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The Diplomatic Boycott of the Beijing 2022 Winter Olympics

Background Information

The Beijing 2022 Winter Olympics are set to take place this coming February, meaning that some countries have already begun planning out their delegations. However, things have taken an unexpected twist as in the last month, the United States, Great Britain, Canada, and Australia have all announced that they will be diplomatically boycotting the event. Notably, a diplomatic boycott’s major differentiation from a complete Olympic boycott is that in a diplomatic boycott, only government officials from the countries boycotting the games will be absent instead of all the athletes as well. Additionally, Japan has also proclaimed its intentions to not send an official government group to the Olympics, however, they have not formally stated this to be a flat-out diplomatic boycott. 

Why is this happening?

The United States, the first country to announce its decision to boycott the Olympics, stated that the decision comes in response to concerns over numerous human rights violations by China. Britain, Canada, and Australia’s reasoning for the boycotting echoed similar values, with Australia’s added notes of boycotting because of China’s hostility towards their imports and vocal criticism of Australia’s move to build new nuclear synonyms. 

China’s Response

As you can imagine, China has not responded favorably. It has denied all of the accusations made so far and has claimed that these countries are fabricating lies to make them look bad. They also stated the United States would pay for their actions and that they never wanted British or Australian government officials at the games in the first place. 

Impacts

The fallout with China has been mostly verbal for the United States, Britain, Canada, and Australia since their declaration to diplomatically boycott the games. However, as stated above, China has hinted at retribution, at least against the United States. Notably, both the United States and Australia are slated to host the Los Angeles 2028 and Brisbane 2032 Olympics respectively, so China’s retribution may come in the form of boycotting those games if nothing else. As for a more short-term impact of the diplomatic boycott of the games, it is evident that tensions have only continued to rise between China and the West, and with numerous powerful nations constantly at each others’ necks, who knows what’s to come for the international community?

Sources

https://www.nytimes.com/article/diplomatic-boycott-olympics.html 12/24/21

https://www.reuters.com/world/china/australia-joins-diplomatic-boycott-beijing-winter-games-2021-12-08/ 12/24/21

https://olympics.com/ioc/olympic-games 12/24/21

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News

Human Rights Group Shut Down By the Russian Supreme Court

Introduction

Memorial Human Rights Center — the oldest human rights center in Russia — is to be liquidated by the orders of the Russian Supreme Court. The decision was made after the Court revoked the legal status of its sister organization, Memorial, which started off as an initiative group that served the preservation of the memory of Soviet repression. In 2015, the group was marked as a foreign agent in the government register, and the most recent court ruling concluded the lawsuit in which prosecutors warranted the group violated its regulations.

Why is this significant?

On the 28th of December 2021, the court stated that Memorial “creates a false image of the USSR as a terrorist state, [which] whitewashes and rehabilitates Nazi criminals”. The closure of this internationally acclaimed organization marks a point in Russia’s history, as recently, more and more NGOs and media outlets have been closed as a result of the “foreign agent” legislation, apart from the Memorial Human Rights Center. The efforts of independent media to spark a conversation about the crimes under Soviet leaders have been effectively shut down many times showing the sensitivity of the current government to criticisms of the country’s past. 

The decision to close the organization was called “political” by Genri Reznik, a lawyer who represented Memorial in court, among many others. He defended the organization by stating the following: “The Memorial Society promotes the health of the nation. To eliminate this from the history of the country now means to contribute to the idea of ‘the state is always right’.”

Public Outcry

Because of Memorial’s popularity among the Russian public, the group was hoping that large public support might negate the court’s decision. Memorial gathered more than 127,000 signatures in its support, followed up by testimonies from people who uncovered the stories of their relatives as a result of Memorial’s work of obtaining the necessary records. 

People such as the former Soviet president Mikhail Gorbachev and the Novaya Gazeta editor, Dmitry Muratov have also spoken about this issue. “The long-term activity of Memorial has always been aimed at restoring historical justice, preserving the memory of hundreds of thousands of victims during the years of repression, preventing such things now and in the future,” they said in a joint statement.

Police arrested several protesters, out of around 100, who stood outside the court and chanted “shame” when the decision to shut down the group was made.

Conclusion

As such events increase day by day, public outcry becomes more and more significant on a global scale. Memorial, in particular, stated they would appeal the ruling before the European Court of Human Rights. It seems as though the closure of groups such as this one, results in a bigger acknowledgment of Russia’s past than it would have without the court’s extreme verdict. Capturing the attention of international media, the case was commented on by many, including Dr. Piotr M. A. Cywinski, the director of the Auschwitz Museum, saying “A power that is afraid of memory, will never be able to achieve democratic maturity”.

