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U.S. Representative George Santos (R-NY) chats with his State of the Union guest and members of his staff as they prepare for the evening in Santos’s office on Capitol Hill in Washington, U.S. February 7, 2023.
Hard Numbers: Santos chargesheet grows, Niger kicks out UN rep, GOP voters question McCarthy ouster, China reaps oil windfall
44,000: US Rep. George Santos (R-NY) — already under scrutiny for lying about his background — allegedly stole more than $44,000 from campaign donors by using their identities and credit card information, according to a new 23-count indictment. Santos is also alleged to have lied to the Federal Elections Commission by claiming he loaned his campaign $500,000 at a time when he only had around $8,000 in the bank.
72: The military junta in Niger ordered UN resident coordinator Louise Aubin to leave the country within 72 hours, following expulsions of France’s ambassador and military missions. Mali and Burkina Faso similarly soured on the UN and expelled French forces following their own coups.
25: Just 25% of Republicans support the move by a small group of far-right Republicans in the House of Representatives to remove former Speaker Kevin McCarthy (R-CA) last month, according to an AP-NORC poll. Around 30% say it was the wrong move, and the lion’s share of the party, 43%, is unsure.
10 billion: Chinese oil importers have saved about $10 billion this year thanks to access to heavily discounted oil from Russia, Iran, and Venezuela, all subject to US-led sanctions. The relatively cheaper energy has been a rare boon for Beijing amid China’s economic crisis.
A graph comparing Venezuela's GDP per capita with the average price of crude oil.
The Graphic Truth: Economic turmoil in Venezuela
Venezuela has the world’s largest oil reserves but a combination of corruption, mismanagement, and tough US sanctions since the Maduro regime came to power in 2013 has meant that the petrostate has failed to benefit from its vast reserves of liquid gold.
While high oil prices under the Chavez regime in the early 2000s gave a boost to Venezuela’s middle class, US sanctions first imposed in 2006 – and significantly ramped up under the Obama and Trump administrations – have cut Caracas off from US financial systems.
Economic hardship is rife, with a staggering 50% of people living in extreme poverty. Pervasive hopelessness has also led to one of the worst migrant crises in the world.
In a bid to offset a global energy crisis in 2022 as a result of Russia’s war in Ukraine, the Biden administration began lifting some sanctions on the Venezuelan oil sector. So how are things faring? We look at GDP per capita and corresponding oil prices since 1999.Commercial vessels wait to pass the Bosphorus strait during a misty morning in Istanbul, Turkey, October 31, 2022.
Hard Numbers: Grain deal extension woes, FRB rescued, loose Libyan uranium, global coke binge
120 or 60: Although the Black Sea grain deal will almost certainly get extended before it expires Saturday, Russia and Turkey are tussling over how long that extension should be. Ankara — backed by Ukraine and the UN — wants to prolong the agreement for another 120 days, while Moscow is insisting on 60 days, presumably to pressure the West to lift sanctions against certain Russian payment systems.
30 billion: Asian and European stock markets on Friday saw gains hours after a group of 11 big US banks swooped in to rescue First Republic Bank, an embattled regional lender. The banks injected $30 billion into FRB to shore up confidence in the US banking system following the recent collapses of Silicon Valley Bank and Signature Bank.
2.3: A warlord has recovered an estimated 2.3 metric tons of uranium ore that had gone missing in eastern Libya. The uranium was probably left over from the late dictator Moammar Gadhafi’s defunct nuclear weapons program.
35: Global cocaine production surged by a whopping 35% in 2020-2021, according to a new UN report. One of the main reasons is that drug cartels have taken over coca-cultivating areas of Colombia previously run by the FARC and are competing to churn out more powder for Americans and Europeans to snort.Russian reservists recruited during the partial mobilisation of troops.
Hard Numbers: Russian casualties, Australian hackers, British sanctions, Michigan’s political shift
100,000: The Pentagon says Russia has suffered 100,000 casualties in the war in Ukraine. This comes as the Kremlin has started retreating from the Ukrainian city of Kherson amid a series of military setbacks. At home, Vladimir Putin is coming under increasing pressure from nationalists who say the war effort has been a failure.
9.7 million: After stealing the medical data of 9.7 million Australians, hackers have begun releasing information on which patients have received abortion care after Medibank, one of Australia’s largest private insurance providers, refused to pay a $10 million ransom. PM Anthony Albanese, meanwhile, called the hackers “scumbugs.”
18 billion: The British government has frozen £18 billion ($21 billion) of assets held by Russian oligarchs and other high-flying officials, making Russia the UK’s most sanctioned nation, overtaking Libya and Iran. The British capital has been colloquially dubbed Londongrad due to the high concentration of Russian wealth in the city.
40: There are lots of interesting takeaways from US midterms, and the outcome in Michigan is one of them. For the first time in 40 years, the Great Lake State’s House and Senate will have Democratic majorities. Democratic Gov. Gretchen Whitmer, who was subject to a kidnapping attempt in 2020, made abortion access central to her campaign and cruised to reelection.
