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Ukrainian President Volodymyr Zelensky speaks during an interview with Reuters in Kyiv.
What We're Watching: Ukraine won't negotiate, AMLO busted spying, North Korean missile diplomacy
Ukraine on offense
Ukraine’s President Volodymyr Zelensky issued a decree on Tuesday asserting that all the lands that Russia’s Vladimir Putin claimed to annex last week — and Crimea, which Russia seized in 2014 — remain part of Ukraine. Zelensky and his generals appear to believe that Ukraine is winning the war with Russia, and they have battlefield advances to back up their case. The Institute for the Study of War, a Washington-based military think tank, has reported that Ukraine has made “substantial gains” on both the eastern and southern fronts over the past few days and that the units they’re defeating are “some of Russia’s most elite forces.” No wonder Zelensky and many others would swat away suggestions from billionaire eccentric Elon Musk that Ukraine might trade land for peace. Russia has acknowledged recent losses, and blame continues to land on the country’s military brass. It’s not clear how far Ukraine can extend its current gains, but the recapture of Crimea, in particular, will be even more difficult than the more immediate tasks ahead for Ukrainian forces. But for now, Ukraine has pushed the Russian military, and the Kremlin, onto its heels.
Mexico’s AMLO caught riding a winged horse
A new report says the government of President Andrés Manuel López Obrador, aka AMLO, has been snooping on journalists using the fearsome Pegasus spyware. Researchers at the Canada-based watchdog Citizen Lab and the Mexican digital privacy advocacy group R3D say the program was installed on the phones of at least three Mexican human rights investigators between 2019 and 2021. The revelation is particularly damning for AMLO, who promised after taking office in 2018 that he’d discontinue the use of Pegasus following revelations that his predecessor had used it against journalists. As recently as last year, AMLO said his government had cut all ties with NSO, the Israel-based company that makes Pegasus, which is typically sold only to governments or law enforcement agencies. According to Human Rights Watch, Mexico remains one of the most dangerous places on earth for journalists and human rights defenders.
North Korea wants attention
Kim Jong Un doesn't like to be ignored. To get attention — particularly from the US and South Korea — his usual shtick is to test ballistic missiles, which North Korea's supreme leader has been doing consistently since the beginning of the year. But he hasn’t gotten much of a rise out of Washington or Seoul – just the usual strongly worded statements. So on Tuesday morning, Kim decided to look elsewhere, firing off a rocket that arced directly over Japan before plunging into the Pacific Ocean. By launching their first missile test over Japan in five years, the North Koreans may hope that rattling a US ally will get Washington to come back to the negotiating table, where Pyongyang wants the Americans to lift economic sanctions without having to surrender its nuclear weapons program first. But North Korea is hardly a priority these days for US President Joe Biden, who has enough on his plate with Russia's invasion of Ukraine, China bullying Taiwan, inflation soaring, and the midterms around the corner. And what about Japan? Expect the shock of the missile overflight to give fresh impetus for Tokyo to boost defense spending.
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A child takes bath in a bucket to cool off amid a heatwave warning in Hunan province, China.
What We're Watching: Dry China, UK inflation forecast, Pegasus spyware shakeup
Feeling the heat in China
Severe drought coupled with record-high temperatures in central and western China have hampered hydropower generation, prompting the shutdown of factories and sparking rolling blackouts in Sichuan province. (China is the world’s largest producer of hydroelectricity, which accounts for at least 18% of its total electricity generation.) The impact of the scorcher is being felt as far away as Shanghai, which relies heavily on hydropower from Sichuan, a province that usually gets a big summer downpour. Meanwhile, the property sector is drowning in debt, prompting China’s central bank on Monday to cut its five-year interest rate to help the construction and real estate sectors. What’s more, Shanghai announced that it would temporarily turn off lights lining the historic Bund waterfront to conserve energy. The energy crunch will further hurt China’s stagnant economy, which continues to contract as a result of President Xi Jinping’s zero-Covid policy. President Xi is desperate to get the situation under control ahead of the 20th Party Congress later this year, when he is expected to secure a norm-defying third term as CCP secretary-general.
