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Se proclamant de gauche tout en cultivant un nationalisme albanais exacerbé, jugé hostile par les Serbes, le mouvement Vetëvendosje a réussi une percée aux législatives de juin dernier et dirige les deux plus grandes villes du Kosovo depuis les municipales de la mi-novembre. / Albanie, Balkans, (...) / Albanie, Balkans, Kosovo, Élections, Identité culturelle, Minorité nationale, Droits des minorités, Parti politique, Politique, Serbie, Europe centrale - 2017/12

Recently, among Central Asian countries, it has become a trend to create a “new Stan” after the countries’ so-called founding fathers. For instance, before starting his second term in 2021, President Shavkat Mirziyoyev of Uzbekistan announced his “New Uzbekistan Strategy” to considerably change the regime and political structure of the country after the first president of the country, Islam Karimov. The administration of Kazakh president Kassym-Jomart Tokayev adopted a similar approach in 2022. In response to political unrest that took place in January of that year, Tokayev proposed a new set of full-scale reforms in the country. In his address to the nation on March 16, he stressed that it is not the following “abstract ideas” but a vision to transform the country into a “New Kazakhstan.” Are these reforms capable of creating new versions of these countries? If the answer is yes, how do these leaders transform their visions into reality?

Upon close examination of these proposed reforms, it could be argued that they represent an approach to modernizing society and state primarily derived from the early Russian economic policy of Russian president Vladimir Putin, in which Moscow focused on the simplification of opening up businesses, tax reforms, reduced government intervention in markets, etc. However, the true genesis of these reform packages is traced back to the Washington Consensus policy prescriptions developed by the IMF, World Bank, and the U.S. Department of the Treasury following the end of the Cold War. By modifying certain aspects of these prescriptions, the current economic reforms of both countries are consistent with the SLIP (Stabilization, Liberalization, Institution Building, and Privatization) Agenda reform packages.

Kazakhstan’s model closely mirrors that of Uzbekistan, with an emphasis on achieving economic growth through inflows of foreign capital and developing small and medium-sized businesses in the country, while also focusing on improving living conditions. In other words, the intention is to create an economy that works for people and a government that is “fair” and “just.” However, this may appear to be an ambitious goal for Kazakhstan, as it is not the first reform effort by Tokayev. A “New Kazakhstan” is a practical response to previous mismanagement of governmental affairs and the unsettled socio-economic environment of the country; Tokayev understands the realities of his country after “Bloody January.” Symbolically, a referendum and constitutional amendments signify that he is determined in his vision for transformation.

Who Follows What? Reform Packages of Uzbekistan and Kazakhstan

Both Uzbekistan and Kazakhstan possess nearly identical institutional and economic models and have passed similar reform efforts addressing the judiciary, state government, human rights, and business development, according to Aziza Umarova, a Research Fellow at the Davis Center for Russian and Eurasian Studies.

In his first year as president, Mirziyoyev proclaimed his state program for 2017, “A Year of Dialogue with People and Human Interests,” which would involve citizens in policymaking by hearing their voices on pressing issues of the country. By the same token, as soon as he took office, Tokayev established the National Council of Public Trust and proposed a model of a “hearing state.” Each initiative would play an intermediary role between the government and society by promoting dialogue among the public, political parties, and civil society.

But the idea of building a “new” nation began in 2021, when Mirziyoyev kicked off his presidential campaign with the notion of establishing “New Uzbekistan.” Soon after winning his second term, he introduced the “Development Strategy of New Uzbekistan for 2022–2026.” This five-year program is a continuation of his first presidential program, the Strategy of Actions for 2017-–2021. As for Tokayev and Kazakhstan, in his address to the nation, he outlined five areas of reforms for “New” Kazakhstan: economic policy, the development of the real estate sector, strategic investment in the country’s future, resetting public administration, and improving law and order.

After carefully Tokayev’s proposals, it is evident that it takes significant attributes from the “Development Strategy” and “Strategy of Actions for Uzbekistan” developed by Mirziyoyev. This is not surprising, as both countries’ economic development model heavily depends on fossil fuel energy resources, agriculture, foreign direct investment, the development of small and medium-sized enterprises, and the digitalization of the economy. 

Kazakhstan’s Economic Reforms: To What Extent Does It Differ?

Kazakhstan’s new economic reforms are the first steps to modernizing the country’s economy by relying on the instruments of a free market, including antimonopoly policies, comprehensive tax reforms, and supporting businesses by creating favorable conditions. Tokayev aims to build an economy in which responsibilities are shared between businesses and government to address complex social challenges. Businesses, in turn, will benefit from these reforms, such as via legislative change in entrepreneurial and business activities and elimination of administrative burdens. Through this process, the government intends to involve businesses in social infrastructure, building facilities to reduce excessive shortages. It is also clear that the new economic policy functions on the basis of market mechanisms by adding a number of social elements, such as honest taxation, and invoking social responsibility. To add to this, a “Council of Domestic Entrepreneurs” will be founded to support socio-economic reforms. Tokayev himself promoted the three principal elements of the new economic policy: the inviolability of private property, investment climate, and fair competition.

Any economic reform in a market economy requires legal and institutional support and, more importantly, the existence of political transparency and a stable political system in a country. The government should take into consideration institution-building and legal reforms to increase its credibility. In the early 1990s, similar reforms were introduced to reduce public sector engagement in the economy. However, there are a plethora of quasi-public institutions in Kazakhstan—about 6,500 organizations are operating in this sector. Being cognizant of these problems, the country’s prime minister asserted an urgent need to reform the legal frameworks surrounding taxation, budget, and business management. Support of domestic businesses requires a vast amount of credit resources, which is currently a problem. Reforms in the banking system are necessary to finance small and medium-sized enterprises, though most banks in the country have accumulated excess liquidity over the past years. Unfortunately, this excess amount has not been effectively injected into the economy—it instead actually suffers from about $42 billion in underfunding for small and medium businesses. To attract foreign funds, political stability will be necessary; already European experts have stressed the need to ensure stability in the country after last January’s events in order to rebuild investors’ trust and propagate the realization of these reforms.

The most notable aspect of these reforms is the pivotal role of trade. Step by step, the country’s new economic policy tries to modernize the trade policy through collaborative work with foreign countries like China, India, the United Arab Emirates, and so on via appointing special advisors on trade from those countries.  Certain features of these policies, such as liberalization and continuation of the privatization process, could be completed quickly. However, both countries have to overcome their classical conundrum—“moving from exhortation to implementation” by providing a solid promotion for the effective functioning of market institutions. Once in 2019, Tokayev stated he would not allow the recurrence of unfortunate events like the massive arms depot blast in Arys. Unfortunately, it was followed by a second military warehouse explosion in Taraz (2021) and Dungan-Kazakh ethnic clashes (2020), not to mention Bloody January last year.