What We’re Watching: US mulls China sanctions, Uzbek talks focus on ‘cooperation,’ US train strike averted
Will the US preemptively sanction China over Taiwan?
If you thought US-China ties couldn't get any icier, think again. Washington is reportedly mulling sanctions in a bid to deter Beijing from invading Taiwan — and nudging the EU to follow suit. No specifics yet, but the package would presumably target the Chinese military, which has upped the muscle-flexing ante near the self-ruled island since US House Speaker Nancy Pelosi visited Taipei in early August. Such a move would be similar to how the US and its allies warned Russia there would be a steep price to pay for invading Ukraine. Taiwan would welcome preemptive sanctions and has long called for the Americans and, more recently, the Europeans to do more to protect the island against Chinese aggression. But any sanctions would also rile Xi Jinping, who’s up for “reelection” next month and has vowed to reunite the island with the mainland before the 100th anniversary of the People's Republic in 2049 – by force, if necessary. While the White House has refused to comment, a sanctions plan could signal that US intelligence believes Xi might make a play for Taiwan sooner rather than later.
Cooperation at the Shanghai Cooperation Organization
This week, Uzbekistan will host the latest meeting of the Shanghai Cooperation Organization, a gathering of world leaders who present their club as an alternative to Western-led institutions, such as the G7 and NATO. There will be photos of powerful people like China’s Xi Jinping, Russia’s Vladimir Putin, India’s Narendra Modi, and Turkey’s Recep Tayyip Erdogan smiling and shaking hands, and in some ways, they can help one another. Xi can make a show of embracing Putin as Europeans and Americans work to isolate his government. Putin can offer Modi more oil at even more sharply discounted prices. Erdogan can back Putin’s bid to include Russian grain and fertilizer alongside permitted shipments of Ukrainian grain. Modi can reassure Xi that his security partnership with Washington remains limited. But behind the scenes, there is friction. Xi will talk up his friendship with Putin, but he won’t create bigger problems for China’s economy by openly ignoring Western sanctions on Russia. Just this week, Xi and Modi pulled troops back from their shared Himalayan border, but deadly hostilities between them could restart at any time. Putin and Erdogan remain on opposite sides of a shooting war between Armenia and Azerbaijan. In short, there’s plenty for these leaders to talk about, but this cooperation forum won’t sharply increase their actual cooperation.
US iron horse strike averted
Think you’re annoyed at all those work demands during your time off? Unions representing half of America’s organized freight rail workers were ready to go on strike this Friday unless they reached an agreement with rail companies that would, among other things, relax the requirement that they stay “on call” 24/7. The economic impact of a strike would have been huge as nearly 30% of US freight moves by rail. It also would have affected many passenger services and driven already-dizzying inflation rates even higher. But just in the nick of time, known “ferroequinologist” (that’s your word of the week — more below) Joe Biden announced a tentative deal early Thursday between unions and companies to stop the strike. It’s a big relief for the president, who didn’t want to clash with organized labor, an important Democratic constituency, by asking Congress to use its authority to impose an agreement on unions as Republicans wanted. What’s a ferroequinologist? From the Latin ferrum (iron) and equus (horse), it’s literally an enthusiast of “iron horses,” an early 20th-century term for trains. “Amtrak Joe” loves trains!
The Graphic Truth: Piling sanctions on Russia
Western powers have tightened the screws on the Russian economy since Vladimir Putin decided to invade Ukraine. But so far sanctions have done little to sway Moscow. Still, the economic pain now inflicted on Russia is far more intense and widespread than what the US and its allies are doing to other regimes hostile to them. Here's a snapshot of current economic sanctions against Russia.
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Russia has geared up to avoid food scarcity.
Food security: one area where Putin’s plans are bearing fruit
Shortly after Russia invaded Ukraine, Russians were seen scrambling for packets of sugar at supermarkets. It was the first sign that Western sanctions meant to punish President Vladimir Putin for the war might actually be having a serious impact. Stores imposed limits on the purchase of some products, and Putin's government rushed to reassure Russians that they would have enough to eat.
Russians are facing shortages of everything from smartphones and cars to paper, but experts say there’s one area where the country might be able to largely insulate itself from the sanctions that have otherwise ravaged the economy: food security.
Since 2014, when Russia’s annexation of Crimea triggered a wave of targeted sanctions, the Kremlin has been preparing for the possibility of more wide-ranging economic punishment from the West. Through a massive program of import substitution, it has tried to reduce the dependence of Russia’s economy on imports by developing domestic industries across sectors over the past eight years. While those efforts have failed in most fields, they have yielded some success in food and agriculture.
Soon after the Crimea invasion, Moscow banned the import of food from countries that imposed sanctions on Russia. At the same time, it unveiled major subsidies for domestic farmers and agri-tech firms to build up the country’s food manufacturing capacity. The result: In 2020, Russia’s need for meat imports was 62% lower than in 2014, while fish imports were down 35%, according to United Nations Comtrade data. The world’s largest wheat exporter, Russia has also temporarily banned the sale of grains to neighboring nations, further bolstering stocks for its domestic consumption.
