Russia, Ukraine: Attack on the Kremlin.
Also: Europe, NATO, Japan, Pakistan, India and Iran.
RUSSIA. UKRAINE. Attack on the Kremlin.
Putin finds a new casus belli as Zelensky denies knowledge.
Russia accused Ukraine of two drone attacks on the Kremlin early Wednesday in a bid to assassinate Vladimir Putin. Volodymyr Zelensky denied the claims. The Wagner Group claimed Ukraine’s counteroffensive had begun.
INTELLIGENCE. After this week’s spate of sabotage within Russian territory, yesterday’s incident, if authorised, looks precipitous. Former Russian President Dmitry Medvedev called for the “elimination” of Zelensky on social media and attacks on Ukraine escalated, with 21 civilians killed overnight in Kherson. Having failed to materially propel his invasion in recent months, Putin will be keen to avoid speculation of a security lapse – Moscow is 450kms from the border – but will also welcome an excuse to escalate attacks against non-military targets. The Wagner Group’s claims that Ukraine’s spring counteroffensive has begun are unlikely true, but in the information war any such assertions could likewise prove useful as Russian citizens see the conflict increasingly impact daily life.
FOR BUSINESS. Irrespective of who did it, the Kremlin attacks bring the war to a dangerous new phase – for Ukraine.
EUROPEAN UNION. UKRAINE. More ammunition.
The EU belatedly reaches a procurement deal.
EU ambassadors agreed on Wednesday to a €1 billion joint procurement plan for missiles and ammunition. After weeks of negotiation, the deal, to buy such supplies for Ukraine, will enter into force on Friday if no member state objects.
INTELLIGENCE. If the deal passes it will represent a step forward for the consensus-based EU. Amid rancour on whether non-EU manufacturers would be welcome in the deal’s supply chain, it brings some reality to European Commission President Ursula von der Leyen’s hopes to create a true “geopolitical commission” in Brussels, rather than merely a trade and currency bloc. Coming soon after the EC launched a €500 million plan to help European arms companies upgrade equipment, it is also a demonstration of a growing comfort with industrial policy as the EU moves away from its free trade origins. Russia’s defence minister Sergei Shoigu meanwhile called for a doubling in missile production, in a likely attempt to deflect blame for weapons shortages.
FOR BUSINESS. The EU’s purchases won’t be decisive, but they are further steps in normalising industrial policy.
JAPAN. NATO. A new pivot to Asia.
A liaison office will cause rancour in Beijing, but little else.
NATO plans to open a liaison office in Japan, media reported on Wednesday. The alliance’s presence would focus on closer ties with the so-called "Asia Pacific 4" group of partners: Japan, South Korea, Australia and New Zealand.
INTELLIGENCE. Washington has long sought to dispel Beijing’s claims the US is planning an “Asian NATO”, whether through the Quad, AUKUS, or trilateral cooperation with South Korea and Japan. The latest move by NATO, if true, will only reignite such accusations. Ahead of this month’s G7 meeting, and following last week’s summits between President Biden and his South Korean and Philippine counterparts, a NATO office would be a reminder of the West’s commitment to Asia as arms otherwise flow to Ukraine. The question remains however whether Asia is ready for more than just symbolism. Australia’s prime minister recently dodged questions on whether Canberra would come to Taipei’s aid in a war, while Taiwan’s foreign minister admitted he too was unclear about who would actually fight.
FOR BUSINESS. A NATO office in Asia won’t make up for the region’s reluctance to step up to Chinese aggression.
PAKISTAN. INDIA. Crossing over.
Pakistan’s foreign minister visits for the first time in almost a decade.
Bilawal Bhutto Zardari departed Karachi early on Thursday for Goa, which will host a meeting of the Shanghai Cooperation Organization. In March, India blocked Pakistan’s attendance at another SCO event.
INTELLIGENCE. Indo-Pakistan relations remain neuralgic 76 years after partition, but there are occasional signs of pragmatism. In this case, it is that both countries want to play to their non-aligned credentials. As a group that explicitly excludes the West, the SCO is more an emblem of emerging multipolarity than a body that actually does anything. Despite India’s poor relations with key member China, Delhi uses the SCO as a screen for what it calls “multi-alignment” as it pursues ties with Western groupings like the G7 and the Quad. Similarly, Islamabad uses the SCO to demonstrate ongoing relevance. Bilaterally, India-Pakistan ties remain poor and Islamabad remains testy over an upcoming meeting in Kashmir of the G20, which India also hosts this year. Pakistan won’t be invited.
FOR BUSINESS. India and Pakistan provide a foil for each other’s ills. Reconciliation requires a change in narrative.
IRAN. Dire straits.
A second ship seizure by Tehran seeks to make waves.
The US military confirmed on Wednesday that Iranian boats had seized a Panama-flagged oil tanker in the Strait of Hormuz. Iranian media said the seizure was on judicial order after the ship collided with an Iranian vessel.
INTELLIGENCE. The tanker, Niovi, en route from Dubai to the Emirates’ Fujairah, does not appear to have the international flavour of the ship seized last week: the Marshall Islands-flagged Advantage Sweet, owned by Chinese interests, manned by an Indian crew, and taking Kuwaiti crude to Houston. Yet both ships signal Iran’s ability to control its adjacent waters, through which one fifth of the world’s oil flows. While irritating to Western importers, which have suffered whipsawing energy prices in recent days, it is unlikely that Gulf neighbours will do much to curb Tehran’s insouciance. Saudi Arabia is expected to reopen its embassy in Tehran next week, after a Chinese-brokered rapprochement in April. Iran meanwhile returned its ambassador to Abu Dhabi last month.
FOR BUSINESS. Iran’s poor behaviour will be tolerated for as long as it has oil and the West is distracted.
GLOBAL. Here comes the son.
A climate pattern looks set to bring hotter temperatures but also rain.
The El Niño weather pattern appeared increasingly likely to return this northern summer, the UN’s World Meteorological Organization said on Wednesday. El Niño (“the boy”) follows a three-year global cooling pattern, La Niña (“the girl”).
INTELLIGENCE. A warming Pacific Ocean is a sign of El Niño’s increased likelihood, and the UN has issued alarmist predictions on the boy’s return, but there are silver linings. Chief of these is a potential end to the devastating droughts in the Horn of Africa and across the Americas, which have caused humanitarian crises and food price inflation respectively. Wetter conditions, from California to Argentina, should also mean drought-caused restrictions at the Panama Canal are lifted in time for holiday shipping schedules. The end of La Niña may in turn mean drier conditions for Australia, Indonesia and South Asia. Predicting the weather can be a fool’s errand, and the UN has a mixed track record, but the geopolitical implications are worth considering, even if the outlook is still hazy.
FOR BUSINESS. Wet weather in Africa could relieve some drivers of conflict, but for every silver lining there’s a cloud.
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