Recommendations

Given the similar growth models of both countries, Kazakhstan should strengthen its socio-economic and political relations with Uzbekistan in the future in order to avoid repeating the mistakes made by its “twin.” For instance, due to the dramatic increase in lending in Uzbekistan since 2016, the banking sector of the Uzbek economy has been affected by excessive amounts of non-performing loans, and the impact of lending growth has risked asset-quality trends in the banking sector. Additionally, through comprehensive economic reforms implemented by the Uzbek government, the country has managed to develop its economy, with an average annual growth of 5.2 percent between 2016 and 2021, while Kazakhstan only has half of that, standing at 2.6 percent. Having nearly similar socio-economic problems, the Uzbek economic growth model under Mirziyoyev could improve by adopting the best practices of its neighbor.

Furthermore, due to geographical proximity, trade and economic interaction would mutually benefit both countries—strengthening cooperation in energy, logistics, and environmental protection. More importantly, there should be no competition between Kazakhstan and Uzbekistan, but rather cooperation for growth and development, and supporting each other in solving regional conflicts and “new age” issues such as environment, cybercrime, etc. Considering their mutual energy sector dependence on Russia, both states should bring about structural reform in their energy supply management and green energy sources through bilateral cooperation. Recently, both countries took down Moscow’s offer of the foundation of a trilateral gas union, which will benefit them in the long run as it significantly reduces Moscow’s influence in the region.

As the future economic condition of the region is uncertain, both countries should be wary of their relationship with Russia, whether social or economic, as to avoid being imposed sanctions on by the West, as their relations could be regarded as giving assistance as third parties in evading sanctions. It is crucial for both Kazakhstan and Uzbekistan to be aware of the potential risks and benefits of their growing economic connections with Russia.

Sardor Allayarov is a Research Assistant at Centre for Analysis, Reporting and Monitoring, located in Bratislava, Slovakia. He is a former Research Intern at the Institute for Foreign Affairs and Trade, Budapest, Hungary.

Image: Khikmatilla Ubaydullaev/Shutterstock.

The most significant development during Secretary of State Antony Blinken’s recent trip to Israel and the West Bank had nothing to do with his visit. Blinken’s low-key suggestions for diffusing conflict between Israel and the Palestinians signify the rapidly shrinking U.S. diplomatic footprint on what was for many years a key component of U.S. policy in the region.

Far more newsworthy and historically significant was the publication by an obscure Israeli ministry of the annual population increase of the settler population in the more than 200 settlements in the West Bank.

The report by the Ministry of the Interior’s Population Registry notes that Israel’s settler population has grown to more than 500,000 in the West Bank proper and more than 200,000 in the settlements of annexed East Jerusalem.

Quantifying the continued, inexorable increase in Israel's settlement population continues a trend as old as the occupation itself. For more than half a century, no matter which Israeli government—left, right, or center—has wielded power, Israel’s settlement population and the number of Israeli settlements have increased. In the ongoing contest between the Israelis and Palestinians over control and sovereignty, there is no better barometer of Israel's success and the concurrent dangers not only to the prospect of Palestinian sovereignty, once considered the key to regional stability, but also to the health of Israel’s own democracy.

The ministry document portrays a settlement enterprise that is growing consistently throughout the West Bank. This includes those settlements in areas of East Jerusalem, formally annexed by Israel, with a population of more than 200,000, and the ring of large settlement areas around Jerusalem comprising so-called “Greater Jerusalem.” The population increase includes settlements in the sparsely populated Jordan Valley as well as those in the highlands of Judea and Samaria, home to the current finance minister, Bezalel Smotrich. Smotrich was born in a Golan Heights settlement and still resides in the heartland of the Block of the Faithful settlement movement, which has been at the vanguard of attempts to “grab and settle” throughout the West Bank for the last half-century.

In addition to the growth of these formal, authorized settlements, so-called illegal settlements and outposts initially established without formal government approval over the last twenty-five years continue to increase in number and population. It should be no small matter that successive Israeli governments have committed to dismantling these outposts without practical effect. Indeed, U.S. administrations have long ceased to even ask, let alone demand, that Israel keep such commitments made to Washington.

Over the last fifty years, there has been only one meaningful (if fleeting) obstacle to the increase in Israel’s settlement population: the violence that accompanied the second intifada between 2000 and 2005.

The insecurity produced by the Palestinian uprising, however, merely reduced the annual increase in the settlement population. In contrast, diplomacy sponsored by the United States—beginning with the 1977 “autonomy talks” and continuing throughout the long moribund Oslo process that commenced in 1992—failed to constrain, and arguably facilitated, the increase. Indeed, an objective assessment of this era can only conclude that one of the key objectives of the diplomatic processes of the last generation was the extraordinary increase in settlements and settlers.

The Biden administration’s current engagement in Palestine continues to be based on the assumption the Palestinian security services must deliver the goods to Israel, and protect its settlers and soldiers, without any prospect of the basic payoff long awaited by the Palestinians: independence, sovereignty, and the retreat of the Israel Defense Forces and settlers to a recognized border. If the Oslo Accords at their very best hinted at such an outcome, it has been clear since Operation Defensive Shield in April 2002 that there is no real prospect of any significant Israeli security or settlement retreat in the West Bank, and that diplomatic efforts led by the United States to confront this reality and transform occupation into independence and sovereignty have failed.

The United States, including the current administration, long ago surrendered to the inexorable increase in Israeli settlements. No serious diplomacy between the parties has been conducted since the George W. Bush administration, and it has been more than a decade since the Americans even considered a diplomatic effort to freeze, let alone reverse, the growth of settlements.

In the absence of such a “diplomatic horizon” based on the creation of a Palestinian state in the West Bank and the Gaza Strip, inventive diplomats have come up with a series of quick fixes in an effort to maintain the fiction of diplomatic progress and U.S. engagement. At best, these efforts treat the less desirable symptoms of continuing occupation—notably Palestinian opposition to Israel’s territorial fait accompli—rather than confronting the cause, at the heart of which is Israel’s long-practiced effort to create “facts on the ground.” So, for example, U.S. engagement is now focused on yet another West Bank security plan, which, yet again, aims to square the circle of mobilizing popular Palestinian support for institutions—security and otherwise—that have woefully failed to protect Palestinians, and their political patrimony, from what they see as a major political, economic, and oftentimes personal threat: settlers and settlements.

Geoffrey Aronson is a non-resident fellow at the Middle East Institute and a former advisor to the EU and others on regional political and security issues.

Image: Paparazzza/Shutterstock.com.

The recent thaw in relations between Australia and China may not come as a surprise to those who have been closely monitoring the two nations' interactions. Some had speculated that a change in Australia's policy toward China would occur under the leadership of Labor Party leader Anthony Albanese, who succeeded Scott Morrison as prime minister and is known for his more flexible approach to China. However, the shift in Australia-China relations over the past year cannot be attributed solely to a change in leadership.

The Early Policy Shift

For over a decade, leaders from Australia's Labor Party have generally adopted a more flexible approach towards China, recognizing the importance of engagement for the nation's interests in areas such as trade, national security, and climate change. This approach has appeared in the foreign policies of former Labor leaders Kevin Rudd and Julia Gillard, and Albanese is no exception. Upon assuming office, one of Albanese's top priorities was to reshape Australia's policy towards China, moving away from Morrison's hawkish stance.

