Indian Strategic Studies: 07/18/22

18 July 2022

Biden Is Fighting the Wrong Battle Against China

Minxin Pei

Typically, the most effective foreign policy pairs smart tactical substance to an overarching strategic theme. Framing a foreign policy correctly can sustain domestic political support, attract allies and provide the intellectual guidance for action. Conversely, flawed framing can undercut any good that specific policies may otherwise be doing. When it comes to China, US President Joe Biden’s administration risks falling into the latter trap.

In most respects, the White House’s China policy is delivering excellent outcomes. Unlike his Republican predecessor, former President Donald Trump, Biden has assiduously cultivated friends and allies in the Indo-Pacific and Europe. The United States is well on its way to building a broad-based coalition that could help sustain an open-ended rivalry with China.

Cycles of Turmoil

Political leadership in Arab countries is often a poisoned chalice. Violence and upheaval have been hallmarks of political transition in the Middle East and North Africa in the modern era, but in fact the history is much longer. Legacies of tribalism and instability stifled the region’s political development while the imposition of centralized nation-states by colonial powers lacked relevance to the cultural and social realities of the region. Their failure to take hold has hampered the emergence of a stable political culture, leaving difficult transitions as the norm and militaries as a major political force. Countries’ difficulty – and at times inability – to overcome their tribal roots and establish a strong sense of national identity all but guarantees this cycle of turmoil will continue. The coups and uprisings in Sudan and Algeria are only the most recent reminders.

US Can’t Down Russian Missiles Being Used in Ukraine, Report Says

MARCUS WEISGERBER

The United States is not prepared to defend itself from the types of cruise missiles Russia has increasingly used to attack Ukraine, warns a new assessment from a prominent Washington think tank.

The report from the nonpartisan Center for Strategic and International Studies argues that military commanders and policymakers have ignored the protection of the continental United States from these low-flying, maneuverable weapons. Instead, they’ve poured billions of dollars into siloed interceptors that protect the homeland from higher-flying missiles and into mobile systems to defend forces deployed in other regions of the world.

“The near-complete lack of homeland cruise missile defense and related forms of air defense more broadly has created a deterrence problem,” the report states.

The War in Ukraine Is the True Culture War

Jason Farago

KYIV, Ukraine — At the thousand-year-old Cathedral of Saint Sophia here, standing on an easel in front of a towering Baroque golden altar, is a new, freshly painted icon that’s just a foot square.

It depicts a 17th-century Cossack military commander with a long gray beard. His eyebrows are arched. His halo is a plain red circle. He looks humble beneath the immense mosaics that have glinted since the 11th century — through Kyiv’s sacking by the Mongols, its absorption into Poland, its domination by the Soviet Union.

No gold. No gemstones. This icon has been painted on three planks of knotty wood: the planks, I learn, of an ammunition box recovered from the devastated Kyiv suburb of Bucha. Out of Bucha’s mass graves, in the wake of terrifying Russian atrocities against civilians, something new has come to Saint Sophia: an image of mourning and resolve, of horror and courage, of a culture that will not give up.

Myths and misconceptions around Russian military intent

Introduction

Russia’s war on Ukraine has reignited debate on Russia’s military capabilities and the way in which Russia intends – or hopes – to use them. But new questions over the accuracy and utility of foreign assessments of Russian military power have added to, rather than replaced, a series of open issues which have divided observers of the Russian Armed Forces for years.

As author Oscar Jonsson notes in this study, ‘the field of Russian military studies has been saturated with definitional debates since 2014’.

In fact, even after close observation of Russian performance in Ukraine, misconceptions about Russia’s military thinking and planning continue to distort the Western policy debate and pervade the media. They negatively influence the shaping of opinions on Russia’s military capabilities and intentions, and therefore risk distorting responses to them.

Biden’s trip to Saudi Arabia is unlikely to lower oil prices

Samantha Gross

However, when many Americans think about Saudi Arabia, one issue comes to mind — oil. Americans today are extremely frustrated with the high price of gasoline and want the president to bring them lower prices. Many likely believe that the trip is primarily about decreasing prices at the pump, despite the president’s emphasis on other issues. However, those people are likely to be disappointed.