Sources

  1. Al Jazeera. “Russian Court Orders Closure of Leading Rights Group Memorial.” Www.aljazeera.com, 29 Dec. 2021, http://www.aljazeera.com/news/2021/12/28/russia-supreme-court-orders-closure-of-leading-rights-group. Accessed 3 Jan. 2022.
  2. International Memorial. “Memorial – Memorial History. A Timeline.” Memo.ru, http://www.memo.ru/en-us/memorial/memorial-history-timeline/. Accessed 3 Jan. 2022.
  3. Rainsford, Sarah. “Russian Court Orders Oldest Civil Rights Group Memorial to Shut.” BBC News, 28 Dec. 2021, http://www.bbc.co.uk/news/world-europe-59808624. Accessed 5 Jan. 2022.
  4. Roth, Andrew. “Russian Court Orders Closure of Another Human Rights Group.” The Guardian, 29 Dec. 2021, http://www.theguardian.com/world/2021/dec/29/russian-court-orders-closure-of-another-human-rights-group. Accessed 5 Jan. 2022.
  5. —. “Russian Court Orders Closure of Country’s Oldest Human Rights Group.” The Guardian, 28 Dec. 2021, http://www.theguardian.com/world/2021/dec/28/russian-court-memorial-human-rights-group-closure. Accessed 3 Jan. 2022.
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News

Biden Releases Reserves to Pump Oil Supply

Introduction

President Joe Biden recently announced the release of strategic oil reserves to alleviate the global lack of supply and ease soaring gas prices. In parallel with nations such as China, India, Japan, South Korea, and the United Kingdom, the US Department of Energy has decided to release 50 million barrels of oil from the “Strategic Petroleum Reserve” to assist in lowering energy prices and address the current pandemic-induced mismatch between oil demand and supply.

Context

Going back to basics, we can see how this move would help slow down rising gas prices for Americans: an increase in the supply of oil will put downward pressure on oil prices and cause an extension in the quantity demanded. The shortage of oil that is occurring due to economic recovery from the pandemic worldwide is risky for economic growth. Since oil is an input in numerous industrial activities, energy prices are a very important economic indicator. Oil prices directly affect the prices of goods made with petroleum products, and they indirectly affect the cost of things such as transportation, manufacturing, and heating. Thus, rising oil prices are generally indicative of rising inflation, and vice versa. 

Biden’s announcement comes after producers in OPEC (The Organization of the Petroleum Exporting Countries) resisted calls to increase their supply in order to help cool down the market and ease rising inflationary pressures. It is important to note that around 30 million of these barrels are in fact an exchange, where companies and traders will take the oil now and return it over a specific time frame in the future. This allows the Department of Energy to leverage its Strategic Petroleum Reserve, which includes over 600 million barrels stored in Texas and Louisiana, during future economic crises. An additional 18 million barrels will be “an acceleration of a previously authorized sale.”

Outlook to the future

The President has been under a spotlight pressuring him to provide Americans with economic relief to combat high gas prices and inflation. He has been blamed for the current economic state of the country, namely the record-high inflation levels. In addition to his decision to release the reserves, he has called on federal regulators to investigate whether oil and gas companies are engaging in”illegal conduct” (anti-consumer or anti-competitive behaviour) by profiting from skyrocketing energy prices during the pandemic. 

As inflation in the States remains exorbitantly high, we can only wait and see what impact Biden’s current plans will have on domestic consumers and how they impact the macroeconomy.

Sources

  1. https://www.whitehouse.gov/briefing-room/statements-releases/2021/11/23/president-biden-announces-release-from-the-strategic-petroleum-reserve-as-part-of-ongoing-efforts-to-lower-prices-and-address-lack-of-supply-around-the-world/
  2. https://www.cnbc.com/2021/11/29/biden-ready-to-release-more-oil-reserves-to-cool-price-amos-hochstein.html
  3. https://www.usatoday.com/story/news/politics/2021/11/23/gas-prices-biden-release-50-m-barrels-strategic-oil-reserve/8722649002/
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News

The Belarus-Poland Border Crisis and its consequences

Introduction

The Belarus-Polish border crisis has become the biggest challenge to the EU’s border in years.  The standoff between migrants and the Polish border guards seems to have been fueled by Belarus’ tensions with the EU. Although some migrants have managed to cross into Poland from Belarus over the past couple of weeks, Poland has recently strengthened its border and closed crossings in response to the crisis. For the Poles and EU member states, the aforementioned crisis is seen as an artificial one created by Belarus’ authoritarian president, Alexander Lukashenko, to get an advantage in the political game between the two.

Origins of the tensions

Since the beginning of November, there has been an influx of migrants from the Middle East [Iraq, Syria, Afghanistan] as well as other countries at the Belarus-Polish border. These migrants have been camped in the Białowieża Forest in freezing temperatures. According to a nonresident fellow at the Atlantic Council’s Eurasia Center, Hanna Liubakova, “it’s a terrible situation” for those caught in the camps without food or proper clothing. Several migrants trapped at the border have died due to the freezing conditions.

Lukashenko’s regime has denied the charge that his administration has been actively encouraging migrants to come to Minsk, before pushing them to the border, encouraging them to clash with Polish authorities. The migrants have come to the border with the hopes that they will cross into Poland since Belarus is not a member of the EU. Poland being a member represents a doorway into the EU and the promise of a better life for these migrants. (BBC)

Although the number of migrants at the border is roughly 4.000, it has become the EU’s biggest border challenge since 2015, when hundreds of thousands of migrants crossed from Turkey into Europe. More than a million migrants were eventually allowed into the union as a result. 

