March 10 2022 Edition
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We have had 2 issues this week – a war in the other side of the world and biblical flooding in the East side of Australia. Really enough for a month’s worth of news!
Both these news items have a long way to play out and both are going to lead to change that right now cannot be predicted.
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Major Issues.
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Unis ‘should be punished’ for producing poor-quality teachers
Julie Hare Education editor
Feb 27, 2022 – 4.44pm
Universities that allow student teachers to graduate without basic skills in classroom management, how to teach literacy and numeracy or understanding the needs of Indigenous and disadvantaged kids will be financially penalised under a proposal to the federal government.
“Far too many graduates are leaving university unprepared to teach children how to read,” the report into the preparation of the teaching workforce says.
Under the proposal, universities would be subject to an extra layer of performance-based funding that would take away government-subsidised places from those schools that fail to demonstrate their graduates have the skills to be classroom-ready.
The recommendation is that an independent expert body would advise the government on the allocation of subsidised places, rewarding those education departments that score highly and punishing those that do not.
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RBA to gradually increase rates to avoid mortgage shock, top economists predict
By Shane Wright and Jennifer Duke
February 28, 2022 — 5.00am
An increase in household debt during the COVID-19 recession will force the Reserve Bank to only gradually increase borrowing costs, the nation’s leading economists believe, although they warn official interest rates could easily climb above 3 per cent.
Ahead of the RBA’s March meeting on Tuesday, most economists in The Sydney Morning Herald/The Age Scope survey expect rates to remain on hold until August, with some saying home buyers could have respite until 2023.
The RBA has kept the official cash rate at a record low 0.1 per cent since November 2020, adding to its quantitative easing program that has pumped more than $400 billion into the economy through the recession.
The bank used its February meeting to end quantitative easing, and financial markets now expect it to lift the cash rate by more than a percentage point this year to deal with growing inflation pressures. The consumer price index rose 3.5 per cent through 2021 and is likely to lift higher through the first six months of this year.
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Why outgoing competition boss Rod Sims fears for the future of the market economy
Economics Editor
February 28, 2022 — 6.45am
In his parting remarks last week, veteran econocrat Rod Sims, boss of the Australian Competition and Consumer Commission, offered some frank advice to his political masters and big business.
Let me put it even more frankly than he did: if governments don’t require businesses to improve their behaviour, voters and consumers could lose faith that they’re getting a fair shake from a lightly regulated economy and fall for populist solutions that make things worse for everyone.
Though business leaders make speeches in praise of competition, the truth is businesses hate competition. Why wouldn’t they? It makes their jobs much harder. To the extent the law allows, they buy out or bankrupt small competitors, and take over big ones.
In its public statements, the Business Council poses as wanting economic “reform” in the interests of us all. Behind the scenes, it lobbies governments hard to preserve big businesses’ ability to take over competitors and to impose unreasonable terms in transactions with small businesses.
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Labor retains strong Newspoll lead as Scott Morrison, Anthony Albanese lift approval ratings
With fewer than 100 days until the federal election, the latest Newspoll shows Scott Morrison is facing a huge battle to hang on to power.
February 28, 2022 - 8:55AM
With fewer than three months before Australia heads to the polls, Labor is maintaining a strong lead over the Coalition, despite a jump in approval ratings for Scott Morrison.
In the latest Newspoll, published in The Australian, the Coalition’s primary vote has lifted a point to 35 per cent, while Labor remained solid at 41 per cent.
Mr Morrison’s approval rating has lifted three points to 43 per cent compared to the end of January, while his dissatisfaction rating has fallen to 55 per cent.
Opposition Leader Anthony Albanese – who has come under fire from the government for being “soft on China” – had his approval rating rise four points to 44 per cent.
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Australia’s self-interest dictates we give the Russian bear the respect it demands
Barrister and writer
February 28, 2022 — 6.00am
The Russian military has pushed further into Ukraine and now meets stiff Ukrainian resistance. As with so many nadirs in the West’s relationship with Russia, this war, too, was wholly avoidable. Saying this does not negate Russian culpability for this aggressive war.
A major error is made, however, especially in Western media, when Russian policy is seen as peculiarly that of Russian President Vladimir Putin, when Putin’s policies serve Russian ambitions since the tsarist empire.
When the Soviet Union formally collapsed in 1991, the West did not accept its victory over a weak and debilitated Russia. Instead, the West reneged on understandings the Russians have always said were made by the first president Bush to not expand the NATO alliance. Not only did NATO expand to include a reunited Germany but, also, a weakened Russia’s nearby, former Warsaw Pact, allies. At the same time, this originally “North Atlantic” alliance – formed to combat Soviet aggression – launched military interventions in the former Yugoslavia and, in 1999, bombed Serbia, Russia’s long-time Balkans ally.
Were this not enough, the liberal 1990s delusions of globalisation and multiculturalism gave way to the post September 11 world, the endless war on terror, foolhardy “regime change” interventions in Afghanistan, Iraq, Libya, Syria, as well as the credulous American support for the disastrous “Arab Spring”.
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Australia’s foreign policy task has just got much harder
A generation of peace between major nations is ending. That has profound consequences for Australians and their foreign policy choices too.
John McCarthy Former US ambassador
Feb 28, 2022 – 5.15pm
In recent years, Australia has had its share of hard foreign policy challenges. They are about to get harder.
A week after the Russian invasion of Ukraine, these are some of the things which we need to think about.
First, the United States’ political energy is finite. Self-evidently, Australia’s priority in recent years has been the rise of China, a priority shared by the US and the rest of the Indo-Pacific.
Ukraine’s dominance of the headlines will not last forever. But President Vladimir Putin has placed European security on the West’s front-burner in a way not seen since the fall of the Berlin Wall.
The Americans can talk and chew gum at the same time. Secretary of State Antony Blinken reminded our region of this when, as the Ukraine crisis accelerated, he attended the Quad meeting in Melbourne last month. But even a foreign policy-security apparatus as experienced as that of the US has difficulty in maintaining simultaneous sharpness of focus over a period in two major and problematic theatres.
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How Putin’s war will affect your money
By John Collett
March 1, 2022 — 8.00pm
Even though the attack by Russia on Ukraine is half a world away, its financial effects will be felt in hip pockets in Australia: with higher petrol prices, supermarket prices and mortgage repayments.
Australia’s annual headline inflation rate is running at about 3.5 per cent, but it is forecast to move higher on the back of surging oil prices and price hikes for other commodities.
Russia is a large commodity producer, especially of oil and gas. Together with Ukraine, it supplies 30 per cent of worldwide production.
The price of a barrel of oil has risen to more than 10 per cent to $US100 and the price of gas is up 20 per cent.
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Democracies vs despots: How should the world be run?
Nine News Political Editor
March 2, 2022 — 5.27am
The war in Ukraine began because a dictator with a gambler’s instincts made a bet that the West is weak. There is plenty of evidence that he is right, but it’s crucial that he is proven wrong.
Ukraine is the first hot front line in a new Cold War that will be fought across the globe in a myriad of ways for decades. Because Vladimir Putin is not acting alone and this is a fight for the way the world is run: a battle between democracies and despots.
Before declaring war Putin met with another president-for-life Xi Jinping, as the Winter Olympics began. They released a 5000-word joint communique heralding that: “Friendship between the two states has no limits, there are no ‘forbidden’ areas of co-operation.”
Beijing’s read-out of this meeting noted: “This is a strategic choice that will have a far-reaching impact on China, Russia and the rest of the world. The two countries have never and will never waver in this choice.”
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Central banks feared inflation but now confront the spectre of stagflation
Senior business columnist
March 2, 2022 — 11.56am
The Russian invasion of Ukraine and the West’s unprecedented response to it have added new complexities to the already-complex decisions the world’s two key central banks were confronting as their economies emerged from the pandemic.
The courses for the US Federal Reserve and the European Central Bank (ECB) had appeared set.
With economic growth strengthening and inflation rates, fuelled by global supply chain disruptions and shortfalls in supply relative to the surprising strength of demand – shortfalls most evident in soaring oil and fuel prices – both the Fed and ECB were about to start raising their interest rates.
The Fed was also planning to begin withdrawing some of the liquidity it had pumped into the US financial system through its massive bond and mortgage purchases in response to the pandemic and the ECB had a similar eventual exit on its horizon.
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Albanese’s eclectic entourage could make or break him at the polls
Award-winning political commentator and author
March 3, 2022 — 5.00am
On Sunday nights before Parliament sits, Anthony Albanese’s leadership group, plus senior portfolio holders and tacticians, gather in his office for dinner.
They are an eclectic bunch – different factions, life experiences and dietary requirements. Katy Gallagher is vegetarian, Mark Butler is vegan, Kristina Keneally is ketogenic, Tony Burke is coeliac, so food is a mixture of takeaway and bring your own.