WHY ARE PRICES SO HIGH?

A number of factors are causing today’s high gasoline prices, most notably lower supply of Russian oil and fuel after Russia’s invasion of Ukraine and slow recovery of oil production after the pandemic. Declining refining capacity in the United States is another factor, as some unprofitable refineries have closed and others, especially in California, are converting to biorefineries to take advantage of greater profit margins in the advanced biofuel market. Diesel fuel gets less attention from most consumers, but price rises for diesel have been even steeper than those for gasoline. More than 40% of European cars run on diesel and the United States is supplying more diesel to customers in Europe to make up for declining Russian supply, raising diesel prices in both regions. Since diesel fuels agriculture and transportation of goods, the increasing diesel price is an important driver of inflation.

With the EU’s Help, Armenia Is Inching Closer to Peace With Azerbaijan

Emil Avdaliani

After nearly two years of intermittent border skirmishes and protracted diplomatic talks, Armenia and Azerbaijan are edging closer to reaching a definitive peace agreement to their decades-long dispute over the Nagorno-Karabakh region. Significant hurdles still exist, but the Armenian perspective on Nagorno-Karabakh since the end of the 2020 war over the breakaway Azerbaijani province has undergone significant changes, reflecting the altered geopolitical balance of power in the region.

The first concrete evidence of the progress in peace negotiations came in March 2022, when Azerbaijan presented a framework for normalizing bilateral relations. This includes establishing diplomatic relations, opening transport routes, mutually recognizing territorial integrity and, most important of all, acknowledging the absence of territorial claims on either side. Border delimitation and demarcation—a troubling issue between the two historical rivals—was another component of the proposed peace plan.

Who will intervene in the world’s hot spots?

As conflicts and crises persist around the world, there is growing uncertainty about how—or if—they will be resolved. The international order is fraying, generating uncertainty about who will intervene and how these interventions might be funded.

There are interminable conflicts, like the situations in Syria, Yemen and Afghanistan, which have produced years of violence, countless thousands of deaths and even more refugees. Then there are the emerging hot spots, including northern Mozambique and the China-India frontier, and any number of potential flashpoints, like the Eastern Mediterranean. Even in situations where there is some tenuous hope of reconciliation, there is also uncertainty—such as South Sudan, where a 2018 peace deal that put an end to years of civil war is for now holding, even as widespread violence continues to plague the country. And the Russian invasion of Ukraine has now brought high-intensity, interstate warfare to the heart of Europe for the first time since the end of World War II.

The Persistent Challenge of Extremism in Bangladesh

Mubashar Hasan; Geoffrey Macdonald

On July 1, 2016, Bangladeshi militants carried out an attack, targeting mostly foreigners and non-Muslims, at the Holey Artisan Bakery in Dhaka. The Bangladeshi government responded to the attack with a concerted and controversial counterterrorism campaign. Although the number of terrorist incidents has been in steady decline since 2016, Islamist groups continue to operate, recruit, and carry out small-scale attacks while aspiring to perpetrate greater violence. This report examines the dynamics, drivers, and manifestations of extremism in Bangladesh and discusses measures to weaken its appeal.

SummaryAlthough contemporary narratives of Bangladesh often emphasize its secular founding, Islamist politics and religious violence have a long history that predates its independence.

Five Things to Watch in the Islamabad-Pakistani Taliban Talks

Asfandyar Mir, Ph.D.

After several months of intense fighting, the Pakistani government and the anti-Pakistan insurgent group the Tehreek-e-Taliban Pakistan (TTP) are talking once again. In early June, the TTP, also known as the Pakistani Taliban, announced a cessation of hostilities with Pakistan for three months. This cease-fire resulted from weeks of secret talks in Kabul between the TTP and Pakistani military officials, followed by a more public meeting between the TTP and Pakistani tribal leaders — both mediated by the Afghan Taliban. For the first time, the Afghan Taliban also confirmed the talks and their role as mediators between Pakistan and the TTP.

