New US assistance for Ukraine

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CWA # 728

The World This Week

New US assistance for Ukraine

GP Team
1 May 2022

The World This Week #168, Vol. 4, No. 167

Ashwin Immanuel Dhanabalan

US and Ukraine: Biden's 33 billion assistance package aims at a long term relationship
What happened?
On 28 April, US president Joe Biden proposed a USD 33 billion package of assistance to Ukraine. The package would be inclusive of the military (USD 20 billion), economic (USD 8.5 billion) and humanitarian aid (USD 3 billion) to the country. Biden further insisted that they were not trying to attack Russia by proposing this enormous package. He added: "We are helping Ukraine defend itself against Russian aggression." However, the package has to be approved by Congress, with Biden proposing to sell the assets of the Russian oligarchs and donate the proceeds to lead reconstruction efforts in Ukraine.

On the same day, the US House of Representatives approved legislation, making it easier for the country to export military equipment to Ukraine. The House passed the "Ukraine Democracy Defence Lend-Lease Act of 2022" with unanimous support, similar to the "Lend-Lease Act" during World War Two. Democratic Representative Mary Gay Scanlon said: "Today the Ukrainian people are standing on the front lines in the fight for democracy and against tyranny, and the US needs to provide them with every possible measure of humanitarian and military aid."

Also, on 28 April, Ukraine's president Volodymyr Zelenskyy claimed that the total damages of war inflicted upon Ukraine totalled USD 600 billion. Furthermore, damages to the infrastructure resulting from the war itself have reached USD 90 billion and most of the damage inflicted was on railways, roadways and bridge infrastructure.

On the same day, Russia's president Vladimir Putin warned against any foreign intervention in Ukraine. Putin added: "If someone from the outside tries to intervene in Ukraine and create strategic threats for Russia, our response will be lightning fast." BBC's analysts suggest that Putin made such threats to deter the allies from increasing their support to Ukraine and deter them from intervening more in the conflict. Russia's foreign ministry spokesperson said Western military support for Ukraine also threatened the continent's security.

What is the background?
First, decrypting US support. The US has consistently continued as Ukraine's most prominent supporter by approving and implementing its USD 13.6 billion aid package to Kyiv in March. The US administration has spent nearly USD four billion in military aid, USD one billion in financial assistance and USD five billion in humanitarian assistance to the country. The recent proposal majorly supports Ukraine's military assistance as out of the USD 33 billion, USD 20 billion is allocated for military aid.

Second, reviving the lend-lease act. The Senate approved the lend-lease act on 6 April and passed it in the House of Representatives. The program was initially created to be a game-changer in the Second world war as it allowed the US to resupply its allies without a bureaucratic hurdle. The war in Ukraine also exposed bureaucratic hurdles, slowing down US support, as Zelensky has constantly sent out appeals, urging the US to react swiftly in the crisis. This also comes as Zelenskyy mentioned how Ukraine would need about USD seven billion a month to keep its economy afloat. Biden's proposal to Ukraine assures a longer-term commitment as the last lend-lease program ended decades after world war two. In addition, the program would boost the morale of the Ukrainians as they continued defending against the Russian forces.

Third, Putin's immediate response. Putin's warning resonates with the possible use of ballistic missiles and nuclear arms to deter Western intervention in Ukraine. Biden is concerned about a nuclear confrontation as Russia's foreign minister Sergei Lavrov warned of a severe risk of nuclear war over Ukraine. In addition, Russia recently tested its next-generation intercontinental ballistic missile (ICBM) Sarmat, which has a range of 18,000 kilometres and can overcome modern missile defence systems. Biden added how Putin's remarks on using nuclear weapons should not be taken lightly as this could possibly lead to a spillover of the conflict.

What does it mean?
First, a renewed commitment to support Ukraine. Biden's proposal of the USD 33 billion aid package and the House of Representatives reviving the lend-lease programme reaffirmed the US support to Ukraine. With the latest package, the US would authorise a total of USD 47 billion in Ukraine since the war began on 24 February. This is twice as much as the US had extended to Afghanistan, which indicates the US is here to stay in Ukraine.

