March 17 2022 Edition
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Sadly we find
ourselves with the news both from Ukraine and the floods seemingly getting
worse as the war ramps up and the scale of the flood disaster becomes clear, with a slack Federal Governmemt response!
We seem to have a ‘perfect storm’ of just dreadful news right now, after a few dreadful years.
I hope we can all be kind to each other as we pass through the sad and horrible period.
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Major Issues.
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https://www.afr.com/policy/economy/a-perfect-storm-awaits-big-super-20220306-p5a27f
A perfect storm awaits big super
The Australian dollar is exposed to dramatic upside risk as geopolitics and the rise of big super collide.
Grant Wilson Contributor
Mar 6, 2022 – 2.41pm
Back in December, we highlighted that big super had been on a manic buying spree coming out of the first wave of the pandemic. We said “plenty can go wrong” and that the sector needed to “tread carefully”.
There were four aspects to this.
First, the flows into global equities and investment fund shares registered in the balance of payments commencing in the financial year 2020-21 were massive.
We have confirmation last week from the Australian Bureau of Statistics that the final quarter of 2021 was more of the same. Over 18 months the cumulative outflow stands at $261 billion, or some 13 per cent of GDP.
There is no historical precedent, in outright or relative terms. It is not even close.
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Australian tenants’ burden set to worsen as rents rise
6:16PM March 6, 2022
Financial strain on Australia’s tenants is expected to worsen in the coming months, with the increase in rental prices to continue to outpace wage growth.
The national cost of long-term rental accommodation has climbed 16.6 per cent since March 2019, two months prior to the last federal election, according to analysis by property researcher CoreLogic.
While the degree of the rental changes varies across capital cities and regional locations, the data shows the housing crisis continued to worsen during the pandemic because of strong competition for few homes.
Weekly costs for tenants are also likely to be affected by rising inflation, while an expected hike in interest rates could see costs filter down from landlords.
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Fund managers need to factor Russia-Ukraine risks into their strategies like ESG investing
8:11PM March 6, 2022
The Ukraine invasion shows global investors need to start getting ahead of big political tensions before they erupt into flashpoints rather than offloading assets after the event, according to a leading fund manager.
The rush by investors to cut their exposure to Russia over the last week, collectively amounting to tens of billions of dollars around the world, shows money markets are playing a bigger role than ever in exerting political pressure in global events.
But fund managers now need to consider geopolitical risks and build them into their environmental, social and governance (ESG) investment strategies, says Reece Birtles of the $9bn Martin Currie Australia.
His comments come after dozens of Australian super funds disclosed their exposure to the conflict over the past week and pledged to bail out of their investments – with most of their share or bond exposures representing just a fraction of their portfolios.
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Media commentators exposed by premature judgments on conflict in Ukraine
6:08AM March 7, 2022
Never have so many sweeping global forecasts been published with so little evidence as during the first week of Russia’s invasion of Ukraine.
Partly this is the triumph of 24-hour digital publishing. Once expert opinion was carefully considered; now the digital beast is so hungry, commentators can barely keep up with demand.
Last week some commentators were declaring as early as Tuesday night that Ukraine had won, simply by standing up to Russian President Vladimir Putin. By Wednesday some were forecasting a new world order in which a united US and NATO would be ascendant over China and Russia.
It was a premature judgment to say the least. Others saw ominous signs of the moral decline of the West in Putin’s calculated adventurism.
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https://www.afr.com/wealth/people/the-nation-s-50-richest-women-revealed-20220303-p5a1d5
The nation’s 50 richest women revealed
The wealth of the nation’s richest women has jumped $7.4 billion as technology entrepreneurs, led by Canva’s Melanie Perkins, climb the Rich Women rankings.
Julie-anne Sprague and Michael Bailey
Mar 7, 2022 – 5.00am
If you’re interested in having a weekend, don’t start your own business, says West Australian iron ore magnate Gina Rinehart, who tops this year’s Financial Review Rich Women List with an estimated fortune of $30.7 billion.
“There is simply no substitute for hard work, focus and dedication,” Mrs Rinehart told The Australian Financial Review when asked for her advice for women starting a business or wanting to expand one.
“For those who are interested in short work hours, not working weekends and public holidays, and ‘work life balances’, starting a business may not be for them; many businesses fail.”
Mrs Rinehart has built an iron ore and agricultural empire throwing off $7.3 billion in net profit in 2021, eclipsing the profitability of three of the nation’s big four banks.
In second place is Melanie Perkins, co-founder of Canva, followed by mining heiress Angela Bennett and then Fiona Geminder and Heloise Pratt, reflecting their share in the Visy Australia business.
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Supply chains must move from just in time to just in case: PM
Phillip Coorey Political editor
Mar 7, 2022 – 10.30pm
Economic and national security policy have become inextricably linked in the “new era” of global unrest, meaning Australia and its allies must move from a “just in time” model of supply of vital goods, to one of “just in case”, Scott Morrison says.
In the keynote speech to open The Australian Financial Review Business Summit on Tuesday morning, the Prime Minister will also shun the left-wing “build back better” model of economic recovery, saying he wants the economy to return to the business-led model that delivered 28 years of successive economic growth before the pandemic struck.
As part of having a more shock-resistant economy, Mr Morrison will outline seven supply chain priorities but say Australia alone cannot solve all the problems exposed by the COVID-19 pandemic and worsening global insecurity, but must do so in concert with trusted partners.
He nominates as supply chain priorities semiconductors, agricultural chemicals, water treatment chemicals, telecommunications equipment, plastics, pharmaceuticals and personal protective equipment (PPE).
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Prepare for prolonged war in Ukraine and insurgencies: PM Morrison
By David Crowe
Updated March 7, 2022 — 5.37pmfirst published at 3.41pm
Australians must prepare for a “prolonged” war in Ukraine that requires a heavy cost on Russia for launching its invasion, Prime Minister Scott Morrison has warned in remarks that also step up calls on China to do more to end the conflict.
Mr Morrison said Russian President Vladimir Putin had to suffer an economic and diplomatic price for starting the war on top of the losses his forces were already seeing on the battlefield, suggesting a long resistance from Ukrainian forces would increase those costs.
But the Prime Minister cautioned against the hope that Ukraine might emerge from the war with its independence assured and slammed the “chilling silence” from China when it had more leverage over Mr Putin than other countries.
Asked if Ukraine would emerge sovereign, independent and whole at the end of the conflict, Mr Morrison said “I’m not confident of that outcome at this point” but added that Mr Putin could not be confident, either, of gaining the victory he expected.
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War, inflation fears darken consumer mood: Westpac survey
March 9, 2022
Talk of floods, war, inflation and higher interest rates have spooked households.
Westpac’s latest consumer sentiment survey showed confidence has turned negative for the first time since September 2020, with the bank’s confidence index dropping from 100.8 points in February to 96.6pts in early March, revealing pessimists outnumbered optimists.
Westpac chief economist Bill Evans said the latest deterioration in the mood among households “comes as no surprise”.
“The war in Ukraine; the floods in south-east Queensland and Northern NSW; ongoing concerns about inflation and higher interest rates were all likely to impact confidence, although the size of the decline is still notable,” Mr Evans said.
“Just over two thirds of Australians expect interest rates to increase over the next year – the highest proportion since August 2011,” he said.
Awareness of issues around inflation have “exploded”, he said.
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Ukraine crisis risks more ‘persistent’ inflation: Reserve Bank governor Philp Lowe
8:20AM March 9, 2022
Reserve Bank governor Philip Lowe warns the Ukraine energy price shock could lead to high inflation being “more persistent and broadbased”, risking “a shift in inflation psychology” that could “require a larger monetary policy response”.
Dr Lowe also said Russia’s invasion of its neighbour was a “new major risk to the global economy”, although Australia will escape the worst of the direct fallout as higher commodity prices boost exports and national income, and he reiterated that it was “plausible that the cash rate will be increased later this year”.
The RBA governor said the flood disaster on the east coast was “causing severe disruptions in some areas at the moment, but GDP is expected to increase by around 4.25 per cent this year” – unchanged from the bank’s February forecast.
In a speech to the AFR’s business conference this morning, Dr Lowe acknowledged “there is a risk to waiting too long (to raise rates), especially in a world with overlapping supply shocks and a high headline inflation rate”.
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https://thenewdaily.com.au/finance/finance-news/2022/03/10/alan-kohler-optimists-leadership/
6:00am, Mar 10, 2022 Updated: 7:55pm, Mar 9
Alan Kohler: The optimists have failed us. Pessimists, please report for duty
The main problem we have as a society is that all of our leaders – politicians and executives – are optimists one and all, not a pessimist among them.
It goes with the job. You can’t be a leader unless you’re an optimist because you must persuade those around you that not only will everything turn out great, but also that only you can make it so.
