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Car drivers queue to fill their fuel tank at a TotalEnergies gas station in Nice as petrol supplies are disrupted by a strike of French refineries and depots, France, March 20, 2023.
Hard Numbers: French oil refinery blockades, China’s mRNA milestone, Moscow comes to Bali, IMF tweaks rules for Ukraine, TikTok hearing
13: As French protesters continue to strike and block oil refineries in response to the government’s recently passed pension reform, 13% of petrol stations around the country are running short on gas. What’s more, a lack of shipments from LNG terminals is raising fears of shortages – and elevated prices – across Europe.
1: China has finally approved its first mRNA COVID vaccine for emergency use. Beijing says that the drug shows high rates of protection when administered as a booster, though it provided few other details.
22,000: Most Russians fleeing conscription and oppression have gone to Georgia, Armenia, and even Turkey. But many have also fled to faraway … Bali. Now, Bali’s governor has asked Indonesia’s central government to rescind a rule allowing Russians and Ukrainians to apply for visas upon arrival, pointing to the fact that 22,000 Russians arrived on the island in January alone. Jakarta introduced the measure to get a post-COVID tourism bump, but some say the newcomers are ruining the island’s zen.
15.6 billion: The IMF has agreed to a preliminary loan for Ukraine worth a whopping $15.6 billion, the biggest package for Kyiv since Russia’s invasion began in Feb. 2022 – though it still needs to be approved by the board. In order to get this deal across the line, the IMF, whose main shareholder is the US, recently changed a rule to allow loans to go to countries facing “exceptionally high uncertainty.”
5: The Federal Reserve hiked interest rates by a quarter point, bringing its key short-term interest rate up to 5%. The decision signals that the Fed is continuing its campaign to temper inflation and consumer price increases, even after the recent banking turmoil.
150 million: That’s how many of its users TikTok claims are US-based, according to its CEO, Shou Zi Chew. On Thursday, Sou will testify before a US House committee hearing to answer questions about the suspected ties of ByteDance, TikTok’s parent company, to China’s ruling Communist Party amid growing calls for a US ban.
Ukrainian troops in the midst of the conflict to take back control of Kharkiv province from Russian forces.
What We’re Watching: Ukraine's gains, Democrats' midterm odds, IMF to offer food aid
Jubilant Ukrainians continue to advance
Ukraine’s military gains of the past few days have emboldened its fighters and leaders. An attack meant to test Russian strength at various points along the front in northeast Kharkiv province became a major counteroffensive when many Russians simply abandoned their equipment and ran. As of Monday, Ukraine has grabbed more territory in five days than the Russian military captured in the past five months. To demonstrate it can still inflict punishment, Russia responded with an artillery blitz aimed at knocking out electricity and water, initially causing widespread outages across Ukraine. But President Volodymyr Zelensky captured the Ukrainian mood on social media with a response aimed at Moscow: “We will be without gas, lights, water and food … and WITHOUT you!” Ukraine’s defense minister has warned his forces to brace for a Russian counterattack, though it appears Russia lacks the manpower and the weapons for an effective near-term military response in Kharkiv province. Russia’s war effort is not collapsing. Its forces remain dug in across much of the Donbas region and along the Black Sea coast. Though Ukraine has seized momentum, this war is far from finished. But Ukrainian forces have again demonstrated that, whatever the Kremlin claims, Putin’s war is not going to plan.
US midterm elections: Do Dems stand a chance?
Political analysts long predicted that midterm elections this November would be a washout, with Republicans slated to gain control of both chambers of Congress. It’s a common trend in midterms, which are seen as a referendum on the current president – and a poor showing for Dems would be consistent with President Joe Biden’s record-low polling numbers in recent months. But some surveys now suggest that after a series of legislative wins over the summer, the Democrats could retain a narrow majority in the Senate and lose the House – but only just. According to FiveThirtyEight’s aggregation of polls, support for Democrats in a general election is currently running at 45%, just ahead of the GOP's 43.7%. However, some analysts are questioning whether the polls could be wrong … again. After polling proved to be dismal in the lead-up to the 2016 presidential election, forecasts for 2020 were more accurate. Still, they overstated Biden’s lead in several swing states, including Ohio and North Carolina, that Trump ended up winning. Yet other pollsters say that this year’s vote could buck the midterm trend in part because of one key issue: abortion. The Supreme Court's overturning of Roe v. Wade already proved to be a galvanizing force in Kansas. Will it affect Dems' chances in crucial districts come November?
IMF to unveil food aid program
The International Monetary Fund will reportedly issue emergency funding to emerging-market economies suffering from shortages due to the global food crisis caused largely by the war in Ukraine. Though details remain scarce, the IMF board is reportedly weighing whether to dole out funds to help import-reliant countries acquire food at a time when much of the world’s grain supply has been stuck at Ukrainian Black Sea ports because of a Russian blockade. (A recent deal brokered by Turkey has seen some grain shipments start to resume.) Before the war, Ukraine and Russia accounted for almost one third of global wheat exports, but food prices have surged and supply has dwindled since Russia invaded Ukraine, leading some crisis-ridden countries, like Somalia, to the brink of famine. Importantly, the IMF deal would not impose the strict conditions of regular IMF funding, which often requires cash-strapped governments to impose unpopular reforms. What’s more, it would temporarily lift low-income country's borrowing quotas by 50%. Indeed, this sort of temporary no-strings-attached lending could boost the image of the notoriously strict IMF at a time when China has emerged as an “IMF competitor,” doling out billions of dollars to at-risk nations without demanding structural reforms in return.