Second, a stronger transatlantic partnership. The previous lend-lease program with the UK started in 1941 and ended only in 2006. Thus, with the US extending such facilities to Ukraine, one could see a more extended period of the US presence in Ukraine and the European continent. Moreover, this commitment would add to the beginning of a longer-term relationship between the US and Ukraine, just as it did with the UK in World War-II.

Third, the possible spillover of the conflict. With the US allocating USD 20 billion for military aid and Russia testing its new ICBMs, a possible direct confrontation between the two has significantly increased. As a result, the threat of the war spilling over from Eastern Europe is imminent.

Also, in the news...
By Ashwin Dhanabalan, Angkuran Dey and Meghna Manoj

East and Southeast Asia This Week
China: Beijing launches efforts to supply humanitarian aid to Syria
On 27 April, China's envoy to the UN called for united efforts to mitigate Syria's economic, security, and humanitarian situation. China's deputy permanent representative to the UN, Dai Bing, called on all actors in Syria to continue communications with the UN Special Envoy Geir Pedersen and work towards advancing Syria's political process. Dai said: "China welcomes the UN move to allocate 26 per cent of the resources for the Syrian humanitarian response plan to carry out 570 early-recovery projects, and hopes that these projects can truly improve people's livelihoods, reduce humanitarian needs, and save more lives in Syria."

China: Beijing opposes US interference in Tibet
On 26 April, the foreign ministry spokesperson Wang Wenbin stated that China firmly opposes US interference in Tibet related issues citing religious freedom. The US has been urging China to disclose the whereabouts of the Panchen Lama, the second most revered figure of Tibetan Buddhism. Wang further mentioned: "If the United States really cares about human rights and religious freedom, why did it carry out the all-round and systematic ethnic cleansing of Indian Americans, leading to their cultural genocide?"

China: Pacific Island countries' partnership in tackling climate change
On 29 April, China and countries in the Pacific reached a consensus about effectively dealing with climate change issues. The dialogue on climate change was held online and offline, and a South-South cooperation agreement along with climate change cooperation projects was signed at the dialogue. China has also assured to build a cooperation centre for assisting the Pacific Island countries. This comes as China has vowed to tackle climate change and is looking to achieve carbon neutrality by 2060.

Vietnam: Hanoi establishes diplomatic relations with the Cook Islands
On 26 April, Vietnam and the Cook Islands established diplomatic relations under the 1961 Vienna Convention. A Joint Communiqué was announced, and the establishment of official diplomatic ties was signed in New Zealand. Vietnam is the 57th country and the sixth ASEAN country to establish relations with the island country. The two countries also discussed bilateral cooperation on tourism, agriculture and fisheries, climate change and COVID-19 prevention.

Myanmar: Aung San Suu Kyi guilty of corruption
On 27 April, a court in the capital city sentenced Aung San Suu Kyi to five years imprisonment. The court said it found the former civilian leader to have engaged in corrupt practices. The case was filed by Yangon's former chief minister Phyo Min Thein, who accused the leader of accepting 11.4 kilograms of gold and cash payments totalling USD 600,000. Suu Kyi had denied the charges labelled against her and called them 'absurd'.

Cambodia: Phnom Penh to fund conservation of endangered animals
On 28 April, Asian Development Bank (ADB) 's NFTs for Development in Asia competition was won by Cambodia's Fauna theme. Cambodia beat 99 other teams and created NFT images that would be based on real-life endangered animals. These NFTs would be given a unique identifier which cannot be copied, substituted, or subdivided. Each NFT's sale will contribute to the wildlife NGO responsible for supporting their conservation. A speaker at the Prudential Tech Summit stated: "The key benefit is obviously the funding – the money that is going to be raised which will be directly donated to the conservation of those animals."

Indonesia: Jakarta widens palm oil export ban
On 28 April, Indonesia expanded its ban on palm oil to include crude palm oil, RBD palm oil and cooking oil. The ban has caused uncertainty in the global palm oil market as prices rose due to Indonesia's initial RBD palm oil ban announcement. Coordinating minister for economic affairs Airlangga Hartarto stated: "Indonesia's export policy has sent the palm oil industry into a tailspin."