A gloomy doomsayer would never be elected to high office or get appointed to run a company: The shareholders and voters wouldn’t believe they could improve their lot.
Preparing for the worst
But while optimists make good leaders in good times, they don’t prepare for the worst because they think the worst won’t happen – I know because I am one, to whom the worst has sometimes happened, always unexpectedly.
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‘They will never forget, never forgive’: Flood backlash tipped at polls
Award-winning political commentator and author
March 10, 2022 — 5.00am
Kevin Hogan is very angry with Shane Stone. “Grossly insensitive” is how Hogan described last week’s intervention by the National Recovery and Resilience Agency Co-ordinator-General when he effectively blamed flood victims for their misfortune by telling Nine mastheads: “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.”
Stone, appointed to the job by Scott Morrison to help people in the regions cope with floods and fires, apparently didn’t get his own memo, the infamous “mean and tricky” letter he sent to John Howard in 2001 warning the then-prime minister to be more responsive to suffering Australians, saying voters thought his government was dysfunctional and out of touch.
Hogan, a National, is the federal member for Page, which includes the devastated city of Lismore. He says the locals are traumatised. The last thing they needed was Stone’s cold-hearted observations. “We are absolutely wiped out,” Hogan told me. “We know floods. Everyone knows what to do. Everyone had prepared.”
But no matter how much they prepared, they could not spare themselves or their community the devastation. He says residents had been advised on the Sunday flood water levels would reach 11.5 metres. They reached 14.5 metres. They woke in the early hours of the next morning to find water invading their homes. Hogan’s electorate office was subsumed and there was some damage to his property, but he dismisses what happened to him as “insignificant” compared to what so many others suffered.
Hogan says he contacted the Defence Minister Peter Dutton at 6am on the day the water rose higher than had been predicted – more than 10 days ago – asking for urgent help.
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Market chaos: The only thing investors can bank on is more volatility
By Mohamed A. El-Erian
March 10, 2022 — 8.13am
Whether it was friends or total strangers, everyone seemed to have the same question for me on a recent trip. Is it time to buy the dip in stocks? After all, US stock markets have already had a few encouraging bounces in the past two weeks of trading, though they proved both temporary and more than fully reversible.
Few have liked my answer because it contends that economics, finance and related policies have been relegated to the back seat when it comes to the drivers of price action. At this stage, their market question is closely related to a political and national security calculation associated with Russia’s invasion of Ukraine: Is there an off-ramp for Vladimir Putin anytime soon? If there is, the occasional bounce could translate into a sustainable longer-term rally. Absent that, more unsettling financial market volatility is in the cards.
The war aggravated what was already an unpleasant start to 2022 for stock investors. The top US stock indexes are now down 10 per cent to 18 per cent this year, while widely followed indexes for Europe and emerging markets have fallen 15 per cent and 12 per cent, respectively.
Until recently, BTD was a profitable strategy — so much so that the investor conditioning that came with it made the dips less pronounced and shorter, especially as “fear of missing out” and “there is no alternative” to stocks joined the fray. What made BTD particularly successful is that markets were consistently supported by huge and predictable injections of liquidity from central banks as well as interest rates pinned near zero.
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https://www.afr.com/policy/economy/liberal-world-order-must-win-against-brute-force-20220310-p5a3cv
Liberal world order must win against brute force
Economics is now downstream from increasingly ugly global politics. But economic interdependence is the way for Australia to never face the test that Ukraine is going through.
Mar 10, 2022 – 8.38pm
In an impassioned live address to Britain’s Parliament from his bombarded capital, Ukraine’s President Volodymyr Zelensky has told the world that his country faces its “to be or not to be” moment.
Rarely is William Shakespeare’s great question posed so starkly as this. Forty-two million Ukrainians are in a fight for their lives against an invader who claims that their nationhood never existed. Their inspiring defence of it has given Vladimir Putin his bloody answer.
There is a need for caution here. Many great powers have begun wars badly, and then they won. Russia’s attempt at quickly decapitating Ukraine’s government in the first days failed, and it seems neither prepared nor equipped for a long conflict.
Its logistics and air operations lack any sophisticated planning or coordination. But Russian generals may be aware of their limitations, and are moving their superior firepower at the speed they expected. They are slowly surrounding cities, building up for long sieges, and turning attention to decimating Ukraine’s civilians rather than engaging its armed forces. Their faster advance from the south might cut Ukraine in half and effectively partition it.
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Why gas is Australia’s best weapon against Putin
Chief political correspondent
March 11, 2022 — 5.00am
The war in Ukraine has descended so quickly into crimes so great that the moral case for a powerful response grows stronger by the day. The latest atrocity, the bombing of a maternity hospital in Mariupol, only adds to the urgency about what else can be done to stop the Russian invasion.
The primary hope is to break the Russian economy. Australia has joined global sanctions to impose a crushing financial penalty that might be enough to halt the attacks, impose extreme pressure on Vladimir Putin and convince other autocrats that similar ventures will trigger the same costs.
But the economic assault is yet to stop the Russian President after almost two weeks of radical steps designed to crash his currency and paralyse his central bank. These steps are certain to bring severe financial hardship to millions of ordinary Russians, with hyperinflation in prospect, yet success depends on whether this pain can force Putin to relent, if not retreat.
Yet, the reality is that Australia has few ways to add to this pressure. It is doing less than in recent conflicts: there are no Australian boots on the ground, aircraft in the sky or ships nearby. This reflects the essential calculation, which is cold but correct, that NATO and its allies must not go into direct combat with Russian forces and risk turning this into a nuclear confrontation.
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Blunt talk from intelligence chiefs is a welcome change
Australian politicians and officials used to treat China as the Voldemort of geopolitics – the country that could not be named. That is all changing.
Andrew Tillett Political correspondent
Mar 11, 2022 – 1.02pm
When Malcolm Turnbull introduced Australia’s foreign interference laws in December 2017, he was at pains to say it wasn’t all about China.
“These reforms are not about any one country. Foreign interference is a global issue,” Turnbull told Parliament.
The Quad and AUKUS show it’s not just Australia that’s in the crosshairs of China’s assertiveness, the National Intelligence chief Andrew Shearer tells the AFR Business Summit.
In Hanoi in August 2019, Scott Morrison was asked by a journalist why he didn’t call out China directly over its island building and other behaviour in the South China Sea. “I’m not here to make accusations, or to do any … things of that nature. It isn’t about picking sides,” the PM said after a meeting with Vietnam’s then prime minister, Nguyen Xuan Phuc.
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China wants Australia to be its vassal state, Intelligence Committee chair warns
March 12, 2022 — 2.00am
London: The chair of federal Parliament’s Intelligence and Security Committee says China wants Australia to be a vassal state like Belarus is to Russia.
Warning that “any of us could be on the receiving end of very traditional forms of hard power as we were in the 20th century,” Liberal Senator James Paterson said that if Putin does overthrow Ukraine’s government, it could inspire similar expansionism in Australia’s backyard.
Senator Paterson made his remarks in a speech to the Henry Jackson Society think tank in London following a two-week visit to meet intelligence figures in the United States and Britain.
He urged British MPs to follow Australia’s example in combatting foreign interference and pushing back in the so-called “grey zone” areas where foreign powers use a range of non-military methods to try to undermine another country.
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COVID 19 Information
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Covid-19 linked to decline in brain function
By Tom Whipple
The Times
11:16AM March 8, 2022
People who have been infected with coronavirus have reduced brain volume and perform less well on cognitive tasks, and the effect is more marked the older they are.
The findings come from a study of almost 800 people, and is the first time scientists have been able to look at the brains of the same people before and after infection. This makes it the best evidence yet for prolonged neurological consequences of an infection.
However, it is not known whether the decline may be reversed over time, or whether it could be mitigated by getting vaccinated first.
“We were quite surprised to see clear differences in the brain even with mild infection,” said Gwenaelle Douaud, from Oxford University in England. Only 4 per cent of those involved had been in hospital with coronavirus.
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https://www.afr.com/politics/federal/new-2b-plan-to-fight-winter-covid-19-surge-20220310-p5a3mx
New $2b plan to fight winter COVID-19 surge
Mar 11, 2022 – 5.00am
The federal government will spend more than $2 billion to boost preparedness for Australia’s looming winter omicron infection wave, set to coincide with the country’s first serious flu season in three years.
Tens of thousands of new COVID-19 cases a day are expected around the country, with a major drive for booster injections and flu vaccinations set to begin within weeks.
Experts are worried about a new strain of omicron – known as the BA.2 variant, which is more infectious than the original – as well the emergence of another variant of concern.
Friday’s meeting of national cabinet will consider a winter COVID-19 and influenza preparedness plan, as the Morrison government makes every effort to keep the nation’s economic recovery on track, reduce workforce shortages and slow infections in schools and social settings.