Swarming Terror

Zachary Kallenborn, Gary Ackerman, and Philipp C. Bleek

Multi-Drone Swarms

Multi-drone terrorism represents an emerging terrorism threat, with a range of potential consequences including, at the high end, mass casualties. Although terrorists could quite easily acquire numerous drones, they face considerable challenges in obtaining and deploying the technology to control multiple drones at once. This is especially true for drone swarms in which multiple drones are integrated into a single weapon platform with inter-drone communication. The real difficulties involved with mounting a truly massive drone attack means that policy-makers must plan for a broad range of threats, and carefully balance the costs of defense systems against risks posed to particular targets.[3]

In a May 2017 speech, General Raymond Thomas (retired), former Commander of Special Operations Command, described how, during the 2016 Battle of Mosul, “At one point there were 12 ‘killer bees,’ if you will, right overhead and underneath our air superiority.”[4] These enemy “killer bees” were simple commercial quadcopters that ISIS had outfitted with explosives. The event portends a larger trend: terrorists using not only drones, but multiple drones at once, to collect intelligence, record propaganda, and carry out attacks.

A New Attack Can Unmask Anonymous Users on Any Major Browser

EVERYONE FROM ADVERTISERS and marketers to government-backed hackers and spyware makers wants to identify and track users across the web. And while a staggering amount of infrastructure is already in place to do exactly that, the appetite for data and new tools to collect it has proved insatiable. With that reality in mind, researchers from the New Jersey Institute of Technology are warning this week about a novel technique attackers could use to de-anonymize website visitors and potentially connect the dots on many components of targets’ digital lives.

The findings, which NJIT researchers will present at the Usenix Security Symposium in Boston next month, show how an attacker who tricks someone into loading a malicious website can determine whether that visitor controls a particular public identifier, like an email address or social media account, thus linking the visitor to a piece of potentially personal data.

Joe Biden Has a Saudi Problem

Yasmine Farouk

Bashing Saudi Arabia during a presidential election season is almost a tradition in the United States, and President Biden made no exception. Emboldened by domestic outrage over the murder of the journalist Jamal Khashoggi and the Saudi-led intervention in Yemen, Mr. Biden went further than his predecessors by calling Saudi Arabia a “pariah” state. That was miscalculated.

With the war in Ukraine sending energy prices higher and China cementing more alliances in the Middle East, Mr. Biden is traveling thousands of miles to attempt to repair a relationship that has reached a nadir in its 80-year history — arguably even worse than after the Sept. 11, 2001, attacks.

Double standards haunt US and Europe in dealings with Turkey and the Middle East

James M. Dorsey

US and European acquiescence in Turkey’s long-standing refusal to honour Kurdish ethnic, cultural, and political rights came home to roost when Turkey initially objected to Finnish and Swedish membership in the North Atlantic Treaty Organisation (NATO). Ultimately, Turkey postponed potential conflict in NATO by dropping its initial objection to Finland and Sweden’s application.

Nevertheless, Turkey maintains a sword of Damocles over the process. NATO’s 30 member parliaments have to ratify the two countries’ membership. Turkish President Recep Tayyip Erdogan warned that ratification by the Turkish parliament would depend on the Nordic states putting their money where their mouth is and in effect adhering to Turkey’s anti-Kurdish policies.

Even though Turkish ratification will be the ultimate litmus test, NATO appears to have moved on since Turkey allowed Finnish and Swedish membership to move forward. NATO does so at its peril.

Great-Power Competition Is Bad for Democracy

Michael Brenes and Van Jackson

Democrats and Republicans alike have greeted the prospect of a long-term rivalry with China as a challenge that will bring out the best of the United States. For years, Washington has touted China as the U.S. military’s only worthy adversary and the kind of threat that could mobilize the national will and cure what’s ailing American democracy.

