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CWA # 771, 31 July 2022
The World This Week #176, Vol. 4, No. 25 31 July 2022
The World This Week #176, Vol. 4, No. 25
31 July 2022
Avishka Ashok and Apoorva Sudhakar
China: Biden-Xi phone call underlines tensions in bilateral relations
On 28 July, Chinese President Xi Jinping and US President Joe Biden discussed and exchanged their views and concerns on bilateral ties and other issues of mutual interest during a two-hour-long telephonic conversation.
Xi highlighted the current situation of the international order and stressed the economic superpowers to take the lead in upholding world peace and security. The Chinese Head of State expressed his concerns regarding the China policy of the US and the country’s perception of China as a strategic competition and a primary rival. Xi suggested working together with the US on macroeconomic policies, global industrial and supply chains, energy and food security.
On the Taiwan issue, President Xi reiterated China’s objection to any support extended towards the independence movement and interference in the country’s internal affairs. Xi urged the US to abide by the one-China principle and the joint communiques. He said: “The three China-U.S. joint communiques embody the political commitments made by the two sides, and the one-China principle is the political foundation for China-U.S. relations. China firmly opposes secession aimed at "Taiwan independence" and external interference, and never allows any room for "Taiwan independence" forces in whatever form.” Biden reassured Xi that the US adherence to the one-China principle had not changed and that the country did not support the independence movement in Taiwan.
What is the Background?
First, the conversation and its timing. The discussion took place at a time of increased tensions between the two countries. The Chinese Foreign Ministry has repeatedly urged the US to refrain from interfering in Hong Kong, Xinjiang, Tibet and Taiwan, which it considers its internal affairs. Additionally, the decision of the US government to ban goods and products produced in the Xinjiang Autonomous Region through the Uyghur Forced Labor Prevention Act has further heightened tensions between the countries. More recently, speculations of US Speaker Nancy Pelosi’s visit to Taiwan have engendered strong reactions and promises of serious consequences from China. Beijing has also urged the international community and other international organisations to set up an investigation into the US violation of the human rights of indigenous and other minorities in the country.
Second, China’s renewed assertion on Taiwan. In recent years, China’s narrative on Taiwan has become increasingly aggressive and assertive. Beijing vehemently opposed the inauguration of the Taiwanese Representative Office in Lithuania, downgraded diplomatic relations and economically coerced the European country to repeal its actions. China's relations with Australia further worsened when the latter expressed concerns over a Chinese invasion of Taiwan in October 2021.
Third, Biden’s objectives vis-a-vis China. The US is at a crucial juncture as China’s fast rise as an economic power in the last few decades threatens to change the status of the US as a sole hegemonic power. China has become increasingly influential in international organizations such as the United Nations, the World Health Organization, and the World Trade Organization, amongst many others. In the present scenario, the US recognizes the need to challenge China’s rise but also does not want to engage in any more trade wars. The primary aim of the US is to protect its interests and repair its domestic economy by controlling the inflation rates.
Fourth, the US Congress’ growing assertiveness on Taiwan. The Congress has acted independently while asserting its views on Taiwan. Regardless of President Biden’s reassurance over the US not supporting the independence movements in Taiwan, the actions of Congress presents a different narrative. Other than Pelosi’s upcoming visit to Taiwan, in November 2021, a delegation of 13 Congressmen visited Taiwan and discussed its defence security with Taiwanese President Tsai Ing-wen and other officials. Prior to that visit, a delegation of US Senators visited the country in June 2021 and announced the donation of 7,50,000 COVID-19 vaccines.
What does it mean?
The phone call between Joe Biden and Xi Jinping comes at a time of high tensions in relations between the US and China. The call attempted to understand the other country’s perspective on issues of common interest and also aimed to carry forward the bilateral relations and cooperation. Both, the US and China, acknowledge the disagreements between the countries but will aim to continue working towards a civil relationship.
For China, the call was an opportunity to express its course of action against Taiwan. China will act aggressively and will not shy away from using its military in case it feels threatened about its sovereignty over Taiwan. Towards this aim, the country will increase its military presence in the Taiwan Straits and engage in drills and operations near Taiwan.
For Taiwan, a visit from the US would be beneficial to its national defence and its status as a sovereign country. Taiwan has pursued greater cooperation with the US and other major powers for a long time. However, increased involvement of the US could significantly destabilize the existing peace in the region and may also push China to take action aggressively.