In the past week, Polish guards used water cannons and tear gas against stone-throwing migrants at the Kuznica-Bruzgi border crossing. Other scenes similar to this one have appeared on the border, supporting Lukashenko’s anti-EU agenda following the union’s sanctions imposed on his regime after the August 2020 elections. (New York Times)

Lukashenko’s hopes and aims

For more than 25 years, Lukashenko has remained the leader of Belarus, returning for a sixth-term as president in a vote which is widely considered fraudulent.

In May, Belarus forced an international flight to land in the capital of Belarus, Minsk, in order to apprehend Roman Prostasevich, a journalist, former editor and founder of an opposition blog and social media channel. The outrageous act prompted the EU to impose retaliatory sanctions. Shortly after, Alexander Lukashenko hinted at the ability for Belarus to quickly stir up a migrant crisis against the neighboring EU member states — Poland, Lithuania, and Latvia.

“Lukashenko wants to show his revenge for sanctions,” says Liubakova of the Eurasia Center. But the leader also wants to switch the discussion from political prisoners, torture and repression under his rule to something external, she says: “he wants to refocus the situation and force the West to see the crisis at the border and ignore the human rights situation in Belarus.” The aim of this is to try to begin discussions and lift the sanctions. Lukashenko understands the leverage he can acquire through force, and believes that through this he can forcefully restore bilateral dialogue. (Inews)

What can Poland and the EU do?

The EU has planned additional sanctions against Belarus as a response to the crisis. Considering the fact that the entire causal factor of this manufactured crisis are the sanctions, the EU should be wary of what it does next.

Outgoing German Chancellor Angela Merkel managed to have a discussion with Lukashenko on Monday, the 15th of November. This rare phone call between the two leaders allowed Lukashenko to secure dialogue with the EU. Germany would most likely receive the highest influx of new immigrants if the Polish border opened up, therefore, it was prudent for Merkel to negotiate. Their talks seem to have been successful since new reports have emerged, stating that Belarus is putting migrants on buses to be transported out of the area. Additionally, in an effort to further de-escalate the situation, Merkel spoke with President Vladimir Putin of Russia, asking him to use his leverage on Lukashenko. So, Lukashenko has succeeded in re-opening dialogue, but it’s unclear where that might lead, given continued international distaste for his authoritarian tactics. (New York Times)

However, now there is the question of where the migrants will go. According to international law, the European Union and Poland are obligated to hear the case of asylum seekers. As Jan Egeland of the Norwegian Refugee Council says, “both sides of this abject power play should take responsibility for these migrants, who are vulnerable people. Belarus and Russia have to stop using them as pawns on some kind of a chessboard.” (Inews)

Sources

  1. https://www.bbc.com/news/world-europe-59289998
  2. https://inews.co.uk/news/world/belarus-what-happening-poland-border-crisis-why-migrants-enter-eu-explained-1307498
  3. https://www.nytimes.com/2021/11/17/briefing/poland-belarus-border-crisis.html
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News

What is COP26 and why is it so important?

Introduction

It is the 26th iteration of the Conference of the Parties to the UN Framework Convention on Climate Change (UNFCCC). This annual meeting brings together the 197 members of the convention to take joint action against climate change. The representatives of the countries discuss issues such as climate change mitigation and financing to support developing countries in their efforts to move away from fossil fuels. This year, the conference took place from the 31st of October to the 12th of November.

History of COP26

The first UN climate talk was held in Berlin, Germany, in 1995. At the historic COP21 meeting, held in 2015, countries approved the Paris Agreement. This was a landmark deal under which each country agreed to submit pledges on emissions reductions for its country and adaptation measures, in a collective effort to keep global warming. 

The COP meets every year, unless the Parties decide otherwise. The COP usually meets in Bonn, the seat of the secretariat, unless a country offers to host the session. Just as the COP Presidency rotates among the five recognized UN regions — Africa, Asia, Latin America and the Caribbean, and Europe (Eastern, Central, and Western) — there is a tendency for the venue of the COP to also shift among these groups.

The secretariat was established in 1992. Originally, the secretariat was located in Geneva. In 1995, however, the secretariat moved to Bonn, Germany. 450 staff are employed at the UN Climate Change, hailing from over 100 countries to represent the many distinct member countries. At the head of the secretariat is the Executive Secretary, a position currently held by Patricia Espinosa.

This year’s COP26

This year the meeting was held in Glasgow UK, from 31st October to 12th November. The UK will share the presidency with Italy, which hosted the last ministerial meeting before the conference.

Five years down the line, countries were scheduled to return to the forum and finalise a rulebook on how to implement the Paris Agreement. The UNFCCC secretariat pushed for this by asking all countries to update their NDCs. None of this happened in 2020 due to the Covid-19 crisis, which led the UN to postpone the meeting. Negotiations resumed this year with the same agenda: “Nations will need to reach consensus on how to measure and potentially trade their carbon-reduction achievements. They will also need to ratchet up their national pledges for a chance to keep global warming within 1.5 °C.”

Why is COP26 so important for South Asia?

South Asia is home to nearly a quarter of the world’s population, and to some of the countries most vulnerable to the impacts of climate change. According to the Intergovernmental Panel on Climate Change (IPCC), the world is currently well on track to reach 1.5C of warming by 2040, and South Asian economies are among the vast majority of countries that are not doing enough to improve on this. 