Despite his strong position on national security and human rights issues, Albanese's government has adopted a more flexible approach in its dealings with China, seeking dialogue to rekindle bilateral cooperation on key issues. This change in foreign policy has made the revival of Australia-China relations more feasible than under the previous leadership. China, too, has played a role in the turnaround of relations. In January 2022, China appointed Xiao Qian, a former ambassador to Indonesia known for his professional communication style and moderate tone, as its new ambassador to Australia. The move of sending a “non-wolf-warrior” diplomat was seen as a signal of China's willingness to repair relations with Australia and modify its aggressive diplomatic approach. Since Xiao took office, he has been vocal about restoring Australia-China relations. For example, in an event held at the University of Technology Sydney’s Australia-China Relations Institute, Xiao stated, “These are the areas where we should continue to conduct constructive dialogue, to minimize the differences if possible, and to enlarge our common grounds if possible.”

In addition, the congratulatory message sent by Chinese premier Li Keqiang to Albanese after the election was another significant indication of China's desire to improve relations. In his statement, Li said that “China stands ready to work with Australia to learn from the past, look to the future and push forward the sound and stable development of a bilateral comprehensive strategic partnership by adhering to the principles of mutual respect and win-win results.” This message, along with previous statements from China's top diplomat in Australia, signaled a new tone in China's policy towards Australia and created a favorable condition for the Albanese government's future efforts to repair relations with China.

The policy change on both sides engendered a more favorable environment for engagement, particularly in the latter half of 2022 and early 2023, laying the groundwork for a potential improvement of Australia-China relations.

Unfreezing Diplomatic Engagement

With a more conducive atmosphere for engagement, Australia and China began to boost their high-level diplomatic interactions. In June 2022, Australian defense minister Richard Marles met his Chinese counterpart, Wei Fenghe, on the sidelines of the Shangri-La Dialogue in Singapore. This marked the first high-level contact between the two nations in three years, signaling improved relations between Australia and China.

At the time, few believed that such engagement meant significant progress had been made in Australia-China relations, as several core disagreements on security, trade, and human rights remained unresolved. Yet, as it was the first high-level contact between the two countries in three years and came just three weeks after the inauguration of the Albanese government, it signaled meaningful progress in unfreezing bilateral relations, especially in light of the ongoing geopolitical competition in the Indo-Pacific region as well as the disputes between the two countries. This swift diplomatic arrangement also demonstrated a shared willingness to restart diplomatic dialogue.

Although there are still contentious disagreements between Australia and China, Canberra’s largest trade partner, efforts to improve relations have continued. Following a defense ministerial meeting in Singapore, Albanese aimed to seize the momentum to further thaw ties. In an interview with ABC News, Albanese emphasized the importance of dialogue with China. "Common sense tells us that, despite our differences, we need to maintain open lines of communication with our largest trading partner. I look forward to continued engagement between ministers of our respective governments,” said Albanese.

Albanese's positive message was later echoed by a top Chinese diplomat. In July 2022, Australian foreign minister Penny Wong met with her Chinese counterpart, Wang Yi, on the sidelines of the G20 foreign ministerial meeting in Indonesia. This marked the first meeting of the two countries' foreign ministers since 2019. During the meeting, Wang said, “China is ready to re-examine, re-calibrate, and reinvigorate bilateral ties in the spirit of mutual respect and work towards restoring relations to a positive trajectory.” This sentiment was further echoed in November 2022 when Wang Yi had a positive exchange on a phone call with Wong ahead of multiple international events. It is highly likely that the call was to ensure a positive diplomatic atmosphere ahead of the Albanese-Xi meeting at the G20 leaders’ summit.

The following week, Australia-China relations achieved a major diplomatic breakthrough. Chinese premier Li and Albanese met on the sidelines of the ASEAN summit in Cambodia, marking the highest-level dialogue between the two nations before the upcoming leaders’ meeting. More critically, Chinese President Xi Jinping met with Albanese on the sideline of the G20 summit a few days after Li’s meeting with Albanese, marking the first leader-level dialogue between the two countries in three years. Not only did the meeting signify the stabilization of Australia-China relations, but it also set a positive trajectory for future developments.

Indeed, diplomatic engagement between Australia and China became more frequent in the months following the Albanese-Xi meeting. The second defense ministerial meeting of the year took place ahead of the ASEAN defense ministers meeting in Cambodia, shortly after the Albanese-Xi meeting. About a month after the Alabnese-Xi meeting, Wong's visit to Beijing marked a crucial step forward for Australia-China relations, as it led to the resumption of the Foreign and Strategic Dialogue, which had been suspended in 2018. The joint statement of the dialogue affirmed that "the two sides agreed to maintain high-level engagement and to commence or restart dialogue" in areas ranging from trade to climate change, signaling a renewed commitment to bilateral cooperation.

After Wong's visit to Beijing, further signs of improvement in Australia-China relations began to emerge. In January 2023, Assistant Trade Minister Tim Ayres met with China's vice minister of commerce, Wang Shouwen, on the sidelines of the World Economic Forum in Davos, where they agreed to hold a virtual meeting of top trade officials in the coming weeks. This development is particularly significant, as trade has been a major source of contention in bilateral relations in recent years. Additionally, the public health agencies of the two countries also held a virtual dialogue in advance of the meeting of trade officials in Davos. This sequence of events may indicate that China-Australia relations are on a path toward a new era.

Disparate Strategic Considerations

For Australia, one of the main motives for improving ties with China is resolving trade disputes to revamp the Australian economy. Such trade disputes have cost billions of dollars in losses across a range of Australian industries, including wine, coal, lobster, and beef. Rather than taking the subject matter to the inefficient international trade framework, Albanese has preferred to address this issue bilaterally. He has vowed to eliminate trade impediments to Australian products and is willing to fix trade ties with China.

Despite the Albanese government’s requests for tariffs to be removed, progress on this front was slow until July 2022, when there were discussions on ending the ban on coal exports to China. This development, along with others, suggested that Albanese's diplomatic approach was bearing fruit. For example, bans on Australian products such as coal have gradually been removed in recent months, and tariffs on other Australian products are also expected to be removed. Additionally, a trade minister meeting is scheduled to take place in the coming weeks, providing a chance for both sides to engage in trade-related issues.

Aside from trade, a stabilized relationship with China provides opportunities for the Albanese government to refine cooperation with China on the key areas of education, tourism, and climate change. In the field of education, for example, China’s large population can provide Australia with massive numbers of talent and funds. The number of Chinese students in Australian higher education has decreased for two years in a row. Yet the stable relationship between the two nations with the easing pandemic restrictions of both countries is expected to attract many Chinese students this year. Similarly, improving Australia-China relations can boost Australia's economy by attracting more Chinese tourists this year.

Perhaps most importantly, a positive relationship with China, coupled with regular dialogue, can help manage competition between the two nations and ensure that it does not escalate into unnecessary conflict. The defense minister meeting in Singapore in June 2022 proved this point. The meeting allowed both sides to frankly discuss pressing issues, such as the dangerous interception of an Australian aircraft by a Chinese fighter jet. This could lower the risk of misjudgments in critical times, preventing conflicts from occurring.

