Comment by Riaz Haq on March 21, 2022 at 8:13pm

Powell Says War May Speed China Moves to Insulate Against Dollar
Fed chief says China has been working on currency matters
Powell says Ukraine war may serve as accelerant to China moves
Powell: Fed Needs to Be 'Nimble' Amid Ukraine Crisis

Federal Reserve Chair Jerome Powell said the Ukraine war could have the effect of accelerating China’s moves to develop alternatives to the current dollar-dominated international payments infrastructure.

Powell was questioned Thursday in a Senate Banking Committee hearing on how China might view the U.S.-led efforts to isolate Russia’s economy, especially by damaging its ability to use the dollar.

https://www.bloomberg.com/news/articles/2022-03-03/powell-says-war-...

Comment by Riaz Haq on March 22, 2022 at 12:01pm

TSMC has suspended all sales to Russia and to third parties known to supply products to Russia while it sorts through the sanctions rules to ensure it fully complies, according to a person familiar with the company’s business, who spoke on the condition of anonymity to discuss sensitive matters.

https://www.washingtonpost.com/technology/2022/02/25/ukraine-russia...

In a statement, TSMC said it is “fully committed to complying with the new export control rules announced.”


GlobalFoundries, the chip manufacturer based in Malta, N.Y., said it also has begun complying with the rules. The company has a system to review and block any prohibited sales to Russia, said Karmi Leiman, the company’s head of global government affairs and trade, though he added that the size of the company’s sales to Russian buyers is “not material.”

Leiman said the internal review system is similar to the one the company uses for Huawei, the Chinese tech giant that has been a target of U.S. sanctions for several years.


Intel, based in Santa Clara, Calif., said it “complies with all applicable export regulations and sanctions,” including the new Russia-focused export controls.

Russia is vulnerable to the export ban because it doesn’t produce consumer electronics or chips in large quantities, analysts say. In particular, it doesn’t make the highest-end semiconductors needed for advanced computing, an area dominated by Taiwan, South Korea, the United States, Europe and Japan.


TSMC’s participation in the sanctions is particularly damaging because the company is the world’s largest manufacturer of chips, including the most advanced.

Among the chips TSMC is no longer manufacturing and shipping are Elbrus-branded semiconductors that are designed in Russia, according to the person familiar with TSMC’s business.

Russia’s military and security services use Elbrus chips in some computing applications, according to Kostas Tigkos, an electronics expert at Janes, a U.K.-based provider of defense intelligence, who described the loss of TSMC’s help with the chips as “devastating” for Russia.

The Russian government has also been encouraging large domestic companies and banks to use Elbrus chips in their computers because the components are designed in Russia.

Russian drones shot down over Ukraine were full of Western parts

The Semiconductor Industry Association, a trade group representing big chipmakers, said its members are “fully committed to complying” with the new rules “in response to the deeply disturbing events unfolding in Ukraine.”


“While the impact of the new rules to Russia could be significant, Russia is not a significant direct consumer of semiconductors, accounting for less than 0.1% of global chip purchases, according to the World Semiconductor Trade Statistics (WSTS) organization,” the group’s president, John Neuffer, said in a statement.

The United States and other Western nations have long regulated sales to Russia of chips and other electronic components specifically designed for military use. Any such sales already required a government license to proceed, industry experts said.

The new rules largely block the sale of dual-use chips, which have both military and commercial applications, to nonmilitary users in Russia, including those in high-tech industries.

In a novel move that the United States has used only once before — against China’s Huawei — it is also requiring companies worldwide to abide by the rules and block such sales to Russia if they use U.S. manufacturing equipment or software to produce chips. Most chip factories around the world use software or equipment designed in the United States, analysts say.

Comment by Riaz Haq on March 22, 2022 at 4:24pm

U.S. tech dominance could offer leverage over Russia — or backfire
Silicon Valley’s increasingly aggressive stance against Russia could fuel the growth of rivals there and in China, Iran, too


https://www.washingtonpost.com/technology/2022/03/03/us-russia-tech...


Withholding technology can be a soft-power weapon to potentially turn a population against its leaders. Yet it also can be costly to the U.S. economy, slow to deliver results and scattershot in its effects — much more likely to affect ordinary Russians using their iPhones than generals firing missiles into Ukrainian cities.

There is another cost, as well. The United States’ dominance of global technology, experts warn, was built over generations but could be eroded in just a few years as rival powers — and especially Russia and China — invest billions of dollars to develop alternative technologies at home, in part to decrease U.S. leverage at moments such as these.