India has been in the spotlight recently as the world’s potential next biggest polluter in the second half of this century, if China and the US reduce their carbon emissions as they have promised. Despite its renewable targets, 80% of India’s energy needs are currently met by fossil fuels, mostly coal. 

International partners have been putting pressure on the Modi administration to set a 2050 deadline for India’s emissions to reach ‘net-zero’, meaning that India would be able to absorb all the emissions it produces. At this year’s COP meeting, Kelkar said that “we need to meet the long-overdue climate finance target of USD 100 billion per year, & we need to close years of pending negotiations on international carbon trading.” While a net-zero commitment by the mid-21st century may be unfeasible for countries in South Asia, Bangladesh and Nepal have submitted updates to their climate pledges prior to COP26, increasing their mitigation efforts in line with the principles of the Paris Agreement.

Top takeaways from COP26

The first two days of the COP26 featured over 100 high-level announcements and speeches. These helped to set the tone for the two-week long conference. Over 140 countries submitted updated 2030 climate plans, or nationally determined contributions (NDCs).

India: announced a commitment (“Panchamrit”) on climate change, which included:

  • Resolution to reach net-zero emissions by 2070, including significant near-term commitments to work toward that goal
  • Pledge to install 500 gigawatts of non-fossil fuel electricity and to generate 50% of India’s energy capacity with renewable energy sources
  • Promise to reduce India’s carbon intensity 45% by 2030 and to cut its projected carbon emissions by 1 billion tons between now and 2030. This will be achieved by steering the country towards a low-carbon development pathway and sending strong signals to every sector about what the future holds.

Brazil

  • Formalized its pledge to reach net-zero emissions by 2050 
  • Set a new goal of reducing emissions by 50% by 2030, however the emissions impact from this goal is no stronger than what the country put forward in 2015
  • It is critical that Brazil comes back soon with a serious commitment to reduce emissions.

China

  • Released its new climate commitment just ahead of COP26, which includes a plan to peak emissions by 2030 and reach carbon neutrality before 2060. This reiterates President Xi’s announcement last December at the Climate Ambition Summit.

New Zealand

  • submitted an updated climate plan with a strengthened 2030 emissions reduction target, aiming to cut its emissions in half from 2005 levels.

Argentina

  • also nudged its 2030 emission cap downward from 359 to 349 million metric tons of CO2 equivalent in 2030.

Sources

  1. https://www.wri.org/insights/top-takeaways-un-world-leaders-summit-cop26
  2. https://www.bbc.com/news/science-environment-59088498
  3. https://www.thethirdpole.net/en/climate/cop26-explained/?gclid=Cj0KCQjwrJOM%20BhCZARIsAGEd4VEAqEsNHfpKPhngRsaAymC52hqhfq5vWy8gTmDzhoItPSwjmYFt%20koEaAv-BEALw_wcB
  4. https://www.thethirdpole.net/en/climate/cop26-south-asia-india-whats-at-stake/
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News

The G20 Summit in Rome, Italy

Who attended?

These past few days, the political leaders of the G20 member countries met in Rome to discuss a handful of issues. Some of the politicians who were present are: 

  • Alberto Fernandez (Argentina)
  • Scott Morrison (Australia)
  • Jair Bolsonaro (Brazil)
  • Justin Trudeau (Canada)
  • Xi Jinping (China)
  • Emmanuel Macron (France)
  • Angela Merkel (Germany)
  • Mario Draghi (Italy)
  • Narendra Modi (India)
  • Joko Widodo (Indonesia)
  • Manuel Lopez Obrador (Mexico)
  • Moon Jae-in (South Korea)
  • Vladimir Putin (Russia)
  • Salman bin Abdulaziz Al Saud (Saudi Arabia)
  • Cyril Ramaphosa (South Africa)
  • Recep Tayyip Erdogan (Turkey)
  • Boris Johnson (United Kingdom)
  • Joe Biden (United States)

Joining these political leaders was the President of the European Commission of the European Union, Ursula von der Leyen, and President of the Council of the European Union, Charles Michel. Antonio Guterres, general director of OMS, specifically discussed financial issues relating to the health of the world population.

What was discussed?

So, first and foremost I want to say my thoughts on the possible solutions that will be discussed in the hopes of resolving some of the world’s current Economics problems.

  1. The European Union will invest in the eco-transaction for social enterprises, which are present in nations like Germany and Netherlands, but not in Turkey or in the United States at the moment. Mario Draghi was noted as saying that the Turkish president did not consider the political circular economy. Therefore, there will be no equality in the sense of financial economics in the future, and as a result there will be more discrepancies in terms of environmental sensibility. 
  2. The markets will be more open to Artificial Intelligence. This is especially important as AI is now considered fundamental for new inventions and innovations. 
  3. The United States will invest more on the prototype of financial democracy. In general, it has been noticed that Biden’s government is more concerned with solving population problems than Trump’s government. 
  4. China will be the first world power nation. Compared with all other international markets, China is one of the best markets for social capital that Chinese companies can invest with and also for AI (Artificial Intelligence).

Conclusion

In general, I believe there will be considerable investments in innovation, but I also think there will be areas that will see more progress than others.