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Antiviral ‘can cause mutation breakouts’
8:08AM March 11, 2022
The Covid-19 antiviral medication sotrovimab that is widely used in Australia and around the world is causing resistant mutations of the virus to break out into the community, University of Sydney research has revealed.
When a proportion of people prescribed sotrovimab take the drug, the virus adapts within their bodies to form mutations that make it resistant to the drug. These people can then pass on the mutated virus to others, leading to breakouts of mutated strains in the community. If resistance occurs, it reduces the effectiveness of the drug by 100-fold.
The revelation comes as the so-called “cousin of Omicron” - BA.1, which is more infectious - was blamed for a significant rise in Covid-19 infections in NSW.
There were 16,288 community cases reported on Thursday, about 3000 more than on Wednesday.
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New omicron variant is one of the most infectious diseases ever known
Tom Burton Government editor
Mar 11, 2022 – 5.46pm
A new strain of omicron coronavirus, believed to be among the most infectious diseases known to mankind, is predicted to cause another nationwide surge of cases during autumn.
But new studies have confirmed vaccines and antiviral medicines seem to be as effective against the BA.2 “stealth” omicron variant as the original BA.1 strain.
The reassuring studies came as health authorities look to expand the vaccination booster program ahead of an expected national autumn wave from the more contagious BA.2 variant.
The wave is coming earlier than was predicted putting pressure on authorities and businesses to gear up for a period of high worker and student absenteeism and demands for rapid testing.
The BA.2 variant is “fitter” than the original BA.1 omicron variant and is already dominant in the UK, Denmark, Hong Kong and India, with Australia predicted to follow the UK path, where the BA.2 variant is now being seen in 80 per cent of cases.
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Climate Change.
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https://thenewdaily.com.au/opinion/2022/03/07/alan-kohler-lismore-climate-change’
Alan Kohler: Some difficult, expensive decisions will have to be made by whoever wins this election
Lismore is not the only town devastated by the Queensland and New South Wales floods, although it was probably the worst, and it embodies the problem now facing Australia from climate change.
On February 28, the water level in Lismore reached 14.4 metres. The previous high was 12.46 metres in 1890.
That also happened to be the day the Intergovernmental Panel on Climate Change published its sixth assessment report on the impact of climate change, in which it warned of “cascading, compounding and aggregate impacts on cities, settlements, infrastructure, supply chains and services due to wildfires, floods, droughts, heatwaves, storms and sea-level rise”.
There have been 29 major floods in Lismore’s history and this year’s was the worst by a long way: 90 per cent of the town’s businesses were submerged; none of the residents was unaffected.
The levee built in 2005, 10.7 metres high and designed for a one-in-10-year flood, was well overtopped by this one-in-130-year event, and the city was inundated up to its eaves.
Now what? After all, climate change is a one-way street, for both extreme weather events and insurance – there’s no going back.
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Australia ‘a harder place to live’ amid disasters: PM
Mar 9, 2022 – 1.21pm
Insurance claims from historic flooding across Queensland and northern NSW look set to reach at least $3 billion and further fuel rising insurance premiums, as Scott Morrison concedes natural disasters linked to climate change are making Australia a harder place to live.
Preparing to ask Governor-General David Hurley to declare a national emergency as soon as Friday, the Prime Minister announced millions in new federal government assistance and promised an urgent start to the recovery effort.
Visiting the hard-hit town of Lismore, in the Northern Rivers region of NSW, Mr Morrison said rubbish removal would take up to a month to complete, promising federal and state governments would work with local communities to speed up mitigation to prevent future disasters.
Another $25 million was committed for urgent emergency relief, food supply and financial counselling services.
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Mosquitoes, snakes and spiders set to increase in NSW after deluge
By Amelia McGuire and Mary Ward
March 10, 2022 — 6.55pm
Experts are warning of a rise in serious mosquito-borne diseases, and spider and snake bites, as health authorities consider expanding a Japanese encephalitis (JE) vaccination program in NSW’s south and west.
Hundreds of pig-farm workers and their families will this week receive the shots, usually given only to travellers to parts of south-east Asia where outbreaks are common. But the state’s top doctor said it was possible others would become eligible to receive the vaccine for the potentially deadly mosquito-borne disease.
NSW on Thursday confirmed its fourth case of Japanese encephalitis, which had never been seen in the state before this February.
The case in a woman in her 60s from Grafton follows confirmed cases in a man and a child from the state’s south-west, and a now-deceased man, also from Grafton, whose infection was detected in an autopsy this week.
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Amid more frequent and intense disasters, ‘hard decisions have to be made’
By Jordan Baker
March 12, 2022
Peter Cosgrove was 27 years old when Cyclone Tracy flattened Darwin on Christmas morning in 1974. Within days of the disaster, the government began loading shell shocked survivors onto aircraft and flying them to cities across Australia. They crouched in the aisles of the planes, and sat on each others’ laps. The young soldier, who already had a military cross from Vietnam and would go on to be governor-general, met their buses at a barracks on Sydney’s south head, where they could finally shower, eat, and sleep.
“They were destitute and devastated,” Sir Peter remembers. “Psychologically traumatised. They were absolutely down and out, tired beyond belief having left everything they owned, which was either blown away or saturated and ruined by the torrential rain.”
No one outside Darwin knew about the cyclone until Christmas afternoon, as communications were wiped out. But as soon as contact was made, the newly formed National Emergency Operations Centre swung into action, sending navy ships and organising the biggest air evacuation in Australian history - more than 30,000 people - which was underway within two days. Prime Minister Gough Whitlam flew from Europe to tour the city on December 29.
Sir Peter was one of the first soldiers sent to Darwin to begin the cleanup. He remembers flying over the city and seeing complete devastation. “It reminded me of aerial images of those Japanese cities in the war [Hiroshima and Nagasaki],” he said. “Seven weeks later, we were [replaced by more soldiers]. We’d been working flat out. As we were flying out of the place in a charter jet and looked out of the window again, I couldn’t see any difference.”
As residents of the Northern Rivers region sifted through their sodden houses this week, angry that help, particularly from the Australian Defence Force, did not come sooner, some wondered whether their experience was Australia’s version of Hurricane Katrina. That storm hit the east coast of the United States in 2005 and led to a flooding catastrophe in New Orleans that exposed a litany of failures by government, including an inability to get food and water to evacuation centres.
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Climate change makes Australia 'harder place to live'
Scott Morrison has called for more dams and a better approach to managing fuel loads in forests to handle natural disasters worsened by climate change.
After major floods in NSW and Queensland this past fortnight, the Prime Minister on Sunday said that Australia is becoming a harder place to live due to climate change.
But Mr Morrison said the nation's approach to climate needs to focus on resilience and adapting to climate change, as well as bringing down carbon emissions.
“Let's talk about bushfires in that context. You want to deal with resilience on bushfires, you have to do fuel load management,” he said.
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Royal Commissions And The Like.
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Thinking about a retirement village? Here’s what you need to know
Issues to consider include entry costs, ongoing fees and the financial implications upon exit.
Louise Biti Contributor
Mar 8, 2022 – 5.00am
While retirement village living and residential care are often seen as alternatives, they are not. Residential care combines accommodation and full-time daily living support while retirement villages are generally independent-living communities.
With changing consumer demands and demographics, many retirement village operators are moving towards models that offer greater levels of daily living support.
As with any property transaction, deciding to move into a retirement village requires a careful evaluation of the suitability of accommodation as well as financial affordability.
The costs of residential aged care are heavily subsidised by the federal government, but retirement villages are private contractual arrangements. The quality of lifestyle in a retirement village can depend on the standard of accommodation and services provided, so you need to have adequate financial resources to meet costs as well as personal living expenses.
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National Budget Issues.
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Defence spendathon must buy a genuine firepower boost
Military spending is being rethought around the world. But effective defence needs far more than just a higher share of GDP.
Steven Hamilton Contributor
Mar 7, 2022 – 4.44pm
Vladimir Putin may ultimately succeed in his invasion of Ukraine by the sheer weight of Russia’s military. But the incompetence of his armed forces has been exposed for the world to see. The lesson for Australia is that a highly functioning military requires a highly functioning state and highly functioning markets.
We’ve all seen the images of Russian military transports shod with cheap Chinese knock-off tyres bogged in the mud; of $50 million Russian fighter jets blown out of the sky by a single soldier wielding a Stinger missile; or of Russian troops given rations seven years out of date and forced to loot convenience stores to stay fed.
Russia spends about 4.3 per cent of its sub-par GDP on defence, 15 per cent more than the US and more than double China. What has it bought Putin? An embarrassingly inept military struggling to invade a neighbour with less than 4 per cent of the land mass, 30 per cent of the population and 10 per cent of the military spending. It should have been easy – it now appears to be anything but.