The point of the gatherings, as Albanese keeps reminding them, is not to lock in decisions on issues, because that is done by shadow cabinet and caucus, but to talk about the week ahead and to toss around ideas. It can get willing. Albanese, said to be an active participant in “robust” discussions, seldom objects, so long as it is respectful and constructive.
What those dinners have done, as well as provide insights into Albanese’s management style, is strengthen the bonds and increase the trust between his frontbenchers and with him. It has also built unity.
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Gas-led recovery goes the way of toilet roll wars as consumers save economy
By Shane Wright
March 2, 2022 — 5.39pm
Scott Morrison’s gas-led recovery out of the COVID-19 recession is so 2020.
The idea of gas supporting the Australian economy as it endured the big ups and downs of the coronavirus has gone the way of sourdough starters, jigsaw puzzles and fighting over loo rolls at the local Woolies.
In its stead, consumers have stood tall and proud. And the December quarter national accounts highlight not only the importance of household spending as the Delta wave gave way to the Omicron surge but also to the economy going forward.
After the 1.9 per cent hit to growth delivered in the September quarter last year, as Victoria, NSW and the ACT bunkered down, the economy expanded 3.4 per cent through the final three months of 2021.
The growth was driven by consumers who, having been freed from their home offices and kitchen benches, could spend the money sitting in their bank accounts and enliven the economy.
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COVID 19 Information
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New research points to Wuhan market as origin of coronavirus pandemic
By Carl Zimmer and Benjamin Mueller
February 27, 2022 — 2.08pm
New York: Scientists have released a pair of extensive studies that point to a market in Wuhan, China, as the origin of the coronavirus pandemic.
Analysing data from a variety of sources, they concluded that the coronavirus was very likely present in live mammals sold in the Huanan Seafood Wholesale Market in late 2019 and suggested that the virus twice spilled over into people working or shopping there. They said they found no support for an alternative theory that the coronavirus escaped from a laboratory in Wuhan.
“When you look at all of the evidence together, it’s an extraordinarily clear picture that the pandemic started at the Huanan market,” said Michael Worobey, an evolutionary biologist at the University of Arizona and a co-author of both studies.
The two reports have not yet been published in a scientific journal that would require undergoing peer review.
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New study explains how COVID steals our sense of smell
By Roni Caryn Rabin
March 3, 2022 — 3.34pm
New York: Few of COVID-19’s peculiarities have piqued as much interest as anosmia, the abrupt loss of smell that has become a well-known hallmark of the disease.
COVID patients lose this sense even without a stuffy nose; the loss can make food taste like cardboard and coffee smell noxious, occasionally persisting after other symptoms have resolved.
Scientists are now beginning to unravel the biological mechanisms, which have been something of a mystery: the neurons that detect odours lack the receptors the coronavirus uses to enter cells, prompting a long debate about whether they can be infected at all.
Now insights gleaned from new research could shed light on how the coronavirus might affect other types of brain cells, leading to conditions like “brain fog”, and possibly help explain the biological mechanisms behind “long COVID” — symptoms that linger for weeks or months after the initial infection.
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Climate Change.
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‘We can’t wait to fix this’: Why the latest IPCC report should spur action
By Greg Mullins and Lesley Hughes
February 28, 2022 — 11.01pm
The United Nations’ Intergovernmental Panel on Climate Change (IPCC) has just updated its assessment of the existing and future impacts of climate change.
Brace yourselves because what we’re about to tell you about how Australia is and will fare is going to be a tough read.
The consequences for Australia include irreversible loss of coral reefs, loss of alpine species, collapse of forests in southern Australia, loss of kelp forests, a drastic rise in severe fire weather conditions, sea-level rise and a dramatic increase in fatal heatwaves.
Australia is one of the most vulnerable developed countries in the world. Right now, rainfall and flood records are being obliterated in south-east Queensland and Northern NSW. These communities have hardly had time to recover from past disasters and again they’re facing profound heartbreak and loss.
Every Australian remembers Black Summer, a bushfire disaster that the world’s media labelled the “canary in the coal mine” as they watched the horror of climate change playing out in real time.
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https://www.afr.com/politics/federal/how-do-you-prepare-for-floods-that-keep-coming-20220303-p5a1et
How do you prepare for floods that keep coming?
Mar 4, 2022 – 5.26pm
Lismore resident Tom Wolff and his partner Shaya Lambrechtsen have spent the past few days helping friends clean mud from their homes before it dries.
After a week of dangerous floods in south-east Queensland and NSW, which have killed 15 people, residents in flood-prone areas are once again mopping up the mess and starting to rebuild their lives.
While the worst of the floodwaters have receded, many residents are still without power, fresh food and fuel in northern NSW.
Long-time residents, such as Mr Wolff and Ms Lambrechtsen, weren’t flooded themselves, but they have pitched in to help their community which seems to be hit with natural disasters with alarming regularity.
“The problem when you are cleaning is, if the mud dries it makes the job a lot harder. So, there’s some urgency to get that ball rolling, just in terms of the amount of labour we need,” Mr Wolff said.
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‘Face reality’: Don’t build in flood prone areas, resilience boss says
By Michael Koziol, Nick O'Malley, Lucy Cormack and Charlotte Grieve
March 4, 2022 — 5.00am
Talking points
· 200,000 people on Sydney’s fringe evacuated
· 60,000 insurance claims already lodged and more to come
· NSW government plans to increase Hawkesbury-Nepean floodplain population from 70,000 residents to 130,000 by 2050
The head of the federal government’s disaster recovery agency has called for an end to floodplain development and says inundated homes should not be rebuilt, as insurers brace for one of the biggest flood claim events in Australian history.
“You’ve got people who want to live among the gum trees – what do you think is going to happen? Their house falls in the river, and they say it’s the government’s fault,” Shane Stone told the Herald.
Stone, the former Northern Territory leader and Liberal Party president appointed by Scott Morrison to lead the National Recovery and Resilience Agency, said residents must “face realities” and councils had to end their “poor planning decisions”.
“Australians need to have an honest conversation about where and how people build homes. The taxpayer and the ratepayer cannot continue to pick up the bill for these huge, catastrophic damage events.”
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Angus Taylor has allowed holders of early carbon credit units to escape their contracts
8:51AM March 5, 2022
Energy Minister Angus Taylor has again intervened in Australia’s carbon market with measures to increase supply with zero carbon reduction, just as the market was hit with concerns over the Russian invasion in Ukraine.
Taylor, with minimum consultation, has allowed holders of early carbon credit units to escape their contracts with the government to sell at a higher price.
The impact will mean more carbon units are traded with zero links to carbon reduction, which was meant to be the aim of the scheme.
It is the third time in a year the government has intervened in the market, an extraordinary comment on its support for free markets and the carbon market in particular.
The spot price for carbon units fell as low as $29 a unit on Friday after the news, from a high of over $50 a unit before the Russian invasion of Ukraine and an overnight price of $47.
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Royal Commissions And The Like.
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House prices slowed sharply in February as Sydney records first monthly fall since 2020: CoreLogic
March 1, 2022
Housing prices slowed sharply through February as Sydney recorded its first monthly fall since 2020, according to new data from CoreLogic.
The property researcher’s monthly index showed prices rose 0.6 per cent nationally last month in what was the smallest gain since the pandemic boom began in October 2020 and close to half the January result (up 1.1 per cent). The result has continued the softening trend in growth rates that have been occurring since April 2021.
Every capital city and broad state regional areas are now recording a slowing in trend in value growth, although at an increasingly divergent rate.
The weakest results of the month were achieved in the country’s two largest cities, which also have the most significant weighting in the national headline figure. Sydney recorded a fall 0.1 per cent, while Melbourne held steady (no change) through February.
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National Budget Issues.
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https://www.rba.gov.au/media-releases/2022/mr-22-05.html
Media Release Statement by Philip Lowe, Governor: Monetary Policy Decision
Number 2022-05
Date 1 March 2022
At its meeting today, the Board decided to maintain the cash rate target at 10 basis points and the interest rate on Exchange Settlement balances at zero per cent.
The global economy is continuing to recover from the pandemic. However, the war in Ukraine is a major new source of uncertainty. Inflation in parts of the world has increased sharply due to large increases in energy prices and disruptions to supply chains at a time of strong demand. The prices of many commodities have increased further due to the war in Ukraine. Bond yields have risen over the past month and expectations of future policy interest rates have increased.
The Australian economy remains resilient and spending is picking up following the Omicron setback. Household and business balance sheets are in generally good shape, an upswing in business investment is underway and there is a large pipeline of construction work to be completed. Macroeconomic policy settings remain supportive of growth.
The resilience of the economy is evident in the labour market, with the unemployment rate at a 14-year low of 4.2 per cent. Underemployment is also around its lowest level since 2008. Hours worked declined significantly in January due to the Omicron outbreak, but the decline in infection rates and high numbers of job vacancies point to a strong bounce-back over the months ahead. The RBA's central forecast is for the unemployment rate to fall to below 4 per cent later in the year and to remain below 4 per cent next year.
