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PROGRAMMING NOTE
As you may have heard me mention during my interview with Bob Wright earlier this week or at the tail end of the Foreign Exchanges podcast I sent out earlier today, I’m starting a new podcast in the next few days along with my friend and FX columnist Daniel Bessner. It’s called American Prestige and it will complement and I hope enhance what we’re doing here. Our goal is to bring some of the day to day news coverage of Foreign Exchanges and the bigger picture analysis Daniel does together to produce a show that’s timely, informative, hopefully entertaining, and that pulls no punches when it comes to understanding and challenging the principles of American Empire. We’ll have interviews, regular segments, and I can promise you a much slicker production than our FX podcasts, mostly because I won’t be the producer.
We’re still putting a lot of finishing touches on things so I don’t have a website for you to check out yet or even a Twitter account (they’re coming!), just a heads up that our first episode will be dropping next week and should at some point after that be available wherever you find your podcasts. In terms of what this means for Foreign Exchanges, the answer is very little. Everything here is going to keep rolling along as usual. Some of the interviews I’ve been doing for FX might wind up on American Prestige instead and that might mean a slight adjustment to the frequency of the FX podcast but that’s it. I’m looking forward to having an outlet where I can pull back from the nitty gritty details a bit and talk about things in a broader sense, but only as a complement to the newsletter, not a substitute in any way.
Like I said the details are still being worked out but please be on the lookout for the show and stay tuned for more updates! Thanks!
THESE DAYS IN HISTORY
June 30, 1520: During La Noche Triste (“the Night of Sorrows”), Hernán Cortés and his forces are driven out of Tenochtitlan by the Aztecs. He regrouped and returned the following year to besiege and ultimately capture the city.
June 30, 1934: In the “Night of the Long Knives,” Nazi leaders purge the Sturmabteilung, including its leader Ernst Röhm, and target other party opponents like German Vice Chancellor Franz von Papen. Estimates of the death toll range from a low of 85 to a high of somewhere around 1000.
July 1, 1097: The Crusaders defeat a Seljuk army at Dorylaeum. The outnumbered Seljuks caught the vanguard of the Crusader army by surprise but were eventually worn down as the day went on and the rest of the Crusaders kept rolling in to relieve their comrades. The victory cleared the Crusaders’ path to Antioch.
July 1, 1968: The “Treaty on the Non-Proliferation of Nuclear Weapons” is signed by 62 countries. Nowadays that list has grown to 191 signatories. The Non-Proliferation Treaty (NPT) has prevented the spread of nuclear weapons ever since, except for all the times—India, Israel, North Korea, Pakistan, South Africa—it hasn’t done that.
July 1, 1997: Sovereignty over Hong Kong passes to China after 156 years of British colonial rule. And they all lived happily ever after.
INTERNATIONAL
As of this writing, Worldometer’s coronavirus figures show 183,399,346 total cases of COVID-19 worldwide to date, with 3,971,119 reported COVID fatalities. According to the New York Times vaccine tracker, over 3.08 billion vaccines have been administered worldwide, or roughly 40 for every 100 people.
In today’s global news:
The Organization for Economic Cooperation and Development revealed on Thursday that some 130 countries and jurisdictions have agreed in principle to institute a global minimum corporate tax of at least 15 percent. That includes the US and apparently China, the two biggest players, and the entire G20, but it does not include European tax havens Hungary and Ireland. The global tax threatens their status as tax havens and therefore is not in their economic interests. Irish officials say they support the idea of a minimum tax “broadly,” just not “actually.”
MIDDLE EAST
YEMEN
The Yemeni military says it has shot down two Houthi drones over Maʾrib province, without offering any details as far as when this supposedly happened or what kind of drones they were.
The World Bank on Thursday checked its couch cushions and managed to find some $150 million to help close a part—a very small part—of the funding gap that the United Nations’ 2021 Yemen humanitarian relief plan is facing. The UN says it needs some $3.85 billion to fund that plan in full and so far it’s managed to raise less than half of that total. Not to be underdone, Saudi Arabia has reportedly coughed up a whole $60 million, which I guess means Mohammad bin Salman will have to buy one less yacht this year than he was planning, to finance the World Food Program’s Yemeni operations. In fact they’ve already sent Yemen the money, as you can see in this actual footage of the transaction:
What can you say? Saudi royals are a charitable bunch.
TURKEY
The US State Department’s 2021 Trafficking in Persons report is out, and while I wish we had time to honor all of this year’s “winners” I think the one exceptional case must be the addition of Turkey to the list of countries that are using child soldiers. For a US ally—a NATO ally to boot—to land on such a list tells you mostly that it’s relationship with the United States is so broken that Washington isn’t willing to ignore its war crimes, which is pretty broken by the standards of US diplomatic partnerships. Turkey is alleged to be using child soldiers as proxies in Syria and then to have sent some of those Syrian child soldiers to Libya in support of the former Government of National Accord. This is the first time a NATO member has wound up on this particular list. Governments on the child soldier list could be subject to repercussions but there’s no obligation to penalize them.