Tunisia: Referendum paves the way for one-man rule
On 25 July, Tunisians voted on the referendum on President Kais Saied’s proposed constitution. After the voting, Saied said: “Our money and our wealth are enormous, and our will is even greater, to rebuild a new Tunisia and a new republic, one that breaks with the past.” The date also marked one year of Saied’s suspension of the parliament and dismissal of the government in 2021. On the same day, the spokesperson of the largest opposition party, Ennahda said: “Ennahda calls for boycotting the constitutional referendum and considers it illegitimate, illegal and issued by a coup authority.”
On 26 July, Reuters reported the exit poll results of the referendum, wherein it was revealed that 92.3 per cent voted “YES” to approve the proposed constitution. However, the voter turnout remained low, and only 27.5 per cent of all registered voters voted. The referendum was boycotted by the opposition and its supporters.
What is the Background?
First, the new constitution. Earlier in 2022, Saied published a draft of the new constitution. The draft holds that the government would be answerable to the president, not the parliament. However, with a two-thirds majority, the parliament can withdraw support to the government. The draft also maintains that the president would have the power to present draft laws, be the sole power to propose treaties, draft state budgets, and appoint or dismiss ministers and judges. The president can extend his two-term tenure if he deems any situation an unavoidable threat to Tunisia.
Second, the gradual power grab. Prior to the referendum, Saied took several measures to consolidate his power. These included the suspension of the parliament, a rule by decree, establishment of a new supreme judicial council, and replacement of the cabinet and several election commission officials. The above ensured Saied had control over all institutions in Tunisia.
Third, criticism against Saied. The referendum was preceded by weeks of protests by opposition coalitions arguing that Saied was undoing the democratic progress in Tunisia. The protesters also raised concerns over the economic crisis, including unemployment, poverty, and inadequate salaries. Opposition parties and trade unions challenged the Saied administration’s decision to approach the IMF for a bailout. The bailout conditions included a need to contain its civil service wage bill and replace generalized subsidies with direct transfers to the poor to tackle fiscal imbalance.
What does it mean?
First, with the new constitution, Saied has awarded himself control over the three pillars of democracy - the executive, judiciary and legislature. In Africa, Saied is not the first strongman leader to grab power through democratic means and military coups. Uganda’s Yoweri Museveni, Cameroon’s Paul Biya, South Africa’s former president Robert Mugabe or Sudan’s former military ruler Omar al Bashir are examples of the same.
Second, Saied has to address the economic issues to win the people’s support. Though there is opposition to the proposed IMF reforms, Saied’s heavy-handed governance is likely to disregard the same and move ahead with the talks
Third, the protests against Tunisia’s long-time dictator Ben Ali in late 2010 led to his fall in 2011, sparking a series of anti-regime protests across the Middle East and North Africa; only Tunisia managed to successfully establish a democratic transition in this Arab Spring. With the return of a strongman in Tunisia, the hope for democracy in the MENA is wavering.
Also, in the news...
East and Southeast Asia This Week
China: Defence Ministry objects to NATO’s strategic document and warns the US from deploying troops in Japan
On 28 July, China’s Defense Ministry Spokesperson Wu Qian addressed a press inquiry and commented on NATO’s strategic concept document and the US plan to deploy troops in Japan. On NATO’s strategic document, Wu expressed China’s opposition to certain content for distorting facts, instigating confrontation and conflicts, and making irresponsible remarks on China’s military development. On the deployment of US troops in Japan, Wu Qian said that China would take resolute countermeasures if the US decides to go ahead with its plans. He said: “The United States' intention to make such a move is perilous and detrimental to the national security of countries in the region as well as regional peace and stability.”
China: Open letter urges Human Rights High Commissioner to refrain from fabricating assessment on Xinjiang
On 27 July, Xinhua Net publicized an open letter to the United Nations High Commissioner for Human Rights Michelle Bachelet. The letter expressed concerns regarding the pressure created on the international organization on releasing the assessment on Xinjiang. The letter hoped that the High Commissioner’s report would reflect the truth and facts of what she witnessed and experienced during her visit to Xinjiang in May 2022. It claimed that the report falsely accused the Chinese government of suppressing the Muslim minority in the Xinjiang Autonomous Region and will be used as a tool to interfere in the country’s internal affairs. Xinhua Net reported: “The assessment, once released, will be definitely used by certain countries as a political tool to interfere in China's internal affairs and to contain China's development under the pretext of human rights. It will badly damage the credibility of Madame High Commissioner yourself and the OHCHR, and seriously undermine the developing countries' confidence in constructive cooperation with the OHCHR.” The letter was signed by 923 state institutions and other government bodies.