I believe the central areas will be capital growth, new health solutions and eco transactions, with a greater focus on the rights of employees. Meanwhile , I think that the semi-peripheral areas will be capital growth, new health solutions but also more consideration of people’s rights on goods and services and on working issues of industries. In my opinion, the periferica areas will be debts and stagflation. It is also possible that there will be problems about having credits as paying back debts may become difficult to do. However, also inflation and financial stagnation are likely to lead to many problems, meaning that no investments will be made into sustainable finance. 

Let’s hope there will be a graduating consideration of nations that are in critical situations, like Perù, Mexico, Spain, and many African countries.

Sources

  1. https://www.consilium.europa.eu/en/
  2. di Taranto, Giuseppe. “The History of Economics.” (2012)
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Analysis News

AUKUS: Why is it such a big deal?

Introduction

Before answering the question of why the AUKUS agreement is such a global issue, we must first understand its background and contents. Over the past couple of decades, ever since the end of the Cold War between the USSR and the USA, a new nation has been rapidly expanding its influence on the world. That nation is China. In response to China’s growing power, many alliances, notably the World War II-era “Five Eyes” alliance (consisting of the USA, UK, Australia, New Zealand & Canada), now seem to be overwhelmingly focused on Beijing. Announced on the 15th of September, 2021, the AUKUS agreement has become the newest addition to the long list of actions taken by the West to counter China.   

Motivations for AUKUS

AUKUS has been described by analysts as one of, if not the most significant security arrangement between the US, UK and Australia since World War II. According to the states involved in the agreement (USA, UK & Australia), the focus of AUKUS is to maintain “a free and open Indo-Pacific,” with the help of nuclear-powered submarines on patrol. The new security partnership will supply Australia with nuclear-powered submarine technology which will be provided by the USA and UK. While it may take over a decade for the Australian Navy to deploy the first submarine, the agreement represents the USA’s mission to form a stronger threat in Asia and the Indo-Pacific to offset China’s rapidly modernizing military. Even though Australia has tried to remain balanced concerning her ties with the USA and China, the recent barrage of disciplinary trade reprisals from Beijing has drastically shifted Australia’s stance on the matter.

China’s Reaction

What does China think of this agreement? Unsurprisingly, Beijing has consistently lashed out at what it calls a “Cold War mentality,” denouncing anti-China partnerships. Chinese officials have stated that the AUKUS agreement will cause an arms race in the Indo-Pacific. From the Chinese perspective, the agreement was not created for competitive purposes, but instead is a deliberate attempt to impede China’s development. Relations have become increasingly tense, even before AUKUS. President Joe Biden’s administration has continued to put effort into preventing China’s economy from pulling ahead. Furthermore, Beijing has sparred with the UK over Hong Kong and Canada over detained citizens while Europe has called China a “systemic rival”.

Reaction of other countries

China is not, however, the only nation that has been upset by AUKUS. France, and many other NATO member states, such as Germany, have denounced the agreement. France suffered the most, losing a $37 billion deal between France and Australia concerning diesel-powered submarines. Adding insult to injury, France – a very old ally of the West – found out about the new pact just a few hours before it was announced to the public. The Asia-Pacific is a key strategic and economic region for France as 1.65 million French citizens reside on islands including La Reunion, New Caledonia, and French Polynesia. The cancellation of a deal that would reinforce such a region is a great loss for France. The French Foreign Minister, Jean-Yves Le Drian described AUKUS as a “stab in the back”. As a response, France has recalled her ambassadors to Washington and Canberra for the time being.

Conclusion

All is not lost, however. In a joint statement, President Joe Biden of the USA and President Emmanuel Macron of France have agreed to work on creating “conditions for ensuring confidence and proposing concrete measures toward common objectives”. The two leaders have said they will meet in Europe towards the latter half of October to further mend the damaged diplomatic relations.

Sources

  1. BBC. “Aukus Pact: France and US Seek to Mend Rift.” BBC News, 23 Sept. 2021, http://www.bbc.com/news/world-europe-58659627.
  2. —. “UK, US and Australia Launch Pact to Counter China.” BBC News, 15 Sept. 2021, http://www.bbc.com/news/world-58564837.
  3. Chazan, Guy. “Aukus Security Pact Is ‘Insult to a Nato Partner’, Says Merkel’s Adviser.” Financial Times, 24 Sept. 2021, http://www.ft.com/content/dfc4f860-c178-4c2a-a46c-c5f4e5595b1a. Accessed 26 Sept. 2021.
  4. Prof. Nursin Atesoglu Guney. “ANALYSIS – Third Front of New Cold War Expanding in Asia-Pacific.” Www.aa.com.tr, 24 Sept. 2021, http://www.aa.com.tr/en/analysis/analysis-third-front-of-new-cold-war-expanding-in-asia-pacific/2373757. Accessed 26 Sept. 2021.
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News

The fate of Afghanistan’s economy after the Taliban takeover

Introduction

Afghanistan is one of the poorest countries in the world due to the destruction of its limited infrastructure through wars, predominantly after the Soviet Invasion (1979- 1989). Along with political instability and high dependency on foreign aid, this state of depravity is perpetuated.