Even as Russians furiously buy iPads, Android devices and Windows-based computers, President Vladimir Putin is pushing hard to wean the country from Western technologies. And if Russia and other U.S. rivals succeed, there also could be long-term damage to the ability of American intelligence agencies — particularly skilled in exploiting U.S.-made tech — to track developments in the next conflict, experts say.

The upshot is that although technology sanctions can be unquestionably powerful, it’s a power that, when deployed, can spark backlashes that undermine its long-term utility. Depriving rivals of American-made technology also threatens the future global prospects of an industry that has driven U.S. economic growth for most of this century. The rise of a Russian Google — or a Chinese Facebook or an Iranian YouTube — are not theoretical developments. They are happening already.

“When you cut them off from American tech, they will find alternatives,” said Peter Micek, general counsel for Access Now, a human rights group that lobbies to keep Internet services available to people worldwide.

U.S. officials and technology executives are attempting to navigate this chessboard of risk and reward as they assemble a potent set of punitive moves against Russia.


The result has been growing restrictions on hardware, with Apple joining others in blocking sales to Russia, and moves by major social media platforms to curb the spread of Russian propaganda through its state-funded RT information service — often in response to the demands of Western governments. Digital purchasing tools, such as Apple Pay, also have stopped working as Western sanctions cut off Russian banks for ordinary operations.

But calls by Ukrainian officials to deprive Russians in general of access to social media and even the Internet itself have sparked significant resistance from both the companies and digital rights groups, which argue that the likes of Twitter, WhatsApp and Telegram are key to delivering information in Russia. They often are the only sources of news on the horrors Putin is inflicting on Ukrainians at a time when his control over national news media is nearly total.

The Russian government, meanwhile, has been squeezing these same companies, throttling Facebook and Twitter, and threatening action against Google in retaliation for its YouTube subsidiary limiting access to RT in response to demands by Western governments.

But as this conflict plays out, the idea of depriving Russia of software updates or online support from U.S. companies has not gained traction, even though such moves could gradually erode the functioning of technological tools used every day by the Russian government and its citizens.

Comment by Riaz Haq on March 22, 2022 at 6:06pm

#US Undersecretary Victoria Nuland: ‘#Russia-#China axis not good for #India… US can help (India) with defense supplies’. #Modi #BJP #Nuland #Ukraine https://indianexpress.com/article/india/russia-china-axis-not-good-... via @IndianExpress

FRAMING the Russia-China alliance over Ukraine as a debate between democracies and autocracies, visiting US Under Secretary of State for Political Affairs Victoria Nuland told The Indian Express Wednesday that US was ready to help India move away from dependence on Russia for defence supplies. Excerpts from an exclusive interview:

On the Russia-Ukraine crisis, how do you read India’s statements?

We had very broad and deep conversations (Nuland met External Affairs Minister S Jaishankar and her counterpart Harsh Vardhan Shringla) about what’s in this war. Unfortunately, Indian students got trapped, and they were able to get out, but unfortunately one Indian lost his life which was very tragic.

The Chinese Vice Foreign minister drew a parallel between NATO’s eastward expansion in Europe and the Quad in the Indo-Pacific.

Obviously, China is trying to seek an advantage for itself in this conflict, as it always does. But again, what threatens China most: open and free societies who offer their people a different way of life than the Communist party of China offers for Chinese people.

So NATO is a defensive alliance, of voluntary alignment of countries who asked to join together to defend themselves. In the Indo-Pacific strategy, we are talking about the great democracies of the region, working together to protect themselves and to advance prosperity, and free and open commerce and navigation and all of these things. All of the things that the autocrats want to change, want to threaten. So I’m not surprised that the Chinese are trying to draw parallels here. Because, in both cases, we’re talking about trying to keep the world free for democratic governance.

Who is a bigger threat — Russia or China?

The worry now is that they intensify their efforts together. They learn from each other, whether it is how to coerce a neighbour economically, or militarily. Whether it’s about how to go in the UN system and undercut the rules of the road that the US, India and other democracies have built to favour freedom. Whether it is that they let each other off the hook by financing each other’s militaries.

All of these things are worrying. But I also think that this is an energizing moment for the democracies, because now we see very clearly what we are up against.

Comment by Riaz Haq on March 26, 2022 at 7:03pm

The takeaway from the US President Joe Biden’s European tour on March 25-26 is measly. Dissenting voices are rising in Europe as western sanctions against Russia start backfiring with price hikes and shortages of fuel and electricity. And this is only the beginning, as Moscow is yet to announce any retaliatory measures as such.