UK’s inflation scare
Brits are feeling the heat this summer, from blistering temperatures earlier this month to ongoing rail worker strikes, disrupted train services, and a deepening cost-of-living crisis. But things could soon get even worse thanks to soaring food and gas prices. On Monday, Citigroup warned it expects consumer price inflation to hit a whopping 18.6% by early 2023 — the country’s highest rate since 1979. This Friday, energy regulator Ofgem will announce the level of its next price cap — the outer limit households pay for home energy costs — with estimates suggesting it could rise to more than £3,500 a year, a 75% increase. Some 10.5 million British households are at risk of fuel poverty this winter as inflation squeezes household income – and raises fears of a recession. Analysts say this dynamic could push the Bank of England to further raise interest rates to rein in inflation. Meanwhile, the leadership race to replace outgoing PM Boris Johnson as Conservative Party leader is nearing its end. Frontrunner Liz Truss – who recently said she would look to change the central bank’s mandate on inflation – has pledged to deliver tax cuts and assistance for UK households grappling with the high energy costs, a pivot from her earlier disapproval of “handouts.” But Rishi Sunak, the former chancellor also gunning for the top job, warns that Truss’s plans could plunge the country into an “inflation spiral.”
Pegasus firm rebrand
NSO Group, the Israeli tech company that developed Pegasus – the controversial spyware that's been sold to some repressive governments in recent years – is undergoing an internal shakeup. CEO and co-founder Shalev Hulio is stepping down, and 100 of its 700 staffers are being let go as the company tries to improve its image after a series of flare-ups that hurt its reputation … and its pocketbook. Governments with questionable human rights records have reportedly used the software to hack journalists, dissidents, and political opponents. The company’s detractors were particularly outraged that the tech was used to spy on the fiancée of journalist Jamal Khashoggi in the months before he was killed. Last year, investors warned the company might default on its debt because of a drop in sales. The revamp is likely part of NSO Group’s bid to get off Washington's blacklist (it’s currently prohibited from accessing American tech) and to boost sales to NATO members.Former Israeli Prime Minister Benjamin Netanyahu at his corruption trial at Jerusalem's District Court
Will Pegasus set Bibi free?
Israel’s spy agencies are notoriously sly operators. They have been known to take out high-profile targets in far-flung places around the world. Most famously, the Mossad tracked down and killed those involved in the massacre of Israeli athletes at the Munich Olympics in 1972.
But Israel’s spying prowess is rarely used on civilians at home – until now. (They do regularly track Palestinians.) It was recently alleged that police used Pegasus, state-of-the-art spyware, to track and hack a slew of politicians, activists, and journalists. Crucially, the bombshell report by Calcalist, an Israeli financial daily, claims that members of former Prime Minister Benjamin Netanyahu’s inner circle – including witnesses in his ongoing corruption trial – were also hacked.
A government-led investigation is now trying to get to the bottom of the still-uncorroborated claims. But if they’re confirmed, the political ramifications could be mammoth.
Background. The name Pegasus might ring a bell. The software, developed by NSO, a private Israeli tech company, was sold to a variety of unsavory governments that used it to hack political opponents and dissidents. (The Saudis reportedly used malware to hack relatives of slain journalist Jamal Khashoggi.) Because of laws governing the export of cyber tools, the Israeli government, then led by Netanyahu, signed off on these sales.
Bibi resurrected? As Bibi’s public trial on bribery, fraud, and breach of trust charges has brought yet more damning revelations to light, many observers have said in recent months that the Likud leader could end up in jail.
But if it is proven that police hacked and stole data belonging to Netanyahu’s son, his political advisors, and other key witnesses without judicial approval, then much of the evidence presented in court could be compromised. While Israeli law does not require judges to dismiss evidence obtained illegally, the court handling this case will have to decide whether to disqualify any illegally obtained evidence on a case-by-case basis.
Natan Sachs, who heads the Center for Middle East Policy at the Brookings Institution, says it’s too early to know what the court might do with the evidence. “In general, the Israeli rules for admissibility of evidence are less strict than in the US, and the ‘fruit of the poisonous tree’ is not dismissed quite as quickly,” he says. Still, “a lot is still unknown … and I’m sure Netanyahu’s legal team will mount an effort to dismiss the evidence.”
Whatever happens, recent revelations are likely to dilute the prosecutor’s case by lending credence to the pro-Bibi battle cry that the charges are part of a political “witch hunt.” The court has already agreed this week to delay two hearings while the wiretapping allegations are probed. If Bibi – who heads the biggest party in the Knesset and is popular on the right – gets off with just a slap on the wrist, he would remain a formidable player in Israeli politics.
Can a fragile coalition survive? Last summer, after four elections in two years, Israel finally formed a new government. The broad coalition – made up of seven parties, including Arabs and Jews – is one of the most ideologically diverse in the country's history. Motivated by a shared ambition to keep Bibi out of power, the coalition – which successfully passed the first state budget in almost three years – has so far proven wrong the naysayers who predicted its imminent downfall.