Russia’s catastrophic invasion of Ukraine has only hardened this conventional wisdom. Even though its origins have nothing to do with China, the war has encouraged Washington to see these two great powers as being of a kind. Just as competition with China is supposed to be the path to American renewal, so, too, is the ongoing struggle against Russia considered a “good war” that can salvage the Cold War–era faith in waging winnable battles against autocrats. Ukraine reminds the world of the inherent virtues of democracy and of the possibility of the bipartisanship that supposedly governed world affairs after the Cold War. As the scholar Francis Fukuyama wrote in March, “The spirit of 1989 went to sleep, and now it’s being reawakened.”

The West Worries Too Much About Escalation in Ukraine

Dan Altman

As the world looks on while Ukrainians fight for their lives and their freedom, many feel a burning desire to do more to support them. The problem is not a lack of forces or resources—it is fear of provoking a wider, perhaps nuclear, war with Russia. That fear is why U.S. President Joe Biden and other NATO leaders have consistently made clear that they will not intervene directly in the conflict, instead limiting their help to weapons, money, intelligence, and sanctions. As devastating as events in Ukraine are today, a nuclear war with Russia could kill more people than Ukraine’s entire population of roughly 44 million.

NATO leaders understand that they must walk this fine line between aiding Ukraine and risking war with Russia, but they have no theory of how to do it. The German and French governments hem and haw about whether to provide Ukraine with tanks. When Poland proposed a plan to transfer MiG-29 fighter aircraft to Ukraine, the United States refused. U.S. Defense Department spokesperson John Kirby warned that it “raises serious concerns for the entire NATO alliance” and therefore was not “tenable.” Yet the United States was already shipping Javelin antitank missiles and Stinger surface-to-air missiles. Soon after, it began sending other weapons, including M777 howitzers and now HIMARS multiple rocket launchers. What is the difference? Those weapons do more to strengthen Ukraine’s combat power than MiG-29s, so the theory cannot be that Russia reacts more strongly to policies that do more harm to its interests. Why, then, missiles and artillery but not planes? The answer is that there is no answer. It is simply arbitrary.

Four (updated) ways the war in Ukraine might end

Barry Pavel, Peter Engelke, and Jeffrey Cimmino

In early March, soon after Russia invaded Ukraine, we proposed four scenarios for how the war might unfold. At that time, we noted that several factors suggested it was turning in the West’s favor, including popular international support for Ukraine, Kyiv’s determination to fight, and newfound transatlantic solidarity. Since then, Russia’s initial offensive has collapsed, transatlantic allies and partners have become bolder in their actions, and NATO appears poised to admit Finland and Sweden.

Four months later, we find it important to revisit our thinking: Foresight is a strategic exercise that requires returning to the original evidence; the assumptions and scenarios should be modified in accordance with actual events. If the scenarios are built on faulty assumptions, or if they are poorly calibrated to events on the ground, they will not be useful for policymakers seeking to develop coherent strategies.

U.S. Missile Defense Is Cruising for a Bruising

Jack Detsch

It was like a scene from a horror movie: After weeks of calm, Russian cruise missiles, which Ukrainian officials said were fired from the Black Sea, interrupted a peaceful Sunday morning in Kyiv in late June, slamming into two residential buildings, leaving one person dead and six wounded.

The fear at the Pentagon is that those kinds of attacks are not some far-off threat. Since Russian President Vladimir Putin’s full-scale invasion of Ukraine nearly five months ago, Russia’s cruise missiles, which can be launched from the air or by sea, have become the Kremlin’s garden-variety weapon. And they’ve scrambled the minds of American defense planners, who spent decades planning to defend against a nuclear attack by a rogue state, like North Korea, and now have to contend with non-nuclear weapons that can outfox traditional missile defenses.

The weaponizing of smartphone location data on the battlefield

Mike Fong

For a country at war, monitoring the cellular networks in the conflict zone provides the most comprehensive view of mobile device activity. But before the conflict even begins, the nation can identify phones of interest, including the devices belonging to soldiers.

Because mobile app location data is often sold to commercial data brokers and then repackaged and sold to individual customers, a country can access such a database and then pick out the phones likely belonging to soldiers. Such devices will ping regularly in the locations of known bases or other military facilities. It’s even possible to identify the owner of a device by tracking the phone to its home address and then referencing publicly available information.