China: Beijing commemorates the 20th anniversary of signing the Declaration of the Conduct of Parties in the South China Sea
On 25 July, China’s Foreign Minister Wang Yi addressed the opening ceremony of the 20th anniversary of the signing of the Declaration on the Conduct of Parties in the South China Sea and said that peace and stability are crucial in the region. The Declaration of Conduct establishes the basic principles and common norms and is the first political document signed by China and ASEAN on the South China Sea issue. Wang Yi said: “All sides should firmly support all efforts that are conducive to peaceful settlement and management of disputes, oppose any words and deeds that create tension and provoke confrontation in the region.” He further called for improving bilateral and multilateral maritime-related dialogue mechanisms.
SCO: China's Foreign Minister initiates a five-point proposal to build a shared community
On 29 July, China’s Foreign Minister Wang Yi attended the meeting of the Council of Foreign Ministers of the Shanghai Cooperation Organization and stressed on the changing dynamics of the international order and the rising regional challenges. Wang Yi also highlighted China’s objective of building a closer SCO community with a shared future and upholding the Shanghai spirit. Wang initiated a five-point proposal to work towards this goal. First, cementing solidarity and coordination. Second, he stressed on regional security and urged the member countries to implement the concept of common, comprehensive, cooperative and sustainable security while opposing confrontation between factions and undermining regional stability. Third, Wang Yi highlighted the need to promote sustainable development and pursuing people-centred development, and continuing cooperation in poverty reduction and green development. Fourth, he emphasized the need to focus on multilateralism. Lastly, China called for expanding the group steadily and gradually. Wang Yi suggested keeping the geographical factors, the observer states, dialogue partners while expanding the group and its capacity.
South Korea: China’s Foreign Ministry responds Seoul’s recent statements on THAAD
On 27 July, China’s Foreign Ministry Spokesperson Zhao Lijian referred to South Korean Foreign Ministry’s statement on the ‘Three No’s Policy” and the THAAD (Terminal High Altitude Area Defense) and urged the country to stick to the commitments made by the country previously. The South Korean Foreign Minister Park Jin addressed the National Assembly and said that the preceding government’s agreement on the policy was not a promise to China. Political experts and analysts in China believe that the statement by Moon Jae-in’s government on the THAAD in 2017 saved the bilateral relations and sustained the trade ties. Zhao said: “No matter which party takes office, no matter what political needs it has domestically, it needs to ensure basic continuity and stability in its foreign policy.” Zhao further explained that China’s position on the US deployment of the THAAD in South Korea was aimed to protect its own national security and prevent the US from harming China’s strategic interests.
Japan: China’s Defense Ministry condemns 2022 white paper
On 26 July, China’s Ministry of National Defense spokesperson Wu Qian addressed a press conference and commented on Japan’s defense white paper and specifically on the part referring to China. Wu claimed that the paper disregarded facts and was completely biased. He said: “The white paper made irresponsible remarks on China's national defense and military development, hyped up the so-called "military threat of China," stirred up regional tensions, and grossly interfered in China's internal affairs.” He also expressed China’s strong dissatisfaction and firmly opposed the contents of the paper, lodging solemn representations with the Japanese side. Wu Qian further stressed on China’s commitment to peaceful development, upholding the national defense policy and world peace while accusing Japan of choosing violence throughout its imperialist historic era.
Indonesia: President Widodo visits China and meets President Xi Jinping and other officials
On 26 July, China’s President Xi Jinping met the visiting Indonesian President Joko Widodo in Beijing and held comprehensive discussions on common issues of interests, bilateral relations and international affairs. The joint statement touched upon the China-Indonesia Strategic Partnership, creation of a shared community with a common future, speeding-up the formulation of a new Five-Year Action Plan for the Implementation of the Comprehensive Strategic Partnership, increasing bilateral trade, strengthening cooperation along the Belt and Road Initiative and Global Maritime Fulcrum, and deepening cooperation in the field of agriculture, health, poverty alleviation and food security. President Xi Jinping’s wife Peng Liyuan also met with Indonesia’s First Lady Iriana Joko Widodo at the Diaoyutai State Guesthouse in Beijing. On the same day, China’s Foreign Minister Wang Yi met with Indonesia’s Coordinator for Cooperation with China and the Coordinating Minister Luhut Binsar Pandjaitan and the Foreign Minister Retno Marsudi. The officials discussed Indonesia’s Presidency in the G20 and the country’s chairmanship at ASEAN next year.