Still, the coalition is unwieldy, and a scandal like this would be hard for any government to weather. Things could start to unravel if it’s revealed that high-level government officials had any prior knowledge of the hacks.
But Lahav Harkov, diplomatic correspondent for The Jerusalem Post, disagrees. She doesn’t think this scandal will impact the coalition’s stability. “It seems that the entire government agrees that there should be an investigation of some type, and many ministers have publicly called for a commission of inquiry,” Harkov says. This sort of “high-level government-appointed investigative body has been used to examine huge issues like the handling of the Yom Kippur War.”
Indeed, recriminations are already flying: Gidon Sa’ar, who now heads the ministry of justice, says these illegal wiretaps occurred under Netanyahu’s watch. Meanwhile, Bibi’s Likud party, now in opposition, smells blood in the water and an opportunity to reverse its political misfortunes. But that effort is unlikely to succeed, according to Sachs, who points out that “this affair all happened, ironically, under Netanyahu, and most of the relevant ministers and police officials were his own appointments.”
Looking ahead. Ultimately, a lot would have to go right for charges against Bibi to be dismissed. But never rule out the resilience of a man who has managed to maneuver his way across many political minefields over the past four decades.
Truckers and their supporters protest coronavirus disease vaccine mandates, in Ottawa, Ontario, Canada
What We’re Watching: Truckers take Ottawa, Iran nuclear deal 'final stage,' Israeli spying scandal, Turkey-Greece disco row
Ottawa “out of control.” Is Washington next? Hundreds of Canadian truckers angry about vaccine mandates have paralyzed the country’s capital for more than a week, blocking roads, blaring horns, and demanding an end to pandemic restrictions. City officials have now declared a state of emergency, with the mayor admitting the situation is “out of control.” While the provincial government in Alberta has pledged to lift all restrictions in response to local sympathy protests, Prime Minister Justin Trudeau has refused to meet with the truckers. Meanwhile, his Conservative opponents are split on whether to support the truckers. Recent polls show that only about 30% of Canadians sympathize with the protests, but the cause has attracted global attention and lots of cash: a GoFundMe campaign raised some $8 million before being shut down. Meanwhile, US truckers are planning to descend on Washington, DC, with a similar convoy next month. Given the shortage of truckers and rising consumer prices, will protesting truckers be seen as freedom fighters or be blamed for shortages of vegetables?
Iran nuclear pact: breakthrough or breakdown? The eighth and likely final stage of Iran nuclear negotiations kicks off Tuesday in Geneva. The long-stalled talks halted (again) last week as diplomats from China, Russia, the UK, France, and Germany flew home to brief their respective governments on the progress. Some experts believe a return to the nuclear deal, which was abandoned by the Trump administration in 2018, is likely. Why the optimism? Because the US last week agreed to restore some sanction waivers, which means foreign companies working with Iran on civilian nuclear projects would be exempt from economic penalties. Still, disagreements remain: Tehran refuses to negotiate directly with Washington, for example, and wants the restoration of all sanction relief promised under the 2015 deal. Critics say the window for reaching an agreement has closed because Iran is just weeks away from amassing enough material to build a nuclear bomb. Israeli PM Naftali Bennett, meanwhile, warned that Israel could still launch a military strike against Iran even if the negotiating countries recommit to the nuclear deal.
Israeli spying scandal. Israel’s government has vowed to investigate new bombshell claims that the police used spyware to hack activists, civil servants, politicians, and other high-profile public figures, including witnesses in the ongoing corruption trial of former PM Benjamin Netanyahu. Pegasus software, developed by the Israeli firm NSO, has been the target of much scrutiny in recent months after it was revealed that several authoritarian governments bought the software – with the permission of Israel’s Defense Ministry – to crack down on dissidents and political opponents. (Pegasus has since been blacklisted in the US.) PM Naftali Bennett said Monday that the allegations were very serious and will be thoroughly investigated. Still, some Israelis fear that Netanyahu, who was ousted last year, might use the revelation to stall his corruption trial. Bibi’s son (also a hacking victim) and lawyers have already launched such a campaign.
