-led Committee for Empowerment, established in 2019. The military is also fomenting popular protests to put pressure on the civilian leadership to transfer power to influential tribal groups in resource-rich strategic areas such as Darfur and Eastern Sudan in order to ensure their loyalty. However, Global Insight believes that the military is unlikely to seek a direct coup. The United States and multilateral organizations such as the International Monetary Fund (IMF) have agreed to restore relations with Sudan only when a Sovereign Military and civilian Council is formed, and most likely will not want to continue normalizing relations or provide financial support to Sudan in the face of a military coup. In such a scenario, they are more likely to reinstate targeted sanctions and suspend critical access to debt relief and financial support initiatives. At the same time, the United States is "deeply alarmed" by the events in Sudan. "We reject the actions of the military and call for the immediate release of the Prime Minister and others who have been placed under house arrest," said Deputy White House Press Secretary Karin Jean-Pierre. US Secretary of State Anthony Blinken stated: "The United States strongly condemns the actions of the Sudanese armed forces," calling for the restoration of a civilian-led transitional Government. In turn , the representative of the US State Department , Ned Price , noted: "In light of these developments, the United States is suspending the provision of $700 million in emergency aid allocations from Sudan's economic support funds." He also added that American officials have not been able to contact Sudanese Prime Minister Abdullah Hamdok, and added that the US views the army's actions as a "military takeover." The IBV reports that according to a number of Western diplomats and other sources close to Hamdok, negotiations began between the two sides last week to resolve the current political crisis. Most likely, we are talking about an attempt to conclude a new power-sharing agreement. "This may not be a direct dissolution of the government or serious changes to the constitutional declaration signed in August 2019, but a kind of broad reshuffle that may provide a larger percentage of the quota for the distribution of power to the rebels and supporters of the military," the sources say. This confirms the version of Global Insight, according to which the military will not go for a direct seizure of power. Cameron Hudson, a member of the Atlantic Council and a former American diplomat, notes that the Sudanese security forces will look for a way to avoid direct responsibility and try to find a compromise. "The security services must have an exit strategy, they are cornered and afraid of what will happen to them if civilians eventually get their way. We also know that these leaders are not going to voluntarily go to the arms of the ICC or to the Kobar prison. They should feel that if they give up power, they will survive in the future Sudan; this will require compromises that may be unpopular," he said. Undoubtedly, if the Sudanese military still decide to seize full power, this step will be perceived extremely negatively in Washington. Especially in the context of the past and failed intra-Sudanese negotiations with the direct participation of the United States, when on October 23, US Special Envoy for the Horn of Africa Jeffrey Feltman met with Hamdok, General al-Burhan and paramilitary commander Mohammed Hamdan Daglo. "Feltman stressed that the United States supports a civil democratic transition in accordance with the expressed wishes of the people of Sudan," the U.S. Embassy in Khartoum said in a statement. Recent events in this context emphasize that the military ignored everything the Americans were talking about. And in this case, if anyone supports the Sudanese security forces, it will be the United Arab Emirates and Egypt. What 's not thick… As a result, Russian experts, as well as in the American Global Insight, come to the conclusion that today we are not talking about a classic military coup in Sudan. Rather, it is "removing a number of unacceptable military figures from the chessboard and replacing them with those who are ready to compromise with them."