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Property prices ‘set to tumble 15 per cent’ as Ukraine crisis bites
Market commentators highlight short-term fluctuations but say prices have traditionally bounced back from downturns caused by international crises during the past 35 years.
Duncan Hughes Reporter
Mar 4, 2022 – 5.00am
Fall-out from the Russian invasion of Ukraine could slow Australian residential property sales, increase inflationary pressure and accelerate a downturn in prices of about 15 per cent, say market analysts.
That’s despite Australia’s property markets generally performing well during major economic, military, and terrorist crises over the past 35 years.
The biggest local threat from the Ukrainian crisis – outside escalating into a regional or nuclear war – is likely to be rising oil and energy prices increasing inflationary pressure and the prospect of higher interest rates.
“While the Ukraine war may take a bit off growth due to the negative impact on confidence, it’s unlikely to drive a recession locally,” says AMP chief economist Shane Oliver.
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Health Issues.
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Mozzie warning after Japanese encephalitis virus found in NSW, Vic
People in three states are urged to shield themselves from mosquito bites after the discovery of a virus that can turn life-threatening.
Residents in NSW, Victoria and Queensland are being warned to protect themselves from mosquito bites after the detection of a virus that can turn into a potentially life-threatening condition.
Traces of the mosquito-borne Japanese encephalitis (JE) virus were found in samples from commercial pig farms at five locations in southern and western NSW, indicating the disease is likely circulating in the mosquito population, a NSW Health spokesman said.
Additional traces were also found in the northern Victorian town of Echuca and in southern Queensland.
The JE virus is spread through mosquito bites and can affect humans and animals and develop into encephalitis, which can be “potentially life-threatening”, Victorian health authorities said.
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The TGA has issued a health influencer ‘ban’. This is what it means
By Sarah Berry
March 1, 2022 — 8.45am
It is not news that social media is a wild west when it comes to health information, a platform where fantasy and reality meld seamlessly.
In 2015, Melbourne-based Belle Gibson went from being a top wellness influencer, making a lucrative career out of claims she cured brain cancer through nutrition, vitamin supplements, oxygen therapy and colonics, to being among the top 10 internet villains of the year when it was revealed she never had cancer at all.
Despite her public fall from grace, many influencers didn’t skip a beat. Most aren’t making claims as grandiose as Gibson, but a cohort of influencers still share misleading posts, make fake reviews and pass off paid testimonials as genuine.
Via testimonials, which for some big names can reach an audience of millions, we hear about the ways various supplements, teas, vitamins, powders, treatments and devices healed them, helped them, saved them. And they can be paid a pretty penny to say it. Influencers can earn between $1000 and $10,000 for a post, according to Jessy Marshall, the founder of beauty, fashion and lifestyle PR agency Hive HQ.
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https://www.afr.com/politics/federal/scott-morrison-contracts-covid-19-reports-20220301-p5a0tz
Scott Morrison contracts COVID-19
Updated Mar 2, 2022 – 12.24am, first published at 12.06am
Prime Minister Scott Morrison has confirmed he has contracted COVID-19 and is suffering flu-like symptoms.
The Prime Minister tweeted a statement in which he said he had taken a PCR test on Tuesday after he developed a fever.
“I had tested myself daily since Sunday, including this morning, with all tests returning a negative result,” it read.
“I took a further test this evening after developing a fever late today. The test was inconclusive so I took a PCR test tonight which returned a positive result late this evening.”
He said he would continue many of his duties from isolation, including chairing meetings on Queensland and NSW floods and the war in Ukraine.
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International Issues.
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The Russian invasion of Ukraine is a huge wake-up call
The first unprovoked attack on a European nation since 1941 should destroy the ugly, complacent view that we never have to worry about defending liberal democracy from brutal autocrats.
Alexander Downer Columnist
Updated Feb 27, 2022 – 5.11pm, first published at 12.49pm
In the end, as I wrote in this column, I didn’t think Russia’s President Vladimir Putin would be so reckless as to attack Ukraine. I assumed he’d calculate that the Finlandisation of Ukraine by threatening it would be enough. He’d fear that the response of the West – in particular the United States – would devastate his economy and turn the Russian public against his cavalier adventurism.
After all, US President Joe Biden and his major European allies – Britain, France and Germany – had warned Putin that if he invaded Ukraine, there would be consequences.
Most Western foreign policymakers thought the same thing. They assumed that exposing Putin’s war plans, talking openly about intelligence assessments and threatening sanctions would make the Russian leader back off.
So let’s understand two things. First, Russia’s invasion of Ukraine is an absolute outrage. It is a flagrant breach of international law and the human rights of the people of Ukraine.
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Vladimir Putin, Russia’s resentful leader, takes the world to war
The war in Ukraine marks the culmination of a slide into a paranoid autocracy that earns comparison with Russia’s most brutal rulers.
Max Seddon
Feb 27, 2022 – 1.16pm
Growing up in a communal apartment in Leningrad, a young Vladimir Putin liked to chase rats across the stairwell with sticks. One day, he spotted a particularly huge rat and drove it into a corner. Suddenly, it threw itself at him, trying to leap onto Putin’s head in its bid to escape.
The incident taught Russia’s president a lesson he carried for decades. “Everyone should keep this in mind. You should never drive anyone into a corner,” he said.
On Thursday, Putin ordered his army to attack Ukraine from the north, south and east in what could be the largest military operation in Europe since the end of World War II.
Despite months of Western warnings about his plans for a brazen assault, Putin framed the invasion as a defensive operation – even going so far as to cite the relevant UN charter article – and claimed that Russia had “been left no chance to act otherwise”.
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https://thenewdaily.com.au/opinion/2022/02/28/alan-kohler-vladimir-putin-west/
6:00am, Feb 28, 2022 Updated: 5:47pm, Feb 27
Alan Kohler: Putin v the West, madness meets weakness
Ending Russian oil and gas exports could be decisive for Russian leader Vladimir Putin, Alan Kohler writes.
The immediate challenge for the United States and Europe is to decide whether to have another oil shock, deliberately, 43 years after the last one.
It’s likely the only sanction painful enough to end the invasion of Ukraine would be an embargo on Russia’s oil and gas sales to Europe, along with its exports of uranium, aluminium, nickel and titanium.
Putin’s calculation is that cutting off Russia’s exports would be too painful for the West and that sanctions other than that are bearable. He might be right.
In the 1979 oil shock after the Iranian revolution, global production only fell 4 per cent but the oil price doubled and led to stagflation, sky-high interest rates and the recession of 1982.
Russia supplies 13 per cent of world’s oil and 40 per cent of Europe’s gas, so the stakes are much higher.
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https://www.afr.com/policy/economy/russia-sanctions-to-be-felt-in-australia-20220227-p5a01j
Russia sanctions to be felt in Australia
John Kehoe Economics editor
Feb 27, 2022 – 8.00pm
The unprecedented move by Western nations to cut off Russian banks from the global financial system will cause its currency to plunge, interrupt trade with the world’s biggest gas producer and boost the price of Australian energy exports.
The expected windfall gain to liquified natural gas exporters such as Woodside Petroleum due to toughening sanctions on Russia will help offset higher petrol prices approaching $2 a litre that local motorists face due to the war in Ukraine.
The United States and Western allies at the weekend announced the removal of some Russian banks from the SWIFT global payments system, which facilitates messages between 11,000 financial institutions to enable the transfer of trillions of dollars for business and retail customers.
Major Western nations also said they would stop Russia’s central bank tapping into its $US630 billion ($870 billion) foreign exchange reserves, which will prevent Moscow propping up its exchange rate and exacerbate heavy selling of the rouble.
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How central bank sanctions could hobble Russia
The ban on Moscow’s use of its roughly $US630 billion of foreign reserves will harm its ability to withstand the cost of the Ukraine war.
Colby Smith and Claire Jones
Updated Feb 28, 2022 – 9.51am, first published at 9.29am
London | The US and its western allies unveiled the most punitive penalties to date against Russia, the latest in a barrage of sanctions rolled out in response to the country’s full-scale invasion of Ukraine.
The measures announced on Saturday (Sunday AEDT) take direct aim at Russia’s central bank and seek to hobble the country’s connectivity to the global financial system. They are intended to destabilise the Russian economy, building on sanctions imposed in recent days that target oligarchs as well as its banks, high-tech companies and aircraft makers.
“It’s becoming increasingly clear that Russia is going the way of Cuba and Iran in terms of the significance of the sanctions being imposed,” said Daniel Tannebaum, a former US Treasury sanctions official who is now a partner at Oliver Wyman, a consultancy.
