Good morning. Here’s your Daily Situational Awareness for Thursday, 07 July 2022.
- READ TIME: 3 min 50 seconds
- Russia-NATO INTSUM
- Indo-Pacific INTSUM
- Geopolitical INSTUM
FIGHTERS SEIZE SHIPS IN MARIUPOL: Russian-backed fighters seized two vessels and their crews in Mariupol. Donetsk People’s Republic fighters damaged a Liberian and Panamanian flagged vessel before capturing the crews and holding them in Russian-controlled territory. These attacks and seizures are unlikely to incentivize commercial vessels to return to Ukraine’s ports, limiting future export potential. – D.M.
RUSSIA MOBILIZING ECONOMY FOR WAR: Russia’s legislature approved emergency powers for the Kremlin to bolster the economy. Under the new powers, Russia’s government will temporarily reactivate “mobilization capacities and facilities,” access its strategic reserves, loosen labor laws to expand working hours “at night, on weekends and non-working holidays,” and use single suppliers for state defense orders. – D.M.
PESKOV: RUSSIA WILL ENSURE SECURITY: Kremlin spokesman Dmitry Peskov said Finland’s proposed NATO basing will require a proportionate response from Russia. The mayor of Lappeenranta, near the Russian border, said the local economy and infrastructure will benefit greatly from a NATO presence, and he hopes it comes through. No final decisions on new NATO facilities in Finland were announced. – D.M.
CHINA AND INDIA BUY $24 BILLION IN RUSSIAN OIL AND GAS: Despite the long list of sanctions placed on Russia by the U.S. and its E.U. partners, Russia has made over $24 billion from selling energy to China and India in the first three months following Russia’s invasion of Ukraine. China bought $18.9 billion in oil, gas, and coal from February through May of this year. India bought $5.1 billion over the same timeframe, a 500% increase from the same period last year. “China is already buying essentially everything that Russia can export via pipelines and Pacific ports,” said Lauri Myllyvirta, lead analyst at the Center for Research on Energy and Clean Air, who has been tracking Russian energy flows since the war broke out. She added, “India has been the main buyer of the [energy] out of the Atlantic that Europe doesn’t want anymore.” – M.M.
CHINA TO FACE NEW EXPORT BANS MODELED ON RUSSIA SANCTIONS: The Biden administration is using lessons it learned from its sanctions of Russian companies over the war in Ukraine for new export bans on Chinese companies. The new export bans will attempt to limit China’s military and technological advances. This latest model for sanctions reportedly involves broadening the circumstances under which so-called export controls would be imposed – essentially redefining what technologies are considered of potential use to military and security agencies. Biden admin officials are concerned that Chinese companies are helping to build a surveillance and enforcement apparatus that persecutes political and ethnic enemies of the state through extrajudicial punishment, and imprisonment. – M.M.
PAKISTAN FACING INFLATIONARY WILDFIRE: Pakistan is experiencing soaring food and fuel prices as its foreign exchange reserves, used to pay for imports, are shrinking at an alarming pace. If the situation continues unabated, Pakistan will face bankruptcy before the year is out, following in the footsteps of its regional neighbor Sri Lanka. Currently, Pakistan has enough foreign currency reserves to pay for five weeks of imports. Since it imports nearly all of its fuel, cooking oil, and food grains, severe food and energy shortages are on the horizon. Although Pakistan’s primary benefactor, China, has increased lending to the struggling nation, its currency reserves remain volatile following a political crisis that resulted in the ousting of Prime Minister Imran Khan earlier this year over allegations of corruption and financial malfeasance. – M.M.
U.S. INTELLIGENCE WARNS CHINA BUYING INFLUENCE WITH U.S. POLITICIANS AND BUSINESS LEADERS: A new report from the National Counterintelligence and Security Center warns that a broad range of entities, including the Chinese Communist Party as well as its intelligence and security services are using “economic benefits” to buy influence with U.S. and foreign political leaders and business leaders. The report states that such efforts are taking place at all levels of government – state, local, and federal – as well as national institutions in academia. The report warned that “In partnering with any foreign entity, U.S. state and local leaders should exercise vigilance, conduct due diligence and ensure transparency, integrity, and accountability are built into the partnership to guard against potential foreign government exploitation.” – M.M.
ISRAELI – ARAB AIR DEFENSE NETWORK TO COUNTER IRAN MISSILE THREAT: The range of threats from Iran and its proxies in the Middle East, particularly armed drones and ballistic missiles, has resulted in increasing cooperation between Israeli and Arab nations. One aspect of this cooperation is a coordinated air defense network. A single operational air defense picture is now possible with a majority of Arab nations employing U.S. -made radar and missile systems that are compatible with Israeli systems. According to retired General Frank McKenzie, former commander of U.S. Central Command, a Middle Eastern alliance of Arab and Israeli nations, now employs an integrated air defense picture to share information about Iranian missile and air defense threats to the region. – M.M.
SRI LANKA JOINS RUSSIAN ALLIANCE: Sri Lanka’s President, Gotabaya Rajapaksa, announced yesterday that he and Russian President Vladimir Putin had a productive discussion on how Sri Lanka and Russia could work together for mutual benefit of their respective nations. Rajapaksa requested a Russian line of credit to help Sri Lanka deal with their current financial dilemma and, in return, opened his country to Russian business interests, including a restart of international flight operations with Russian air carrier AeroFlot. Rajapaksa said Russian fuel and tourists were vital to rescuing the country’s faltering economy.
IN TODAY’S EARLY WARNING: Mike provides an update to the domestic economic outlook. You can get access to his daily Early Warning report here: https://forwardobserver.com/subscribe
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