South Asia This Week
India: China reaches four-point consensus on border issues
On 28 July, China’s Ministry of National Defence Spokesperson Wu Qian addressed a press conference and announced that a four-point consensus had been reached with India on the resolution of border issues at the 16th round of the China-India Corps Commander Level Meeting. According to the Chinese Defence Ministry, the two sides consented to actively work towards implementing the consensus achieved at the meeting, thereby building momentum for progress in bilateral relations. China and India have agreed to effectively manage differences, maintain security and stability and continue open communication and dialogues while attempting to reach an acceptable solution on the issue. The Chinese spokesperson also revealed that the current situation along the borders were calm with regular military and diplomatic channels between the two sides.
India: Highest ever FDI recorded for FY 21-22
On 29 July, the ministry of commerce informed India received approx. USD 84 billion worth of FDI. The amount of FDI equity entering the manufacturing sectors surged by 76 per cent in the fiscal year 2021–2022. Foreign investment in the manufacturing sector is under the automatic route. Manufacturing activities may be self-manufacturing by the investee or contract manufacturing in India with a legal basis.
Pakistan: Rupee breaks records, slides to 237 against the dollar
On 26 July, the rupee according to the Forex Association of Pakistan, continued to slide against the dollar, hitting another low of Rs237 in the interbank market. FAP chairman Malik Bostan says about the need to increase dollar inflows as it would stabilize the rupee and further stated that the local currency should be used in trade with Afghanistan as it would save two billion USD in foreign exchange. The investors in the country are hopeful that the pressure on rupee would ease in the upcoming sessions ahead of inflows from the IMF and friendly countries. The dollar, under renewed pressure, still has higher demands from the importers, which are alleged by the bankers the reason for the national economy to drown. Meanwhile, Miftah Ismail stated that the pressure would be removed in a couple of weeks. This came in context with the creation of policy plans to deduce imports and organically raising the exports.
Pakistan: Ulema’s ceasefire negotiation ceasefire with the Afghan government
On 25 July, an eight-member delegation of Pakistani ulema led by known religious scholar Mufti Taqi Usman, reached Kabul for talks with senior leaders of the Afghan interim government in a bid to persuade leaders of TTP to further extend their ceasefire with Islamabad. They met Mufti Noor Wali and other Taliban leaders from the erstwhile Fata. One of the demands and the team is the reversal of the merger of the erstwhile Fata with the settled areas of KP, something that the government has already termed “non-negotiable” and this demand for the reversal of the FATA merger was refused by TTP leadership. They said, “They cannot trust the ulema in absence of concrete assurances from the military establishment which wields the real power in Pakistan”. This meeting is a continuation with the 57-member Jirga whose visit became fruitless when they met TTP commanders in Kabul last June.
Pakistan: Parvez Elahi sworn in as the new Punjab CM
On 26 July, the Supreme Court ruled that PTI backed Chaudhry Parvez Elahi, the duly elected chief minister of Punjab for securing 186 votes against 179 of his opponents, PML-N’s Hamza Shehbaz, in the re-elections for the post of the chief minister. The short order was issued by a three-member bench, including the CJP. He was sworn in as the CM of Punjab at the president’s house in the wee hours of Wednesday as the Islamabad governor refused to administer the oath. The proceedings were in context with the top court declaring Mazari’s ruling in Punjab CM’s election illegal and ruling that PTI’s candidate Elahi will be the new CM of the province, declaring all the appointments made by Hamza illegal and telling the members of his cabinet to vacate their offices.
Afghanistan: Tashkent Conference was constructive, says Taliban
On 26 July, acting Minister of Foreign Affairs, Amir Khan Muttaqi while speaking at the end of the Tashkent conference said: “Good views were exchanged for economic and transit development and for Afghanistan to become an economic hub,” adding, “We hope with this exchange of views and information, the economic and political relations with neighbouring, regional and world countries will be incentivised.” Prior to the meeting, the Ministry of Foreign Affairs of Uzbekistan said: “The main goal of the event is to develop a set of measures and proposals for the approaches of the world community to promote stability, security, post-conflict reconstruction in Afghanistan and its integration into regional cooperation processes in the interests of the multinational Afghan people and the whole world.” The conference was attended by representatives of 20 countries, including Russia, the EU, the US, China, the UK, Japan, Iran, Pakistan, and India.