A senior US administration official added that the new measures amount to Russia “getting kicked off the international financial system” and becoming a “global economic and financial pariah”.
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Is fortress ‘Mother Russia’ Vladimir Putin’s endgame?
The Russian dictator’s willingness to risk global isolation could be about practising the arguments laid out in Samuel P. Huntington’s famous ‘clash of civilisations’ thesis.
Ross Douthat
Feb 27, 2022 – 5.09pm
When the United States, in its hour of hubris, went to war to remake the Middle East in 2003, Vladimir Putin was a critic of US ambition, a defender of international institutions and multilateralism and national sovereignty.
This posture was cynical and self-interested in the extreme. But it was also vindicated by events, as our failures in Iraq and then Afghanistan demonstrated the challenges of conquest, the perils of occupation, the laws of unintended consequences in war.
And Putin’s Russia, which benefited immensely from our follies, proceeded with its own resurgence on a path of cunning gradualism, small-scale land grabs amid “frozen conflicts”, the expansion of influence in careful, manageable bites.
But now it’s Putin making the world-historical gamble, embracing a more sinister version of the unconstrained vision that once led George W. Bush astray. And it’s worth asking why a leader who once seemed attuned to the perils of hubris would take this gamble now.
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https://www.afr.com/policy/economy/ukraine-increases-the-inflation-risks-20220224-p59z8y
Ukraine increases the inflation risks
Deglobalisation is inflationary. It now makes even less sense for the Reserve Bank of Australia to maintain its wait and see policy before lifting interest rates.
Warren Hogan Columnist
Feb 27, 2022 – 1.19pm
It increasingly looks as if Australia is experiencing a sharp burst of inflation, much like what happened in the US and Europe over the past six months.
The next consumer price index report in late April should confirm further broad-based price rises across the economy. Early calculations suggest a trimmed mean result as high as 1.5 per cent in the March quarter. This will leave the annual rate fast approaching 4 per cent and take core inflation well above the Reserve Bank of Australia’s 2 per cent to 3 per cent target range.
The company earnings season has been replete with anecdotes and data points highlighting continuing severe supply chain disruptions, rising import costs and big jumps in consumer prices across a range of goods and services.
The Russian invasion of Ukraine will only add to the global inflationary pulse, with many commodity prices rising to new cyclical highs in the past two weeks. Australia, in particular, stands to benefit from rising wheat, oil and gas prices over the months and years ahead.
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China in a bind over friendship with the world’s most hated man
Beijing’s tacit support for Russia’s Ukraine invasion is further damaging China’s relationship with the West, with little upside for the Communist Party.
Michael Smith North Asia correspondent
Feb 27, 2022 – 2.19pm
Tokyo | China’s President Xi Jinping is in a bind. After using the Winter Olympics as a platform to throw his weight behind Vladimir Putin, a man he called his “best friend”, Xi now founds himself aligned with the most hated man in the world and a bloody invasion by an aggressor with no respect for sovereign boundaries.
It is unclear whether Xi knew about Putin’s plans when they declared on February 6 that there would be no “forbidden areas of co-operation” between Russia and China. Either way, he comes out of it looking bad.
Though it would have suited China for its authoritarian ally to force the United States and NATO to back down to Putin’s demands, being drawn into a full-scale military attack that will upset the global economy does not. Australian Prime Minister Scott Morrison on Friday accused Beijing of enabling Russian aggression.
The contradictions in China’s position were reflected in the mixed messages coming from Beijing over the weekend, even as the Foreign Ministry refuses to acknowledge there is an “invasion” taking place at all.
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https://www.smh.com.au/world/europe/what-putin-means-by-nuclear-signalling-20220228-p5a07n.html
What Putin means by nuclear signalling
By Malcolm Chalmers
February 28, 2022 — 11.08am
London: Vladimir Putin’s nuclear threat is most likely intended to deter further Western involvement in the Ukraine war.
Russian leaders will have read the calls from Ukrainians for a no-fly-zone over their country, policed by NATO air forces.
British Defence Secretary Ben Wallace, along with all Western governments, has rejected the idea, making clear that NATO has no intention of going to war with Russia. But the paranoid occupant of the Kremlin won’t take their word for it.
Putting nuclear forces on alert, on this line of reasoning, is intended to send a simple message to NATO - keep out of this war, and do not get any more committed than you already are.
Otherwise, the Russian President is saying, it could be Western cities, from Berlin to London to New York that could be threatened.
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Ukraine invasion: How much further will Putin go?
11:00PM February 27, 2022
Vladimir Putin’s invasion of Ukraine raises serious questions about how much further he is going to go territorially and what are his long-term geopolitical aims. And how will NATO react?
Russia’s massive use of military force leaves Europe faced with by far the most serious military challenge it has had since the end of the Cold War 30 years ago. Putin’s use of military force raises serious questions about the security of Europe and whether he might go on to threaten other members of NATO, particularly the three Baltic countries and Poland. Last Thursday morning, Russian forces launched a multi-pronged assault on the north, east and south of Ukraine. Many of us thought that his main attack would be on the Donetsk and Luhansk enclaves in eastern Ukraine, where he could easily expand the territory occupied by pro-Russian elements.
The attacks in the south along the Black Sea coast were also expected because of the important leverage Russian troops in Crimea could exert to occupy such cities as Mariupol, Kherson and Odessa. This is now occurring and Putin’s aim is to exclude Ukraine from access to the Black Sea – through which much of Ukraine’s huge grain exports must go.
Kyiv was always going to be on Putin’s wish list because of his aim to destroy the political leadership of President Volodymyr Zelensky. But many experts reckoned that attacking a city with a population of three million would bog down Russia’s invasion of Ukraine. And there would be the ensuing challenges of fighting a long-drawn-out and inconclusive urban insurgency warfare. But Putin’s aim is to install a puppet regime in Kyiv that will be subordinate to Moscow’s every wish. Most likely, he will seek to concoct an obedient regime consisting of Russian double agents and “stay behinds” presumably already occupying influential positions.
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Xi throws his hat into Moscow’s ring of fire
In casting his lot with Russia, Xi Jinping looks to be girding for years of tension with the West. Will he regret that choice now?
By THE ECONOMIST
Some saw it as a pivotal moment in China’s relationship with Russia, and indeed in the crisis over Ukraine. On February 19, Wang Yi, China’s Foreign Minister, speaking by video link to a conference in Munich, declared that the “sovereignty” and “territorial integrity” of countries should be protected, adding, lest anyone misunderstand, “Ukraine is no exception”. It sounded like an affirmation of international norms, just as Russia’s President, Vladimir Putin, was about to shatter them.
But three days later, after Putin recognised two separatist enclaves within Ukraine as independent republics and promised to deploy Russian soldiers to defend them, it became obvious that Wang had been presenting only a veneer of high-minded diplomacy.
As the US and Europe imposed sanctions on Russia, condemning Putin’s assault on Ukraine’s sovereignty and territorial integrity, China called on “all sides” to exercise restraint and “avoid continued escalation of the situation”.
On February 23, the foreign ministry’s chief spokesperson, Hua Chunying, said America was making the situation worse by “sending weapons to Ukraine, heightening tensions, creating panic and even hyping up the possibility of war”.
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The private life of Putin – who is the man behind the Iron Curtain?
More than any world leader, we still see only what Russia’s president wants us to see. Here’s what we do know about him.
Guy Kelly and Matt Qvortrup
Feb 28, 2022 – 10.40am
Of all the qualities required for being an effective spy, two surely sit right at the top of the deck: the ability to take on the appearance of whatever people want you to be; and a talent for knowing when to keep schtum – especially on the subject of yourself.
Vladimir Putin, it’s no surprise to learn, was an effective spy, even if he was known for taking risks. He grew up dreaming of working as a secret agent, was the son of a member of the secret police, and joined the KGB straight out of college. Over 16 years in the security service, he rose to the rank of lieutenant colonel, until the collapse of the Soviet Union in 1991.
The nature of that start to life meant that eight years later, when the diminutive Putin was elected prime minister, then president, of the biggest country on the planet, nobody was quite sure who he was or where he had come from. Like any good agent, he could write his own backstory.
A quarter of a century on, time in which Putin has travelled from unknowable political fledgling to czarist global pariah, certain convenient aspects of his myth have become calcified, but the majority remains cloudy. More than any world leader, we still see only what he wants us to see.
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Vladimir Putin’s grand plan is unravelling
But a cornered Russian president could become even more ruthless and dangerous.
Gideon Rachman Columnist
Updated Mar 1, 2022 – 9.42am, first published at 9.19am
Vladimir Putin is a “genius”, chortled Donald Trump. The former US president was speaking on the very eve of Russia’s invasion of Ukraine — and was lost in admiration for the “very savvy” man in the Kremlin.
So, what has this genius achieved? Days into the invasion and Russian troops have failed to win the quick victory that Putin was counting on.