The biggest news in the world from the past few weeks stems from the Taliban takeover of Kabul, the capital of Afghanistan, and effectively replacing the Afghanistan government. With most government officials and Former President Ashraf Ghani fleeing the country, the Taliban has now taken complete control of the presidential palace and declared that the war is over. How will this impact the economic conditions of Afghanistan?

Foreign Investments

As mentioned earlier, Afghanistan is greatly dependent on foreign aid. However, international aid flows are under a cloud of profound uncertainty. German Foreign Minister Heike Maas told the ZDF broadcasting program, “We will not give another cent if the Taliban takes over the country and introduces Sharia law.”(Sharia Law is the Islamic legal system, which governs religious rituals and aspects of day-to-day life, including finance and banking).

Moreover, following recent unrest and the toppling of the government, investor confidence in Afghanistan could drop to an all-time low.

 So, now that the Taliban has taken complete control of Kabul, international trade and business will soon come to a halt as the militant group has stopped all exports and imports, particularly with India. India imports about 85% of its dry fruits from Afghanistan. The Federation of India Export Organisation expressed concern that dry fruit prices may go up in the coming days due to the turmoil in Afghanistan.

 Hence, the Afghanistan economy has the potential to experience a significant downfall, since international aid accounted for ~43% of their GDP (Gross Domestic Product) in 2020, per the World Bank. Thus, considering the following in terms of foreign investment, the nation has a bleak future.

Mineral Resources

According to WION, while Afghanistan may be one of the poorest nations in the world, it is a region of vast mineral resources. In 2010, American geologists said the resources in this region are worth about – $1 trillion.

Valuable minerals such as iron ore, copper, gold, lithium, sulphur, and various gemstones, to name a few. A 2010 report of Afghanistan’s Ministry of Mines recorded the country’s copper resource at almost 30 million tonnes. Further, another report in the same year said that 28.5 million tonnes of copper lay hidden in undiscovered deposits, bringing the total to roughly 60 million tonnes. Given current rates at the London Metal Exchange, the mineral resources would amount to ~$500 million. Moreover, Afghanistan has a gold resource of at least 2700 kilograms, making gold the most favourable hedge ever since inflation. (Inflation is the rate at which the general level for the price of goods & services rise, resulting in a sustained drop in the purchasing power).

However, one mineral has particularly a striking potential. Lithium is a metal used in the batteries of mobile devices and electric cars. The latter application will be crucial in the future, as the automobile sector is quickly transitioning towards zero-carbon forms of transport.

Today, lithium is also facing unprecedented demand, with an annual market growth of 20% compared to just 5-6% a few years ago. According to the International Energy Agency, global demand for lithium is expected to grow by over 40 times by 2040. Additionally, The Pentagon memo designated Afghanistan as “The Saudi Arabia of Lithium”.

China Takes Interest?

Back in 1996, when the Taliban first took control of Afghanistan, China refused to recognize their rule and left their embassy shut for years. This time around, Beijing has been one the first to embrace the Islamist militants next door.

But, what prompted such a change of heart?

Director of the China Program at the Washington-based Stimson Center Yun Sun said: “Twenty years ago, China was not a global power and what was happening in Afghanistan did not bother China.”

Today, China commands an economy worth $14.7 trillion—more than 17 times its size in 1996—in addition to a massive trade-and-infrastructure initiative that stretches across the Eurasian landmass. Although China has not officially sought ties with the militant group, there are hints that it will provide financial assistance to Afghanistan.

 China is currently eyeing the mineral resources of Afghanistan, which are worth $1 trillion. Moreover, the large reserves of copper and lithium specifically will be highly beneficial for the Chinese electronics industry.

The Taliban will need significant assistance to rebuild Afghanistan. Because Western countries and financial institutions are unlikely to assist, China, with its massive reserves of capital and proximity to Afghanistan, can play a supporting role in the survival of a future Taliban government.

Conclusion

In conclusion, Afghanistan may have a chance to grow its economy under such grave circumstances with Chinese assistance.

The exploitation of the rare earth minerals would bring foreign currency to Afghanistan, whose weak economy relies on subsistence agriculture, services, and international aid. However, some observers are calling not to overestimate China’s interests in Afghanistan.

Their statements imply that the idea of a China which would get its hands on the mineral wealth of Afghanistan is a fantasy. Researchers say that the recent investments that China will specifically be for the exploitation of pine nuts (Pine nuts are one of the more expensive nuts on the market). It can be said that Chinese interest and collaboration with Afghanistan under Taliban control may be short-lived.

Sources


1.What next for Afghanistan’s economy? – BBC News
2. Financial News – Forex News, Stocks Market News (fxempire.com)
3. The fate of Afghanistan economy under Taliban rule | Business News (timesnownews.com
4. Minerals worth trillion dollars: So really how big is Afghanistan’s economy under Taliban control? (msn.com)
5. What next for Afghanistan’s economy? – BRIGHT NEWSROOM
6. Why China is interested in Afghanistan (linkedin.com)
7.Taliban to reap $1 trillion worth of Afghanistan’s mineral wealth – Frontline (thehindu.com)

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News

Taliban Rises to Power Again

Introduction

What are the Taliban? The Taliban is a militant terror group that ruled Afghanistan under the command of Mullah Omar (founder and the first leader of the Taliban) from 1996 – 2001 until they were toppled by the U.S. forces. In response to the 9/11 attack, the US launched “Operation Enduring Freedom,” which was aimed at all the suspects of the attack — mainly Al Qaeda and Taliban. Due to this, the Taliban was overthrown easily. The ideology followed by the Taliban is extremist. They aim to install Islamist rule all across Afghanistan. They have almost 85,000 fighters according to recent NATO estimates.