China, on the other hand, has different strategic considerations. Firstly, as a key security and economic actor in the Indo-Pacific region, Australia is a critical regional ally of the United States. If China insists on its aggressive diplomatic approach toward Australia, it will only push Australia toward the camp of the United States, making the “anti-China club” stronger. In contrast, by mitigating tensions with Australia, China can prevent the anti-China coalition from growing.

Secondly, China seeks to improve its ties with Australia as part of its major effort to boost its global image, moving away from its “wolf-warrior” diplomacy. This shift is aimed at repairing damaged relationships and enhancing cooperation with key actors, including Australia, South Korea, and several European countries.

Lastly, China's domestic challenges, including a decline in economic growth, a deteriorating demographic outlook, and the ongoing COVID-19 pandemic, have compelled Beijing to shift its policy priorities inward. In this context, China has mitigated tensions with many regional players in order to avoid creating additional problems abroad. This will allow China to address its pressing domestic issues and sustain its national development, particularly its economy. Moreover, by stabilizing relations with Australia and other nations, China has constructed a favorable environment to re-engage with the global community and reinvigorate its economy through bilateral economic initiatives.

Overall, it is certain that Australia-China relations are much more stable than a year ago. This trend will likely be sustained in the first half of 2023 as both sides continue to engage and seek to address controversial issues. However, many existing disputes over security, human rights, and ideological issues remain unaddressed. To that end, it will not be surprising if these disagreements challenge Australia-China ties in the future.

Ray Weichieh Wang is a freelance analyst and contributor for several media outlets, focusing on diplomacy and politics in the Indo-Pacific. His research interests center on international relations in the Indo-Pacific, focusing on China, Taiwan, Japan, and South Korea. His pieces have appeared in The National Interest, The Diplomat, The News Lens, among other outlets. Wang holds a BS degree in Diplomacy and International Relations from Tamkang University.

Image: Kaliva / Shutterstock.com.

Certains films visent à améliorer le monde. Comment les y aider ? En les identifiant à un message et en ciblant le public apte à le répercuter. Mais il n'est pas certain que le cinéma y gagne, et pas davantage l'engagement non balisé. / Fiction, Documentaire, Politique, Cinéma, Art - (...) / Fiction, Documentaire, Politique, Cinéma, Art - 2023/02

À la fois chef d'État et autorité religieuse, le pape se veut médiateur sur la scène internationale, notamment lors de conflits armés. Dans le cas de l'Ukraine, cette position traditionnelle lui attire les accusations de naïveté et de complaisance vis-à-vis de Moscou. L'histoire récente de la diplomatie (...) / Conflit russo-ukrainien 2022-, Pacifisme, Diplomatie, Christianisme, Vatican - 2023/02

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Vladimir Putin’s speech to mark the annexation of four Ukrainian regions was rich in history and hyperbole. However, the Russian leader leveled an accusation at the West it struggles to convincingly dismiss:

“It was the so-called West that trampled on the principle of the inviolability of borders, and now it is deciding, at its own discretion, who has the right to self-determination and who does not.”

For those with long-enough memories, this refers to Kosovo. When the ethnic-Albanian leadership of the Serbian province unilaterally declared independence in 2008, most of the West immediately recognized it as a state (overall, slightly less than half of UN member states have done so, with several reversing their decisions). The UN Charter, which guarantees the sovereignty and territorial integrity of its members, was simply ignored. For Putin, his salami slicing of other nations begins with Kosovo: it has been repeatedly cited as precedent in recognizing or annexing South Ossetia, Abkhazia, Crimea, and now the latest regions in eastern and southern Ukraine.

This is not to point to a false equivalence between the West and Russia. It only highlights the former’s once circumstantial approach to principles it now proclaims sacrosanct in Ukraine. In the age of Western interventionism following the Cold War, the principle of territorial integrity has never been applied consistently. Instead, it has been contingent on friendship: whether the West prefers those behind attempted secession, or those from whom they are trying to break away. Unfortunately, that inconsistency has denuded international law of its authority, creating a world where unilateral declarations of border changes become permissible.

Speaking from Experience

As president of Serbia at the time of Kosovo’s attempted secession, I stated that the West’s actions “annuls international law, tramples upon justice and enthrones injustice.” That it set a dangerous precedent was reiterated by various world leaders, including some in the West who worried of its destabilizing effects on international relations. Ominously, already in 2008 Putin warned that the West did not grasp the extent of its consequences: the recognition of Kosovo was “a two-ended stick and the second end will come back and hit them in the face.”

Some Western politicians argued Kosovo was a sui generis case: it set no precedent for others who aspired to independence because it was unique. However, on what grounds was never made clear.

It didn’t pass the sniff-test. Within a matter of months, Russia would recognize Abkhazia and South Ossetia, secessionist regions in Georgia that had declared independence more than 15 years beforehand. Then-President Dmitry Medvedev would write in the Financial Times: “We argued consistently that it would be impossible, after that [the recognition of Kosovo], to tell the Abkhazians and Ossetians (and dozens of other groups around the world) that what was good for the Kosovo Albanians was not good for them.” Russia both criticized the decision, then also used it as a precedent. The double standard could now be used by anyone.

Little in principle separated the three secessionist regions. In fact, much in context connected them: Abkhazia, Kosovo, and South Ossetia had been autonomous regions within socialist republics inside communist blocs; all had their autonomy stripped from them upon the collapse of the Soviet Union and Yugoslavia; all had proclaimed independence on the basis that it protected the ethnic minority—Russians and Albanians, respectively—from the parent state. The main difference lay in those doing the recognizing: Russia on one side, the United States and almost all its NATO allies on the other.

For Kosovo, the West would argue the ghost of the Western Balkans wars from the 1990s changed everything. Yet in 2008, Kosovo Albanians faced no existential pressures. The Serbian leadership had grappled with its history, apologized for war crimes committed at Srebrenica, Bosnia, and Vukovar, Croatia, and fulfilled all obligations towards the Hague Tribunal, established by the UN to prosecute crimes committed during conflicts in the Balkans. Our government was on a liberal and pro-European trajectory. We were a fully-fledged democracy. A deal for extensive and full Kosovo autonomy within the Serbian state was on the table. Even the then British ambassador told the UN Security Council that “it is not ideal for Kosovo to become independent without the consent of Serbia and without consensus in this (Security) Council.”

There was, however, one difference: the Kosovo Albanians knew they had the full support of the United States, which had intervened on their side in the 1990s in a war while Serbia was ruled by Slobodan Milosevic—so, before the restoration of Serbia’s democracy. This emboldened their leadership to shun compromise and reject Serbian offers of full autonomy.

None of this means Putin’s claims today of a neo-Nazi genocide against ethnic Russians are true, or that thousand-year-old histories should be the basis for borders, or that the referendums to join Russia in the four Ukrainian regions are justified. What it does mean, however, is that it is the West that opened the door through which Putin would step through.

Perhaps more damaging was a by-product of the episode. Kosovo not only revealed the West thought there should be one set of international rules for themselves, and another for everyone else; it also led to an advisory opinion from the International Court of Justice (ICJ) that would weaken the cornerstone of the international legal architecture—territorial integrity. Its destabilizing effects are only beginning to percolate through the international order. The story behind its formation deserves to be better understood.