Ukrainian resistance is much fiercer than the Russian leader anticipated, as Ukraine’s army fights back and the population mobilises. Captured Russian soldiers have been filmed complaining that they were told they were going on a training mission.
The international response has also been tougher, more co-ordinated and united than Putin bargained for. Russia is being cut out of the global financial system. Most European airspace has been closed to Russian airlines.
There has been a historic reversal in German foreign and security policy — with Berlin finally sending weaponry to Ukraine and pledging to spend more than 2 per cent of gross domestic product on defence.
The NATO alliance has been given a new sense of purpose. Russia is turning into a pariah, with even China failing to back it at the UN — it abstained instead.
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The nine reasons why Ukraine’s riches matter to the world
Louis Ashworth
Mar 1, 2022 – 7.55am
London | Capturing resource-rich Ukraine would give Vladimir Putin control of a cornerstone of the global commodities market.
The former Soviet state is a superpower in several crucial goods and is a key supplier for global metals and food markets.
The UK is unlikely to be directly affected as it imports little from Ukraine. But supply disruptions and the impact of sanctions if applied to areas annexed by Russia have already sent ripples across global markets.
Analysts at the Centre for Strategic and International Studies said last month that “Russian annexation of some or all of Ukraine would increase Russian manpower, industrial capacity and natural resources to a level that could make it a global threat”.
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The West’s plan to isolate Putin: Undermine the rouble
By targeting Russia’s central bank, American and European leaders have taken aim at what could be one of Putin’s greatest weaknesses: the currency.
Patricia Cohen and Jeanna Smialek
Mar 1, 2022 – 9.44am
In Russian cities, anxious customers started lining up on Sunday in front of ATM’s, hoping to withdraw the money they had deposited in banks, fearful it would run out. The panic spread Monday. To try to restore calm, the Bank of Russia posted a notice on its website: “The volume of bank notes ready for loading into ATMs is more than sufficient. All customer funds on bank accounts are fully preserved and available for any transactions.”
Even before the sanctions were announced over the weekend, the rouble had weakened. On Monday it plunged further, with the value of a single rouble dropping to less than 1 cent at one point. As the value of any currency drops, more people will want to get rid of it by exchanging it for one that is not losing value — and that, in turn, causes its value to drop further.
In Russia today, as the purchasing power of the rouble drops sharply, consumers who hold it are finding that they can buy less with their money. In real terms, they become poorer. Such economic instability could stoke popular unhappiness and even unrest.
“If people trust the currency, the country exists,” Michael S. Bernstam, a research fellow at the Hoover Institution at Stanford University, said. “If they don’t, then it goes up in smoke.”
The sanctions aimed at the banking system were announced during a tense weekend in which Putin put his nuclear forces on a higher level of alert. The United States, the European Commission, Britain and Canada agreed to remove some Russian banks from the international system of payments known as SWIFT and to restrict Russia’s central bank from using its storehouse of hundreds of billions of dollars’ worth of international reserves to undermine the sanctions.
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Putin’s violent thuggery has roused a powerful opponent
Political and international editor
March 1, 2022 — 5.00am
As a lightning strike illuminates a dark landscape, Russia’s invasion of Ukraine has shown us a great deal, very quickly, about the underlying nature of countries and their leaders.
First, Russia. Russia’s Vladimir Putin last week confirmed that he’s a psychopathic mass murderer. This week, his rapid resort to heightened nuclear alert tells us that he is under pressure and frustrated with the way his war is developing.
Putin already had flexed Russia’s nuclear muscle. He’d already brought forward by months the annual military exercises that demonstrate the readiness of the Russian strategic nuclear missile force.
And just before Putin launched last week’s invasion, he hinted at using his nukes against countries that sought to interfere with his plan, threatening “consequences of the kind you’ve never faced before in your history”. Subtle, no?
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Three big military decisions the Ukrainians will have to make soon
By Mick Ryan
March 1, 2022 — 3.30pm
In their 1999 book on military strategy in the era of globalisation, Unrestricted Warfare, two Chinese colonels wrote: Warfare has re-invaded human society in a more complex, more extensive, more concealed, and more subtle manner. Over the past five days, war has re-invaded European society with Russia’s invasion of Ukraine, although it has been anything but subtle.
The Ukrainians are fighting hard (and smart) for their people, and the idea of a free and democratic society. This sense of purpose for combatants and the citizens they serve is critical. At the same time, it is not clear that the Russian soldiers fighting in Ukraine have a similarly compelling sense of purpose.
We are approaching a critical phase in the Russian conquest of Ukraine. There have been multiple commitments of Western lethal and non-lethal aid in the past 72 hours. Concurrently, the Russians continue to commit more combat forces. According to background briefings at the Pentagon, Russia now has committed about 75 per cent of its combat power initially arrayed at the Ukrainian border.
After an initial lack of progress, it is likely that the Russian military leadership has rethought its strategy and will change its operational approach in the Ukraine. This will result in an increase in the use of artillery, rockets, thermobaric weapons, and air delivered munitions as they turn to their more traditional approaches to war to secure their version of “victory”.
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We are in a new ideological conflict more dangerous than the Cold War
The new conflict is not one between communists and capitalists, but one between irredentist tyranny and liberal democracy. In many ways, this will be more dangerous than the Cold War.
Martin Wolf Columnist
Mar 2, 2022 – 9.34am
Nobody knows how this will end. But we do know how it began. Vladimir Putin has mounted an unprovoked assault on an innocent country. He has committed the worst act of aggression on European soil since 1945 and has justified this vile act with outrageous lies.
He has also, for the moment, united the west against him. Putin is not the first tyrant to confuse a wish for peace with cowardice. He has instead roused the anger of western peoples. The result is a range of sanctions on Russia as impressive as it is justified.
Putin may be the most dangerous man who has ever lived. He is dedicated to restoring Russia’s lost empire, indifferent to the fate of his own people and, above all, master of a vast nuclear force.
Yet resistance, however risky, is imperative. Some will insist that Putin’s actions are the west’s fault and above all the result of its decision to extend NATO.
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Europe must stop paying for the Russian gas financing Putin’s war
There should be an EU-led energy embargo until Russia withdraws its forces to its pre-February 24 borders, says a former IMF chief economist.
Simon Johnson
Mar 1, 2022 – 11.58am
On February 24, the first day of the full-scale invasion of Ukraine, the West paid Russia about $US500 million ($690 million). That’s the average daily value of purchases of Russian energy by the European Union, the United Kingdom and the United States. As the conflict continues, the daily flow of cash has remained about the same. Europe, in particular, is effectively financing Russian aggression, the destruction of lives and livelihoods, and the creation of a massive refugee crisis. Why?
The short answer is that the West has been slow to recognise the full danger of Russian President Vladimir Putin’s intentions. For millions of Ukrainians, the continuing flow of money is fuelling tragedy.
The strength – and weakness – of Russia’s economic position is evident from its foreign-trade statistics, which were analysed in a working paper published last month by the Bank of Finland Institute for Emerging Economies. Most of Russia’s exports are oil, petroleum products and gas ($US240 billion in 2019), and more than half go to the EU. The rest of Russia’s exports combined ($US48.5 billion) amount to less than the value of its gas exports ($US51 billion).
China buys 28 per cent of Russia’s oil, but only 5 per cent of its petroleum products and 1.1 per cent of its gas. The EU buys 63.9 per cent of Russian gas and Britain buys another 4.5 per cent.
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Why the US won’t fight in Ukraine
March 2, 2022 — 8.11am
Washington: As a convoy of Russian armed forces more than 50 kilometres long edges towards Ukraine’s capital, it begs the question: what will it take for the West to take direct military action against Vladimir Putin’s aggression?
While the US and its allies have condemned Putin’s “unprovoked and unjustified” invasion, President Joe Biden has made it clear he will not put American troops into Ukraine and battle Russia directly.
“That’s a world war when Americans and Russia start shooting at one another,” he told NBC’s Lester Holt this month, when asked what kind of scenario would prompt him to put boots on the ground in Ukraine. His answer was simple: “There’s not.”
Maybe so, but much can change in the heat of war. Ukrainians are fighting valiantly to defend their country, but Russia still has an incredible military force that can, and perhaps will, overwhelm the former Soviet republic if or when the convoy reaches Kyiv.
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The West is wreaking financial havoc in Russia. The rest of the world has escaped - for now
Senior business columnist
March 1, 2022 — 12.05pm
The impact of the West’s draconian financial sanctions on Russia at the weekend have been immediate and dramatic, plunging Russia’s banking and financial system into crisis and forcing its authorities to respond with unprecedented actions to try to avert a complete implosion.
The combination of the sanctioning of Russia’s central bank, the freezing of its foreign exchange reserves, the cutting off of most Russian access to the SWIFT international messaging system that underpins global financial transactions and the more conventional sanctions on its banks and companies wrought havoc in Russia’s financial markets on Monday, with spillover effects elsewhere.
