Turkey, Russia, Ukraine: Grain train.
Also: Japan, China, Central Asia, Taiwan, Europe, United States and Singapore.
TURKEY. RUSSIA. UKRAINE. Grain train.
Erdogan delivers a Black Sea deal.
Turkey’s president said Wednesday the Black Sea Grain Initiative, to export Russian and Ukrainian grain and fertiliser through the Black Sea, would be extended for two months. The UN-backed arrangement was set to expire Thursday.
INTELLIGENCE. Erdogan scraped through Sunday’s first-round presidential election. His chances of defeating opposition candidate Kilicdaroglu in the 28 May second round will only be boosted by this diplomatic score. Moscow may not have ceded if Turkish voters had opted for his pro-West opponent. Though the US State Department reprimanded the Kremlin for “using people’s hunger as a weapon in their war against Ukraine”, UN Secretary-General Guterres hailed the “good news for the world”. Ukraine ships out 10% of the world’s wheat – its finance department will be relieved, as will customers in the Middle East and Africa, where Russia is competing for influence.
FOR BUSINESS. The reprieve was immediate, with Chicago wheat and corn futures falling 3.4%, but insurers may still be scratching their heads. Other grain and fertiliser producers will continue to benefit from the Black Sea disruption.
JAPAN. CHINA. CENTRAL ASIA. Pre-summer summitry.
Hiroshima hosts the G7, while Xi’an hosts the Stans.
The G7 Summit opened on Thursday in Hiroshima, where leaders will discuss Russia, Ukraine and China. On the same day, China opened the inaugural China-Central Asia Summit in the historic Silk Road city of Xi’an.
INTELLIGENCE. Japan will play a cheerful host, its economy having just emerged from a technical recession (growing 1.6% year-on-year) and its stock market at a 33-year high. President Biden may, however, not be the most attentive guest amid ongoing DC debt limit talks, and friends being peeved at his cancellation of trips to Australia and Papua New Guinea. Beijing is meanwhile playing the long game, seeking to craft strategic alliances with the powers sandwiched between it and Moscow, despite the short-term threats. China’s Belt and Road Initiative will increasingly concentrate on Central Asia. Italy, the only G7 country to have joined so far, has indicated it will leave.
FOR BUSINESS. Russia’s conduct caused Western sanctions. It has also opened an eastern front to Chinese efforts to remould central Asia’s trade, energy and investment environments, despite the two country’s “no limits” friendship.
TAIWAN. CHINA. Status Hou?
The Kuomintang nominates a centrist presidential candidate.
Taiwan’s main opposition party nominated Hou Yu-ih, a former police chief and competent administrator, on Wednesday, to lead its party in the 2024 election, which Beijing and Washington will be watching closely.
INTELLIGENCE. The former two-term mayor of New Taipei City seeks a middle ground in relations with China. Under the current president, Tsai Ing-wen, of the Democratic Progressive Party, Taiwan has been a lightning rod for the ongoing trans-Pacific power struggle, weathering escalating military threats from Beijing but enjoying closer support from Washington. Each trend could continue should the DPP’s chosen successor, the current vice president, Lai Ching-te, get up in 2024, but both will likely abate if Hou and the slightly more pro-China KMT succeed. Hou is mute on the primary geostrategic details – he is an ambiguous candidate for an ambiguous state.
FOR BUSINESS. A return to more cordial relations between Beijing and Taipei would cool tensions in the Pacific and give Taiwan’s semiconductor industry – its critical economic resource – a major reprieve.
EUROPE. UNITED STATES. Turing times.
Regulators chat GPT and crack down on crypto.
The EU announced on Tuesday new rules to make cryptocurrency exchanges liable for the loss of customers’ assets, while also requiring crypto firms to be licensed. US senators on Wednesday interrogated Silicon Valley’s AI pioneers.
INTELLIGENCE. At least 25 countries have partially banned crypto, but where it’s being squeezed out, sponges are at the ready. Dubai has created a regulatory body to attract crypto firms, while true believers are still convening in old hotspots, including in Miami, for Bitcoin 2023. Driven by fear rather than buyer’s remorse, regulators are now also examining AI platforms. Italy started with a ban on ChatGPT in March, the European Parliament passed its AI Act last Thursday, and now leading players are lobbying for kid gloves in Washington. Legacy firms may be getting a pass: Microsoft had its acquisition of video game house Activision Blizzard approved by EU regulators on Monday.
FOR BUSINESS. Regulators’ failure to pre-empt crypto chaos bodes ill for efforts on artificial intelligence. Per OpenAI’s CEO: “If this technology goes wrong, it can go quite wrong.” Watch for hurried, possibly AI-drafted regulation.
EUROPE. RUSSIA. Picking up the pieces.
Europe gets ready to hold Moscow to account.
The Council of Europe, charged with promoting democracy, human rights and the rule of law across the Continent, approved on Wednesday the establishment of a “Register of Damage” to document damage done by Russia in Ukraine.
INTELLIGENCE. German Chancellor Olaf Sholz said the register would “punish the war crimes of Russian occupiers” and impose “accountability for the enormous damage Russia inflicts”. Despite European solidarity with Ukraine, this effort may be as futile as the International Criminal Court’s attempts to have Putin arrested and tried. History can’t be written until victory is won. It can, however, change tack. On Wednesday, the Russian and Iranian presidents inked a deal to build the 170-kilometre Rasht-Astara railway, connecting transport networks in their countries with Azerbaijan. And Russia’s deputy prime minister led a delegation of 28 Russian energy firms to a Tehran exhibition.
FOR BUSINESS. Any eventual reconstruction of Ukraine will rival the post-WWII Marshall Plan. In the meantime, pariahs are shifting energy and other infrastructure to accommodate current market realities.
SINGAPORE. Hanging tight.
Singapore conducts another execution, despite international pressure.
On Wednesday, a Singaporean national convicted of trafficking cannabis was executed in the city-state – the second in three weeks. The hanging of a mentally disabled Malaysian man in 2022 turbocharged the abolitionist campaign.
INTELLIGENCE. Singapore is premised on the free flow of capital, not drugs. Democratically elected but autocratically governed, the island nation will be slow to update its justice system. This has not dented the significant talent flows from its northern competitor, Hong Kong. Nor does it detract from other regional reform movements: Thailand legalised cannabis in 2022, and Malaysia abolished the mandatory death penalty in April. Despite trends, there is no risk of Singapore being sanctioned on its laws. Investors still chase Indonesia, where first-quarter foreign direct investment was up 17% year-on-year, despite 112 death penalties in 2022 (94% of which were drug-related).
FOR BUSINESS. Singapore remains Southeast Asia’s premier business hub and may soon overtake Hong Kong as the gateway to China, notwithstanding its increasingly outdated strictures (which are at least transparently enforced).