Afghanistan: US delegation discusses unfreezing of Afghan reserves with Taliban officials; US launches the ‘US-Afghan Consultative Mechanism’
On 27 July, a delegation of the United States held meeting a meeting with Taliban officials on the possibility of releasing billions of dollars from Afghan central bank reserves. A statement released by the State Department said that the two sides discussed ongoing efforts to enable the USD 3.5 billion in licensed Afghan central bank reserves to be used for the benefit of the Afghan people. Additionally, the US expressed the need to accelerate the work on these efforts.
Meanwhile, US Secretary of State Antony Blinken announced the launch of the ‘US-Afghan Consultative Mechanism.’ While speaking at the launch he said: “It’s going to make it easier for Afghan civil society groups to communicate and collaborate with American policymakers across a whole range of shared priorities – from supporting income-generating activities for Afghan women, to strategizing ways to help Afghan human rights monitors safely document abuses, to devising new methods to promote religious freedom,” adding, “What we want to do is to make our partnerships with Afghan civil society more effective, more rigorous, more productive, more purposeful. And that’s what this new initiative is all about.”
Afghanistan: Acting FM Muttaqi meets with foreign ministers of China and Pakistan in Tashkent
On 29 July, acting Minister of Foreign Affairs, Amir Khan Muttaqi, China’s State Councilor and Foreign Minister Wang Yi and Pakistan’s Foreign Minister Bilawal Bhutto-Zardari on the side-lines of the Council of Foreign Ministers (CFM) of the Shanghai Cooperation Organisation (SCO) in Tashkent. During the meeting with FM Wang, matters related to economics and trade ties between the two countries were discussed. Similarly, FM Bilawal reiterated Pakistan’s commitment to a stable and prosperous Afghanistan and stressed the need for further promoting contacts, humanitarian assistance and increasing trade between the two countries.
Central Asia, Middle East and Africa This Week
Armenia-Azerbaijan: Blinken speaks with Armenian and Azerbaijani leaders
On 25 July, US Secretary of State Antony Blinken held separate telephonic conversations with Azerbaijan’s President Ilham Aliyev and Armenia’s Prime Minister Nikol Pashinian and offered US assistance in building ties between the two countries. According to State Department spokesperson, Ned Price Blinken offered the US’s assistance in facilitating regional transportation and communication linkages and encouraged the continuation of the ongoing peace negotiations and called for further progress in the direction of peace and stability in the region.
Iraq: Escalating political crisis
On 30 July, protestors rallying in support of Shia leader Muqtada al- Sadr, breached the heavily fortified Green Zone and stormed Iraq’s Parliament for the second time in a week. The protestors oppose the candidacy of Mohammed Shia al-Sudani, the pro-Iran Coordination Framework’s candidate for Prime Minister’s post.
The incident resulted in clashes, stone pelting, tear gas firing, and more than 125 people including protestors and the police are reportedly injured. Prime Minister Mustafa Kadhimi’s office called on the security officers to guarantee the safety of institutions. The UN Mission in Iraq has called for a de-escalation and said that the “voices of reason and wisdom are critical to prevent further violence.”
Lebanon: Diplomatic row with Ukraine over Syrian cargo ship
On 28 July, the Ukrainian Embassy in Lebanon stated that a Syrian cargo ship sanctioned by the US, allegedly carrying stolen grains from Ukraine docked in Tripoli. Docking was confirmed by Marine Traffic, a monitor for vessel traffic and location. The ship was headed to Tartus Port in Syria, but the embassy did not elaborate on how the grains came from Ukraine, why it was re-routed to Lebanon, and the possibilities of off-loading the cargo in Tripoli. It suspects the ship to be carrying 5000 tonnes of barley and 5000 tonnes of flour. In the backdrop of war in Ukraine, Kyiv has accused Russia of stealing food grains from Ukraine and sending it to countries like Syria. Suspecting a link, the Ukrainian Ambassador to Lebanon Ihor Ostah met President Michael Aoun and warned the Lebanese leadership against buying stolen goods from Russia.