Timeline

Early1990s 

● Taliban emerged in Pashtun areas straddling Pakistan and Afghanistan 

1995 

● Captured the province of ‘Herat’ 

27 SEP 1996 

● Taliban captured the Afghan capital, Kabul, and the regime of President Burhanuddin Rabbani was overthrown 

● Islamic Emirate of Afghanistan was established by Mullah Omar 

1998 

● 90 percent of Afghanistan was captured 

● They enforced their own Islamic or Sharia Law once they were in power 

2001 

● Al-Qaeda, led by Osama Bin Laden in Afghanistan, carries out the largest terror attack ever conducted on US soil (9/11) 

● A US-led coalition bombs Taliban and al-Qaeda facilities in Afghanistan. Targets include Kabul, Kandahar and Jalalabad. 

(7th of October) 

● Fall of Kabul; the Northern Alliance, a group of anti-Taliban rebels backed by coalition forces, enters Kabul as the Taliban fled the city. (13th of November) 

2004 

● New constitution, 26th of January; the constitution paves the way for presidential elections in October 2004.

● Hamid Karzai, the leader of the Popalzai Durrani tribe, becomes the first president under the new constitution. He serves two five-year terms as president. 

2006 

● UK troops deployed to Helmand, May 2006 

2009 

● 17th of February 2009, U.S. President Barack Obama approves a major increase in the number of troops sent to Afghanistan. 

2011 

● Osama bin Laden killed, 2nd of May 2011 

2013 

● Death of Mullah Omar, 23rd of April 2013 

2014 

● NATO ends combat operations, 28th of December 2014 

2015 

● Taliban resurgence 

2020 

● The US and the Taliban sign an “agreement for bringing peace” to Afghanistan, in Doha, Qatar on the 29th of February. The US and Nato allies agree to withdraw all troops within 14 months if the militants uphold the deal.

2021 ● On the 16th of August, the Taliban returned to power, In just over a month, the Taliban swept across Afghanistan, taking control of towns and cities all over the country, including Kabul. Afghan security forces collapsed in the face of the Taliban advance.

What is happening in Afghanistan now?

On April 14, US President Joe Biden announced that the US forces would withdraw by September 11th, 2021. In May 2021, foreign forces started to withdraw from the country and the Taliban stepped up to defeat the Western-backed government. The Taliban captured 26 provincial capitals in just 10 days, while Kabul fell in 1 day and the Taliban were thus able to take control over Afghanistan again. On August 15th, Afghanistan’s President Ashraf Ghani, who was backed by the U.S., resigned and fled to Oman.

On August 14th, Joe Biden made a statement about the Afghanistan crisis and what role the U.S. will play : 

“Over the past days, I have been in close contact with my national security team to give them directions on how to protect our interests and values as we end our military mission in Afghanistan. 

First, based on the recommendations, I have authorized the deployment of approximately 5,000 U.S. troops and an orderly and safe evacuation of Afghans who helped our troops during our mission and those at special risk from the Taliban advance. 

Second, I have ordered our Armed Forces and our Intelligence Community to ensure that we will maintain the capability and the vigilance to address future terrorist threats from Afghanistan. 

Third, I have directed the Secretary of State to support President Ghani and other Afghan leaders as they seek to prevent further bloodshed and pursue a political settlement.

Fourth, we have conveyed to the Taliban representatives in Doha that any action on their part on the ground in Afghanistan, that puts U.S. personnel or our mission at risk there, will be met with a swift and strong U.S. military response. Fifth, I have placed Ambassador Tracey Jacobson in charge of a whole-of-government effort to process, transport, and relocate Afghan Special Immigrant Visa applicants and other Afghan allies. Our hearts go out to the brave Afghan men and women who are now at risk. We are working to evacuate thousands of those who helped our cause and their families.”

What does the Taliban’s return mean for the citizens of Afghanistan?

Questions are being asked about how the group will govern the country, and what their rule means for women, human rights, and political freedom in Afghanistan. Its leadership says it wants peace and an inclusive government that is compatible with Islamic law or the Sharia Law, but many Afghans are skeptical about this and thousands have already fled the country, fearing a return to a brutal and repressive regime.

A brief about the Sharia law: 

Sharia is Islam’s legal system. It is the set of laws that govern the daily lives of Muslim people and it is based on a combination of the Quran and the teachings from the prophet Muhammad. 