“Today, Russia produces enough basic foods to avoid significant shortages,” said Denis Davydov, a senior lecturer in accounting and finance at the University of Vaasa, Finland, who has closely followed the Russian economy over the past decade.
That’s a major change for a country that — throughout its modern history — has suffered from desperate famines, food shortages, and bread lines, which weakened the authority of both Czar Nicholas II and the subsequent Soviet regime. Putin appears to have learned at least some lessons from the follies of his predecessors, say analysts.
The first seeds of Russia’s move toward agricultural self-sufficiency were planted in 2010, when the country introduced a food security doctrine that laid out targets for domestic production of everything from salt and sugar to meat and potatoes. But that document wasn’t translated into actual policies at the time, said David Laborde and Joseph Glauber, researchers at the International Food Policy Research Institute.
The economic penalties Russia faced in 2014 proved a turning point. The Kremlin’s subsequent focus on reducing Russia’s reliance on food imports reflects its careful preparation for even tougher sanctions of the kind that the country today faces, said Stephen Wegren, a political science professor at Southern Methodist University, whose research focuses on the political economy of post-communist states. “I think a big factor has been the goal to make the Russian agriculture sector sanctions-resistant,” Wegren said. “National security has been a driving force.”
The weather has helped Russian agriculture in recent years, said Wegren. Warming temperatures because of climate change have allowed farming in parts of the country that were previously too cold for cultivation. Meanwhile, the devaluation of the Russian ruble following the 2014 sanctions “simply made any remaining imported food product uncompetitive relative to domestic analogs,” further helping the homegrown agriculture sector, said Davydov.
But it wasn’t just luck: The Putin administration has also proactively worked to get Russians to change their palate, said Laborde and Glauber. Instead of rapeseed oil, which is partially imported, Russia has encouraged the use of sunflower oil — the country is behind only Ukraine in the production of sunflower seeds. Similarly, beer — which relies on cereals that Russia produces — is replacing imported wine, they said, even as Russians are on the whole turning away from alcohol. “There is an economic rationale justifying these successes,” said Laborde and Glauber.
To be sure, Russia’s successes in food security have serious limitations, and the country faces challenges in the coming months. It is still dependent on the import of some key foods. By 2020, the country had managed to reduce its spending on imported fruits by only 20% compared to 2013, according to the National Rating Agency, an independent Moscow-based ratings institution. Russia is also the world’s fourth-biggest importer of butter.
In time, sanctions could start hurting even those parts of Russia’s food industry where it has dramatically increased domestic production because the country’s agricultural sector “is heavily dependent on imported equipment and farming machinery,” said Davydov. “The efficiency and costs of food production will depend on whether it will be possible to continue importing this equipment or re-channel imports from other countries.” Where imports are still possible, they’ll be costlier in the future if the ruble — which has stabilized for now after plummeting in February and March — takes further hits.
Meanwhile, the Russian Central Bank’s decision to raise interest rates to an all-time high of 20% in order to tame inflation will adversely affect lending rates for firms that need to borrow money to purchase or service equipment. “More expensive financing will obviously transfer into higher product prices,” Davydov said. Already, the absence of foreign competitors has in recent years led to sharp increases in food prices: Beef today costs four times as much as it did in March 2014. Experts are convinced that this trend will continue.
Still, Russia’s self-sufficiency in many basic food commodities means it can always import the rest from “friendly” nations, said Wegren. China, one of the world’s largest agricultural exporters, is unlikely to impose sanctions on Russia.
“There may be localized shortages, but I do not expect mass hunger,” Wegren said.
That’s good news for Putin. In February 1917, food riots over bread shortages were catalysts for the Russian Revolution later that year, in which the Bolsheviks dethroned the tsar. Whatever happens to Russia’s current autocrat, food likely won’t bring him down.
Charu Kasturi is a freelance writer specializing in foreign affairs. He is based in Bangalore, India, and often writes for outlets such as Al Jazeera and Foreign Policy.
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Do cryptocurrencies undermine US sanctions?
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:
Do cryptocurrencies make it harder to enforce foreign policy sanctions?
Well, that is exactly what the Biden administration worries about. As part of growing concerns of whether unregulated currencies undermine a whole host of policies, sanctions and foreign or trade policy should be a priority area. And just like others who wish to evade tracing of their wealth or transactions, the very states or their sanctioned entities should be assumed to resort to all options to evade restrictions while continuing to do business. So having cryptocurrencies undermining the ability to enforce strategic goals logically raises eyebrows in Washington.
Didn't the Biden administration recently sanction a cryptocurrency exchange itself?
Yes, it did. But the sanctions against SUEX were intended to prevent the company or platform from being the clearing house for criminal money. My sense is that there will be plenty more legal updates, regulations and ad hoc steps to ensure that cryptocurrencies do not undermine the ability to make policy, whether it's monetary or foreign policy.
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