What We’re Listening To
Funky town controversy in Turkey. The latest spat between Turkey and Greece doesn’t center on the usual issues, such as Cyprus, gas drilling rights in the Mediterranean, or the endless debate about who really invented yogurt. This time it’s about a disco party held at a former Orthodox Monastery in Eastern Turkey. Although the 4th-century cliffside Sumela complex lost its religious function a hundred years ago when ethnic Greeks were expelled from the new Turkish Republic, it’s a popular destination for Greek Orthodox pilgrims. Athens has protested, saying that social media clips of the party are “offensive” and a “desecration.” Come on, Turkey and Greece – can’t we all just join hands and start a love train?
What We're Watching: YouTube snuffs Bolsonaro, Israel probes Pegasus, China rejects COVID inquiry (again)
YouTube pulls Bolsonaro's rants: Google-owned YouTube pulled down a series of videos on the channel of Brazil's populist President Jair Bolsonaro, accusing him of spreading misinformation about the pandemic. YouTube removed more than a dozen clips for touting quack cures for coronavirus or claiming, in defiance of scientific experts, that masks don't reduce COVID transmissions. Last year, Twitter and Facebook also removed some content from Bolsonaro's feeds for similar reasons. But critics say that YouTube's move is too little too late, because Bolsonaro has been spreading misinformation about COVID since the pandemic began. Many Brazilians hold him personally responsible for the country's abysmal pandemic response, which has led to almost 550,000 deaths, the second worst toll in the world. Will YouTube's move change Bolsonaro's message? His weekly address to the nation, where he converses not only with government ministers but also various conspiracy theorists and loons, is broadcast on YouTube. Surely he doesn't want to risk losing that — or does he?
Israel establishes Pegasus probe: The Israeli government has set up a committee to probe recent allegations that an Israeli tech firm's surveillance software, called Pegasus, was licensed to foreign governments, and then used to spy on journalists, dissidents, and human rights activists. Seventeen media companies joined forces to cover this alleged cyber breach. NSO, the Israeli tech firm that licenses Pegasus, says it exports its products to 45 countries with approval from the Israeli government. In an interview after the alleged breach, NSO's CEO said that if the allegations of hacking are true "it is something we will not stand as a company," and claimed there was no link between the 50,000 leaked numbers and the company. NSO also says it welcomes a transparent probe that will clear the company's name. However, the group has not released any more information on its contractual agreements with various governments, like Saudi Arabia, which stands accused of human rights abuses.
China rejects another COVID origins probe: Barely five months ago, China thought it was finally done with probing the origins of the coronavirus, after a joint investigation with the World Health Organization reached the conclusion that, as the Chinese have always said, the virus most likely leaped from bats to humans, via another animal at a Wuhan wet market. Now, with US intelligence looking into the possibility that COVID may have leaked directly from a Wuhan lab — which most scientists say is less likely — Beijing doesn't want to revisit the issue again. The Chinese have turned down a WHO request for another probe, which is itself a big flashpoint in already-frosty US-China ties: the Americans say the Chinese have never been transparent about what happened in the early days of the pandemic, while the Chinese say the Americans only seek to blame China for political reasons. Whichever side you are one, it's important to clarify that a fresh investigation would aim only to ascertain whether the lab leak theory merits further study at all -- it would not reach any conclusions on its own.
US, NATO, & EU condemn China's Microsoft hack; Pegasus spyware leak
Marietje Schaake, International Policy Director at Stanford's Cyber Policy Center, Eurasia Group senior advisor and former MEP, discusses trends in big tech, privacy protection and cyberspace:
The US, NATO, and the EU have all condemned China for its hack of Microsoft Exchange servers. What happens next?
Now, the joint statement sends a strong signal, but there are operational steps that need to be clarified. Firstly, why was it possible to hack Microsoft servers at all and how to close the gaps to make software more resilient? Additionally, governments making statements condemning China or others are well-advised to attach consequences to such attributions. Sanctions of the economic, financial or immigration type, as well as restrictions on state-owned enterprises, should all be on the table. Certainly, clear criteria need to be there with regard to responsible behavior and the application of international law in cyberspace.
What do we know about the Pegasus spyware leak?
Now, on the one hand, we have known about the toxic surveillance and spyware market for over a decade. But the Pegasus Project provides new and important insights into the targets of Israeli spyware company NSO Group. It is impossible to consider those targets, journalists, human rights defenders, politicians, even President Macron, to be suspects of terror or crime. But that is how NSO defends the sales of intelligence-grade technology around the world, including to the rulers of Saudi Arabia with their dismal record of human rights violations. So it is now crystal clear that claims stating that these spyware systems are for targeted and controlled purposes are false and that the spyware and surveillance sector is out of control. I can only hope that democratic governments will draw a line and stop this market from running out of control even further once and for all.