By M. K. BHADRAKUMAR

https://www.indianpunchline.com/bidens-reality-check-in-europe/

The unkindest cut of it all is that the Russian Defence Ministry chose Biden’s trip as the perfect backdrop to frame the true proportions of success of its special operation in Ukraine. The US and NATO’s credibility is perilously close to being irreparably damaged, as the Russian juggernaut rolls across Ukraine with the twin objectives of ‘demilitarisation’ and ‘denazification’ in its sights.

The Russian General Staff disclosed on Friday that the hyped up Ukrainian Armed Forces, trained by the NATO and the US, have sustained crippling losses: Ukrainian air force and air defence is almost completely destroyed, while the country’s Navy no longer exists and about 11.5% of the entire military personnel have been put out of action. (Ukraine doesn’t have organised reserves.)

According to the Russian General Staff’s deputy head Colonel General Sergey Rudskoy, Ukraine has lost much of its combat vehicles (tanks, armoured vehicles, etc.), one-third of its multiple launch rocket systems, and well over three-fourths of its missile air defence systems and Tochka-U tactical missile systems.

Sixteen main military airfields in Ukraine have been put out of action, 39 storage bases and arsenals destroyed (which contained up to 70% of all stocks of military equipment, materiel and fuel, and more than 1 million 54000 tons of ammunition.)

Interestingly, following the intense high-precision strikes on the bases and training camps, foreign mercenaries are leaving Ukraine. During the past week, 285 mercenaries escaped into Poland, Hungary and Romania. Russian forces are systematically destroying the Western shipment of weapons.

Most important, the mission to liberate Donbass is about to be accomplished. Simply put, the main objectives of the first phase of the operation have been achieved.

Apart from Kiev, Russian troops have blocked the northern and eastern cities of Chernigov, Sumy, Kharkov and Nikolaev, while in the south, Kherson and most of Zaporozhye region are under full control — the intention being to not only to shackle Ukrainian forces but to prevent their grouping in Donbass region. (See my article Dissecting Ukraine imbroglio, Tribune, March 21, 2022)

“We did not plan to storm these cities from the start, in order to prevent destruction and minimise losses among personnel and civilians,” Rudskoy said. But, he added, such an option is not ruled out either in the period ahead.

It stands to reason that Washington and European capitals are well aware that the Russian operation is proceeding as scheduled and there is no stopping it. Thus, the NATO’s extraordinary summit on March 24 confirmed that the alliance is unwilling to get into a military confrontation with the Russian Army.

Instead, the summit decided to strengthen the defence of its own territories! Four additional multinational NATO combat groups of 40,000 troops will be deployed in Bulgaria, Hungary, Romania and Slovakia on a permanent basis. Poland’s proposal to deploy NATO military units in Ukraine was outright rejected.

However, Poland has certain other plans, namely, to deploy contingents to the western regions of Ukraine to support the ‘fraternal Ukrainian people” with the unspoken agenda of reclaiming control over the historically disputed territories in the those regions. What Faustian deal has been struck in Warsaw on March 25 between Biden and his Polish counterpart Duda remains unclear. Clearly, vultures are circling Ukraine’s skies. (See my blog Biden wings his way to the borderlands of Ukraine, March 24, 2022)

Comment by Riaz Haq on March 28, 2022 at 7:56am

#Pakistan’s #Energy Crunch Spurs ‘Barter’ #Trade for #Afghan #Coal. #LNG purchase tender scrapped after offers were too expensive. #Cement factories buying coal from #Afghanistan as prices surge. #russiasanctions
https://www.bloomberg.com/news/articles/2022-03-28/pakistan-s-energ...

Cash-strapped Pakistan can’t afford to buy fuel on the spot market and is either skipping purchases or turning to alternatives such as Afghani coal as it grapples with a worsening energy crisis.

State-owned Pakistan LNG Ltd. didn’t award a recent purchase tender seeking several shipments of liquefied natural gas through May due to high offer prices. Cement manufacturers, meanwhile, are buying coal from Afghanistan at roughly half the price of shipments from regular supplier South Africa.

Comment by Riaz Haq on March 28, 2022 at 4:25pm

Economic Weapons of Mass Destruction

https://www.project-syndicate.org/commentary/economic-wmds-and-the-...

By RAGHURAM G. RAJAN


Because Russia's war against Ukraine could not go unpunished, the use of painful, sweeping economic sanctions is clearly justified. In the future, though, these powerful new tools will need to be subject to proper controls; otherwise, they could trigger a reversal of globalization – and of the prosperity that it has made possible.