Saudi Arabia: Crown Prince visit to France
On 28 July, Saudi Arabia Crown Prince Mohammed bin Salman visited France and met French President Emmanuel Macron. Primary agenda for the talks were energy deals, in the wake of Western European countries scrambling for energy resources outside Russia. Alongside energy deals, the two leaders discussed the developments in wars in Ukraine and Yemen. Crown Prince’s visit also highlights the start of new relations between the West and Saudi Arabia, after plummeting to a low, post Jamal Khashoggi’s killing in Istanbul in 2018.
Jordan: Meeting between Jordanian King and Israeli Prime Minister
On 27 July, Jordan’s King Abdullah II met Israeli Prime Minister Yair Lapid, in a move to carry forward the cooperation established under the Abraham Accords. During the meeting Jordan stressed that Palestine be included in the water-for-energy deals between Israel and Jordan, and to maintain calm at the holy sites in Jerusalem, which have witnessed violence in recent months.
Israel: Teenager shot dead in West Bank
On 29 July, clashes erupted in West Bank, following the demonstrations in the village of al-Mughayyer near Ramallah, organized by the Palestinian Authority’s Committee against Wall and Settlements, against the Jewish settlers in the area. During the clashes, a 16-year-old Palestinian was shot by the Israeli Army and was pronounced dead by a hospital in Ramallah. The Palestinian Health Ministry confirmed that the teenager was short in chest by the Army, during confrontations.
Africa: Algeria, Nigeria, and Niger revive gas pipeline deal
On 28 July, BBC reported Nigeria, Niger and Algeria had signed an MoU to construct a gas pipeline across the Sahara. The development comes after the deputy director-general of the European Commission’s energy department said that Europe was seeking alternatives to Russia’s potential supply cuts. The pipeline through the Sahara will supply 30 billion cubic metres of gas to Europe. The deputy director-general said currently, Nigeria was supplying 14 per cent of the EU’s gas imports. He said: “If we can get up to beyond 80%, at that point, there might be additional LNG that could be available for spot cargoes to come to Europe.” The revival of the pipeline comes more than a decade after an agreement was signed in 2009.
West Africa: Macron criticises Africa's position on Russia
On 25 July, France's president Emmanuel Macron commenced a three-day visit to three African countries: Cameroon, Benin and Guinea-Bissau. Macron focused on Africa's current position on Russia amid the war in Ukraine. Outlining the global food crisis fuelled by the war, Macron accused Russia of using food as a "weapon of war." Macron emphasised that African leaders had failed to condemn Russia and said: "The choice that has been made by the Europeans, first of all, it is not to participate in this war, but to recognize it and name it. But I see too often hypocrisy, especially on the African continent."
Africa: Lavrov concludes tour of four African countries
On 27 July, Russia’s foreign minister Sergey Lavrov concluded his tour to four African countries: Egypt, the Democratic Republic of the Congo, Uganda, and Ethiopia. Lavrov conveyed that Russia was a better partner for Africa as it does have the alleged colonial mindset of the US and other Western. Lavrov emphasised that Russia was not responsible for the food crisis in Africa and dismissed the West's allegations that Moscow was "exporting hunger." Further, Lavrov appreciated "the balanced position of Africans on what is happening in and around Ukraine."
Europe and The Americas This Week
Eurozone: Inflation reaches all time high
On 29 July, it was reported that in July, the inflation in the Eurozone has reached a new all-time high of 8.9 per cent. Raising concerns about the possibility of inflation, this rise shows a marked slowdown of the bloc's economy. Among the countries that use the Euro as a single currency, the Baltic States are most affected because of their dependence on foreign imports- Estonia (22.7 per cent), Latvia (21 per cent), and Lithuania (20.8 per cent). Other than these countries, Belgium, Greece, Spain, Cyprus, Netherlands, Slovenia, and Slovakia are also in the double-digit category. The core inflation in the bloc stands at 4 per cent, which is the highest since the creation of the euro. This rise in the inflation rate is due to the spillover of the disruption in the global energy markets, the global food crisis, and China's strict zero-covid lockdowns.