South Asia This Week
India: New Delhi defends its position with Russia at the Raisina dialogue
On 29 April, India's external affairs ministry, during the "Raisina Dialogue", justified New Delhi's position in the Ukraine War. India's external affairs minister S Jaishankar said: "We have to be confident about who we are. I think it is better to engage the world on the basis of who we are rather than try and please the world as a pale imitation of what they are." His comments came as India faced criticism for its ties with Russia as EU leaders at the dialogue hinted at New Delhi joining the West and aligning itself against Russia.

Bangladesh: Prime minister Sheikh Hasina permits India to use the Chittagong Port
On 28 April, India's external affairs minister S Jaishankar met with Bangladesh's prime minister Sheikh Hasina, who offered New Delhi to use Chittagong port for increasing connectivity. The leaders discussed several bilateral issues concerning their respective countries. Hasina emphasised the need for improving the connectivity between both countries, especially in the northeast of India. Jaishanskar thanked Sheikh Hasina for her warm reception. And added: "Our bilateral relations are moving from strength to strength under the guidance of the two leaders."

Afghanistan: the US continues off-budget aid reconstruction as on-budget aid halts
On 29 April, US Special Inspector General for Afghanistan Reconstruction (SIGAR) released a report that mentioned the end of on-budget US reconstruction assistance to Afghanistan. However, Afghanistan had received some reconstruction funds through off-budget assistance and multilateral organisations. The report further mentioned: "Specifically, US agency off-budget assistance funded 85 activities, while assistance to multilateral institutions funded the remaining 15 activities. These ongoing efforts covered a range of activities, including emergency food assistance, health initiatives, and demining efforts."

Afghanistan: Government plans to convene an assembly to discuss pertinent issues
On 29 April, the Islamic Emirate decided to hold a 'Loya Jirga' (great assembly) to analyse the domestic issues in the country. The gathering of the leaders and the citizens needs to be given a unique title as per the remarks made by the Islamic Emirate's spokesperson Zabiullah Mujahid. He said: "We haven't named it yet, but a gathering of Afghans will be held and will discuss some issues." The details of the gathering time and venue are yet to be released by Kabul.

Afghanistan: Moscow looks to establish full diplomatic ties with Kabul
On 27 April, Russia's foreign minister Sergei Lavrov mentioned that Moscow would set up diplomatic relations with the Islamic Emirate only if Kabul built an inclusive government. Lavrov said: "We want to work towards the full diplomatic recognition of the new authorities in Afghanistan, under the understanding that they will keep their promise and form an inclusive government not only from the ethno-confessional point of view since they now have Uzbeks, Tajiks and Hazaras in the government." The Islamic Emirate welcomed the remarks made by the minister, reinforcing the fact that the government has already taken steps to create an inclusive government in Afghanistan.

Pakistan: Suicide attack claims lives of four, including three Chinese nationals
On 26 April, a suicide attack outside the University of Karachi's Confucious Institute killed four people. Baloch Liberation Army, a banned organisation, has claimed responsibility for the attack. Prime minister Shehbaz Sharif expressed his grief over the loss of lives and termed the attack to be heinous. China's nationals who lost their lives include Confucius Institute Director Huang Guiping, Ding Mupeng and Chen Sai. Pakistan's foreign office spokesperson stated that the incident was a "direct attack on the Pakistan-China friendship and ongoing cooperation".

Pakistan: Prime minister Shehbaz Sharif visits Saudi Arabia
On 28 April, Pakistan's prime minister Shehbaz Sharif visited Saudi Arabia at the invitation of Saudi Arabia's Crown Prince Mohammed bin Salman. Sharif mentioned: "Pakistan and Saudi Arabia are bound by deep-rooted and abiding fraternal ties which are built on a solid foundation of mutual trust and support." He thanked Muhammad Bin Salman for extending his invitation to him and his delegation. The two leaders discussed their bilateral relations and reaffirmed their commitments to enhance them in the future.

Afghanistan: China urges the US to lift illegal sanctions on Kabul's assets
On 26 April, China's spokesperson Wang Wenbin at the UN blamed the US for causing issues for the women in Afghanistan. Wang said the issues were caused as the US had frozen billions of dollars worth of assets. Wang added: "What the United States should do is immediately lift its illegal freeze on the assets of the Afghan central bank, apologise and compensate the Afghan people for their lost 20 years, and bring the murderers of the Afghan people to justice." He further mentioned how the 20-year invasion of Afghanistan by the US had claimed the lives of more than 174,000 Afghans, leading to a humanitarian disaster.