ISRAEL-PALESTINE
The Israeli military is conducting a new round of airstrikes on Gaza overnight after an apparent spate of “arson balloon” launches out of the enclave on Thursday. These strikes are as far as I know ongoing and there’s no indication as to damage or any casualties as yet. The Israelis generally stick to “military” targets when responding to balloon launches, which keeps the chance of casualties relatively low.
UNITED ARAB EMIRATES
The OPEC+ group of major oil producing nations was scheduled to hold a ministerial meeting on Thursday, most likely to discuss plans to increase production in August and beyond in order to meet rising global demand and respond to recent price hikes. That meeting has been postponed at least until Friday, after Emirati officials balked at a Russian/Saudi proposal. OPEC+ drastically cut production last year at the height of the pandemic, with those cuts set to phase out in April 2022. The Russian/Saudi plan would have gradually ramped production back up but extended the full phase out until the end of 2022 in order to avoid an oversupply. The Emiratis apparently want to return to full production faster than that. It’s unclear now what the group will decide, and global oil prices ticked up on Thursday due to the uncertainty.
IRAN
Iranian Supreme Leader Ali Khamenei has named a new chief justice, Gholam-Hossein Mohseni Ejei, to replace outgoing chief justice and new President-elect Ebrahim Raisi. Mohseni Ejei has been serving as Iran’s First Vice Chief Justice since 2014, first under Sadeq Larijani and then under Raisi. If there’s any reason to think he’ll diverge much from his predecessors it has to do with the fact that he’s spent considerable time working in Iran’s intelligence apparatus as well as its judiciary, and no I’m not sure what that might mean in terms of his administration of justice but chances are it’s not good. He, like Raisi, is already under US sanctionsIt’s not inconceivable that Mohseni-Ejei could factor into the succession question at some point down the road, it seems unlikely given how much Khamenei seems to be grooming Raisi to take over.
According to Reuters, Iranian officials have been limiting access for International Atomic Energy Agency personnel to their uranium enrichment facility at Natanz since that site was the target of a sabotage attack in April. While Iran’s participation in the IAEA’s Additional Protocol is still in limbo, as a declared nuclear site Natanz should still be relatively open to the agency’s inspectors, so this lack of access is of some concern. Reuters sources seem to believe the dust up is on its way to being resolved.
ASIA
AZERBAIJAN
Azerbaijani authorities have opened criminal proceedings against 53 Armenian soldiers they’ve had in custody since the end of last fall’s war in Nagorno-Karabakh, under questionable at best circumstances. They’re facing life in prison if convicted. The Russian-brokered ceasefire agreement Armenia and Azerbaijan signed to end that war obligates both sides to turn over prisoners of war. According to Azerbaijan, these soldiers for some unknown reason crossed into Azerbaijani territory after the war and therefore are not, strictly speaking, POWs. There’s no evidence supporting that claim. The soldiers may have been captured in what had become Azerbaijani territory at the end of the conflict but even if that’s true it’s far more likely that they were there in error caused by a rapidly shifting and badly defined border than that they intentionally crossed into Azerbaijan after the war was over.
If the Azerbaijani narrative about where and/or how these soldiers were captured is false (as seems likely) then they’re in violation of the ceasefire. They may also be violating the ceasefire by not revealing exactly how many Armenians they have in custody—authorities say they’re holding about 60 but there’s some reason to believe that figure is closer to 100. But as is always the case in these situations, the ceasefire agreement is only relevant to the extent that it’s enforced. In this case it seems fairly clear that Russia would need to be the enforcer, and it’s shown little interest in playing that role.
MALAYSIA
The other highlight to emerge from the US Trafficking in Persons report seems to have been the decision to bump Malaysia from its Tier 2 trafficking “watch list” to Tier 3, the report’s lowest level. Countries in Tier 3 have, in the State Department’s view, failed to implement “minimum standards” with respect to combating human trafficking, and are not even deemed to be making a good faith effort to implement them. The US government has sanctioned a handful of Malaysian firms over forced labor allegations. The lowered designation could put some US aid to Malaysia at risk though it does not necessarily mandate aid cuts.
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CHINA
Several other countries joined Malaysia in Tier 3, including China, based largely on allegations of forced labor and other abuses in Xinjiang. Coincidentally, Xi Jinping addressed members of the Chinese Communist Party on Thursday to mark the CCP’s centennial, saying among other things that China “will not accept sanctimonious preaching from those who feel they have the right to lecture us.” I don’t think he had an advance copy of the trafficking report so presumably he was just referring to sanctimonious preaching in general.