Taliban officials have repeatedly tried to assure Afghan citizens, particularly women, that this time the rule will be different. Earlier this week, the Taliban urged women to join its government. Some representatives have also said that women will be allowed to work and study. When they were last in power, the Taliban had made full burqa compulsory but this time they said that women will not be required to wear a full Burqa, and can opt for just the hijab (headscarf). Well, what is the actual situation on the ground? Despite their assurances, parts of the country are seeing a return to the repressive old order, women in some provinces are not allowed to leave their home without a male relative escorting them and were also denied access to universities in some places, girls have been banned from returning to schools and there have been reports of several forced marriages. Smartphones and television have been banned, young men are being forced to join their ranks. Reporters and peace activists who raised their voices against the Taliban face risk to their lives. In the current situation in Afghanistan, chaos has been created everywhere, Airports and ATMs were mobbed with thousands of people trying to escape the country. According to reports, 5 civilians have been shot at the terminal, 3 people were also seen holding on to the wheel of a US plane flying out of Kabul.

How are other countries and the UN reacting?

United Nations: UN Secretary-General Antonio Guterres urged the Taliban to exercise utmost restraint to protect lives 

China: Released a statement that it is looking to deepen “ friendly and cooperative” relations with Afghanistan.

Pakistan: Imran Khan, made a statement which was “ The Afghans broke shackles of slavery” 

Germany: Released a statement that U.S, troops withdrawal was the “biggest NATO Debacle”.

India: Union minister of state for External Affairs, Meenakshi Lekhi, said that India wants peace all over the world as India continues evacuation exercises to rescue Indians currently in Afghanistan.

Why was the Taliban’s renewed rule over Afghanistan inevitable?

Over the past 20 years, the U.S. has poured trillions of dollars into Afghanistan to oust the Taliban, an effort that was clearly unsuccessful. But a look at the country’s strategic geographic location and the politics of the region tells us that this outcome was inevitable. Afghanistan is strategically located between central and south Asia – a region rich in oil and natural gas. It has long faced constant meddling from the Soviet Union/Russia, the UK, the U.S., Iran, Saudi Arabia, India, and Pakistan.

Sources

  1. https://scroll.in/article/1002900/talibans-victory-in-afghanistan-was-inevitable-even-after-two-decades-of-american-intervention
  2. https://www.aljazeera.com/program/inside-story/2021/8/17/what-does-the-talibans-return-to-power-mean-for-afghanistan
  3. https://www.bbc.com/news/world-south-asia-11451718
  4. https://www.bbc.com/news/world-27307249
  5. https://www.whitehouse.gov/briefing-room/statements-releases/2021/08/14/statement-by-president-joe-biden-on-afghanistan/

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News

A Noisy Return to a Post-Pandemic Normal

Introduction

As COVID-19 infections throughout the world rise, especially with the Delta variant — a mutated version of the virus — it brings into question, when will we get back to a new ‘normal’. While parts of the world are already returning to a pre-pandemic norm, countries in Africa still lag behind in securing vaccines for their healthcare workers. Until the world can ensure a safe and equitable distribution of vaccines, there will be no normal — for a while. 

The United Kingdom

Dubbed “Freedom Day,” the United Kingdom is returning to pre-pandemic normalcy. All restrictions have been lifted, and with 68.8% of the population having received a 2nd dose, all is going well, until you start to take into account the steady rise in infections — especially with the transmissible Delta variant, which killed thousands in India a few months ago. Like Shakespeare’s play on words, this is another gamble with the economy. For the past few months, the British economy has been stagnating, recent consumer trends show that household expenditures decreased by 11% when compared to Q3 2020-2021, and a loss in consumer spending hurts aggregate demand in the UK. This has a negative effect on the GDP and led to a loss in income, rise in unemployment, and consistent failures to meet monetary policies set forth by the Bank of England. 

Downing Street is now trying to get people back out: partying, eating, drinking, and working; and throughout the western world, governments have taken similar approaches. Across the pond, the United States is, for the most part, open, while Canada is coming out of lockdown. Lockdowns have hurt local business, people are frustrated and government debts and deficits have taken a toll on the state. However, in most of the Western world, we see that vaccines are readily available, but most countries still do not have enough vaccines to return to a ‘new’ normal. 

Georgia

Countries such as Georgia, Ukraine, or Belarus for example are not relatively poor states — in comparison to the rest of the world — but lag behind in vaccination rates. Vaccine hesitancy is rampant among the public and even with government encouragement, few people volunteer to take it, and in order to save their economies, prematurely opened up. This leaves them vulnerable to COVID-19, which delays the world’s return to normal, and raises a philosophical question: do the ends justify the means for some countries that are opening up prematurely due to vaccine shortages? For example, the IMF predicts Georgia will grow at 7.7% this year due to opening up prematurely, but amid rising delta infections, hospital beds filling up, and exhausted medical and financial resources, it is very possible many will die in the next wave. 

However, Georgia isn’t alone. There are a hundred other countries facing the same question. Do the ends justify the means? What to prioritize? Nonetheless, getting the jab is important — no matter where you live — as it means you are one less person to vaccinate and more vials can be donated to other, lesser developed countries. The faster vaccines can be secured for poorer, lesser developed nations, the faster we will return to a ‘new’ normal because a dozen nations don’t represent the world. The longer it takes to vaccinate any human, the longer this pandemic drags on, and the longer you’ll wear a mask. So, if you have the opportunity to do so, take your dose as it’ll help strengthen the world from a virus which churned the world to a halt.

Sources