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Ukraine
Demand for combat drones in Ukraine
Ukraine is actively working on the important military task of developing its UAV fleet. Since 2016, Ukraine has used more than 300 drones in the Donbas region. Most of these drones are produced by a single Ukrainian private company – Dnepropetrovsk-based “DeViRo” which provides the Ukrainian Army with “Leleka-100” reconnaissance drones. This small drone is perfect for conducting reconnaissance over small areas, but Kyiv is still hesitating over whether or not to integrate these drones into the army as the backbones of its drone fleet, both because of the corruption scandal over deals made so far and as a strategic excuse for the acquisition of combat drones. The team responsible for designing “Leleka-100” claim that their UAVs are able to overcome Russian electronic warfare systems. Now the leadership of the company is considering the option of creating a suicide drone, but the biggest problem is that for these purposes they would need to obtain a special explosive charge that would have to be externally sourced. Ukraine has other companies that are building UAVs, but none has created a combat drone yet.
Cooperation between Turkey and Ukraine still in the active phase…
This week representatives of the state-owned Ukrspetsexport concern held a working teleconference with the leaders of the Directorate of Defense Industry of Turkey, during which they discussed key initiatives for more than 60 joint projects that are currently being implemented between Ukrainian and Turkish enterprises in the field of military-technical cooperation. The conference was also attended by the Ukroboronprom aviation management team and employees of the Ivchenko-Progress state company. In particular, the meeting concerned the implementation of previously signed contracts for the supply of military hardware and plans for further in-depth cooperation, including the prospect of localizing production both in Ukraine and Turkey, and the creation of new joint ventures. The parties agreed to hold the next joint meeting on these issues and prioritize offline projects at the end of June in Istanbul, Turkey. Besides, the parties agreed to continue a very ambitious project for the production of the AI-35 Engine, which, in addition to being used as an engine for cruise missiles, can also be used to propel UAVs. In addition, the heavy drone Akinci, developed by Baykar, is also equipped with Ukrainian-made AI-450T engines. The Presidency of the Defense Industries, SSB – is responsible for the development of the defense industry of Turkey and ensuring the modernization of the Turkish armed forces, and as such reports directly to the President of the Republic of Turkey.
International financial assistance to Ukraine
The economic situation in the country continues to deteriorate. For example in May budget revenues fell to 38% and in the second quarter, the level of unemployment will jump from 8% in 2019 to 11.5% this year. This is a huge drop, reminiscent of the economic downfall during the 1990s, but supply chains are more or less stable, so it is unlikely that the “90s” will return to Ukraine in the near future. At the same time, Ukraine continues its search for external funds. The first 2020 IMF tranche was announced this week, amounting to $1.9 billion. The second will amount to an additional $1.6 billion, the third – worth an additional $1.5 billion is due in 2021 (Stand-By Program). This week Ukraine received the second and final tranche of the 4th macro-financial assistance program in the amount of 500 million Euros from the European Commission. Moreover, the Pentagon has notified Congress that the Ukrainian government has made the necessary progress in key reforms and therefore can count on additional assistance in the amount of $125 million, but it is going to be implemented successfully only if the U.S. is not deeply bogged down into the internal struggle against special radical groups in the US. Concurrently, the IMF continues to push Ukraine for more transparency in terms of foreign access to its land market following a recent controversial land law. The EU is pushing for faster implementation of a new “Inland Navigation Law” and promises investments to the country in case of successful implementation.
Apple moving to Ukraine…
According to an April 15, 2020 entry in the State Register, Apple has registered a legal entity in Ukraine – “APPLE UKRAINE” – with the registration address at IQ Business Center (a trade center in Kyiv). The sole founder and beneficiary of the company is the legal entity Apple Inc. (Ireland). Among the activities of the company are wholesale and retail trade in computers, electronic and telecommunication equipment. At the moment, the company has not made any official statements about this. Apparently, Apple’s announcement of the launch of the enterprise in Ukraine will take place this summer.
Ukraine as part of the U.S. electoral race and other cooperation between countries
Seven former U.S. Ambassadors to Ukraine published a joint declaration where they expressed or even asked the Ukrainian President not to inject Ukraine into the upcoming Presidential Elections in the U.S. “We are thus disheartened by efforts to inject Ukraine into America’s domestic politics as the 2020 US presidential election approaches. Those efforts advance a false and toxic narrative, one with no basis in the reality of US-Ukraine relations, in order to weaken the relationship between the United States and Ukraine and sow division within our two countries. That serves neither country’s interests. We strongly condemn these efforts to divide our two countries and call on officials in both to avoid steps that will only erode the bilateral relationship and alienate our countries from one another.” Nevertheless, it is more likely that Zelensky will try to help Donald Trump to win the elections, and Trump will not allow the destabilization to happen. The Ukrainian topic is truly “toxic” in American politics, and this time Trump will try to impose this “toxicity” against the Democrats.