Russia’s former foreign minister, Andrei Kozyrev, put it this way: “The Kremlin spent the last 20 years trying to modernise its military. Much of that budget was stolen and spent on mega-yachts in Cyprus. But as a military adviser you cannot report that to the President. So, they reported lies to him instead.”
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No freedom without cost as war ushers in ‘new economic era’: Treasurer
Phillip Coorey Political editor
Mar 9, 2022 – 8.20pm
Australians must be prepared to bear a higher cost of living in return for standing up to aggressors and living free of fear and coercion, Treasurer Josh Frydenberg has warned.
With news of the Russian invasion of Ukraine ricocheting around the world and stoking anxiety over China, the Treasurer said the imposition of sanctions and longer term measures such as safeguarding supply chains came with a cost.
“The message to Russia and others is clear: there will be swift and significant economic costs imposed on those countries that choose to violate our fundamental international rules and norms,” he told The Australian Financial Review Platinum 70 Dinner.
“But we must not be naive about the costs these necessary actions will also impose on the West.
“These costs will flow initially in the form of higher commodity prices and, in turn, higher inflation. Already, European gas prices have nearly tripled, thermal coal prices have nearly doubled and global oil prices have risen by more than a third since the invasion began.”
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Start preparing now for higher interest rates: Lowe
Ronald Mizen Economics correspondent
Mar 11, 2022 – 4.33pm
Reserve Bank of Australia governor Philip Lowe has warned borrowers to start preparing for higher interest rates, which he acknowledges will come as an unwelcome development for many households.
Economists say surging prices of commodities such as oil, gas and coal, which have been pushed higher by Russia’s invasion of Ukraine, will cause inflation to rise sharply in the coming months.
“Indeed, the contribution from fuel to inflation is set to add 0.7ppt [percentage point] to inflation by the middle of the year,” Capital Economics economist Ben Udy said.
ANZ is tipping headline inflation to push 5 per cent by June.
The last time the official cash rate was increased was in November 2010.
An estimated 1 million-plus borrowers have never experienced rate increases.
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Health Issues.
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Over-the-counter healthcare to sink extra $3.52 billion into ads
Miranda Ward Media writer
Mar 7, 2022 – 5.00am
Advertising expenditure by over-the-counter (OTC) healthcare brands will grow by $US2.6 billion ($3.52 billion) globally between 2021 and 2023, as the sector continues to invest more money into advertising as countries settle into a new health normal following the COVID-19 pandemic, suggests media agency Zenith.
Ad spend by OTC healthcare brands will surge 36 per cent above the pre-pandemic spending level of US$16.7 billion in 2019 to $US22.7 billion in 2023, research from Zenith predicts.
While the growth will be driven by spend in India, Russia and the US, Zenith predicts in 2023 advertising spend by OTC healthcare brands in Australia will be US$463 million, or 64 per cent above the US$266 million spent before the pandemic in 2019.
While advertising spend around the world shrank as the pandemic crunched wallets in 2020, over-the-counter brands unsurprisingly stepped up their advertising investment. It grew by 6.8 per cent in 2020 as consumers sought to better understand and protect their health as COVID-19 case numbers soared.
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Out of pocket or out of care: Medical costs pile pressure on Australians
By Dana Daniel
March 6, 2022 — 9.00pm
Out-of-pocket medical costs are hitting Australian households, with more than 1 million people forking out $1000 a year on out-of-hospital services and medications, while those unable to afford it miss out on care.
A Grattan Institute analysis found the biggest spenders – about 25,000 people – paid an average $3000 a year on health expenses, with fees charged by specialists such as dermatologists, obstetricians and cardiologists a major contributor after the average gap increased by 50 per cent in a decade.
Half of cancer patients paid more than $5000 a year out of pocket on medical costs, the report said. An estimated 43 per cent of people in Australia will be diagnosed with cancer by the age of 85.
Leading cancer researcher Professor Sanchia Aranda, the former Cancer Council chief executive who chairs City Cancer Challenge, said some high-charging specialists were misleading patients and should be forced to properly disclose treatment costs.
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Bill shock: the unhealthy truth about medical specialist fees
Grattan Institute health economist and former health bureaucrat
March 7, 2022 — 5.00am
Over the past few weeks, I have been navigating the specialist medical system, and experienced first-hand the bill shock that many Australians face when they have to do the same. I was referred to a dermatologist, made an appointment, and when I got the confirmatory email discovered that the dermatologist was proposing to charge more than three times the Medicare schedule fee, meaning I would have had a huge out-of-pocket payment.
I could not in conscience support price gouging at that level, and so used my referral to see a different dermatologist, who still charged way in excess of the Medicare schedule fee, but not three times.
I’m one of the lucky ones. I can afford to pay an out-of-pocket bill for medical care. But many, many Australians are not so lucky. In 2021, an estimated half a million Australians either deferred or missed out on seeing a specialist because they couldn’t afford it.
I had another advantage over others, because I knew I wasn’t locked into seeing the specialist named on my referral. I also knew that only 10 per cent of initial consultations with dermatologists are charged at more than three times the schedule fee, so the person I was initially planning to see was a high-priced outlier.
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Expanding bulk-billing and enrolment key to making healthcare more affordable
Dr Duckett (PhD) is the director of the health program at Grattan Institute, Melbourne.
7th March 2022
Nearly every Australian uses some part of the health system every year, whether it be going to the GP, getting a prescription filled, or seeing a specialist.
Despite having a universal healthcare system, patients often still pay for these services out of our own pockets.
Sadly, these out-of-pocket payments are unaffordable for many Australians – so they skip the trip to the doctor, or defer going to the chemist.
This is bad for those individuals, but also bad for taxpayers and the economy.
It makes people sicker, widens inequities, and puts further strain on the health system down the track.
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What is Japanese encephalitis and why is it spreading in Australia?
Mosquitoes are spreading a rare tropical disease further south than ever before. What are the signs of Japanese encephalitis and why is it here?
By Sherryn Groch and Stuart Layt
March 8, 2022
Cases of a rare tropical virus have been discovered across Australia’s east coast – the first time the mosquito-borne Japanese encephalitis has spread below the country’s northern tip.
The virus is rarely fatal but a number of people have been hospitalised, at least two of them in intensive care, since authorities discovered it had been spreading undetected for weeks in piggeries across Australia’s southeast.
On Tuesday evening, Victorian health authorities confirmed a man in his 60s had died from the disease last month, after an autopsy revealed the virus. Seven cases in total have been confirmed in the state, along with two in New South Wales and one in Queensland.
The federal health department has declared the outbreak an incident of national significance and warned people to guard against mosquitoes as floodwaters and unusually humid conditions attract more of the insect down south. “We’re not going to see thousands of cases, this is not another pandemic,” says infectious disease physician Associate Professor Paul Griffin. “But we need to be on our guard. We’re seeing more of these tropical diseases flare up [in Australia] because of climate change.”
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One in four medical researchers fails to declare conflict of interest, study claims
By Lucy Carroll and Liam Mannix
March 13, 2022 — 12.15am
Talking points
· Australian researchers got $11.5 million from drug companies in the past year.
· Declaring conflicts of interest in Australia relies on an honour system.
· Disclosures are seen as crucial to keep research transparent and free from bias.
One in four Australian medical researchers fails to declare important conflicts of interest in medical trials, such as payments from big pharma companies, a new study claims.
Big pharma money has frequently been shown to influence trials – making them more likely to find what the companies want – but science continues to rely on an honour system by asking researchers to declare their conflicts of interest.
Australian medicos collected just over $11.5 million in payments from drug companies in the past year. But, in many cases, these payments are not declared when they should be, according to a new University of Sydney-led study.
The research, published in the Journal of General Internal Medicine this week, examined 120 clinical trials of new drugs, comparing the authors’ declared conflicts of interest in studies published in medical journals with a database of money they actually received.
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International Issues.
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War and Peace shows Putin is doomed to abysmal defeat
The hardware of the Russian invasion may operational, but the software of its narrative has seized up, and Vladimir Putin’s plan is failing in ways he could not have imagined.
Simon Schama
Updated Mar 6, 2022 – 11.59am, first published at 11.25am
States are built with hardware, but nations run on software. Which is the more indispensable to the life or death of a nation state, we are, through Ukraine’s bloody ordeal, just discovering.
The hardware of state power consists of armies, bureaucracies, security police, imposing buildings, abysmal prisons.
National software is something less tangible but no less powerful: the obstinacy of allegiance under extreme stress; the kinship of calamity; the surge of patriotic emotion; the fortitude of families; the swell of civic pride even as neighbourhoods are besieged or destroyed; the inconvenient resistance of truth; and, not least, the transfiguring experience of creating, amid torment, an unforgettable national epic.