A country can also use information obtained from one or more data breaches to inform their devices of interest. The T-Mobile breach in 2021 demonstrated how much customer data is in the hands of a mobile operator, including a phone’s unique identifier (IMEI) and its SIM card’s identifier (IMSI).

WHEN IRREGULAR BECOMES EVERYWHERE: THE CYBERED FIGHT IN UNWANTED PLACES

Chris Demchak

In early 2021, major democracies around the world woke up to find that a Chinese government–associated cyberattack group Hafnium had left open a backdoor access point in Microsoft exchange servers’ software across their countries with no regard to who else might also take advantage of the widely distributed technology. What followed was a massive escalation of widespread cyberattacks by state-sponsored and criminal groups globally. With “attack attempts doubling every few hours,” cybersecurity analysts across the United States and its allies rang alarm bells. “Tens of thousands of servers have been hacked around the world. They’re being hacked faster than we can count.” In the United States, the FBI took the unprecedented step of obtaining a warrant to electronically enter hundreds of infected American computers to delete the malicious software left by the Chinese. The nation-state adversary had not only used cyber to achieve its own aims, but also handed its cyber weapons over to the global criminal community as part of their campaign.

Since its inception, the internet has presented security challenges but, for far too long, advanced democracies have clung to a utopian vision of a globally munificent cyberspace, ignoring what has emerged in the form a globally integrated and cybered conflict. The United States and its allies have also critically misunderstood the networked information fragilities of their democratic societies and institutions.

Special Forces Around the World: Conduct, Oversight, and Opacity

Murray Jones

This report has so far focused on British Special Forces and the military infrastructure around them. But the missions, skills, equipment, and elite status of Special Forces are by no means unique to the UK.

Due to their size, Special Forces of different nations will often collaborate with other states. They may do so by training together, sharing intelligence or, even, fighting side by side. Troopers may well embed with another nation’s forces, as was tragically the case for Sergeant Matt Tonroe. The British SAS soldier was killed in Syria in 2018, while he was fighting alongside US commandos, when an explosive carried by an American colleague was accidentally detonated.

Collaboration between Special Forces was common in Afghanistan. This was a multinational effort, with 49 nations contributing troops at some stage, including all 30 NATO nations. At its peak, there were more than 13,000 special operators from at least 18 countries that committed their Special Operations Forces (SOF). The respective heads of the US, UK and Australian Special Forces were reported to meet on a weekly basis to discuss what each was doing, as part of the so-called ‘SOF tribe’.

How to understand Israel and Saudi Arabia’s secretive relationship

Bruce Riedel

Saudi Arabia has taken a complex approach to recognising Israel by several Arab countries in the Abraham Accords. It has a long history of clandestine cooperation with Israel against mutual enemies. Recently, it has said public recognition of Israel will come only if there is movement to resolve the Palestinian conflict and create a two-state solution. But the kingdom has tolerated and even abetted the development of diplomatic and military ties between some of its closest allies and Israel.

Israel values its covert contacts with the Saudis but craves public recognition as the path to ending its isolation in the Islamic world. Yet it overestimates Riyadh’s clout. Several Muslim countries would not follow the Saudis’ lead on normalization of relations with Israel: Algeria (the largest Arab and African country), Iraq (which just recently criminalized any contact with Israel), and Pakistan (the only Muslim state with nuclear weapons). But the Israelis still chase the Saudis.

War and the Liberal Hegemony

ROBERT KAGAN

Why did the United States intervene in the Second World War? The question is rarely asked because the answers seem so obvious: Hitler, Pearl Harbor, and what more needs to be said? To most Americans, World War II was the quintessential “war of necessity.” As the late Charles Krauthammer once put it, “wars of choice,” among which he included Vietnam and the first Gulf War, are “fought for reasons of principle, ideology, geopolitics or sometimes pure humanitarianism,” whereas a “war of necessity” is a “life-or-death struggle in which the safety and security of the homeland are at stake.” If World War II is remembered as the “good war,” the idea that it was “necessary” is a big part of the reason why. The enemies were uniquely wicked and aggressive; Americans were attacked first; they had no choice but to fight.