The Wisdom behind International Law

International law is by nature conservative. Borders are not perfect. But when the UN Charter was written in the ashes of the Second World War, a new member-state’s imperfect lines were to be recognized, because that member-state committed to recognizing all others. On admittance, those lines bound a nation’s territorial integrity—the lynchpin of the new order. UN states were codified as being the fundamental units of international relations and dispute resolution, rather than bonds of ethnicity.

Leaders recognized that tweaking at the edges would cause the edifice to collapse. Any violation was to be condemned because, if permitted, it would weaken the entire system. That is why, whenever a dispute arose over borders, the UN Security Council would favor territorial integrity.

The preference for the imperfect over the alternative would be underlined in the coming decades. As independence movements swept Africa in the 1950s and 1960s, liberation leaders were left with a dilemma. The continent was home to the world’s least sympathetic borders. Its straight lines spoke to colonialists armed with pencils, rulers, and unreliable maps in Europe, rather than the realities of geography, religion, and ethnicity on the ground. The newly independent nations met in Cairo in 1964 under the Organization for African Unity to resolve the problem of their fabricated borders. They signed an agreement that, whilst recognizing that “border problems constitute a grave and permanent factor of dissension,” they nonetheless pledged to “respect the borders existing on their achievement of national independence.” They too recognized the alternative—redrawing the map—would unleash chaos.

Territorial integrity was the crowning principle of the post-World War II era. However, the UN charter also enshrined what has become a misunderstood principle: the right to self-determination. But it only granted a right to an independent state in cases of colonization or foreign military occupation should it result in an independent state. Specifically, this referred to foreign holdings, not territories within a state. It did not grant ethnic minorities the right to secede. Nevertheless, the Kosovo Albanians, and many other secessionist groups, would declare independence on the grounds of self-determination.

The Error of the ICJ

In February 2008, after the West rushed to recognize Kosovo, my government asked the ICJ for an advisory opinion. First, we needed a referral from the UN General Assembly. Many in the West initially opposed the proposal, but after pressure from other nations that criticized the blocking of a legal and peaceful path to resolution, most would end up abstaining from the vote on the UN resolution. Still, the United States and Albania would be amongst the mere six UN member-states that would vote against referring the case to the ICJ. Presumably it was preferable to be seen as obstructing peaceful resolution, rather than to have an advisory opinion.

Conclusively referred to by the General Assembly, Western lobbying of ICJ judges then began in earnest. Fortunately for those governments, the legitimacy of an international court is different to national sovereign jurisdiction. In the former, it rests on the voluntary political buy-in by individual nations; in the latter, citizens are—at least in principle—automatically bound by state law.

The United States and others let it be known that if Kosovo’s declaration were ruled illegal, it would simply ignore the opinion. A rejection of an advisory ruling by the most powerful countries on Earth would have punctured the court’s credibility, permitting others to equally ignore its conclusions.

The ICJ had been here before. It had been plunged into irrelevance for nearly two decades after a ruling in 1966 on South West Africa, now Namibia, that was widely seen as upholding colonialism. In its immediate aftermath, the supposed world court would end up hearing maritime disputes referred by mostly European nations. It only recovered credibility with the developing world after a series of later decisions that held up justice against powerful nations.

Yet the wholesale dismissal of an opinion on Kosovo by the West threatened to be even more damaging. The judges therefore had a thin line upon which to tread: a need to apply the tenets of international law, but also to bring the international community with it.

The conclusion in the Kosovo case was narrow and, in my opinion, wrong. It failed to give a meaningful answer to the question. It ruled that the declaration of independence itself (the document, not what it said) did not violate international law—as if this were an issue of free speech. Whether the act of secession was in accordance with international law was left entirely unaddressed. Nor did the court’s conclusion express an opinion on whether Kosovo’s recognition by third parties was contrary to international law. It stated:

“The Court does not consider that it is necessary to address such issues as whether or not the declaration has led to the creation of a State.”

This may have satisfied the West. But as a dissenting judge would write, it was clearly inadequate: “the unilateral declaration of independence … was not intended to be without effect. … It was the beginning of a process aimed at separating Kosovo from the State to which it belongs and creating a new State.”

Consequently, the ICJ advisory opinion at once justified nothing and everything. It opened the space for diametrically opposed interpretations. The Kosovo Albanians, having achieved recognition from UN member states upon its declaration, had not been found to violate international law. Yet in not confirming Kosovo’s statehood, we in Serbia—and those that did not recognize Kosovo—felt the principle of territorial integrity still applied: the self-proclaimed state was an illegal entity. In reality, nothing had been resolved.

Moreover, it sent a signal to the rest of the world: independence movements could now proclaim independence risk-free, leapfrogging the national jurisdictions that bound them, with recourse to an advisory opinion in international law. Statehood was to be reliant on others’ recognition, rather than being situated, as in the past, within international law. Th e UN member-states were free to make up their own minds on whether to support them—and would do so based on who their allies were. In other words, on political—not legal—grounds. The same question the ICJ avoided answering in the case of Kosovo now stares at them from the trenches of Ukraine.

No right to secession, nor the necessary conditions for it, had been established by the ICJ’s advisory opinion. Rather, a muddling precedent had been drawn into the architecture of international law. Contained within were the seeds of instability. Cross the Black Sea from Ukraine, and its damaging effects are today visible in conflict resolution in the South Caucasus.

Failure in the South Caucasus

On 14 September 2022, the guns fell silent in the South Caucasus. Yet another ceasefire had been agreed to Europe’s longest running conflict. Nearly 300 Armenians and Azerbaijanis had died in the flare up, the most significant since the Second Karabakh War came to an end on November 10, 2020.

The conflict over Karabakh has been intractable. The region was once an autonomous province within the Soviet Socialist Republic of Azerbaijan. As the Soviet Union disintegrated, the ethnic Armenian leadership of the province declared independence in 1991, setting off a war between neighbors Armenia and Azerbaijan. The result would leave the former in control of around one-fifth of the latter’s territory. In 1994, following a ceasefire that ended the First Karabakh War, it then became one of many post-Soviet frozen conflicts—alongside Transnistria in Moldova, and South Ossetia and Abkhazia in Georgia. In 2020, the dispute heated back up: a short conflict (the Second Karabakh War) saw Azerbaijan recapturing back much—though not all—of its territory.

At the beginning of the conflict, international law appeared unambiguously to be on Azerbaijan’s side. In 1993, four separate UN Security Council resolutions, which are legally binding, would reiterate that the Armenian “occupying forces” should withdraw. Each would be ignored by the Armenians, who at first rested their case in ancient history, backtracking on their commitment to the UN Charter. Having only recently joined the UN along with Azerbaijan, as freshly independent countries, they had agreed that Soviet-drawn borders would form each other’s territorial integrity.

However, when Kosovo’s claim to statehood was not rejected by the ICJ, Armenian separatists then presumed the law to be on their side. The West’s assertion that it was sui generis fell on deaf ears: “That (ICJ) decision has an extremely important legal, political, and moral significance and sets a precedent that cannot be confined to Kosovo,” the unrecognized government of the so-called Nagorno-Karabakh Republic stated.