NORTH KOREA
The tea leaf reading that generally passes for reporting on North Korea has produced a few guesses about some of the senior officials Kim Jong-un may have canned during a politburo meeting earlier this week in which he railed against some unspecified “grave incident” involving Pyongyang’s COVID response. These include, according to Reuters, politburo members Ri Pyong Chol and Pak Jong Chon, along with party secretary Choe Sang Gon. Ri’s departure would be particularly noteworthy, since as vice chairman of the Korean Workers’ Party’s Central Military Commission he’s been heavily involved in North Korea’s missile program.
Those names are speculative, as is any attempt to ascertain what “grave incident” Kim was referencing. Some analysts are sticking to the notion that North Korea is suffering a major COVID outbreak, but there’s no sign of the kind of public health response such an outbreak would warrant and indeed this week’s politburo meeting itself is evidence that senior leaders aren’t terribly concerned about contracting the virus. The more likely explanation is something economic, perhaps a serious food crisis brought on by the country’s lockdown measures. But who knows?
ANTARCTICA
We don’t usually include Antarctica in these newsletters, but hey this seems kind of important:
The United Nations on Thursday recognised a new record high temperature for the Antarctic continent, confirming a reading of 18.3 degrees Celsius (64.9 degrees Fahrenheit) made last year.
The record heat was reached at Argentina’s Esperanza research station on the Antarctic Peninsula on February 6, 2020, the UN's World Meteorological Organization said.
“Verification of this maximum temperature record is important because it helps us to build up a picture of the weather and climate in one of Earth's final frontiers,” said WMO secretary-general Petteri Taalas.
“The Antarctic Peninsula is among the fastest-warming regions of the planet -- almost 3C over the last 50 years.
“This new temperature record is therefore consistent with the climate change we are observing.”
The previous record was 17.5 degrees Celsius, also recorded at Esperanza in March 2015. As always I’m sure it’s fine.
AFRICA
NIGER
A group of Boko Haram fighters reportedly went on a bit of a rampage in southeastern Niger on Tuesday, killing at least four civilians traveling on a bus before ambushing a Mixed Multinational Force patrol in the area. The patrol seems to have driven the militants off, killing at least 13 of them in the process.
ETHIOPIA
The Ethiopian government on Thursday called on the Tigray People's Liberation Front, which regained control of much of the Tigray region earlier this week, to reciprocate the ceasefire Ethiopian forces have adopted so as to permit humanitarian relief to enter the war torn region. The TPLF seems fairly uninterested in a ceasefire at this point, its spokesperson Getachew Reda telling Reuters that its fighters intent to “fully liberate every square inch of Tigray.” Well then. It’s now being reported that a major bridge over the Tekezé River near the town of Shire has been destroyed, which could be a huge blow to relief efforts even if the TPLF decides to stop fighting. It’s unclear who destroyed the bridge or when it was destroyed, but the river separates the parts of Tigray that are once again in TPLF hands from areas in the western part of the region that have been occupied by militias from the Amhara region, so it’s possible the militias destroyed it to slow the TPLF’s advance. Millions of people in Tigray are thought to be in need of humanitarian assistance, at least 900,000 of them critically.
UGANDA
Ugandan authorities have traced the attempted assassination of Works and Transport Minister Katumba Wamala in Kampala last month to the Allied Democratic Forces militia, which is active across the border in the Democratic Republic of the Congo. Wamala’s daughter and his driver were both killed in that attack. Police have arrested several suspects in connection with the attack and believe they were trained at an ADF camp in the DRC’s North Kivu province. It’s not clear whether the alleged attackers are believed to be ADF members themselves, but the militia was originally based in western Uganda before it moved into North Kivu.
DEMOCRATIC REPUBLIC OF THE CONGO
Speaking of the ADF, a group of its fighters is believed to have been responsible for another attack in the city of Beni on Thursday in which at least nine people were killed. This is the third terrorist attack in Beni this week—two bombings on Sunday were later claimed by the Islamic State’s Central Africa Province, which is another name for the ADF or at least comprises a large faction of the ADF (the precise relationship between the two groups still isn’t entirely clear).
ESWATINI
Protests calling for reforms to Eswatini’s absolute monarchy continued on Thursday. Those demonstrations began earlier this week, calling for democratic reform and decrying King Mswati III’s decadence and his arbitrary rule. There have been reports of police violence, of looting amid the protests, and of protesters barricading major streets and setting fires. The government reportedly deployed the kingdom’s army on Thursday in an effort either to tamp down on the looting or to enhance its ability to suppress the demonstrations, depending on your point of view.