This perception of World War II has had a paradoxical effect on the broader American foreign policy debate. On the one hand, writers of an anti-interventionist bent rightly perceive that the war’s reputation as “necessary” and therefore “good” has encouraged Americans to believe that other wars can be “necessary” and therefore “good,” too. (Krauthammer believed the “war on terror” was also one of “necessity,” and Richard Haass put the Gulf War in the “necessary” category, and in 1965 even David Halberstam and The New York Times editorial page believed that American intervention in Vietnam was necessary.) On the other hand, anti-interventionists are not alone in believing that, even if World War II was necessary, the circumstances were unique and therefore irrelevant to subsequent foreign policy discussions. There will never be another Hitler, and the idea that a foreign great power (as opposed to a terrorist group) might launch a direct attack on the United States seems far-fetched even today. World War II thus stands apart, bracketed from further relevance, as perhaps the only widely agreed “necessary” foreign war and therefore the only “good” foreign war that the United States has ever fought.

Trust in AI: Rethinking Future Command

Christina Balis and Paul O'Neill

The traditional response to the acceptance challenge posed by the military use of AI has been to insist on humans maintaining ‘meaningful human control’ as a way of engendering confidence and trust. This is no longer an adequate response when considering both the ubiquity and rapid advances of AI and related underpinning technologies. AI will play an essential, growing role in a broad range of command and control (C2) activities across the whole spectrum of operations. While less directly threatening in the public mind than ‘killer robots’, the use of AI in military decision-making presents key challenges as well as enormous advantages. Increasing human oversight over the technology itself will not prevent inadvertent (let alone intentional) misuse.

This paper builds on the premise that trust at all levels (operators, commanders, political leaders and the public) is essential to the effective adoption of AI for military decision-making and explores key related questions. What does trust in AI actually entail? How can it be built and sustained in support of military decision-making? What changes are needed for a symbiotic relationship between human operators and artificial agents for future command?

The Pandemic Fueled a Superbug Surge. Can Medicine Recover?

THE DESPERATE NEED to save the lives of Covid patients during the pandemic’s first waves, coupled with shortages of hospital personnel and protective equipment, drove a shocking reversal in progress against deadly superbugs, according to a new analysis by the US Centers for Disease Control and Prevention.

The report, released July 12, synthesizes lab and hospital-admission data to reach a grim conclusion: From 2019 through 2020, the number of antibiotic-resistant infections occurring in hospitals, and resulting deaths, each increased by at least 15 percent. For some of the most hard-to-treat pathogens, the increases shot up 26 percent to 78 percent. And those figures are even worse than they appear, because in the years immediately preceding the pandemic, resistant infections in hospitals across the US had been forced down by almost a third—meaning that Covid wiped out years of progress in reducing one of health care’s most stubborn threats to patients.

China Made a Failed Bet on Sri Lanka’s Rajapaksa Family

Michael Rowand

As Sri Lankan protesters stormed the presidential residence in Colombo, the Chinese Embassy released no statements and did not tweet. The Chinese Ministry of Foreign Affairs offered no comment until Monday afternoon, well behind others such as India, the European Union, and the United States. The French Embassy even retweeted a tweet comparing the events in Sri Lanka to the French Revolution. Yet the silence from Beijing that immediately followed the collapse of the Rajapaksa regime (and the word salad from the Ministry of Foreign Affairs that finally emerged) should not be confused for a lack of interest. The fall of the Rajapaksa government in Sri Lanka will have considerable long-term implications for Chinese international politics—if the family doesn’t claw its way back into power.

Members of the Rajapaksa family have held public offices in Sri Lanka for more than half a century. The current generation that includes Mahinda Rajapaksa and Gotabaya Rajapaksa, both of whom have been president, are the grandchildren of Don David Rajapaksa, who held a powerful colonial post when Sri Lanka was controlled by the British Empire. Their father was a deputy speaker of the Sri Lankan Parliament after the country’s independence. Many other family members have held government positions. The family has nearly cornered political power in Sri Lanka for much of this century, and its power has come with conspicuous corruption.