On the morning of May 29, a pair of US Air Force B-1B Lancer strategic bombers from the Ellsworth, South Dakota Air Force base crossed the airspace of Ukraine. The command of the Ukrainian Air Force reported that the fighters of the Ukrainian Air Force – a pair of Su-27 and a pair of MiG-29 – escorted them along a given route in general formation. Ukrainian pilots received the baton from Polish pilots, and the air patrol event itself was planned to achieve compatibility between NATO and the Alliance’s key partners. US Air Force B-1B Lancer bombers flew from the American Ellsworth air force base across the Atlantic, and the territory of several European countries, including the Republic of Poland, and Ukraine. The U.S. Air Force Command in Europe reported that these two Lancer B-1Bs completed what had been a long-term strategic mission for the task force in Europe and the Black Sea region. For the first time, the mission of a group of bombers was carried out jointly with Ukrainian Su-27 and MiG-29 fighters, as well as the Turkish KS-135. The same joint tasks were conducted with Greeks, Polish, and Romanian Air Forces.
Ukraine as a spacepower
It seems that Elon Reeve Musk is opening a new page in human history. Humanity at the times of social calamities is raising their heads to skies, to space. Ukraine as a country with a space industry which she inherited from the dead superpower – the Soviet Union – tries to join this new historical trend. For these purposes, Ukraine is creating a Ministry of Development of the Space Industry, which will be under support and supervision of the Minister of Development of Strategic Technologies and Innovations.
Additionally, Ukraine is planning to secure independent access to space, without an actual cosmodrome. Kyiv is planning to do this by launching craft from aircraft that is already airborne. The head of the Ukrainian Space Agency stated that “Today, space is no longer a game of superpowers, where the United States confronts the Soviet Union or, as now, China… We are witnessing the creation of a real global market in which different companies from different countries compete, offer their services, products. Today we propose the creation of a space ecosystem. That is, it will be the Ukrainian space market, in which there will be a place both for state players and for private companies, startups, international corporations.” Furthermore, for example, Ukraine plans to negotiate with NASA to take part in the Artemis Moon program.
Energy Diversification
Ukraine recorded a record export of gas from the EU countries this year especially from Poland and Hungary. It tremendously decreases Ukrainian dependence on Russia, while at the same time positively impacting energy cooperation between Ukrainian neighbors from the European Union. For example, Poland has supplied Ukraine 690 million cubic meters of gas since the beginning of this year. Whilst Poland exported a record amount of gas to Ukraine, Hungary became the main exporter of gas to Ukraine this year with 50% of the entire Ukrainian gas import. The share of Slovakia last year was around 36%, but this year decreased, whereas the Polish share rose unexpectedly to 16%.
Ukrainian de-nuclearization
This week, the share of energy from the nuclear power plants in Ukraine fell to a historical minimum in the period since the end of the Cold War. The power generation capacity of coal-fired thermal power plants exceeded the operating capacity of nuclear power plants; this was as a result of state policy. Curiously, Ukraine is slowly becoming a de-industrialized country with all the consequences that derive from such a phenomenon. At the same time, international “green” energy companies appealed to Ukraine for faster implementation by Ukraine of the “compromise memorandum” between investors and Ukraine. The share of “green” energy now in Ukraine is around 10%, and investors are planning to increase this number.
Belarus
With Belarus entering the active phase of its presidential race, it seems that Alexander Lukashenka must this time fight for his position as leader of the country and as president. Electoral competition is quite active and people are reacting to a new format of political life. He heavily criticized the process of collecting signatures by opposition candidates and warned that they must be careful otherwise the police may bite, in response. As a countermeasure, Lukashenka is planning – before the elections – to change the Government in the country.
Lukashenka recently mysteriously stated, in front of the KGB chief, that “we know where the wind is coming from” and once again stated that he and the chief of the KGB are keeping the situation in the country under control. Lukashenka for many years was complaining about the revolutionary processes in the post-Soviet area against local rulers and now he is afraid that such a scenario is in the cards for his country as well. During the meeting, he publicly reiterated that “Maidan is not going to happen in Belarus” and that he knows “those who blow the wind.” The only issue is whether they are going to initiate the process of “Maidanization” before the elections or afterward. But he threatened opposition “Maidans”, saying that neither a “Zelensky” nor a “Pashinyan” scenario is going to happen in the country and he directly and publicly gave an order to the director of KGB that the destabilization of the political situation in the country is not allowed. Lukashenka is ready to involve the Army against the opposition in the case of a “Maidan” scenario.
Like Ukraine, Belarus is hoping for foreign financial assistance. From the EBRD, Minsk is expecting to receive in the near future around 10 million Euro for SME to help deal with the economic fallout of the pandemic.