Like in the case of Kosovo, Azerbaijani offers for autonomy status were rejected by the Armenians, who now believed their right to self-determination would lead to their recognition as a state—eventually. Western partners did not help. Beginning to draw from temporary “facts on the ground” as a given, its commitment to the territorial integrity of Azerbaijan waned.

In 2008, a UN General Assembly resolution was passed that reaffirmed “support for the sovereignty and territorial integrity of the Republic of Azerbaijan” and demanded the “immediate, complete and unconditional withdrawal of all Armenian forces from all the occupied territories of Azerbaijan.” The United States and France voted against it. Many other Western powers abstained.

Proclaimed absolute in Ukraine and irrelevant in Serbia, the cornerstone principle of territorial integrity was now perceived to be ambiguous in Azerbaijan. Such inconsistency cannot be cited on the grounds of vast differences in space and time. They all happened in a thirty-year arc across the post-communist world. Everything, it seemed, was permissible. Nothing was principled.

Negotiations to diplomatically resolve the conflict dragged on meaninglessly. Pent up frustrations would spill over into the 2020 Second Karabakh War. That is partially a result of Kosovo: the Armenian leadership felt legitimized to hold out until its independence claim could be recognized; Azerbaijan felt its territorial integrity was the trump card. Without a shared common understanding of international law, the space for compromise did not overlap. With the peace process at a dead end, flexions of force became the only way to change the status quo. Two years after the Second Karabakh War in 2020, no peace settlement has yet been signed and the situation at the un-delineated international border between Armenia and Azerbaijan remains uncertain.

The Coming Disorder

Western territorial integrity fudges are becoming unstuck. In the immediate post-Cold War unipolar world, inconsistency was perhaps tenable. Global order and its stability were underwritten by U.S. might and supremacy. Allies were backed over principles because nobody had the cleft to challenge the West.

Today, the world is multipolar. Smaller countries coalesce around various centers of power based on their interests if it suits them. Whilst America is still the preeminent power, its relative authority has waned. In hindsight, past American (and Western) disregard for territorial integrity and international law looks short-sighted. With growing geopolitical tensions, such consensual rules are needed more than ever to temper power struggles. The conflict over Kosovo was never about one small Serbian province—it was about the challenge it represented to a post-World War II peace founded on territorial integrity. In trampling the principle, the West lost its moral authority.

Western appeals to principles of territorial integrity now hold diminished sway outside of its own backyard. When Russia officially annexed Crimea, a United Nations General Assembly resolution was tabled that affirmed Ukraine’s territorial integrity and rejected the validity of the referendum Putin claimed he was only honoring. The results? 100 votes for, 11 votes against, 58 abstentions, and 24 absent.

Whilst it may have passed, many UN member-states clearly felt they had little to gain in upholding a system of mutual protection if others did not play by the rules. A similar vote was brought in October 2022 demanding Moscow reverse course of its “attempted illegal annexation” of the four Ukrainian provinces. Though there was improvement on the Crimea resolution, more than one-fifth of countries still voted against it or abstained—even after extensive Western lobbying. It is hardly the diplomatic victory that was proclaimed: compare it to a UN General Assembly resolution that passed in 1974 affirming the territorial integrity of Cyprus following the invasion of the North by Turkey: 117 votes for, 0 votes against, 0 abstentions.

The Kosovo precedent and the subsequent ICJ ruling not only has implications for the international community; it has also given license to any group that wants to secede. With global instability on the rise, this will become increasingly dangerous.

The coronavirus pandemic, Russia’s invasion, and Western sanctions have profoundly shaken the global economy. Coupled with the growing devastation of climate change, the world faces a prolonged crisis. Against such headwinds, the center will struggle to hold. Marginal or disenfranchised groups are more likely to grow disaffected and agitate against their authorities. Secession attempts will become more common. States will likely turn more inwards at the precise moment when we need global cooperation.

Ultimately, secessionism or annexation are regressive answers to the question of multi-ethnic states. If we are to return some semblance of stability to our increasingly fractious and decentralized world, we must return to the principle of territorial integrity.

Of course, there is a simple solution. The Western states could roll back their recognition of Kosovo, reaffirming that the principle of territorial integrity applies across time and all contexts. This may not stop the likes of Putin, but it would remove his justification for illegal land grabs whilst dampening dormant secessionist forces around the world that will feed on future instability. Yet though practically straightforward, and its benefits self-evident, a Western mea culpa is as likely as Russia voting to affirm the territorial integrity of Ukraine.

Boris Tadić served two consecutive terms as Serbia’s first democratically elected president (2004–2012).

Earlier this month, I had the privilege of participating in the conversations held in the various lounges and side events connected to the annual meeting of the World Economic Forum in Davos, Switzerland. One topic was on everyone’s lips, from the official sessions at the Congress Center to the late-hour conversations at Hotel Europe’s Piano Bar: decoupling between the United States and China. This decoupling can be described using the metaphor of Charles Dickens’ A Tale of Two Cities. In the classic book, the two cities of Paris and London are depicted as vastly different from one another, yet connected through the tumultuous events of the French Revolution. Similarly, the United States and China, closely interconnected through trade and investment only several years ago, are now moving in separate directions as tensions rise and their relationship becomes increasingly fraught. Chinese vice premier Liu He warned against the “Cold War mindset” at Davos, but he failed to convince the world that Beijing is back. Just the title of this year’s gathering, “Cooperation in a fragmented world,” spoke volumes about the state of play in global affairs.

Just as the French Revolution in 1789 created a divide between Paris and London, trade tensions and geopolitical disputes between the United States and China are resulting in the decoupling of the two of the world’s largest economies. This global divide is defined by a growing sense of mistrust between the two economic engines of global trade.

The Bretton Woods system, established in the ruins of a world left devastated by World War II, was a set of international monetary arrangements that aimed to promote economic stability and growth by linking national currencies to the U.S. dollar and fixing exchange rates. In a multipolar world, the Bretton Woods system faces several challenges, including

• U.S. dollar dependency: The system is heavily dependent on the stability of the U.S. dollar, and fluctuations or disorderly devaluations in its value could have major impacts on other currencies and the global economy.

• Limited adaptability: The fixed exchange rate regime can’t easily adjust to changes in the global economy and will often lead to imbalances and trade conflicts.

• Unequal economic growth: The Bretton Woods system was designed for a world dominated by two major powers, the United States and the Soviet Union. In a multipolar world with multiple centers of power, such a system will struggle to accommodate diverse levels and systems of economic growth and development.

• Increased monetary competition: The rise of China and Russia’s pullout from the global financial system, together with increased monetary competition, has made it more difficult for the United States to maintain its dominant position in the global monetary system.

• Inadequate response to crises: The system has been criticized for its inability to respond effectively to economic shocks and crises, such as the oil crisis of the 1970s.

The systemic challenges faced by the Bretton Woods institutions in a multipolar world have contributed to its gradual decline and calls for a shift toward a new diverse and inclusive global monetary system, in which the various regions can come together to agree on a common playbook and rules of engagement. With the old order on the retreat, the new order is yet to take its final form, but we are beginning to see signs of the shape of things to come.