EUROPE
RUSSIA
Russia’s Federal Security Service (FSB) said on Thursday that it had thwarted an alleged Islamic State plot to carry out terrorist attacks in Moscow and in the city of Astrakhan, killing one alleged IS operative in the process. Details are very sparse, including the timing of the apparent bust.
SWEDEN
Swedish Moderate Party leader Ulf Kristersson abandoned his bid to be prime minister citing his failure to win any centrist support for the right wing coalition he was hoping to lead. Parliament speaker Andreas Norlén quickly moved on to his second PM candidate, none other than current caretaker PM Stefan Löfven. He’ll have until Monday to try to cobble together a workable coalition, presumably something along the lines of the one that he had in place until he lost a confidence vote last week. Löfven may have enough parliamentary support to reform his cabinet, but whether he’ll have enough support to get anything done—in particular a new budget—remains to be seen.
AMERICAS
VENEZUELA
The World Food Program says it has sent its first shipment of food under a new program to feed Venezuelan school children. Back in April the WFP reached an agreement with President Nicolás Maduro’s government to provide food assistance to Venezuela, a surprising development given Maduro’s often stated hostility toward humanitarian aid. The program aims to feed some 185,000 school children this year and then ramp up until it’s reaching some 1.5 million children by mid 2023. The WFP says it’s managing distribution directly rather than through the government, which may be a concession to the United States and its hostility toward Maduro.
HONDURAS
The Biden administration on Thursday released a list of 50 current and former officials in El Salvador, Guatemala, and Honduras who are accused of corruption and/or undermining democracy in the region. Included on the list is former Honduran President José Porfirio Lobo Sosa along with several current senior officials in Salvadoran President Nayib Bukele’s administration, former Guatemalan President Alvaro Colom Caballeros, and current Guatemalan Supreme Court justice Manuel Duarte Barrera.
HAITI
At least 15 people were killed on Tuesday in Port-au-Prince, including a Haitian journalist and a prominent political activist, in a spree that Haitian Prime Minister Claude Joseph termed a “terrorist attack” on Thursday. Joseph and national police chief Leon Charles blamed the killings on a group of rebellious current and former Haitian police officers called “Fantom 509” and suggested they were retaliating for the murder of former national police union spokesperson and Fantom 509 member Guerby Geffrard hours before the spree began.
UNITED STATES
Finally, TomDispatch’s Mandy Smithberger and William Hartung dig in to the newest iteration of America’s ever-increasing military budget:
President Biden’s first Pentagon budget, released late last month, is staggering by any reasonable standard. At more than $750 billion for the Defense Department and related work on nuclear weapons at the Department of Energy, it represents one of the highest levels of spending since World War II — far higher than the peaks of the Korean or Vietnam wars or President Ronald Reagan’s military buildup of the 1980s, and roughly three times what China spends on its military.
Developments of the past year and a half — an ongoing pandemic, an intensifying mega-drought, white supremacy activities, and racial and economic injustice among them — should have underscored that the greatest threats to American lives are anything but military in nature. But no matter, the Biden administration has decided to double down on military spending as the primary pillar of what still passes for American security policy. And don’t be fooled by that striking Pentagon budget figure either. This year’s funding requests suggest that the total national security budget will come closer to a breathtaking $1.3 trillion.
That mind-boggling figure underscores just how misguided Washington’s current “security” — a word that should increasingly be put in quotation marks — policies really are. No less concerning was the new administration’s decision to go full-speed ahead on longstanding Pentagon plans to build a new generation of nuclear-armed bombers, submarines, and missiles, including, of course, new nuclear warheads to go with them, at a cost of at least $1.7 trillion over the next three decades.
The Trump administration added to that plan projects like a new submarine-launched, nuclear-armed cruise missile, all of which is fully funded in Biden’s first budget. It hardly matters that a far smaller arsenal would be more than adequate to dissuade any country from launching a nuclear attack on the United States or its allies. A rare glimmer of hope came in a recent internal memo from the Navy suggesting that it may ultimately scrap Trump’s sea-launched cruise missile in next year’s budget submission — but that proposal is already facing intense pushback from nuclear-weapons boosters in Congress.
In all, Biden’s first budget is a major win for key players in the nuclear-industrial complex like Northrop Grumman, the prime contractor on the new nuclear bomber and a new intercontinental ballistic missile (ICBM); General Dynamics, the maker of the new ballistic-missile submarine; Lockheed Martin, which produces sea-launched ballistic missiles (SLBMs); and firms like Honeywell that oversee key elements in the Department of Energy’s nuclear-warhead complex.
(1) Defund and then (2) Abolish the Pentagon.