The value of the Russian rouble slumped 30 per cent before a modest recovery to be 20 per cent down. It has fallen 30 per cent against the US dollar in the past two weeks to be worth less than one US cent.
Russia’s central bank, after an emergency meeting, more than doubled its policy rate, from 9.5 per cent to 20 per cent.
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‘Give me everything I want and I’ll call off my troops’: Putin
By AFP
AFP
9:34PM March 1, 2022
Russian President Vladimir Putin laid out conditions for ending his invasion of Ukraine after five hours of talks between the two countries’ represent atives on the Belarusian border.
Shortly before the talks broke up on Tuesday morning Australian time, agreeing merely to hold a second round of negotiations “soon”, Mr Putin laid out his prerequisites for ending the war in a phone call with French President Emmanuel Macron.
“Putin stressed that a settlement is possible only if Russia’s legitimate security interests are unconditionally taken into account, including the recognition of Russian sovereignty over Crimea, the demilitarisation and denazification of the Ukrainian state and ensuring its neutral status,” the Kremlin said.
A Macron aide said the French President had urged Mr Putin to spare civilians, civilian infrastructure and Ukraine’s road network during their 90-minute call, the latest in series of exchanges between the leaders. “President Putin confirmed his willingness to make commitments on these three points,” the aide said.
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https://www.afr.com/world/europe/russia-is-a-potemkin-superpower-20220301-p5a0ql
Russia is a Potemkin superpower
Putin may well take Kyiv. But even if he does, he will have made himself weaker, not stronger.
Paul Krugman
Mar 2, 2022 – 11.26am
Beware, Vladimir Putin: Spring is coming. And when it does, you’ll lose much of whatever leverage you had left.
Before Putin invaded Ukraine, I might have described the Russian Federation as a medium-size power punching above its weight in part by exploiting Western divisions and corruption, in part by maintaining a powerful military. Since then, however, two things have become clear. First, Putin has delusions of grandeur. Second, Russia is even weaker than most people, me included, seem to have realised.
It has long been obvious that Putin desperately wants to restore Russia’s status as a Great Power. His already infamous “there is no such thing as Ukraine” speech, in which he condemned Lenin (!) for giving his neighbour what Putin considers a false sense of national identity, made it clear that his aims go beyond recreating the Soviet Union – he apparently wants to recreate the tsarist empire. And he apparently thought that he could take a big step toward that goal with a short, victorious war.
So far, it hasn’t worked out as planned. Ukrainian resistance has been fierce; Russia’s military has been less effective than advertised. I’ve been especially struck by reports that the early days of the invasion were hampered by severe logistical problems – that is, the invaders had a hard time providing their forces with the essentials of modern war, above all fuel. It’s true that supply problems are common in war; still, logistics is one thing advanced nations are supposed to be really good at.
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Ordinary Russians mull their future as sanctions bite
Price hikes, runs on banks, cancelled foreign travel and even their damaged reputation around the world are just some of the problems facing Putin’s people.
Misha Zelinsky Special correspondent
Mar 2, 2022 – 12.46pm
Lviv | Russian lawyer Anya was preparing for an overseas holiday when her country invaded neighbouring Ukraine. Now, concerned about her future as the West sanctions Russia, she’s mulling selling her Moscow apartment and leaving for good.
“I was supposed to pack my bags for an Austrian holiday. Now I pack my apartment. I need hard US currency to protect my wealth and my options,” the 30-year-old tells me via instant messaging app Signal.
“I don’t think they will be prioritising Russian visas right now.”
Ordinary Russians are facing the prospect of higher prices and crimped foreign travel after heavy Western sanctions were imposed on Russia to shut off its economy from the global financial system.
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How the West’s financial straitjacket could defeat Putin’s military might
Internal panic and a run on Russian banks to dump the crashing rouble means we may be witnessing the first use of overwhelming economic force to help resolve a modern armed conflict.
Richard Holden
Mar 2, 2022 – 12.21pm
Vladimir Putin’s unprovoked invasion of Ukraine has led many people to lament an end to the relative orderliness and stability of the post-Cold War era.
According to this view, we are confronted with huge uncertainty. Uncertainty about how this conflict will end, about Russia’s future territorial ambitions, about China’s response. Even about the use of nuclear weapons.
But at least one certainty remains. If people are worried about getting access to their money, there’s going to be a bank run.
The underlying reasons are very different, but we’ve seen a version of this movie before: Greece 2015. In a hyperconnected world, a crisis of financial confidence can turn into a modern-day bank run on an entire country. Fast.
And that is exactly what we are witnessing in Russia. In real time, no less. From early on Sunday morning there were long lines at ATMs, with Russians scrambling to get their roubles out and convert them into something, anything, that might hold its value.
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https://www.afr.com/world/europe/three-scenarios-for-how-this-war-ends-20220302-p5a155
Three scenarios for how this war ends
If Putin goes ahead and levels Ukraine’s biggest cities and its capital, Kyiv, he and all of his cronies will never again see the London and New York apartments they bought with all their stolen riches.
Thomas L. Friedman
Mar 2, 2022 – 5.31pm
The battle for Ukraine unfolding before our eyes has the potential to be the most transformational event in Europe since World War II and the most dangerous confrontation for the world since the Cuban missile crisis.
I see three possible scenarios for how this story ends. I call them “the full-blown disaster,” “the dirty compromise” and “salvation.”
1. The disaster scenario is now underway
Unless Vladimir Putin has a change of heart or can be deterred by the West, he appears willing to kill as many people as necessary and destroy as much of Ukraine’s infrastructure as necessary to erase Ukraine as a free independent state and culture and wipe out its leadership.
This scenario could lead to war crimes the scale of which has not been seen in Europe since the Nazis — crimes that would make Vladimir Putin, his cronies and Russia as a country all global pariahs.
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https://thenewdaily.com.au/opinion/2022/03/03/kohler-bitcoin-putin-currency/
6:00am, Mar 3, 2022 Updated: 9:06pm, Mar 2
Alan Kohler: This could be Putin’s way out of his currency prison
This week, cryptocurrency exchanges one and all turned down a request from Ukraine to join the sanctions and freeze Russian accounts, because it would go against their libertarian values.
Which is ironic given they are tacitly supporting an anti-libertarian autocracy.
But there may end up being more to this irony than meets the eye.
The Russian invasion of Ukraine is the first major conflict since the invention of Bitcoin, another small way in which it is unique in the history of wars.
An isolated aggressor can now theoretically use borderless, decentralised Bitcoins to do its business instead of the fiat currency system from which it has been expelled.
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The battle for Kyiv will be on a scale the world hasn’t witnessed for 75 years
Military leader and strategist
March 2, 2022 — 3.45pm
It is six days since the Russian conquest of Ukraine began. Six long days where the Ukrainians have courageously defended their homeland against the behemoth that is the Russian military machine. Until this point, the ground combat, with battles large and small, has largely taken place outside of major populated areas. That is about to change.
Currently, the war is split between two key areas, and two forms of military operations. The north and northeast front on one hand is slow and plodding. The southern front on the other seems to be seeing a more imaginative form of combined arms and joint force manoeuvre.
Kremlin warns Kyiv residents to flee the city as at least five killed as Russian missile hits TV tower
But in both areas, there is an increasing focus on cities. On surrounding them and capturing them. In his recent book on urban warfare, British scholar Anthony King wrote that “urban combat has become a central, maybe even defining form of warfare in the 21st century. In the 20th century, armies prepared to fight in the field. Today, it seems all but inevitable that they will fight in cities.” Written just a year ago, these words are prophetic.
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Joe Biden’s all-American crisis of confidence
Joe Biden is poised to follow Jimmy Carter’s fate unless he applies history from 50 years ago to rescue his presidency from terminal malaise.
From Inquirer
March 2, 2022
It is just over a year since some eminent historians were comparing Joe Biden to Franklin Roosevelt or Lyndon Johnson and hailing the advent of a “transformative” presidency. My response at the time was that it was more likely to be a reprise of Jimmy Carter’s. This is starting to look as good a prediction as my January 2 call that war was coming to Ukraine.
It was on July 15, 1979, that Carter delivered what came to be known as his “malaise” address to the nation – though the word did not appear in the text. Intended as a bold, broad-brush speech “about national concerns, the energy crisis, reorganising the government, our nation’s economy, and issues of war and especially peace”, it has gone down in history as a political suicide note.
“It’s clear,” Carter said, “that the true problems of our nation are much deeper … than gasoline lines or energy shortages, deeper even than inflation or recession.” He quoted one of many American religious leaders and intellectuals with whom he’d recently spoken: “We are confronted with a moral and a spiritual crisis.”