The EU: New gas reduction plan introduced to prepare for potential discontinuation of Russian gas
On 27 July, EU members agreed to introduce a new plan to reduce their gas usage, to prepare for the winter, if Russia cuts its gas supply. They have set the goal to cut consumption by 15 per cent by March 2023. So far, Ireland, Malta, and Cyprus have been entirely exempted from the plan as they are physically disconnected from the EU and will not be able to contribute to the gas stored by the bloc. Estonia, Latvia and Lithuania too secured an exemption as they are still heavily dependent on Russian gas, and will have to adhere to the plan only if Russia retaliates. Another clause by which countries will be exempt from the plan is if they overshoot the EU-wide gas storage target of 80 per cent by 01 November.
Poland: UN Special Rapporteur accuses Poland of differential treatment of migrants
U.N. Special Rapporteur on migrants' rights, Felipe Gonzalez Morales criticized Poland for its discriminatory treatment of migrants. He has urged the country to Poland to stop detaining non-Ukrainian migrants near the Belarus border. While he did praise Poland’s government for their protection and assistance to more than two million refugees from Ukraine, he also noted that migrants from the middle east and Afghanistan have not been treated the same way. According to Morales, these non-European refugees have faced not only illegal detainment, which violates international humanitarian law but have also had to face trouble obtaining residence permits, proper shelter and legal protection.
Croatia: New bridge built to connect the divided territories
On 26 July, Croatia officially inaugurated the Peljesac Bridge which connects the two divided parts of Croatia. Both parts were divided by a stretch of Adriatic sea which was controlled by Bosnia. The two-kilometer bridge cost around EUR 526 million and is funded by the EU for EUR 357 million. The China Road and bridge cooperation won the international bid for the construction of the bridge in 2018. The people of Dubrovnik feel connected to Croatia for the first time since Yugoslavia broke up in 1991. The bridge will be a huge boost to the tourism industry and its economy.
Europe: EU Approves smallpox vaccine for monkeypox; first death recorded in Spain
On 25 July, the European Commission approved the Danish biotech company Bavarian Nordic’s Imnavex vaccine for use against Monkeypox in the EU member states. The Bavarian Nordic vaccine was generally used for protection against smallpox. The company’s chief executive Paul Chaplin said: "The availability of an approved vaccine can significantly improve nations' readiness to fight emerging diseases, but only through investments and structured planning of the biological preparedness." He added that the vaccine was developed in collaboration with the US government. Spain recorded the first monkeypox-related deaths outside Africa. The outbreak has been concentrated in Europe, with 70 per cent infections. Recently declared as a public health emergency, monkeypox has spread to 78 countries so far. In Spain, the health ministry's emergency and alert coordination center announced that 4298 cases have been registered so far, among which information is recorded for 3750 patients. Of them, only 64 are women, 120 have been hospitalized and one has expired. The Spanish health ministry has not provided any further details on the deceased.
Ukraine: Exporting of grains start back after the missile interruption by Russia
On 27 July, Ukraine reported on the recommencement of work in the Odesa, Chernomorsk, and Yuzhnyy ports signed under the deal. The port was previously attacked by Russia on 23 July, but it denied the attacks stating it had targeted only the military infrastructure. Ukraine accused Russia for breaching the agreed deal and now has announced the restart of the port operations. According to the Ukraine’s Navy: “In connection with the signing of the agreement on the unblocking of Ukrainian ports for the export of grain, work has resumed in the ports of Odessa, Chernomorsk and Pivdennyi.”
Russia: ROSCOSMOS to exit International Space Station after 2024
On 26 July, the newly appointed chief of Russian Space Agency said, that Russia would withdraw from the ISS after 2024 and build its own orbiting outpost. “I think that by that time, we will start putting together a Russian orbital station,” said Yury Borisov to President Putin. ROSCOSMOS also revealed a model of Russia’s orbital station, estimated to cost $6 billion. In the context of the ongoing war, the deteriorating relations with the US/West and the ISS’ aging infrastructure, the announcement can be seen as an attempt by Russia’s Space industry to raise the bar and ensure the Russian economy is well equipped with the necessary space services.
Russia-Ukraine: Explosion at the bridge in Kherson and Ukrainian offensive
On 27 July, a Ukrainian rocket was fired on the Russian-controlled Antonovsky Bridge in Kherson. The attack is being seen as a signal of the intensifying preparedness towards its first counteroffensive in the region. The attack was on a strategic bridge over the Dnipro River which is a highway that connects Kherson to the Crimean Peninsula. Ukrainian forces have begun to retake nearby towns and villages while moving towards the major city that has been under the Russian control for the longest time during the war. The other importance of the bridge is that, it is one of the three bridges that plays a huge role in the region for the Russian forces to move their supplies, equipment, and their soldiers into the territory.