Europe’s Tiny Steps Won’t Solve Its Energy Emergency

Brenda Shaffer

The European Union and its 27 member states have invested more money, effort, and political capital in energy policy than any other region in the world. Until this year, Europe was admired globally as the gold standard for energy and climate policy. Germany’s Energiewende—or energy transition—was especially touted as a shining example of how to green the energy supply.

No one aspires to emulate the Europeans today. Germany and the EU have spiraled headfirst into the globe’s worst energy crisis since the Arab oil embargoes of the 1970s and 1980s. All across the continent, Europe’s energy policies have led to astronomical price increases, industry shutdowns, potential energy shortages, and geopolitical vulnerability. Germany, in particular, is in crisis mode and will likely see much worse, as its entire economic model—based on energy-hungry manufacturing, cheap Russian gas, and a self-mutilating shutdown of nuclear energy that Berlin still won’t reverse—is on the verge of collapsing without a plan B. In short, Europe is in a mess of its own creation.

U.S. Missile Defense Is Cruising for a Bruising

Jack Detsch

It was like a scene from a horror movie: After weeks of calm, Russian cruise missiles, which Ukrainian officials said were fired from the Black Sea, interrupted a peaceful Sunday morning in Kyiv in late June, slamming into two residential buildings, leaving one person dead and six wounded.

The fear at the Pentagon is that those kinds of attacks are not some far-off threat. Since Russian President Vladimir Putin’s full-scale invasion of Ukraine nearly five months ago, Russia’s cruise missiles, which can be launched from the air or by sea, have become the Kremlin’s garden-variety weapon. And they’ve scrambled the minds of American defense planners, who spent decades planning to defend against a nuclear attack by a rogue state, like North Korea, and now have to contend with non-nuclear weapons that can outfox traditional missile defenses.

How higher interest rates will squeeze government budgets

In recent years government debt appeared to matter less and less even as countries borrowed more and more. Falling interest rates made debts cheap to service, even as they grew to levels that would have seemed dangerous a generation before. The pandemic put both trends into overdrive: the rich world borrowed 10.5% of its gdp in 2020 and another 7.3% in 2021, even as long-term bond yields plunged. Now central banks are raising interest rates to fight inflation and public debt is becoming more burdensome. Our calculations show that government budgets will feel a squeeze far more quickly than is commonly understood.

In May America’s budget officials raised by a third the forecast cumulative interest bill between 2023 and 2027, to 2.1% of gdp. That is lower than forecast before the pandemic, but it is already an underestimate. Officials optimistically assumed the federal funds rate would peak at 2.6% in 2024, but markets now expect the rate to exceed 3% in July 2023. In the euro zone, as interest rates have risen, the premium indebted countries like Italy must pay to borrow has gone up, reflecting the danger that their debts may eventually become too onerous to service. Britain’s officials forecast in March that its government would spend 3.3% of its gdp servicing its national debt in 2022-23, the highest share since 1988-89.

Pakistan’s foreign policy reset hits a dead end

Arif Rafiq

When Pakistani Prime Minister Imran Khan’s government fell in a vote of no confidence in April, his detractors in the power elite claimed that the change of government would lead to improved ties with the world and an easing of the country’s economic crisis.

Khan, they said, had ruined Pakistan’s relations with the West with steps like an ill-timed visit to Russia that coincided with the invasion of Ukraine. They also alleged that his government had harmed ties with long-time ally China, including by levelling accusations of corruption in projects that were part of the Belt and Road Initiative–linked China–Pakistan Economic Corridor.

But the foreign policy reset pursued by the new coalition government and the Pakistan Army, which had backed Khan until relations soured late last year, has yielded few tangible dividends. Three months after Khan’s ouster, no country has come to offer Pakistan extraordinary support as inflation soars and the country faces a balance-of-payments crisis. In fact, Pakistan’s relations with long-time partner China appear to be facing a stress test.

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