CHICAGO – War is horrific, no matter how it is waged. Nevertheless, Russia’s unprovoked attack on Ukraine, with its scenes of Ukrainian civilians being murdered or driven from their homes, undoubtedly had to be opposed. In addition to supplying Ukraine with military weapons, governments around the world have deployed economic weapons against Russia. While Russia, an economic midget relative to its military power, may still lash out by expanding the range of military weapons it uses and the territories it targets, it is a risk the world had to take.

Compared to Russia’s indiscriminate bombing, economic weapons will not kill people as quickly, create as much visible destruction, or inspire as much fear. Nonetheless, the unprecedented economic weapons that have been deployed against Russia will be unquestionably painful.

The strictures on Russia’s central bank have already contributed to the ruble’s collapse, and new limitations on cross-border payments and financing have had an immediate impact, weakening confidence in Russian banks. Though trade sanctions (restricting exports of key inputs such as airplane parts to Russia, as well as purchases from Russia) and the exodus of multinational corporations from Russia will have a less immediate effect, they will reduce economic growth and increase unemployment significantly over time. If these measures are not reversed, they will eventually translate into lower living standards, poorer health, and more deaths in Russia.

That we have come to this point reflects a widespread political breakdown. Too many powerful countries are now being led by authoritarian rulers whose reliance on nationalism makes them less willing to compromise internationally and who face few domestic constraints on their behavior. If Russian President Vladimir Putin’s aggression were to go unpunished, more international provocations like his war in Ukraine would become inevitable.



https://youtu.be/yFCpMOCVdAw


Equally problematic is the breakdown of the international order. The United Nations Security Council cannot legitimately act against any of its permanent veto-wielding members (China, France, Russia, the United Kingdom, and the United States). The organization’s impotence translates into impunity for strongmen who flout international norms. Moreover, even if the UN could approve a military response, the will to confront a determined nuclear power militarily would probably be lacking.

Economic weapons, made possible by global integration, offer a way to bypass a paralyzed global governance system. They allow other powers an effective (that is, painful) but civilized way to respond to aggression and barbarity.



But the risks that these weapons can create must not be underplayed. When fully unleashed, sanctions, too, are weapons of mass destruction. They may not topple buildings or collapse bridges, but they destroy firms, financial institutions, livelihoods, and even lives. Like military WMDs, they inflict pain indiscriminately, striking both the culpable and the innocent. And if they are used too widely, they could reverse the process of globalization that has allowed the modern world to prosper.

Comment by Riaz Haq on March 28, 2022 at 7:03pm

In 2020, #Russia was the world's 11th-largest #economy, according to the World Bank. But by the end of this year (2022), it (#Russian #GDP) may rank no higher than No. 15, based on the end-February rouble exchange rate. #UkraineUnderAttack #Sanctions https://www.reuters.com/world/europe/four-weeks-war-scar-russias-ec...

Russia's invasion of Ukraine on Feb. 24 sparked sweeping sanctions that ripped the country out of the global financial fabric and sent its economy reeling.

A month on, Russia's currency has lost a large part of its value and its bonds and stocks have been ejected from indexes. Its people are experiencing economic pain that is likely to last for years to come.

Below are five charts showing how the past month has changed Russia's economy and its global standing:


In 2020, Russia was the world's 11th-largest economy, according to the World Bank. But by the end of this year, it may rank no higher than No. 15, based on the end-February rouble exchange rate, according to Jim O'Neill, the former Goldman Sachs economist who coined the BRIC acronym to describe the four big emerging economies Brazil, Russia, India and China.

Recession looks inevitable. Economists polled by the central bank predicted an 8% contraction this year and for inflation to reach 20%.


Forecasts from economists outside Russia are even gloomier. The Institute of International Finance predicts a 15% contraction in 2022, followed by a 3% contraction in 2023.

"Altogether, our projections mean that current developments are set to wipe out the economic gains of roughly fifteen years," the IIF said in a note.

Comment by Riaz Haq on March 29, 2022 at 1:15pm

#India stands with #Russia as Lavrov visits. #Delhi plans to double its imports of Russian coking coal used in making steel. India recently contracted to buy 45,000 tonnes of Russian #sunflower #oil for April delivery after supplies from #Ukraine stopped.
https://www.msn.com/en-us/news/world/india-stands-by-trade-with-rus...


NEW DELHI - Russian Foreign Minister Sergei Lavrov is set to fly to India this week, sources said, finding time to visit to one of the biggest buyers of Russian commodities since the international community began isolating Moscow for its invasion of Ukraine.

There is little sign that buying will slow down any time soon, as more deals get signed. One source said the two countries could discuss smoothening trade payments disrupted by Western sanctions on Russian banks. Media have said he could hold talks in the Indian capital on Friday.