The 60-kilomtere Russian convoy, stalled in the mud, hobbled by blown tyres, fuel and food shortages, is the ultimate embodiment of dumb hardware: a lumbering dinosaur, inexorably destructive, fire-breathing in its oxygen-sucking terror, yet also brainlessly impotent, incapable, for all its death-dealing, of achieving any politically strategic end.
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https://www.afr.com/world/asia/china-s-defence-spending-to-outstrip-economic-growth-20220305-p5a236
China’s defence spending to outstrip economic growth
Michael Smith North Asia correspondent
Mar 6, 2022 – 11.36am
Tokyo | China’s defence spending will outstrip its economic growth this year as President Xi Jinping’s government hunkers down for a challenging period dominated by global security tensions at the same time as China’s GDP will increase at its slowest rate in decades.
China’s lawmakers gathered in the Great Hall of the People in Beijing on the weekend to endorse a 7.1 per cent increase in defence spending, which will include enhanced combat training and “combat readiness”.
Chinese Premier Li Keqiang also announced a GDP growth target of “around 5.5 per cent” for the year, as expected. The relatively moderate target is the government’s lowest forecast in three decades, which reflects the multiple challenges facing the world’s second-largest economy.
However, interest in China’s defence spending is at unprecedented highs following Russia’s invasion of Ukraine and growing concern in the Indo-Pacific about China’s claims on parts of the South China Sea and a possible conflict with the United States over Taiwan.
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Russia can defeat Ukraine, but it can’t hold the territory
Seth G. Jones
Mar 7, 2022 – 9.34am
Russia’s ambitious invasion of Ukraine has three fronts: a northern one targeting Kyiv, an eastern one focused on Kharkiv and its environs and a southern one attempting to overrun cities including Kherson, Odessa and Mariupol from Crimea and the Black Sea. The scorched-earth campaign includes the bombardment of civilian neighbourhoods, and it seems unlikely that the Ukrainian military, however heroically it fights, will be able to prevent the occupation of some of its major cities.
But can Russian forces hold the territory that they seize? That’s far more in doubt. If past conflicts involving the occupations of hostile lands serve as a guide, the Russian army may not be able to, especially if Ukrainian citizens continue to rise up against their occupiers.
Russia has a combined 190,000 soldiers and irregular units inside and just outside Ukraine, a country of approximately 43 million people. (That figure accounts for a million people fleeing the conflict.) Those numbers translate into a force ratio of four soldiers per 1000 inhabitants. Moscow could deploy additional ground units to Ukraine, but it has not moved to do so yet - and most of those soldiers have little battlefield experience.
There are no precise formulas for how many soldiers are needed to hold conquered territory, but scholars studying past conflicts have made some estimates. Some have suggested that a force ratio of as many as 20 soldiers per 1000 inhabitants is necessary to pacify a hostile local population. One study that I co-authored concluded that the average force ratio to establish security after successful military operations is 13 soldiers per 1000 inhabitants.
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https://www.afr.com/world/europe/dear-china-whose-side-are-you-on-in-ukraine-20220307-p5a2bk
Dear China: Whose side are you on in Ukraine?
There is only one country that might have the power to stop the war in Ukraine now, and it’s not the United States. It’s China.
Thomas L. Friedman
Mar 7, 2022 – 9.00am
With every passing day, the war in Ukraine becomes a bigger tragedy for the Ukrainian people but also a bigger threat to the future of Europe and the world at large. There is only one country that might have the power to stop it now, and it’s not the United States. It’s China.
If China announced that, rather than staying neutral, it was joining the economic boycott of Russia — or even just strongly condemning its unprovoked invasion of Ukraine and demanding that it withdraw — it might shake Vladimir Putin enough to stop this vicious war. At a minimum, it would give him pause, because he has no other significant ally aside from India in the world now.
If China chooses instead to ride with the outlaws, the world will be less stable and less prosperous for as far as the eye can see — especially China.
Why would President Xi Jinping of China take such a stand, which would seemingly undermine his dream of seizing Taiwan the same way Putin is attempting to seize Ukraine? The short answer is that the past eight decades of relative peace among the great powers led to a rapidly globalising world that has been the key to China’s rapid economic rise and the elevation out of poverty for some 800 million Chinese people since 1980. Peace has been very good for China. Its continued growth depends on China’s ability to export to and learn from that world of steadily integrating and modernising free markets.
The whole Faustian bargain between the Chinese Communist Party and the Chinese citizenry — the CCP gets to rule while the people get to be steadily better off economically — depends to a significant degree on the stability of the global economy and trading system.
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Sanctions on Putin offer no playbook for China and Taiwan
The West’s earlier exclusion of Russia from a peaceful and prosperous Europe now looks mistaken. It would be foolish to try the same approach over Taiwan.
James Curran Columnist
Mar 6, 2022 – 12.34pm
Now that Vladimir Putin’s KGB strength mentality of thuggery is manifest in Russia’s invasion of Ukraine, the consensus about the advent of a new Cold War is gathering pace in world capitals.
Just as in the early 1950s, the European and Asian theatres of an assumed global ideological struggle now seemingly come together.
Then, the outbreak of the Korean War followed tensions between the two superpowers over the Marshall Plan, a divided Berlin, the formation of NATO and the Soviet Union’s acquisition of the atomic bomb.
Now the fault lines are being drawn in Kyiv and the Taiwan Strait.
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China just set its lowest target for economic growth in 30 years. It still looks ambitious
Senior business columnist
March 7, 2022 — 11.59am
China has set its lowest economic growth target in 30 years. Despite that, it’s being universally described as ambitious.
The 5.5 per cent targeted for GDP growth this year is well short of the 8.1 per cent achieved in 2021 as the economy was rebounding from the worst of the impacts of the pandemic.
It is, however, materially higher than the 4 per cent growth experienced in the final quarter last year as the economy showed signs of stress, much of it self-inflicted.
That slowdown towards the end of last year reflected some of the distress and anxiety in China’s property sector after a heavy-handed crackdown on leverage in the sector.
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Of all Putin’s errors, misreading Ukrainians is the worst
The President’s triumph in Crimea led to a fatal miscalculation about the national pride of many Ukrainians.
James Kilner
Mar 7, 2022 – 3.48pm
It should never have been like this, not in Vladimir Putin’s mind at least. When he launched his war against Ukraine, Russia’s president expected his soldiers to stroll to victory and to be greeted like heroes and saviours. Instead, they have been received as pariahs, a hated occupying force.
The victory celebration – like the one he enjoyed in 2014 after Crimea’s annexation from Ukraine, with its cheering, adoring crowds, flag-waving, brass bands, and air force flyover – will forever be a fantasy.
Of all the miscalculations that Putin has made over his Ukraine adventure – and there have been many regarding the fight that Ukrainian forces would put up, the quality of the Russian army and the hardcore sanctions that the West threw at Russia – a lack of support from Russian-speaking locals appears to have been his biggest, and his most baffling.
Anastasia is a 24-year-old IT specialist who lives in Kyiv. Her first language is Russian, although, as is common, she also speaks Ukrainian.
“Honestly, I don’t understand why Putin decided to ‘protect’ us,” she says.
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https://www.afr.com/world/europe/through-the-looking-glass-how-russians-see-the-war-20220305-p5a23t
Through the looking glass: how Russians see the war
Hans van Leeuwen Europe correspondent
Mar 6, 2022 – 8.45am
London | President Vladimir Putin’s crackdown on anti-war dissent in mainstream and social media on Friday (Saturday AEDT) will cut off most Russians’ access to information from Western sources, giving him space to spin his own mind-bending narrative.
If Russians are not seeing the military’s bombardment of residential buildings, schools and hospitals, or clips of tearful and demoralised Russian conscripts and bombed-out tanks, or evidence of Ukraine’s stirring popular resistance, what are they seeing?
As Putin steps up the information war, let’s take a leap through the looking-glass – into a Russian media world where there is no war, only a “special military operation”, as Russia takes on the lone burden of “ridding Europe of Nazis”.
Where we in the West are adorning our Twitter feeds and buildings with Ukrainian flags, in Russia you can see newspaper mastheads and social media influencers sporting a white “Z” – the symbol painted on Russian tanks and military vehicles.
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https://www.afr.com/world/europe/russia-is-once-again-behind-an-iron-curtain-20220308-p5a2nu
Russia is once again behind an iron curtain
A collapsing economy and a stalled war mean repression is the only way Putin can hold on to power.
Gideon Rachman Columnist
Mar 8, 2022 – 9.22am
Vladimir Putin is a keen student of Russian history. Last summer, he self-published a long essay, “On the historical unity of Russians and Ukrainians”, that was also a manifesto for war. But, amid all his historical musings, Putin missed one crucial recurring pattern: the role that failed wars have played in bringing about regime change in Russia.