At an international level, Belarus is advocating closer relations between the Eurasian Union and its potential trading partners. Moldova now has observer status and in the near future, it looks that Uzbekistan will follow suit. For example, representatives from Moldova took part in the high-level event in the Eurasian Union for the first time. Egypt is ready to sign a free trade agreement with the Eurasian Union. The foreign policy of Belarus does not limit itself, this week Belarus again received humanitarian help from China for the fourth time.
Moldova
It is commonly assumed that Moldova doesn’t have access to the Black Sea but this is not in fact the full truth. Moldova has one tiny inland coastline on the Danube River which allows access to the world ocean. On this coastline, Kishinev is developing its own port Giurgiulești. This week the President of Moldova pledged its support to the strategic importance of the port for the economic independence of the country. It is necessary to deepen the river bed in order to be able to receive large-capacity vessels. In Giurgiulești, there is an oil loading, grain, and the passenger terminal for a railway junction that connects Moldova with neighboring countries. The seaport of Giurgiulești is located at the confluence of the Prut into the Danube at the junction of the borders of Moldova, Romania, and Ukraine. Giurgiulesti has the status of a seaport thanks to the Convention on the Danube Regime.
Along with the struggle with Coronavirus in the country, there is a serious political confrontation between different political groups. The most symbolic element of this confrontation is the draft of the law which allows foreign NGOs to increase their power in the country. Additionally, this law is supported by both the opposition and the European Union and the EU promised to provide more financial assistance to the country if the law is adopted. The President stated this week that such a law would turn Moldova into a “banana republic” with NGOs able to determine the future of the country.
Baltic States fighting against fake news
Analysts at the Lithuanian Armed Forces’ Strategic Communication Department recorded a “complex multi-stage information operation” aimed to discredit US forces in Europe, the military said in a press release. A “fake news operation” directed against US forces in Europe was carried out last week. The operation was launched after the US Army in Europe announced the renewal of the Defender 2020 Plus military exercise, previously canceled due to the coronavirus. The recent operation involved two fake news articles. They presented a counterfeit “view” of Christopher G. Cavoli, US Army Europe general, and Patrick O’Neal, US Army officer, allegedly stating that the Baltic states and Poland were not capable of training in the exercise. In the second phase, fake email letters imitating the authorship of the Baltic News Service (BNS) and the Polish defense minister were sent to the media, institutions in other countries, and international organizations.
Moreover, the Latvian Ministry of Interior Affairs submitted draft legislation to the Parliament for combating false news. The amendments provide for allowing the court to decide on the termination of media which distributes false, misleading, or distorted information. Currently, there is no regulation for combating false news in Latvia and no definition thereof.
The Baltic States and China
This week the Lithuanian National Cyber Security Centre (NKSC) reported that the Chinese Hikvision and Dahua surveillance cameras used by Lithuanian institutions and leaders are vulnerable to interception and some are connected to servers in Russia. Also, it was indicated that these cameras have 61 points of vulnerability, send data to Russian servers, can be remotely accessed by their manufacturers, and use lightly protected passwords. Once the password is intercepted, the cameras can be switched on and off and their settings can be changed. Furthermore, the Chinese manufacturers also have unhindered access to the equipment for maintenance, which means they are able to freely log into the cameras. Users are also directed via Chinese IP addresses to Russian servers for software updates, which may end up harvesting user data. For specialists, it is also suspicious that a mobile app that can be used to allow remote control from mobile phones collects sensitive data about the user and the equipment. The war against China is taking on an interesting micro-level dimension.
The Lithuanian Government is preparing to adopt a “5G Development Plan” which sees the rollout of the technology in at least one city by 2022 and to cover most of the country’s populated areas by 2025. In particular, Lithuania plans to sign a memorandum on 5G with the United States and perhaps with other countries. The use of Chinese technology has been a contentious issue, with the US urging its allies to ban companies like Huawei from their networks. According to the Lithuanian Intelligence Service, the recent intensification of Belarusian-Chinese and Russian-Belarusian military cooperation has become a “risk factor” for Lithuania. The first sign of the risk to the Baltic States could be seen when the Russian and Chinese navies conducted joint drills in the Baltic Sea, but now the cooperation is intensifying.
Further disinformation attacks have been reported by the Latvian Ministry of Defense. The disinformation campaign targeted the NATO Enhanced Forward Presence (eFP) battlegroup in Latvia focused on the effects of the coronavirus pandemic and claimed that the battlegroup had been particularly hard hit by the virus, claims which were rejected as wholly untrue. Estonia’s Ministry of Defense has highlighted the need to remain vigilant even as the emergency situation in the country expired early last week.
Autor
Ridvan Bari Urcosta
Senior Analyst at Strategy&Future
Strategy&Future
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