Energy Crisis: Gazprom holds Siemens responsible for the reduction in gas flow
On 29 July, following the shock that emerged from the Russian company Gazprom’s decision to reduce the gas flow, the company released its correspondence with Siemens blaming the latter for the crisis. Russia had to reduce its gas flow through the Nord Stream 1 pipeline due to turbine malfunctions. Siemens produces the turbines for the Nord Stream 1, which failed to fulfil its commitments. The Deputy Chief Executive of Gazprom stated that Siemens has so far only eliminated one-fourth of the total number of the malfunctions discovered in the turbines. The statement comes after Gazprom announced on 27 July, that the output from the Nord Stream 1 would be reduced by one-fifth of its capacity.
Canada: Pope Francis apologises to indigenous Inuit survivors of Catholic run schools
On 24 July, Pope Francis started his Canada visit with an intent to reconcile and listen and dialogue with Indigenous Peoples, to express his heartfelt closeness and to address the impact of colonization and the participation of the Catholic Church in the operation of residential schools throughout Canada. In the main apology of his Canada trip, delivered on 25 July, Francis spoke of "cultural destruction," but he didn't use the term "cultural genocide" as some school survivors had hoped and expected.
Venezuela: UK court rules against President Maduro in gold battle
On 29 July, London's High Court rejected President Nicolas Maduro's latest efforts to gain control of more than $1 billion of Venezuela's gold reserves stored in the Bank of England's underground vaults in London. It marked the latest victory for opposition leader Guaido, who has won a series of legal clashes over the bullion after the British government recognised him rather than Maduro as the South American country's president. The Maduro and Guaido camps have each appointed a different board to the Central Bank of Venezuela (BCV) and the two have issued conflicting instructions concerning the gold reserves.
Brazil: First monkey pox related death reported in the South-eastern part
On 29 July, Brazil reported the first monkeypox-related death outside the African continent, shortly before Spain confirmed Europe’s first known death in the outbreak. Brazil’s health ministry has recorded close to 1,000 monkeypox cases, mostly in Sao Paulo and Rio de Janeiro states, which are also in the country’s southeast. Along with the United States and Canada, it is one of the countries that has been most affected by monkeypox in the Americas. The first case in the current outbreak was confirmed in the United Kingdom on May 7 and the World Health Organization (WHO) said the emergence of hundreds of cases outside the central and western African nations where the virus is endemic suggested it had been spreading undetected for some time.
IMF: Global economic growth reduced by 0.4 per cent to 2.9 per cent
On 26 July, in its World Economic Outlook Update July 2022, International Monetary Fund updated its risk assessments for global economic growth. The global growth, which was prospected to be at 6.6 per cent in 2021 has been further slashed at 2.9 per cent growth. China’s growth has been reduced to lowest in 40 years at 3.3 per cent and inflation will also remain high, 6.6 per cent for advanced economies and 9.5 per cent for developing economies. The risks to the outlook are overwhelmingly tilted to the downside. The war in Ukraine could lead to a sudden stop of European gas imports from Russia; inflation could be harder to bring down than anticipated either if labor markets are tighter than expected or inflation expectations unanchor; tighter global financial conditions could induce debt distress in emerging market and developing economies; renewed COVID-19 outbreaks and lockdowns, as well as a further escalation of the property sector crisis, might further suppress Chinese growth; and geopolitical fragmentation could impede global trade and cooperation.
About the Authors
Apoorva Sudhakar, Avishka Ashok, Abigail Miriam Fernandes, Padmashree Anandhan, Rishma Banerjee and Emmanuel Selva Royan are Research Associates in the School of Conflict and Security Studies at the National Institute of Advanced Studies. Akriti Sharma, Harini Madhusudan, Rashmi Ramesh and Ankit Singh are PhD Scholars at NIAS. Joel Jacob is a research intern at NIAS.
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Vignesh Ram | Assistant Professor | Manipal Academy of Higher Education, Manipal
Harini Madhusudan, Rishma Banerjee, Padmashree Anandhan, Ashwin Immanuel Dhanabalan, and Avishka Ashok
Padmashree Anandhan and Rishma Banerjee
Mathew Sonu Simon
Rashmi BR and Akriti Sharma
Emmanuel Selva Royan