Defeat in the first world war created the conditions for the Russian Revolution in 1917. Moscow’s humiliation in the Russo-Japanese war of 1904-05 also helped to provoke a failed revolution. The Crimean War of 1853-56 led to the death, possibly by suicide, of Tsar Nicholas I. More recently, the draining war in Afghanistan contributed substantially to the collapse of the Soviet Union in 1991.
The USSR lost some 14,000 troops in a decade of fighting in Afghanistan. The Russian government has admitted to losing almost 500, killed in the first few days of its invasion of Ukraine. The real figures are likely to be considerably higher. Lyudmila Narusova, a Russian senator, has spoken of one Russian company of 100 soldiers with only four survivors. And the worst of the fighting probably lies ahead.
So, could failure in war once again topple a Russian government? Most experts I spoke to think it unlikely - at least in the short term. Ben Noble of University College London is “sceptical of claims that Putin will soon be deposed in a palace coup - or that the existing elite could be removed by mass protests”. Dominic Lieven, an authority on the collapse of tsarist Russia, also cautions against counting on a swift unravelling of the Putin system.
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Commodity prices skyrocket as war grips markets
Alex Gluyas and Andrew Tillett
Updated Mar 7, 2022 – 5.37pm, first published at 12.48pm
The prospect of a ban on Russian crude supplies by the West pushed oil prices as high as $US139 a barrel and sent global equity markets tumbling amid fears that ballooning inflation could derail the economic recovery.
The Australian dollar shot above US74¢ for the first time since November 2021 and oil and gas producers rallied, limiting the S&P/ASX 200's loss to 1 per cent.
While the West has largely avoided widespread sanctions on Russia’s energy sector, US Secretary of State Antony Blinken said over the weekend that the Biden administration and its allies are considering an embargo on Russian oil.
Anxiety was heightened on Monday by a report that the US is considering the ban without the participation of European allies.
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https://www.smh.com.au/national/putin-s-primitive-murderousness-is-backfiring-20220307-p5a2fk.html
Putin’s primitive murderousness is backfiring
Political and international editor
March 8, 2022 — 5.00am
Vladimir Putin eventually might win the battle. But he is losing the war. The point of Putin’s war? To prevent any further expansion of America’s military alliance with 28 European nations and Canada, the NATO treaty, he claimed. If so, his relentless use of violence and intimidation is backfiring.
A week of indiscriminate Russian killing has achieved what decades, even centuries, of European history could not. Public opinion in Finland and Sweden, countries that have been prepared to take their chances with Russia for centuries, has transformed.
For the first time, opinion in the two militarily non-aligned nations has moved emphatically in favour of joining NATO. Sweden’s former prime minister Carl Bildt remarked: “The unthinkable might start to become thinkable.”
The Atlantic Council’s Anna Wieslander, formerly an official in Sweden’s Defence Ministry, observes: “Clearly, Russia’s unprovoked war is pushing the two countries closer to NATO membership than ever before.”
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War in Ukraine highlights lack of knowledge of European history
Senior Research Fellow, Australian Catholic University
March 7, 2022 — 5.00am
The war in Ukraine has exposed complacency across the world. Useful idiots who said Putin would never invade. Europeans too dependent on Russia to keep their homes warm in winter. Russia’s own war machine, whose brittleness is now exposed.
Australians should not exclude ourselves from those caught out. We haven’t taken Europe seriously enough for 30 years, either in policy terms or in our engagement with its complex history.
Australian universities teach frighteningly little European history these days. And what we do offer is overwhelmingly skewed towards well-worn topics of the 20th century. Beyond them, Sydney University offers half-a-dozen generic modules on all-encompassing themes such as “Medieval Cultures” or “Revolutionary Europe”. The University of Melbourne is not much better, with only a few pre-1900 options.
Surveys are in, deep knowledge is out. And the situation in other G8 universities is generally worse.
This dearth of opportunity for students has important consequences. It means that generations of our politicians, civil servants, and the general public now lack the knowledge and skills to understand historic grievances and other roots of conflict.
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West needs a recovery plan for the economic consequences of the war
Absent a timely policy response, the advanced economies can expect lower growth, worsening inequality and divergent performance between countries.
Mohamed El-Erian Contributor
Mar 8, 2022 – 2.36pm
Russia’s invasion of Ukraine, and the sweeping sanctions the United States and Europe have imposed on Russia in response, have triggered economic disruptions at four levels: direct, blowback, spillover and systemic. To contain their longer-term consequences, we must start working on recovery plans now.
Needless to say, the Ukrainian and Russian economies are being hit the hardest. Economic activity in Ukraine is likely to contract by well over a third this year, aggravating the rapidly escalating humanitarian crisis. Already, the war has led to more than 750 civilian casualties and driven 1.5 million Ukrainians to flee to neighbouring countries, with millions more on the move internally.
While Russia is not enduring large-scale human suffering or physical destruction, its economy is set also to contract by about a third, owing to the unprecedented severity of the sanctions it is under.
In particular, a freeze on the central bank’s assets and the exclusion of selected Russian banks from SWIFT, the financial messaging system that enables most international bank payments, are bringing the economy to its knees, with “self-sanctions” by households and companies, from Apple to BP, compounding the damage.
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Ukraine’s leaders must plan for a smart insurgency
Military leader and strategist
March 8, 2022 — 3.45pm
Nothing in war ever is certain. Since the Russian invasion, the Ukrainians have surprised many with their military excellence and global influence operations. The strategic leadership of President Volodymyr Zelensky has also been a revelation. The Russians, on the other hand, have appeared clueless about many aspects of 21st century warfare. There will be more surprises ahead.
Military leaders must plan for the worst case in all situations. There are (we assume) military leaders in Ukraine and in the West who are currently preparing for Russian battlefield successes, and considering how Ukraine might continue to resist in that event. The Ukrainians must build and sustain an insurgent campaign that is conducted in urban and rural areas.
What preparations might give an insurgency the best chance of success?
It is important, upfront, to define what success looks like. It must be a long-term political success. As French military officer and counterinsurgency theorist Dave Galula wrote: “Insurgency is the pursuit of policy by a party, inside a country, by every means”. Therefore, a successful Ukrainian resistance would deliver the retention of national sovereignty, the removal of all Russian (and other hostile combatant) troops, and the freedom to decide the nation’s destiny. Other Ukrainian political aims might include war reparations from Russia and membership of international organisations. These are important.
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Biden, Johnson ban Russian oil imports in a bid to thwart Putin’s war
Updated March 9, 2022 — 6.46amfirst published at 4.23am
Talking points
· President Biden announces US boycott of Russia’s oil, liquefied natural gas, and coal.
· Britain follows suit, announcing a phase-out of Russian oil and oil products by the end of 2022.
· Moves designed to squeeze Russian economy and put more pressure on Vladimir Putin over the invasion of Ukraine.
· However, bold tactic might shake global energy market at a time when US petrol prices are already at record highs.
· The US and the UK will ban the importation of Russian oil amid growing pressure to stop inadvertently financing Russian President Vladimir Putin’s bloody invasion of Ukraine.
As Russia continued its attack for a 14th day, President Joe Biden said the US would boycott Russia’s oil, liquefied natural gas, and coal in a bid to thwart Putin’s “war machine” and further punish him for his unprovoked attack.
Soon after, Britain also announced it would phase out imports of Russian oil and oil products this year, a move Prime Minister Boris Johnson said was aimed at delivering “another economic blow to the Putin regime following their illegal invasion of Ukraine”.
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Removal of Putin from power only way to end Ukraine horror
11:00PM March 8, 2022
Russia’s war with Ukraine has not gone as well as expected. Most Western experts predicted that Russia’s reformed and modernised military would swiftly overrun the Ukrainian armed forces.
The chairman of the US Joint Chiefs of Staff, General Mark Milley, reportedly told the US congress the Ukraine capital of Kyiv could fall within 72 hours of a full-scale Russian invasion.
Instead, we are now into almost two weeks of the war and Ukrainians are valiantly holding the Russian onslaught at bay in both Kyiv and Kharkiv. Instead of sticking to the Russian army’s traditional method of using overwhelming force to attack a single target, we have seen separate battalion tactical groups of 700-800 men attacking the Ukraine capital from several different directions. The slow grind of urban warfare in both Ukraine’s major cities has resulted in an embarrassing deficiency in Russian logistics support – including such basics as fuel and food.
However, the battle is going better in the south of Ukraine, where Russian forces seem certain to gain control of the cities of Mariupol, Kherson and perhaps Odessa along the whole of Ukraine’s coastline on the Black Sea. Ukraine, which is a major wheat exporter and competitor of Australia, will then become a landlocked country. Vladimir Putin could then move west of Odessa and claim the adjoining part of eastern Moldova called Transnistria, where Moscow has long kept an occupation force. The possibility of conflict with Moldova itself might then arise.