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Supporters of Lebanon's Hezbollah leader Sayyed Hassan Nasrallah hold flags during an election rally in Tyre, Lebanon.
Can this election save Lebanon?
Corruption and mismanagement have become the hallmarks of Lebanese governance.
In 2019, the country’s ill-managed economy imploded thanks to a self-serving political elite, and in 2020, an explosion resulting from government negligence killed 230 people at a Beirut port. Subsequent attempts to stonewall the criminal investigation of the blast again exposed the greed and malice of those in charge.
In short, things need to change.
Voters will cast their ballots on May 15 in general elections for the first time since all hell broke loose three years ago. Is there any hope for a political turnaround, or will the country continue rolling over a cliff?
Decades of deterioration. Years of government mismanagement and corruption coupled with ongoing sectarian violence since the country’s civil war ended in 1990 have fueled low expectations and apathy amongst Lebanon’s electorate. Indeed, decades of pocket-lining by politicians, combined with successive governments racking up mountains of debt, have crashed the economy and sent standards of living into a free fall.
Since 2019, Lebanon’s currency has lost 90% of its value, and inflation now stands at an unfathomable 215%. Lebanese who have seen their savings dry up and their opportunities dwindle are increasingly disillusioned, and they lack trust in the government's ability to improve their plight. As a result, only 54% of eligible voters say they plan to vote, according to Oxfam.
Ongoing sectarian strife is part of the equation. Earlier this year, former PM Saad Hariri – son of slain Sunni PM Rafik Hariri – announced his resignation from politics, leaving a political vacuum. Many Sunni Lebanese – roughly one third of the population – don’t intend to vote.
Analysts say this could be good news for Hezbollah, the Shiite political party and militant group backed by Iran and deemed a terrorist organization by the US and EU. Led by Hassan Nasrallah, a hardliner, Hezbollah has been dubbed a state within a state, because it has vast military capabilities, provides some social provisions, and takes independent actions at home and abroad – like firing rockets into Israel – that invariably impact the Lebanese state.
Hezbollah’s coalition already holds around 55% of parliamentary seats and is hoping to pick up some Sunni votes to further consolidate power. The Saudis are clearly worried about it too: A prominent Saudi columnist reportedly called Hariri a “traitor” for backing out of the election and allowing Hezbollah to fill the void.
What’s at stake?
Much-needed dough. With 75% of the country living below the poverty line, Beirut has been engaged in ongoing negotiations with the International Monetary Fund for access to loans and aid.
Last month, the two sides reached a preliminary agreement for a $3 billion loan contingent on Lebanon implementing a series of reforms, including getting rid of bank secrecy laws that allow the central bank to withhold information from donors, and restructuring the banking sector.
Still, if the past is prologue, the political elite will likely continue dragging their feet on reforms that might be detrimental to their personal interests and wealth. Hezbollah has displayed some willingness to negotiate with the IMF, though it says it won’t agree to any austerity measures that would hurt its base, the majority of whom are poor.
While this loan is just a drop in the ocean compared to Lebanon’s crushing $70 billion debt, it would still be an important stepping stone, analysts say, toward boosting investor confidence.
Who's watching?
Surely, the Gulf states, which are locked in a semi-rapprochement with Beirut after a rocky 18 months. The Saudis and Emirates once flooded Lebanon with cash but withdrew as Hezbollah’s – and Iran’s – grip on power tightened. Things got worse last year after a Lebanese minister criticized Riyadh’s onslaught in Yemen, prompting the Saudis to block all Lebanese imports.
The Saudis, for their part, have shown a willingness to patch things up. But it’s hard to imagine that the two states will get much cozier if Hezbollah’s power continues to grow.
The status quo presents big problems for Washington. Many members of Lebanon’s political class, who Washington partners with to try and cut off terrorist financing, are also obstructing the reform efforts needed for unlocking international aid.
Inside Lebanon, the marriage of convenience continues: Lebanon’s political elite siphon money, and Hezbollah seem to get carte blanche to fire rockets at Israel and wage Tehran’s regional war. The people of Lebanon, meanwhile, continue to suffer.
The Graphic Truth: Deep in the red with China
The pandemic has thrown many already-indebted countries further into the red. The problem is two-pronged for many Asian, African, and Latin American countries. They have taken on huge amounts of debt from the IMF to weather pandemic-related economic uncertainty, while also being caught up in a debt trap set by China, which funds large infrastructure projects in developing states but often with complex or misleading fine print. We take a look at which countries out of a group of 24 surveyed states owe China the most compared to their respective IMF debts.