It will only be Lavrov's third visit overseas since Russia's Feb. 24 invasion of Ukraine, after a trip to Turkey for talks with his Ukrainian counterpart earlier this month and a scheduled meeting in China on Thursday.

Russia is India's main supplier of defence hardware but overall annual trade is small, averaging about $9 billion in the past few years, mainly fertiliser and some oil. By comparison, India's bilateral trade with China is more than $100 billion a year.

But given sharp discounts on Russian crude oil since the attack on Ukraine, India has bought at least 13 million barrels, compared with nearly 16 million barrels imported from the country for the whole of last year. Many European countries have also continued to buy Russian energy despite publicly criticising Moscow.

New Delhi has called for an immediate ceasefire in Ukraine but has refused to explicitly condemn Moscow's actions. It has abstained from voting on multiple U.N. resolutions on the war.

India is now considering doubling its imports of Russian coking coal used in making steel, the Indian steel minister said on Sunday. Reuters reported on Tuesday that India recently contracted to buy 45,000 tonnes of Russian sunflower oil for April delivery after supplies from Ukraine stopped. Last year, India bought about 20,000 tonnes from Russia a month.

"India will import more items from Russia, especially if it is at a discount," one senior Indian government official said.

Comment by Riaz Haq on March 29, 2022 at 4:21pm

Pro-#Russia Sentiment on #Indian Twitter Draws Scrutiny. “There were dense clusters of communities engaging with it (#IStandWithPutin hashtag) , many of which were based in #India or based in #Pakistan” #UkraineUnderAttack https://www.nytimes.com/2022/03/29/technology/twitter-russia-india....

https://twitter.com/haqsmusings/status/1508946186815770624?s=20&...

Some of the accounts used fake profile pictures, raising researchers’ suspicions. Others racked up thousands of retweets on their pro-Putin posts, despite having few followers and low engagement on the rest of their tweets.

Although the activity suggested the accounts may be inauthentic, there was no hard evidence that they were part of a coordinated influence campaign aimed at shifting sentiment about the war in India. A Twitter spokeswoman said the company was still investigating.

The challenge of identifying influence campaigns is further complicated by the split of public opinion in India. While some people have vehemently opposed the war, others have vocally backed Russia and held marches to show support.

“Russia and India have longstanding and deep security and economic relations,” said Graham Brookie, director of the Atlantic Council’s digital forensic research lab. “If you’re Russia and you’re facing increased global scrutiny, increased global closure, you look to countries like India to at least abstain from as many efforts to isolate Russia as humanly possible.”


---------

While India and Russia have long had close ties, researchers say there are signs that social media posts parroting Kremlin talking points may not be legitimate.


In the days after Russia’s invasion of Ukraine, thousands of Twitter accounts shared messages of support for Vladimir V. Putin, the Russian president.

They tried to deflect criticism of the war by comparing it to conflicts instigated by Western countries. Their commentary — along with tweets from other users who condemned it — made the hashtag #IStandWithPutin trend on Twitter in several regions around the world.

While some of the accounts said they were based in Nigeria and South Africa, the majority of those with a declared location on Twitter claimed to be from India and targeted their messages to other Indian users, researchers said.


The prevalence of accounts claiming to be from Indian users indicates that India’s social media landscape has become an important destination in the effort to influence public opinion of the war in Ukraine. Users who said they were from India made up nearly 11 percent of the hashtag trend in the two weeks after the invasion. Just 0.3 percent were from Russia and 1.6 percent from the United States during that time.

---------

The death of an Indian student in the fighting in Ukraine this month brought into focus India’s challenge of evacuating nearly 20,000 of its citizens who were in the country when Russia’s invasion began. Hundreds of Indian students remained stuck amid heavy shelling at the time. India’s prime minister, Narendra Modi, who has avoided condemning Russia, appealed to Mr. Putin and his Ukrainian counterpart, President Volodymyr Zelensky, for help.

Russia’s local embassy used Twitter to instruct Indian media outlets to not use the word “war” but to instead refer to it as a “special military operation,” as media outlets in Russia have been forced by law to do. Some Indian Twitter users responded by mocking the embassy, while others chastised local media outlets as inept and needing instruction from Russia.

Pro-Russian sentiment has taken hold in right-wing circles in the United States, misinformation that has spread within Russia claims Ukrainians have staged bombings or bombed their own neighborhoods, and myths about Ukrainian fortitude have gone viral across social media platforms. But in India and other countries where social media users joined the hashtag, pro-Russian narratives have focused on ethnonationalism and Western hypocrisy over the war, themes that have resonated with social media users.

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