He went on dolefully: “A crisis of confidence … strikes at the very heart and soul and spirit of our national will. We can see this crisis in the growing doubt about the meaning of our own lives and in the loss of a unity of purpose for our nation. The erosion of our confidence in the future is threatening to destroy the social and the political fabric of America … Our people are losing … faith, not only in government itself but in the ability as citizens to serve as the ultimate rulers and shapers of our democracy.”
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Brutal invasion should be a wake-up call for Western politicians
The Ukraine crisis is a wake-up call for Western politicians, corporate leaders, and economists shown to lack any practical or strategic sense of how to get to a green future.
Kenneth Rogoff Columnist
Mar 3, 2022 – 12.39pm
Russia’s brutal invasion of Ukraine should be a wake-up call for Western politicians, corporate leaders, and economists who advocate a green and equitable future but lack any practical or strategic sense of how to get there.
Regardless of what short-term tactics Europe and the United States use in responding to the current crisis, their long-run strategy needs to put energy security on a par with environmental sustainability, and funding essential military deterrence on a par with financing social priorities.
The Soviet Union collapsed in 1991 in no small part because Russia’s leaders, most of all president Boris Yeltsin and his economic advisers, recognised that the Soviet communist military-industrial complex could not afford to keep up with the West’s superior economic might and technological prowess.
Today, with Russia’s economy less than one-20th the combined size of the US and EU economies, the same strategy of vastly outspending Russia on defence should be much easier to execute. Unfortunately, there is a hesitancy in many Western societies, particularly on the left, to admit that defence spending is sometimes a necessity, not a luxury.
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https://www.afr.com/world/europe/the-harsh-reality-is-russia-is-winning-the-war-20220303-p5a1bz
The harsh reality is Russia is winning the war
The first week of Vladimir Putin’s invasion of Ukraine has been the best week for American grand strategy in a very long time. But those achievements won’t mean anything, if the instability can’t somehow be contained.
Ross Douthat
Mar 3, 2022 – 11.57am
Let’s start with a very cold-sounding observation. The first week of Vladimir Putin’s invasion of Ukraine has been the best week for American grand strategy in a very long time.
Before the invasion, the United States faced the following set of challenges: First, we had in Ukraine a tacit client state but not a formal ally, to which we had committed just enough support to make it a tempting target for Russian aggression but not enough – for sound strategic reasons – to actually protect it.
Then we had a set of formal allies, our friends in western and central Europe, that were economically dependent on Russian resources and less-than-eager to shoulder new military burdens.
And we faced a near-superpower rival, China, whose growing Pacific ambitions require American resources and attention, both of which were tied up by our inability to hand off our responsibilities in Europe.
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https://www.afr.com/world/europe/why-ukraine-is-the-war-we-can-t-ignore-20220303-p5a1l2
Why Ukraine is the war we can’t ignore
Whatever Putin intended with his attack on Ukraine, his bombs have set off a seismic geopolitical shockwave that could tilt the terrain of great-power politics for a generation.
Hans van Leeuwen Europe correspondent
Mar 4, 2022 – 10.05am
London | At the start of this year, only a real politics boffin would’ve had any idea who Volodymyr Zelensky was - let alone how to spell his name. Now he is ubiquitous: on every social media platform from TikTok to Twitter; on your TV screens; and even on Amazon, where you can buy an “I don’t need a ride, I need ammo” T-shirt.
For the West, the ever-quotable Zelensky is the leading face of the war in Ukraine. But he is not the only face: anyone with even a passing interest will have seen crying children, stoic soldiers, gutsy gun-toting grannies, and graphic, terrifying footage of the Russian bombardment.
Mostly it’s not CNN clips or a Getty image - it’s videos taken by ordinary people on their phones and posted on social media. It’s real, it’s relatable.
You can watch unarmed villagers swarm a Russian jeep, or a lone man waving a pair of Ukrainian flags in a town square as ominous tanks look on. You can see a Russian soldier, standing by his military vehicle, flag down a passing motorist to cadge some diesel - and be told to go back to Russia. You can watch and re-watch the moment Kharkiv’s benign city hall is blown to smithereens, or Ukraine’s television tower taking a hit.
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Putin’s terrified team blindsided by invasion
By Marc Bennetts, Maxim Tucker and Didi Tang
The Times
March 4, 2022
President Putin concealed his plans to invade Ukraine from his cabinet and officials were not prepared for the punishing scale of international sanctions, an investigative website has reported, citing sources close to the Kremlin.
The government was only aware that Putin planned to recognise the two Kremlin-backed separatist regions in eastern Ukraine, formulating its economic policies on the understanding that sanctions would be relatively light, the Agentstvo media outlet said.
“This is f***ed up. They are out of their f***ing minds!” a source was quoted as saying. Many government officials were ready to resign in protest but feared this would be seen as treason, a source said, adding: “Resignation will lead only to a prison camp.”
Before its troops began the full-scale invasion on Thursday, February 24, the Kremlin repeatedly denied it planned to attack. Russian media are banned from using the terms “war” or “invasion” on penalty of imprisonment, and ordered to refer only to a peacekeeping mission or special military operation to keep order in eastern Ukraine.
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https://www.afr.com/world/europe/it-is-very-clear-putin-has-no-plan-b-nyt-columnist-20220303-p5a1hu
‘It is very clear Putin has no Plan B’
Vladimir Putin has four choices: lose early, lose late, lose big or lose small. So, what could happen next?
Lulu Garcia-Navarro, Thomas L. Friedman, Ross Douthat and Yara Bayoumy
Mar 4, 2022 – 10.30am
We’re headed into the second week of Russia’s war on Ukraine. Russian forces have escalated their assault on Ukraine’s second-largest city, Kharkiv. With its ground forces bogged down by logistical failures, Moscow has turned to aerial bombardment of civilian targets across Ukraine.
Refugee agencies estimate that more than 600,000 people have fled to nearby European countries. In his State of the Union address, US President Joe Biden promised that Russia would face more pain for its actions. But has the West reached the limits of what it can do with economic measures?
Yara Bayoumy, the world and national security editor for Times Opinion, and the columnists Thomas L. Friedman and Ross Douthat joined Lulu Garcia-Navarro, a Times Opinion podcast host, to discuss what could happen next.
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Molotov cocktail: the DIY grenade destroying Russian tanks for decades
For all that is unique about this war, by resorting to the “poor man’s grenades”, the Ukrainian people are, in fact, joining a long tradition of guerillas, rioters and underdogs.
Daniel Capurro
Mar 4, 2022 – 1.55pm
In ordering the invasion of Ukraine, Vladimir Putin’s biggest miscalculation may have been his apparent assumption that the Ukrainian people would immediately give in to Russian troops – or even welcome them as liberators.
Analysts talk of never having seen such high morale or determination from a civilian population. And there has been no greater symbol of the grim defiance with which Ukrainians have responded to the invasion than the Molotov cocktail.
From mothers and students gathering to distil the petrol bombs, to social media videos of drive-by Molotov attacks and official guides on how to make and use them, the improvised weapon has become an essential way for Ukrainian civilians to oppose their would-be occupiers.
“Right now, nobody is drinking much beer anyway because of the war, so we decided to use the bottles to make Molotovs instead,” Juri Zastavniy told The Telegraph earlier this week. He is the manager of Pravda Brewery in Lviv, western Ukraine, which has gone from making “Putin the D***head” beer to petrol bombs.
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Isolated Putin a ‘lonely, vulnerable man’, says Australian spymaster
Andrew Tillett Political correspondent
Mar 4, 2022 – 6.29pm
Russian President Vladimir Putin is an increasingly lonely and vulnerable leader, and stamping out dissent following his invasion of Ukraine could be his undoing, Australia’s foreign spy chief said in a rare interview.
Warning that the clash between democracies and authoritarian states was getting “starker”, Australian Secret Intelligence Service director-general Paul Symon said the sharing of intelligence among Western agencies in the run-up to the war and since fighting broke out in Ukraine was at an unprecedented level.
Russian forces dramatically raised the stakes on Friday, with shelling setting a training building on fire close to Europe’s biggest nuclear power station.
US President Joe Biden and UK Prime Minister Boris Johnson both urged Russia to stop fighting near the Zaporizhzhia power station in Ukraine’s south-east. Russian forces have already captured the defunct Chernobyl power station, which remains highly radioactive after its reactors melted down in a 1986 disaster.
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Wartime commodity rally fuels global growth fears
Richard Henderson and Peter Ker
Mar 4, 2022 – 4.00pm
War in Europe has pushed commodity prices to levels not seen since the financial crisis, adding to upwards pressure on consumer prices and muddying the outlook for growth and inflation at a pivotal moment in the global recovery.
The S&P GSCI benchmark, one of the broadest measures of global commodities, this week touched its highest level since 2008 as conflict in Ukraine pushed the prices of raw materials that underpin the global economy, from oil to wheat, aluminium and precious metals, higher.