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https://www.afr.com/world/europe/putin-has-no-good-way-out-and-that-really-scares-me-20220309-p5a354
Putin has no good way out, and that really scares me
If you’re hoping that the instability that Vladimir Putin’s war on Ukraine has wreaked on global markets and geopolitics has peaked, your hope is in vain.
Thomas L. Friedman
Mar 9, 2022 – 1.01pm
If you’re hoping that the instability that Vladimir Putin’s war on Ukraine has wreaked on global markets and geopolitics has peaked, your hope is in vain. We haven’t seen anything yet. Wait until Putin fully grasps that his only choices left in Ukraine are how to lose — early and small and a little humiliated or late and big and deeply humiliated.
I can’t even wrap my mind around what kind of financial and political shocks will radiate from Russia — this country that is the world’s third-largest oil producer and has some 6000 nuclear warheads — when it loses a war of choice that was spearheaded by one man, who can never afford to admit defeat.
Why not? Because Putin surely knows that “the Russian national tradition is unforgiving of military setbacks,” observed Leon Aron, a Russia expert at the American Enterprise Institute, who is writing a book about Putin’s road to Ukraine.
“Virtually every major defeat has resulted in radical change,” added Aron, writing in The Washington Post. “The Crimean War (1853-1856) precipitated Emperor Alexander II’s liberal revolution from above. The Russo-Japanese War (1904-1905) brought about the First Russian Revolution. The catastrophe of World War I resulted in Emperor Nicholas II’s abdication and the Bolshevik Revolution. And the war in Afghanistan became a key factor in Soviet leader Mikhail Gorbachev’s reforms.” Also, retreating from Cuba contributed significantly to Nikita Khrushchev’s removal two years later.
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Xi Jinping must do the unthinkable, and broker peace for Ukraine
If China’s leader really wants to be a historic statesman, he can turn his toxic alliance with Putin into leverage for a Ukrainian settlement.
Stephen Roach Contributor
Mar 9, 2022 – 2.16pm
With war raging in Ukraine, China’s annual “Two Sessions” convey an image of a country in denial.
As the Communist Party and its advisory body gather in Beijing this month, there has been little or no mention of a seismic disruption in the world order – an omission that is all the more glaring in view of China’s deep-rooted sense of its unique place in history.
With its unabashed great power aspirations, modern China may well be at a decisive juncture.
Two documents – the joint Sino-Russian co-operation agreement, signed on February 4 at the opening of the Beijing Winter Olympics, and the Work Report, delivered on March 5 by Chinese Premier Li Keqiang to the National People’s Congress – encapsulate China’s disconnect.
The wide-ranging statement on Sino-Russian co-operation spoke of a “friendship between the two states [that] has no limits”.
It featured an almost breathless accounting of common interests, as well as commitments to addressing climate change, global health, economic co-operation, trade policy, and regional and geostrategic ambitions.
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There are no good choices for the West on Ukraine
Strong sanctions are important, though they may ruin Russia’s economy without changing its policy or regime.
Martin Wolf Columnist
Mar 9, 2022 – 9.38am
Evil exists. It sits in the Kremlin consumed by resentment and lust for power. It marches into a country whose crime was to dream of freedom and democracy.
How is such evil to be defeated? Might economic sanctions, combined with the resistance of the Ukrainian people, force Vladimir Putin into retreat? Or might they even lead to his overthrow? Alternatively, might he risk escalation up to use of nuclear weapons?
Beyond doubt, the sanctions the West has used are powerful. Putin has even called them “akin to an act of war”. Russia has been largely cut out of the global financial system, and more than half of its foreign reserves have been rendered useless. Western businesses are frightened of continuing to engage with Russia, for reputational and prudential reasons.
Neil Shearing, chief economist of Capital Economics, forecasts a peak-to-trough fall in gross domestic product of 8 per cent, followed by a lengthy period of stagnation. The jump in the central bank’s interest rate to 20 per cent will on its own be costly. Shearing may well be too optimistic.
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https://www.afr.com/business-summit/the-benign-geopolitical-world-order-is-over-20220309-p5a33p
The benign geopolitical world order is over
Mar 9, 2022 – 5.19pm
Russia’s aggression in Ukraine and China’s assertiveness in the Indo-Pacific signal an end to the benign geopolitical environment and a new era of political and economic uncertainty, chief executives have been warned.
The government’s chief intelligence adviser, Andrew Shearer, said that with Russian President Vladimir Putin backed into a corner, people should prepare themselves for more indiscriminate attacks on civilians.
“So we are in for a very brutal, bloody couple of weeks,” Mr Shearer told The Australian Financial Review Business Summit.
The war in Eastern Europe was “a major risk to the global economy,” Reserve Bank of Australia governor Philip Lowe said in a speech to the Summit, while warning surging energy prices and supply chain disruptions would spur higher inflation.
Reinforcing Dr Lowe’s outlook, Santos chief executive Kevin Gallagher warned oil and gas supplies would not meet demand in any meaningful timeframe, keeping prices high; while Woodside boss Meg O’Neill said Ukraine was a sober reminder of the need for energy security.
Mr Shearer said: “Geopolitics is back, and back with a vengeance.”
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West, Russia escalate sanctions as war turns more brutal
Andrew Tillett, Matthew Cranston and Hans van Leeuwen
Mar 9, 2022 – 3.45pm
Russia and the West are escalating tit-for-tat sanctions after the US and UK vowed to stop buying Russian oil and gas, and Moscow has announced export controls allowing it to ban the sale of key goods and raw materials to “unfriendly” countries.
As the oil price again surged after the US and UK announcement, Ukraine President Volodymyr Zelensky hinted at possible concessions to end the war, including abandoning Ukraine’s bid to join NATO and talks over the future of breakaway pro-Russian regions.
“I have cooled down regarding this question a long time ago after we understood that ... NATO is not prepared to accept Ukraine,” Mr Zelensky said in an interview with America’s ABC News.
Separately, Mr Zelensky used an impassioned address to Britain’s Parliament to say Russia should be declared a “terrorist state”, as Ukraine launched fresh accusations that Russia was shelling humanitarian corridors meant to be used by people to evacuate cities safely, including the Black Sea port of Mariupol, where citizens have been without power and water for days.
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They predicted the Ukraine war. But did they still get it wrong?
Realists predicted some kind of conflict over Ukraine. But realism’s predictions still did not describe reality, for three reasons.
Ross Douthat
Mar 10, 2022 – 9.58am
It’s a curious feature of Western debate since Russia’s invasion of Ukraine that a school of thought that predicted some version of this conflict has been depicted as discredited by the partial fulfillment of its prophecies.
From the 1990s to the 2010s, from US diplomat George Kennan’s opposition to NATO expansion to political scientist John Mearsheimer’s critique of American involvement in Ukraine, thinkers associated with foreign policy realism – the school known for its cold-eyed expectation of great-power conflict, its doubts about idealistic visions of world order – argued that the attempt to integrate Russia’s borderlands into Western institutions and alliances was poisoning relations with Moscow, making great-power conflict more likely, and exposing nations such as Ukraine to disastrous risks.
“The West is leading Ukraine down the primrose path,” Mearsheimer asserted in 2015, “and the end result is that Ukraine is going to get wrecked.”
But now that Ukraine is, in fact, being wrecked by a Russian invasion, there’s a widespread view that his realist worldview lies in ruins too – that Mearsheimer has “lost his reputation and credibility” (to quote the Portuguese thinker Bruno Maçães) and that the realist conception of nations as “pieces in a game of Risk” with “eternal interests or permanent geopolitical orientations, fixed motivations or predictable goals” (to quote Anne Applebaum of The Atlantic) should be discarded on the evidence of Vladimir Putin’s invasion and the Ukrainian response.
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https://www.afr.com/world/europe/europe-s-populists-pay-a-price-for-praising-putin-20220310-p5a3ab
Europe’s populists pay a price for praising Putin
Hans van Leeuwen Europe correspondent
Mar 10, 2022 – 7.33am
London | Some of Europe’s leading populists are grappling to contain the political hit to their reputations from their previous support for Russian President Vladimir Putin, as he becomes the Continent’s universal bogeyman.
Politicians in the firing line include: Marine Le Pen, who hopes to take the French presidency off Emmanuel Macron in April; Matteo Salvini, only a few years ago Italy’s leading powerbroker and PM hopeful; and iconoclast Brexiteer Nigel Farage.
Mr Salvini, leader of the muscular conservative Lega Nord party, has probably had the most torrid time.
Although his signature political stance is a hard line against migration, he has sought to overcome his previous paeans to Mr Putin by surfing the wave of public sympathy for Ukrainian refugees.
To this end, the former interior minister took himself off to Poland on Tuesday – amid his usual flurry of social media activity – to personally welcome refugees on Italy’s behalf.