The reluctance of developing countries to accept the “Washington consensus” can be seen as a rejection of the old system and its shortcomings. The economic paradigms that have dominated the post-World War II era are no longer seen as relevant or effective in a rapidly changing and highly volatile multipolar world, and developing countries are seeking new ways to promote stability and growth that take into account their unique challenges and needs.

Where the World Islands Come Into Play

The notorious Russian political analyst Alexander Dugin has coined a theory of world geography known as the theory of World Islands. It is based on the idea that the world can be divided into several distinct cultural and political spheres, or "islands," each with its own unique characteristics and history. According to Dugin, these islands have distinct cultural and political identities and are defined by the way they relate to each other and to the world at large.

Dugin, sometimes described as the ideological mastermind behind Putin’s Russia, has argued that these islands will be organized into a hierarchy, with the West at the top and other regions, such as Russia, China, and the Islamic world, lower down. Dugin argues that the world is undergoing a profound transformation, with the rise of new powers and the decline of the West, and that this shift will have major implications for the future of the world. He believes that the world is moving away from a unipolar order dominated by the West and toward a multipolar order in which the various world islands will have greater autonomy and influence.

Currently, we are seeing several world islands appearing, with the United States leading the united West, although occasional cracks in the transatlantic bond are emerging over trade issues and protectionist policies on both sides of the Atlantic. Russia was kicked out of the Western financial system and has been forced to develop its own system or integrate its payment systems with China’s. Africa remains largely a question mark, with one of the panelists at the Davos Africa House reminding the audience that it is still more difficult for most Africans to visit neighboring countries than it is for foreigners. We see similar islands, or varying standards, emerging in the sphere of digital technologies.

The Future Is Both Digital and Backed by Real Assets

Fintech, or financial technology, may play a significant role in shaping the form and structure of the future global monetary system. The innovative use of technology through collaborative investment and finance platforms has the potential to reach populations that have been excluded from traditional financial services and to increase access to financial services for areas that haven’t benefited from being part of the Washington Consensus. Fintech solutions often use digital infrastructure and low-cost operating models to provide financial services at lower costs, making them accessible to a wider range of customers. Fintech has also opened up new forms of finance, such as crowdfunding and peer-to-peer lending, allowing everyone to become their own banker. The recent crash of cryptocurrencies has revealed the weakness of fintech solutions that aren’t backed by real assets.

Thus, it is crucial that the new global monetary system be backed by real assets, as such a system can provide greater stability and build confidence in high-volatility environments. Stability has become the new alpha that investors are seeking. Real assets are tangible items such as gold or real estate that have intrinsic value and are not subject to the same fluctuations and uncertainties as other forms of currency. Currencies backed by real assets are seen as more trustworthy and reliable, as their value is directly linked to the value of the underlying assets. Digital assets backed by real assets can also provide a powerful hedge against inflation. As the global economy is looking for more real asset-based solutions, the question then becomes: how do we bring the fragmented world together to discuss the common rules of the game, and where should such a meeting take place?

Will Bretton Woods 2.0 Be Based In the Gulf?

The Gulf Cooperation Council (GCC) countries are a natural choice to bring nations together in a multipolar world to discuss the future of the global monetary system. This is due to their role as bridge builders and their diplomatic efforts to become platforms for conversation around the future direction of global development and leadership, signified by the recent Dubai Expo 2020 and the 2022 FIFA World Cup held in Qatar, together with the United Arab Emirates’ upcoming chairmanship of the COP28 climate conference.

The GCC countries have a long history of serving as intermediaries between nations and have established the region as a hub for economic, political, and cultural exchange. Strategically located at the crossroads of Europe, Asia, and Africa, the GCC states have significant geopolitical influence in the wider region, making the Gulf well-suited to serve as a future platform for international collaboration and cooperation. The GCC countries have strong diplomatic ties with nations around the world and have a reputation for serving as neutral intermediaries in conflicts and disputes. While Ukrainian president Volodymyr Zelenskyy has called neutrality ‘immoral’ in the light of the war in Ukraine, the reality of our world is that when the war ends—and all wars eventually end—there will be a Ukraine and there will be a Russia, and they will have to learn to live with each other again.

Even the fragmented world needs its meeting places. During World War II, there was the Bank for International Settlements, where the warring parties could still come together to discuss both outstanding commercial issues and the future of the global order after the war. Similarly, the Gulf is uniquely positioned to bring the parts of the world that are not talking to each other back together and map out the architecture of the future global monetary system.

Ville Korpela is Executive Director at Impact Innovation Institute. He is also a member of the Councilors Program at the Atlantic Council.

Image: Drop of Light/Shutterstock.com.

Once upon a time, the leaders of a mighty military power, which was the successor to a great historic empire that had lost much of its territories after the end of an international war, were concerned that political instability and a regime change in a nearby country that had once been one of its provinces could threaten its ethnic brethren that resided in that lost domain. Further, these leaders feared that a rival historic power with ties to the country’s other ethnic group would exploit the situation to attain a military presence there.

So, in violation of international law, the ex-empire deployed its troops into the country and invaded part of its territory under the pretext of saving its compatriots and defending its core interests.

After occupying more than one-third of that country’s territory, the military power declared that territory to be an autonomous region, and later as an independent state. This move for all practical purposes divided that country, and it wasn’t recognized by members of the international community, including the power’s leading allies.

That “independent state” has survived for close to half a century, as repeated diplomatic efforts to bring the two parts of the country together have failed. The illegal occupation, coupled with human rights violations, has ignited criticism, while the unoccupied part of the country has developed into a modern and prosperous liberal democratic state.

Bottom line is that the status quo has remained intact and in line with the interests of all the players involved. And notwithstanding its illegal occupation of the territory, the nation-state that continues to dream about re-establishing its old empire has emerged as a major regional and global player that maintains diplomatic ties with all members of the international community.

Of course, the aforementioned aggressor country is not Russia, and the situation described is not the Russian occupation of Ukraine and the events leading to it. Instead, it is the story of the island of Cyprus, which has been divided since 1974 when Turkey invaded in response to a Greek-backed military coup. Certainly, the prospects for a possible diplomatic deal on the island are remote; for all practical purposes, Turkey’s occupation has been accepted as part of the status quo in Cyprus and the region.

That reality allows all the players involved to place Cyprus’ territorial division at the bottom of the global agenda. This is in stark contrast to, say, Israel’s occupation of the West Bank and Gaza, which continues to stir international tension, and is more like the independence of Kosovo that permits everyone, including those who don’t recognize that state, to live with it.

But while Ukraine isn’t exactly “like Cyprus,” and there are some major differences between Russia’s invasion of its neighbor and Turkey’s occupation of a Mediterranean island, there are intriguing similarities that raise the possibility of a solution along similar lines. Under such a plan, Ukraine remains divided between a Russian-controlled autonomous territory and an independent and prosperous Western-oriented Ukraine.