Sri Lanka: World bank agrees to provide USD 600 million
On 29 April, the World Bank agreed to provide USD 600 million to Sri Lanka as the country faces an economic crisis. Sri Lanka's president of the media division said: "The World Bank has agreed to provide USD 600 million in financial assistance to address the current economic crisis." The organisation added that it would be releasing USD 400 million shortly and assured the banks of continued assistance to the current economic crisis. This led to Sri Lanka's stocks climbing 4.1 per cent due to the bank's assurances.

Maldives: Beijing signs certificate of assistance with Male's ministry of foreign affairs
On 28 April, the ambassador of China to the Maldives, Wang Lixin, signed the certificate of an assistance agreement with the Maldives minister of state for foreign affairs, Ahmed Khaleel. The agreement mentioned that USD 310,000 would be used to complete certain aspects of the building renovation programme of the foreign ministry. In addition, the money will also be used for training and capacity building purposes. The assistance comes as China's foreign minister Wang Yi announced the assistance during his visit to the island country in January 2022.

Central Asia, Middle East, and Africa This Week
Armenia and Azerbaijan: Countries agree on a structure of border demarcation commission
On 25 April, Armenia's foreign minister Ararat Mirzoian and Azerbaijan's foreign minister Ceyhun Bayramov agreed to the structure of a commission that would delimit the border between the two countries. The ministers further discussed ways to improve the security issues in the area and matters related to preparing a peace treaty after a six-week war erupted between the two neighbours in 2020.

IMF: Report on possible social unrest in Africa due to rising food and energy prices
On 28 April, the International Monetary Fund(IMF) cited possible social unrest and havoc in Africa, especially in the Sahara region, due to surging prices of food and oil caused by the war in Ukraine. The head of the IMF's African department Abebe Aemro Selassie said: "Fuel price increases feed into transportation costs, and people providing goods and services will raise their prices because they are now facing higher input costs." Many African states, hit hard by the pandemic, face the brunt of rising inequality, poverty rates and increased prices of essential goods.

African Union: The EU fulfils its commitment to the AU's peace and security initiative
On 28 April, the EU started funding the African Union (AU) peace and security initiatives and has allocated RAND 10 billion for the next three years. This comes as the EU seeks to fulfil its promise to Africa's heads of state and the AU following the sixth AU-EU summit, held in February. The EU mentioned: "The EU does not lose sight of its partnerships with other parts of the world, especially Africa, fully recognising the importance of addressing crises and violent conflict on the African continent jointly and in a comprehensive way."

Nigeria: Senate outlaws ransom payments
On 27 April, Nigeria's Senate passed a bill imposing a jail term of up to 15 years for paying a ransom to free any individual who has been kidnapped. In addition, the bill has made the crime of abduction punishable by death in the cases where victims die. The bill serves as a mandate for Nigeria's terrorism law at a time when increasing gang kidnappings have killed thousands of people across the country. The chairman of the Senate's judiciary human rights and legal committee, Opeyemi Bamidele, said: "this would discourage the rising spate of kidnapping and abduction for ransom in Nigeria, which is fast spreading across the country."

Democratic Republic of Congo: Resurgence of the Ebola virus
On 27 April, a new Ebola virus outbreak in the DRC raised concerns about regional and international transmission risks. The resurgence of the virus in Northwestern DRC has left two dead, with 267 close contacts being identified in the town of Mbandaka. WHO stated: "The risk of regional and international spread of this epidemic cannot be ruled out as the town of Mbandaka borders the Congo River and has river and land connections with the capital Kinshasa, the Republic of Congo, the Central African Republic and Angola." However, the WHO has described the current risk as 'low' at an international level and 'moderate' at a regional level.

Europe and the Americas This Week
Russia: Four European gas buyers made payments in rubles to Gazprom
On 27 April, a report by Bloomberg stated that four European gas buyers had already paid for gas supplies in rubles to Gazprom. The report further mentioned that ten European companies have already opened their accounts at Gazprombank to meet Russia's payment demands for securing gas supplies as they try to circumvent the sanctions in place. This comes at a time when the EU has placed sanctions on Russia and has made it clear that the mechanism the Kremlin has proposed for receiving payments would violate the existing sanctions.

