Intermarium Weekly 09-15.04.2020

Romania

In Romania, a new executive order was announced on the evening of April 10, with further restrictions to come into force within the curfew, due to the COVID-19 pandemic. Therefore, the new executive order states that exports of wheat, barley, oats, corn, rice, wheat flour, soybeans, seed oil and sugar, but also of biscuits are to be suspended during the state of emergency. Sales of majority stakes in energy companies are also suspended, regardless of the form of ownership. Interestingly, on the flip side, Ukraine is still planning to continue with grain exports on a large scale.

 

3Bs play with China

For the first time in history, a train carrying only postal cargo arrived from China in Europe and it stopped in Lithuania. The 42-container shipment arrived in Vilnius’ terminal early on Sunday. Some 260 tons of parcels will now be shipped from Vilnius to 30 European countries. Most of them will go to Germany, Britain, France, Spain and Hungary. Two of the containers were intended for Lithuanian customers. Until now, postal parcels from China to Europe were mostly shipped by air.

The Estonian Centre for Defence Investment (ECDI) signed a framework agreement with Guardtime OÜ and GT Cyber Technologies OÜ, the object of which is to develop, over a period of four years, an automated command and development platform for the NATO Cyber Range, which will exponentially improve the resources required for preparing and carrying out cyber training exercises. This is critically important given the parameters of the new generation warfare Russia is running in its western theater of operation aka the European Intermarium.

The railway system of Eastern Europe is going to be playing a crucial role during the Covid-19 pandemic and maybe afterwards as well. The region therefore looks to benefit in terms of its future connectivity from the development of the project “Rail Baltica.” As the trilateral discussion of the Baltic States regarding its implementation model continues, Lithuania suggests not to deviate from the main purpose – to implement the project on time because Rail Baltica is important not only for the Baltic region, but also for Europe as a whole, as a part of trans-European rail network that is going to provide much-needed rail links between the Baltic and the Adriatic.

 

Belarus

Alexander Lukashenka eventually recognized the threat of COVID-19, and the country is promptly gearing towards isolation, both external and internal. If before Belarus was called the last dictatorship of Europe, this week it was possible to say that Lukashenka restrained from any more draconian measures. Finally he has given up this laissez-faire approach and put the country on the path of self-isolation (Lukashenka calls it “ambulatory treatment”).

Relations between Russia and Belarus over COVID-19 have only deteriorated; Lukashenka recently slammed Russia for claiming to have helped Belarus and criticized Russian media for the way they have been covering Belarusian methods of fighting against the virus. He stated, probably sending a message to the Kremlin that – if you want to help us, reduce gas prices. Now they pay around $127 for one thousand cubic meters. The Belarusian Prime Minister was asked about this topic during negotiations with his Russian counterpart on April 13. Minsk says it has asked for a re-assessment of gas prices because of the global crisis which is seriously affecting global energy prices.

Lukashenka continues his policy of diversification of both energy policy and foreign policy. 

A tanker with Norwegian oil for the Naftan refinery in Navapolatsk arrived at the port of Klaipeda in what is part of a series of shipments that began in January earlier this year. Notwithstanding their continued efforts to wriggle free, Belarus still depends on Russian oil and gas and continues its negotiations over oil deliveries. Concerns of Belneftekhim have concluded contracts with large Russian oil companies and some others, namely, with the Big Five (Rosneft, Tatneft, Surgutneftegaz, Lukoil, Gazprom Neft) and small companies with which they had previously worked, including “Safmar.” In April, Belarus expects from Russia 2 million tons of oil.

 

Ukraine

This week the Ukrainian Parliament approved a new budget with an expected decrease of 7.5%. Ukraine hopes to receive funds from the World Bank ($50 million), the IMF, the EU (160 million Euro). Moreover, a huge forest fire in Ukraine has been raging for more than a week and is now just one kilometer away from the defunct Chernobyl nuclear power plant, posing radiation risks. If the situation possesses a threat to the health of the people, the Ukrainian authorities are going to face a serious challenge alongside that of COVID-19.

In previous IW, we reported that missiles “Olcha-M,”  “Neptun” and “Grom-2” had been tested. This week it was reported that Ukraine had suspended production of old and new missile systems. The reason for such a decision is that the Ministry of Defense has failed to provide funds for financing the Pavlograd Chemical Plant. The plant temporarily suspended production of solid-propellant rocket motors for new Ukrainian missile systems. But actually the main result of the termination is the total shutdown of the entire missile program in Ukraine. The plant has not received any funding since the beginning of year. If we spoke in strategic terms, it would mean that the most precious industry of Ukraine, that somehow can provide Ukraine with air and coastal defense, is under serious threat.

The Pentagon stated their continuation of close cooperation with Ukraine in an official statement following a phone call between U.S. Defense Secretary Mark Esper and Ukrainian Defense Minister Andriy Taran. Furthermore, the US Embassy in Ukraine has transferred to the Armed Forces a batch of special vehicles based on Toyota Land Cruiser 70 SUVs.

Military drills have been organised in the Kherson region with the participation of units of the 36th Detached Marine Corps with engagement of tank brigades. Moreover, according to the results of successful state tests, the Unmanned Aviation Reconnaissance System (UAV) and Fire Correction Complex of A1-SM “Fury” was officially adopted by the Armed Forces of Ukraine. This is a 100% Ukrainian-made UAV which proved its effectiveness during the military conflict in Donbas.

Finally, Ukraine presented the plans of building a naval base in the Sea of Azov which would be a game changer in the Ukrainian struggle against the Russian naval dominance in the Sea of Azov. Russia has full dominance in the Sea of Azov and Ukraine needs a permanent naval presence in the sea. However, without a naval base it is impossible, hence Ukraine elaborated a project of a future naval base. According to Ukrainian plans, it has to be finished within the next two years. Ukraine hopes to use U.S. armed boats in the future naval base. Unfortunately, it should be stated that Russian naval presence is overwhelming, both in the Black Sea and the Sea of Azov. However, without a naval base in the Sea of Azov, it is impossible to guard the Ukrainian cost line near Berdyask and Mariupol in case of landing of Russian troops. Therefore, it is urgently necessary to build it.

 

Autor

Ridvan Bari Urcosta

Senior Analyst at Strategy&Future

 

Ridvan Bari Urcosta

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