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https://www.afr.com/world/europe/putin-s-brutal-endgame-reduce-ukraine-to-rubble-20220310-p5a3b2
Putin’s brutal endgame: reduce Ukraine to rubble
The Russian president envisioned a quick victory. If his history is any guide, destruction may be his fallback plan.
Marc Champion
Mar 10, 2022 – 12.37pm
Watching Russia’s military machine grind a gruesome path through Ukraine, it’s impossible not to feel you’ve seen this tragedy before.
The artillery volleys slamming into apartment blocks, the firing on evacuation corridors, and even the disorganisation and hubris of the attack are all familiar scenes from Chechnya, Georgia, or Syria. Whatever the location, the ending has been the same: cities reduced to rubble.
President Vladimir Putin’s war in Ukraine is barely two weeks old, but this time it’s starting to look like an act of retribution that has no obviously achievable endgame.
As Russia’s generals shift to ever more brutal tactics, it isn’t clear how Putin can marry Ukraine’s devastation with the goals he’s set out: namely, to create a neighbour that’s no longer “anti-Russian” and, in the process, to change Europe’s post-Cold War security order in Moscow’s favour.
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Xi’s Putin problem: why China will try to sit on the fence
There is a question mark over how far the Asian nation will go to support its ‘little brother’ now that the war is not going the way Vladimir Putin expected.
Michael Smith North Asia correspondent
Mar 11, 2022 – 5.00am
Three months after assuming power in 1949, Mao Zedong travelled to Moscow to call on fellow strongman Communist leader Josef Stalin.
It was Mao’s first overseas trip as leader and a humbling experience for the man who had just addressed a crowd of thousands in Tiananmen Square to declare the formation of the People’s Republic of China.
Historians say Mao’s efforts to formalise an alliance with China’s Communist “big brother” was an uphill battle and that China’s leader felt disrespected, being left to wait for months in the Russian winter in a country home outside Moscow. He had little choice. China was poor and desperate to industrialise.
A treaty was eventually signed and thousands of Soviet engineers and other workers arrived in China to help build factories and produce planes, ships and tanks. Moscow later gave China access to nuclear technology and exported its education system to the emerging Communist power.
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https://www.afr.com/world/asia/what-south-korea-s-new-president-means-for-australia-20220310-p5a3hl
What South Korea’s new president means for Australia
For the past five years, Seoul has been missing in action from efforts to buttress the rules-based order. Yoon Seok-youl has promised a more proactive foreign policy.
Gordon Flake Contributor
Mar 11, 2022 – 5.00am
The presidential election in South Korea was close, with the two leading candidates separated by about 250,000 votes from more than 32 million ballots. The tiny margin meant the results were not known until the following morning.
Progressive Power Party candidate and former prosecutor Yoon Seok-youl claimed victory over Lee Jae-myung, the self-styled “Korean Bernie Sanders of the ruling Democratic Party. The result marks a transition in the Blue House from the progressive to the conservative side of politics.
At a time when democracy has retreated in many parts of the world, there are some big-picture positives which should be emphasised. Despite voluntary voting, a spike in COVID-19 cases to about 250,000 a day and various pandemic restrictions, an impressive 77 per cent of eligible voters went to the booths. In an act essential to democratic transition, losing candidate Lee conceded the race and congratulated his opponent. No democratic backsliding there.
Given a packed media cycle, South Korea’s presidential contest unfortunately did not receive wide coverage in Australia. South Korea is Australia’s 4th-largest trade partner. Its investment in Australia has more than doubled in the past decade to more than $25 billion. And with South Korea’s focus on hydrogen, lithium, future batteries and critical materials, that investment is poised to expand at an even faster rate in the coming years.
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US inflation soared 7.9pc in past year, a fresh 40-year high
Matthew Cranston United States correspondent
Updated Mar 11, 2022 – 4.49am, first published at 2.58am
Key Points
· Core prices rose a sharp 0.5 per cent month to month and 6.4 per cent from a year earlier.
· For the 12 months ending in February, grocery prices leapt 8.6 per cent, the biggest year-over-year increase since 1981.
Washington | US inflation hit a new 40-year high of 7.9 per cent driven by a surge in gas, food and housing costs that are all expected to rise further as the impact of the war in Ukraine filters through.
The higher inflation number keeps the Federal Reserve on track to hike rates next week and presents a growing political problem for the Biden administration already languishing in the polls.
“The Russia-Ukraine war adds further fuel to the blazing rate of inflation via higher energy, food, and core commodity prices that are turbocharged by a worsening in supply chain problems,” Oxford Economics’ chief US economist Kathy Bostjancic said.
The latest inflation reading from the Labor Department did not include the oil and gas price surges that followed Russia’s invasion of Ukraine on February 24. Since then, average gas prices nationally have jumped about 62 cents a gallon to $US4.32, according to AAA.
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Putin’s poor judgment will lead to suffering for his people
Senior business columnist
March 10, 2022 — 11.58am
Russia is on the verge of defaulting on its debts in another indication of how effective Western financial sanctions have been in throttling its financial sector and economy.
The sanctions on its central bank have cut off access to the most useable elements of its considerable foreign currency reserves and the banning of its key banks from the SWIFT financial messaging network that facilitates internal payments have choked Russia’s ability to access foreign currencies to meet its interest and principal payments.
On Tuesday, the Fitch ratings service became the latest of the international credit rating agencies to downgrade Russia’s sovereign debt to “junk” status, saying a default on its bonds was imminent.
That the Russian authorities are feeling the pressure is obvious. Having already directed its companies to sell 80 per cent of their foreign currency holdings and convert them to roubles to try to support the currency, this week they said the companies would be able to make payments on their overseas debts – but only in roubles.
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China cools links with Russia as it recognises war
By David Charter
The Times
March 11, 2022
China has acknowledged for the first time that a “war” is taking place in Ukraine and appears to be holding back aviation supplies from Russia.
In another indication that China may be seeking to put a little distance between itself and Moscow, it has been easing government exchange rate controls to allow the rouble to fall faster in value against the yuan to protect itself from the impact of economic sanctions on its neighbour.
“We hope to see fighting and the war stop as soon as possible,” Wang Yi, the foreign minister, said in a call with Jean-Yves Le Drian, his French counterpart. The remark, reported by state media, represents a shift in the party line, which had avoided the words “war” and “invasion”.
The highest-level talks between Ukraine and Russia since the invasion, hosted by Turkey, broke up yesterday without agreement on humanitarian corridors.
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https://www.afr.com/policy/foreign-affairs/new-rules-for-our-grave-new-world-20220309-p5a35b
New rules for our grave new world
There are six things that free countries can do to avoid living in a world haunted by the likes of Vladimir Putin.
Bret Stephens Contributor
Mar 11, 2022 – 12.21pm
Russia’s invasion of Ukraine is being described as the end of the post-Cold War era. This isn’t quite accurate. Since the Soviet Union collapsed in 1991, we’ve seen three different eras. Each of them lasted about a decade.
There were the End of History years of the 1990s, when Washington thought the main task of foreign policy was to usher the world into a more democratic, free-market, rules-based order. Those priorities faded after 9/11, when no international issue mattered more to policymakers than the fight against militant Islamism. A decade later, after Osama bin Laden was killed in 2011, Barack Obama effectively called an end to the war on terror, saying it was time to “focus on nation building here at home”.
This was a decade whose animating instincts were typified by two telling reactions by two presidents to two crises — both involving Ukraine.
The first was Obama’s tepid response to Russia’s 2014 seizure of Crimea, after which he refused to provide Kyiv with lethal military aid on the theory that Ukraine’s future was a core Russian interest but not an American one. The second was Donald Trump’s attempted shakedown of Volodymyr Zelensky in 2019, in which he tried to hold up security assistance to Ukraine in exchange for dirt on the Biden family.
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Why China can’t bail out Putin’s economy
By Paul Krugman
March 12, 2022 — 1.00am
In deciding to invade Ukraine, Vladimir Putin clearly misjudged everything. He had an exaggerated view of his own nation’s military might; my description last week of Russia as a Potemkin superpower, with far less strength than meets the eye, looks even truer now. He vastly underrated Ukrainian morale and military prowess, and failed to anticipate the resolve of democratic governments — especially, although not only, the Biden administration, which, in case you haven’t noticed, has done a remarkable job on everything from arming Ukraine to rallying the West around financial sanctions.
I can’t add anything to the discussion of the war itself, although I will note that much of the commentary I’ve been reading says that Russian forces are regrouping and will resume large-scale advances in a day or two — and has been saying that, day after day, for more than a week.
What I think I can add, however, is some analysis of the effects of sanctions, and in particular an answer to one question I keep being asked: Can China, by offering itself as an alternative trading partner, bail out Putin’s economy?
No, it can’t.
Let’s talk first about the impact of those sanctions.
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I look forward to comments on all this!
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David.
