Intermarium Weekly 01-08.04.2020

(wikimedia.org)

 

The new normal

The strategic approach allows us to see the following common characteristics of the situation regarding Coronavirus:

1. A State of Emergency or Special Conditions have been imposed almost everywhere. This creates both positive and negative consequences. In many countries of the region, political elites are divided over the issue of the role of government as it battles to deal with the challenges posed by Covid-19. On the one hand, liberal opposition is against the accumulation of power in the hands of their opponents; on the other, the objective situation is pushing the government for more restrictive measures in countries such as Czech Republic, Romania, Bulgaria, Poland, etc. All this is happening in an atmosphere of total uncertainty over when the tight regime can be relaxed even partially. For example Polish Prime Minister Mateusz Morawiecki anticipated that the peak of the crisis will probably come in May and June. Such scenarios blur the hopes that the damage to the economy is possible to restore. The restrictive political, economic and social measures taken in many countries have already been prolonged for at least another month.
2. Countries are looking for measures which would at least temporarily stabilize the downfall of their economies and eventually restore social stability. As a result, countries are trying to diversify their financial sources: international financial institutions like the IMF, the EU, and their own limited indigenous resources. The desperate situation is forcing Eastern European countries – namely Ukraine, Georgia and Moldavia – to seek help from NATO as additional sources of funding the economy. It would be interesting to predict that the only stable harbor which can provide credits to the rest of the world is China. Until now, this is not on the agenda, but if the situation becomes desperate, the massive inability of countries to pay off external and internal debts is a rising concern;
3. In order to restore the economic situation, countries are fighting for establishing the most favorable conditions for the international trade (so called “green corridors.”)
4. “Strategic food resources” along with medical equipment and instruments have been established in many countries as a special protectionist regime, regarding the food or grains. The logic of governments is to ban grain exports and all what will be needed in difficult times. The countries which are not able to provide the economic autarky, especially agricultural independence, are going to find themselves in the most uncomfortable situation.
5. A political crisis is rising in many countries over the ability of national health care systems to tackle the challenges presented by Covid-19. In many countries Health Ministers are under attack and have found themselves on the edge of political confrontation.
6. The role of the Church amongst different confessions is increasing and many Churches are considering the measures which were introduced against Covid-19 that strained the normal lives of religious institutions.
7. Every country tries to find a model which can bring the country at least partially from the current crisis and restore economic activities. For example such countries like Estonia are looking for a solution by the “massive testing” of the population;

 

Belarus: “No plans to move Westward!”

Recently the Ambassador of Belarus to Russia gave an interview in which he pointed out that Belarus needs to restore good relations with the United States, both politically and economically. The most essential sign of improvement of relations, according to him, is the lifting of sanctions from Belarus. At the same time, the Ambassador stressed that relations with Russia remain close, as between allies and strategic partners. And as he reassured Russia, Belarus does not have any plans to ally itself with the West.

Belarusian military experts pay attention to the important fact that actually the U.S. achieved some important goals in the Eastern Europe in the framework of “Defender Europe 2020.” The US command in Europe managed to fulfill the main objectives of the exercise – from the deployment of troops to the deployment of all necessary infrastructures. In other words, they have tested in practice the ability to form a large-scale grouping in an eastern direction so as to “protect” European members of the Alliance and have identified points that need to be further developed. They are predicting that next year or after the end of the Corona crisis, NATO will return to the concept of conducting huge-level military exercises in Eastern and Central Europe.

 

Is One Belt-One Road reanimated? Soon it will be clear.

A freight train carrying raw materials from China to Kaliningrad under the support of Latvian Railway (LDz) has departed and will reach its destination in approximately nine days. It will take the train ten hours to pass through Latvia’s territory, including the time it takes to pass customs and settle the necessary paperwork, LDz explains.

The company also reports that this will be the longest freight train to have crossed Latvian territory from Russia to Kaliningrad, with 75 rolling stock units and a weight of 7,460 tons. Latvia, when compared to other European Union member states, has the option to process longer and heavier freight trains. According to data compiled by audit company Ernst & Young in 2018 on European railway infrastructure, the average freight train weight that passes on Poland’s railway infrastructure is less than 1,500 tons.

 

Ukrainian realities…

Ukraine is accumulating all possible financial sources from abroad in order to stabilize its economy. For example, Vladimir Zelensky agreed with Angela Merkel about the possibility of using German credits against Covid-19. Ukraine also received humanitarian assistance from the United States (for fighting against Covid-19. Additionally, and this may turn out to be the lion share of all investments in the country, there will also be some kind of contribution from the IMF and the World Bank. The first tranche from the IMF must come soon and the amount of it ought to be $5.5 billion. This became possible only because of the recent adoption of the land law by the Ukrainian Parliament, and the bank law, which have both generated enormous amounts of controversy throughout the country. With or without the credit from the IMF, the country will face a decrease approximately 6% of its GDP.

The Ukrainians are facing serious difficulties with their jobs in Poland and the Baltic States because of the coronavirus. More than 100,000 Ukrainians have left Poland since the start of quarantine. This is more than 12% of the entire Ukrainian work force in Poland. Poland is already feeling the effects of worker shortages in many industries. This may also create serious consequences after the quarantine, when Poland will need all those people back. Ukraine in its turn hopes to receive humanitarian help from Turkey.

A new rocket has been developed in Ukraine which is capable of hitting targets at a distance of 120 km. “Olcha-M” was created by the Luch Design Bureau in Kiev, who have also successfully conducted the testing of a new missile “Neptun” in the Black Sea near Odessa which hit sailing targets. The Neptune missile is capable of hitting targets up to 100 km.

 

 “Ruslan” Diplomacy

Logistics and mobility at the times of virus offer the most precious advantage. The countries which possess gigantic airplanes have the chance to broaden political influence. Both Russia and Ukraine possess the biggest aircraft “Ruslan” which is able to transport huge deliveries. Ukraine, like Russia, fully engaged its air fleet of ANs 124 Ruslan, into the fight against the Covid-19. The main purpose of engagement is the delivery of masks and other medical equipment from China to Europe (Spain, Czech Republic, Greece and Portugal). Ukraine is also delivering masks for its own needs from China. For this purpose, Ukraine arranged daily flights to China by smaller air planes than “Ruslan”. Despite Ukrainian efforts to provide its own citizens with masks, hundreds of thousands of masks have been smuggled to neighboring countries, even to Israel.

Now both Russia and Ukraine in full capacity use those aircrafts for delivering medical equipment all around the world including Eastern Europe. Recently a Ruslan landed in Warsaw carrying medical equipment from China to the Polish capital.

 

Autor

Ridvan Bari Urcosta

Senior Analyst at Strategy&Future

 

Komentarze (0)

Trwa ładowanie...

Załaduj więcej komentarzy