The rally has triggered fresh concerns for growth as advanced economies enter a fragile phase of monetary tightening.
Central banks – including the US Federal Reserve, the most influential for global markets – are walking a fine line as they attempt to tighten policy settings without triggering a recession.
Higher commodity prices will increase the cost of producing goods, adding a further inflationary jolt as countries such as the United States grapple with consumer price growth running at their highest levels in decades.
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End of ‘the end of history’ suddenly speeds up
The complacent post-Cold War assumption that globalisation was enough to defend liberal democracy has been shattered by the Ukraine crisis.
Mar 4, 2022 – 5.33pm
If Russia’s invasion of Ukraine was “going to plan”, as Vladimir Putin claimed during Friday morning’s blustering television address, Kyiv would now be occupied, Ukrainian President Volodymyr Zelensky would be captured or dead, and a Kremlin-controlled puppet government would have waved the white flag. And Europe’s biggest nuclear power plant would not have been shelled and caught fire.
The reality is that Russia’s advance remains unexpectedly stalled due to the heroic resistance of Ukraine’s army and civilian forces. Russia’s overwhelming military superiority probably means that the inevitable seizure of Ukraine is being delayed at the cost of a higher casualty toll and greater economic pain than Mr Putin anticipated. However, the stalled invasion has allowed the West to both boost military aid to Ukraine and to belatedly stiffen the financial sanctions targeting Russia’s banks and the rouble.
What the Ukraine crisis has suddenly sped up is the end of the “end of history” era of globalisation that supposedly began with the 1989 fall of the Berlin Wall. The economic benefits of nation-states integrating into a more prosperous global economy are unquestioned. However, the complacent post-Cold War assumption that globalisation was enough to keep the peace and defend liberal democracy has been shattered by the first unprovoked attack on a sovereign nation in Europe since World War II.
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Putin’s energy shock is becoming a world food crisis. Brace for rationing.
By Ambrose Evans-Pritchard
March 4, 2022 — 11.13am
The world was facing a grain supply crunch even before Putin’s invasion of Ukraine.
The United Nations food price index was already higher in real terms than at the height of the global hunger crisis a decade ago, when Tunisian bread protests set off the Arab Spring.
The tight global market for grains, vegetable oil and fertilisers was probably one of the many reasons that Putin chose this moment to strike, calculating - wrongly it may prove - that the West would not dare to squeeze him too hard.
The world faces what amounts to a commodity “black swan” across the gamut of primary resources. Oil, gas, coal and the “ags” are all spiralling higher together, with metals catching up fast. It is a systemic stagflation shock, an intractable problem for central bankers. It acts like a war reparations tax on the economies of importing nations and is ultimately contractionary.
Natasha Kaneva, from JP Morgan, said inventories of tradable commodities are critically low and the world is running out of safety buffers. This is a recipe for “non-linear price increases”, she said.
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Isolated Putin’s only lifeline: become Xi’s puppet
Peter Hartcher
Political and international editor
March 5, 2022 — 5.00am
Only one person can save Russia from the worst consequences of the shattering international sanctions imposed on it in the past week. It’s not Vladimir Putin. The fate of Russia’s economy and Putin’s regime is now in the hands of the man he describes as his “best friend”.
China’s President Xi Jinping alone has the power to keep the Russian economy functional and Putin in power. The Moscow share and derivatives market remains shut because the authorities know what would be revealed if it allowed them to open. How?
Because the securities of 27 of Russia’s biggest companies continued trading in London for a few days until they were suspended this week. And the losses were horrendous. Before suspension, they’d lost between 90 and 100 per cent of their value since the beginning of the invasion of Ukraine. The sanction-hit Sberbank was down by 99.7 per cent to trade for just one penny, for instance. Oil giant Lukoil had lost 99.2 per cent.
Russian government bonds have been downgraded to junk status. The rouble has fallen further in the past week than it did during the country’s 1998 default. In other words, world financial markets consider Russia to be all but bankrupt.
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How Ukraine president Volodymyr Zelensky found his roar
The Economist
10:55PM March 4, 2022
On the morning of February 26, Volodymyr Zelensky posted a video of himself on Twitter. After a night of the worst fighting Kyiv had seen since the second world war, and of propaganda from Moscow claiming he had fled the capital in fear, Ukraine’s president emerged from his office red-eyed and unshaven.
He was holding a smartphone in his right hand as he filmed himself walking past the House with Chimaeras, a famous Kyiv landmark that serves as the presidential residence.
He smiled at the camera and declared: “Good morning to all Ukrainians! There are a lot of fakes out there … (but) I am here.”
The former actor and comedian looked exhausted but happy: happy to be alive, happy that Kyiv had not fallen and happy to play the role of a national leader, holding his nerve and his country together in the darkest hour of its 30-year history as an independent state.
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The Ukraine nuclear plant fire was contained. But experts fear what’s to come
Michael Birnbaum
Mar 5, 2022 – 3.11pm
For a small tribe of veteran atomic experts who helped secure the Soviet Union’s nuclear energy and missiles as it started to fall apart in the late 1980s, the grainy images of the fighting around the Zaporizhzhia nuclear power plant in Ukraine, Europe’s largest, were like something out of a frightening alternative reality.
That smoke. Those tracers. That fire. They, more than most others, knew the precise mechanics of how an accident could quickly turn into disaster.
Although the damage appears to have been contained - and Europe spared a nuclear disaster on the level of Fukushima - nuclear experts said they were still fearful as Russia’s military battles its way across Ukraine. The country has four active nuclear power plants and one failed one, Chernobyl, whose radiation still requires constant upkeep.
“This morning I thought about the Cuban missile crisis,” said Frank von Hippel, a theoretical physicist at Princeton University, who tracked loose nuclear weapons on behalf of the Clinton White House and helped lead efforts to calm the nuclear arms race with the Soviet Union.
“This is the first time we’ve had a war among nuclear reactors,” von Hippel said. “That was not a scenario we considered.”
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https://www.afr.com/policy/foreign-affairs/decades-of-pacifism-gone-in-a-day-20220303-p5a1im
Decades of pacifism gone in a day
Berlin’s post-Cold War foreign policy was rich in moralism but poor in morality. It left Germany defenceless, Eastern Europe weak, and Vladimir Putin expecting an easy victory in Ukraine.
Oliver Hartwich Contributor
Mar 4, 2022 – 11.19am
In less than a week since Russia invaded Ukraine, the war has turned German politics upside down.
We are used to seeing about-faces, changes of mind, and U-turns in politics. But what happened in Berlin on Sunday morning, announced by new Chancellor Olaf Scholz, left the normal volatility of politics far behind.
In a special sitting of the Bundestag, both the government and the major opposition party jointly discarded decades-old German positions.
Germany has elevated security to the top of its political agenda. And finally dumped the weak, amoral, and irresponsible foreign policy of the Merkel years.
They did so across the fields of foreign, security, defence, and energy policy. The goal: to create a strong country able to defend its interests and without dependence on rogue states for its energy needs.
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Pandemic, war: The global supply chain crisis keeps getting worse
By Ana Swanson
March 3, 2022 — 11.16am
The Russian invasion of Ukraine has rattled global supply chains that are still in disarray from the pandemic, adding to surging costs, prolonged deliveries and other challenges for companies trying to move goods around the world.
The clash in Ukraine, a large country at the nexus of Europe and Asia, has caused some flights to be cancelled or rerouted, putting pressure on cargo capacity and raising concerns about further supply chain disruptions. It is putting at risk global supplies of products like platinum, aluminum, sunflower oil and steel, and shuttering factories in Europe, Ukraine and Russia. And it has sent energy prices soaring, further raising shipping costs.
The conflict is also setting off a scramble among global companies as they cut off trade with Russia to comply with the most far-reaching sanctions imposed on a major economic power since the end of the Cold War.
The new challenges follow more than two years of disruptions, delays and higher prices for beleaguered companies that use global supply chains to move products around the world. And while the economic implications of the war and sweeping sanctions on Russia are not yet clear, many industries are bracing for a bad situation to get worse.
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Aggressor Russia’s economy pushed to brink of failure
4:13PM March 4, 2022
While Russia rains bombs and missiles down on Ukrainians, its own citizens are under a different type of assault as Western sanctions push the country’s economy to the brink of collapse.
Everyday Russians are feeling the effects of the economic sanctions, which have already pushed interest rates to 20 per cent as the central bank desperately scrambles to prevent a further collapse in the rouble.
After a 30 per cent plunge in the value of the currency, runaway inflation for imported goods – if they are available at all on shop shelves – will slash already stagnant living standards.
In a desperate attempt to prop up the currency and as Russians lined up to take their money out of ATMs, the central bank doubled the key interest rate from 9.5 per cent to 20 per cent – shoring up deposits, but destroying lending.
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I look forward to comments on all this!
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David.