Russia and Ukraine: The UN Secretary-General embarks on a visit to Moscow and Kyiv
On 28 April, the UN secretary-general António Guterres toured the towns of Borodyanka and Bucha, which Russia had shelled before its troops withdrew to the east. In Kyiv, the UN secretary-general met with Ukraine's president Volodymyr Zelensky, pledging to provide humanitarian assistance and boost its efforts across the board. He further stated: "The war is an absurdity in the 21st Century." The Secretary-General had also met with Russia's president, Vladimir Putin, in Moscow to reiterate the UN's position in the conflict. Following this, Putin agreed 'in principle' to allow the UN and Red Cross to lead evacuations in the besieged city of Mariupol.

Moldova: Government warns of rising tensions in the breakaway region of Transnistria
On 28 April, mysterious explosions rocked Transnistria, a breakaway Russian-controlled region in Moldova bordering Ukraine, raising fears about the conflict spilling over. Moldova's deputy prime minister, Nicu Popescu, said: "his government had seen a dangerous deterioration of the situation." The explosions have triggered fears about Moldova being drawn into the conflict, stoking discontent about Moscow supporting the rebels in the predominantly Russian speaking breakaway region.

Turkey: Activist Osman Kavala sentenced to life imprisonment
On 26 April, an Istanbul court found activist and philanthropist Osman Kaval guilty of trying to overthrow the government. As a result, the activist has been sentenced to life imprisonment without the possibility of getting parole. The ruling comes after the activist had already spent more than four years in prison without being convicted. The trial attracted international attention, straining relations between Ankara and the West, which has viewed it as a crackdown on critics of the president, Recep Tayyip Erdogan. Following the sentence, the US state department said: "His unjust conviction is inconsistent with respect for human rights, fundamental freedoms, and the rule of law."

UNHCR: Report records an alarming rise in loss of migrant lives
On 29 April, a report released by the UNHCR pointed out that more than 3,000 migrants, refugees and asylum seekers have gone missing while trying to reach European shores via the Mediterranean and Atlantic sea routes. The agency said: "Most of the sea crossings took place in packed, unseaworthy, inflatable boats - many of which capsized or were deflated, leading to the loss of life." The UNHCR has also called for urgent support to protect refugees and asylum seekers who embark on dangerous journeys across sea routes.

The US: NASA and its partners set to conclude the SOFIA mission
On 29 April, NASA and its partners at the German Space Agency decided to conclude the Stratospheric Observatory for Infrared Astronomy (SOFIA) mission by 30 September after a successful eight years. SOFIA is a Boeing 747SP aeroplane modified to serve as a reflecting telescope. It is now serving a three-year extension after completing a five-year prime mission assignment in 2019. The decision to conclude the mission comes after the report published by the National Academies Decadal Survey on Astronomy and Astrophysics pointed out that the productivity of the mission does not justify its operating costs.

Colombia: IMF approves a USD 9.8 billion flexible credit line
On 29 April, the IMF approved a USD 9.8 billion flexible credit line for Colombia. However, the country mentioned that the credit line would be treated with precaution. The new credit line comes after Colombia last drew about USD 5.4 billion in December 2020 to address the COVID-19 pandemic. The IMF stated: "Colombia qualifies for the credit line by virtue of its very strong economic fundamentals and institutional policy frameworks and track record of implementing very strong policies and commitment to maintaining such policies." However, IMF further mentioned that Colombia would be still vulnerable to external risks, including inflationary pressures and a spike in risk premia.

Panama: National assembly passes bill to regulate crypto assets
On 28 April, the National assembly lawmakers approved a bill regulating the use and commercialisation of crypto assets. The bill would open the door to public and private assets, making it possible for people even to pay their taxes through cryptocurrency. In addition, the bill has a larger ambit covering the trading and use of crypto assets, issuance of digital securities, new payment systems and the tokenisation of precious metals.

About the authors
Ashwin Immanuel Dhanabalan is a Project Associate at the National Institute of Advanced Studies. Angkuran Dey and Meghna Manoj are Postgraduate scholars at the Centre for South Asian Studies at Pondicherry University.

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