To recall, Cyprus, which was once part of the Ottoman Empire before it was taken by the British following a post-World War I settlement, experienced growing violence between its Greek and Turkish communities after winning independence in 1950. Relations further deteriorated throughout the 1960s, and intercommunal violence became more common. Then, in July 1974, a Greek military regime instigated a military coup in Cyprus with the intention of uniting the island with Greece, or “Enosis,” provoking a Turkish invasion. Turkish leaders justified their country’s invasion and initial occupation of 3 percent of the island as part of an attempt to protect its Turkish minority, which constituted 20 percent of the population.

After ensuing peace talks between the two communities failed to lead to a peace agreement, the Turks expanded their occupation to 36 percent of the island. That resulted in the de facto partition of Cyprus with a United Nations buffer zone—known as the Green Line—separating Cyprus from the Turkish-occupied areas in the north which absorbed many of the Turks that were displaced from the south.

In 1983, the de facto Turkish Cypriot Administration declared independence as the Turkish Republic of Northern Cyprus—not to be confused with the Republic of Cyprus. There the government, backed by the United States and the European Union, which Nicosia joined in 2004, transformed itself into a prosperous economy. Nicosia still regards the northern part of the country as Turkish-occupied territory and supports the idea of negotiations aimed to bring the country together. Meanwhile, the northern part has been settled by Turkish immigrants and has gradually become a province of Turkey.

In this context, the United States and the EU, which publicly insist that Russia should vacate Crimea and the other Ukrainian areas that it has illegally occupied, seem to have no major problem turning the Turkish occupation of Cyprus into a marginal international issue; in fact, Turkey remains an important member of NATO and Ankara has conducted negotiations with Brussels over joining the EU, even as its forces have occupied Cyprus.

One of the main reasons that the status quo on the island has lasted for so many years is the reluctance of Nicosia and Athens to challenge the Turkish occupation through the use of military force. It seems that the leaders in Nicosia have made their cost-benefit analysis and decided that the benefits of becoming a thriving Western society and ally of the United States and the EU outweigh the costs of confronting Ankara. 

From that perspective, Ukraine’s leaders in Kyiv may reach a point where the costs of continuing the war with Russia in order to liberate Crimea and other Russian-occupied territories would be perceived as outweighing the benefits of a cease-fire that would provide for the reconstruction of Ukraine and permit its future accession to the EU and NATO.

That shouldn't prevent Kyiv from continuing to challenge the illegal Russian occupation of Ukraine and calling for the return of those territories to Ukraine’s control at some point in the future.

Of course, a deal that accepts the current status quo in Ukraine would not satisfy everyone, but it would allow the United States and the EU to rebuild Ukraine and help it join the West. Further, it would assist the West in restoring ties with Moscow and finding ways to ensure that Russia becomes part of a new and peaceful postwar balance of power in Europe.

Dr. Leon Hadar, a contributing editor at The National Interest, has taught international relations at American University and was a research fellow with the Cato Institute. A former UN correspondent for the Jerusalem Post, he currently covers Washington for the Business Times of Singapore and is a columnist/blogger with Israel’s Haaretz (Hebrew).

Image: Seneline / Shutterstock.com

Beijing makes no secret that it wants China’s yuan to replace the dollar as the world’s premier reserve currency. During his recent trip to the Middle East, President Xi Jinping tried to advance that objective. In promoting trade relations with oil-rich nations, especially Saudi Arabia, he went out of his way to announce that oil contracts would settle in yuan and not, as usual, in dollars. Much of China’s Belt and Road scheme also aims to elevate the yuan to international status. Someday Beijing might succeed. The yuan might overtake the dollar. Stranger things have happened. If it does, it will take a very long time, and will require a lot of change in China. For now, though, China’s yuan lacks all the attributes required of a global reserve.

At the top of the list is widespread acceptance. The dollar may not have the dominance it once enjoyed in the late 1940s and the 1950s, but it is accepted for transactions much more widely than the yuan. Many other currencies are also accepted more widely than the yuan. According to the non-partisan Congressional Research Service, China’s yuan features in some 2 percent of global import and export contracts. That is well up for five or ten years ago, but still well short of the dollar, which accounts for some 75 percent of world trade contracts and settlements, whether an American is involved or not. Euros, Japan’s yen, and Britain’s pound sterling fall far short of the dollar’s use but still play a greater role than the yuan.

Nor does the yuan fare much better as a vehicle for currency trading. In 2022, according to the Bank for International Settlements, some 7 percent of global currency trading occurred in yuan. China’s currency has received an extra fillip recently because Western sanctions against Russia have made Chinese links valuable to anyone who wanted to buy or sell in Russia. At the present, elevated level, the yuan has surpassed both the Canadian and the Australian dollar in this regard, as well as the Swiss franc. But even with this year’s special jump, the yuan falls far short of the amount of currency trading done in the euro, the yen, or sterling. And it is well behind the dollar, which dominates some 90 percent of all global currency trading.

Preferences by central banks to hold each currency in reserve approach this matter from a different perspective. The yuan clearly is not preferred. Some 70 central banks do hold yuan in reserve, a much greater number than a few years ago, but still, according to the International Monetary Fund, these holdings amount to only a bit over 2 percent of the global total. That figure falls short of the euro, for instance, which amounts to some 20.6 percent of global central bank reserves, or even the yen, which amounts to 5.8 percent. The yuan’s role certainly falls far short of the dollar, which amounts to about 59 percent of these reserves. As should be apparent from these trading proportions, the dollar, on strictly practical grounds, should have a higher proportion of central bank reserves than it does. Diplomacy and politics explain this difference.

Perhaps the greatest of the yuan’s inadequacies concerns China’s own financial system. For a currency to serve as the global reserve, it must have liquid, active financial markets denominated in it. These markets must offer all who must hold the global reserve currency—importers, exporters, currency traders, international banks, and central banks—a wide range of investment options for their holdings: liquid short-term deposits, for instance, longer-term bonds, stocks, options, futures, forward contracts, and the like. Those financial markets must offer people the ability to trade in and out of such investments quickly and easily. Dollar-based markets—in the United States and elsewhere—offer an abundance of such support. China does not.

A sense of this difference emerges from a comparison of the relative size of financial markets in the United States and China. U.S. equity markets amount to about 33 percent of all global stocks, whereas China’s stock market equals slightly less than 8 percent of the global total. In bonds, the figures are respectively 39 percent and 17 percent. Vast as these differences are, they do not capture the still wider difference in the sorts of investment and trading vehicles that are offered in dollar-based markets but are limited or non-existent in yuan-based markets. Far from offering liquid, easily accessed markets for yuan-based investments, China still distinguishes between domestic and foreign uses of its currency. It controls flows of money into and out of the country. It has limited trading in futures and forward contracts, including those directly concerned with currency.

Some yuan enthusiasts have pointed to the advent of a digital yuan as the key to that currency’s future dominance. It will, these enthusiasts claim, enable the yuan to acquire a global reach denied to the dollar until it, too, acquires a digital version. While it is true that the People’s Bank of China issues a digital version of its currency, and that the Federal Reserve does not issue a digital dollar, that in no way limits the dollar’s digital global reach. On the contrary, well-established networks of wire transfers, credit cards, debit cards, and ATMs, along with payment services such as Venmo, PayPal, and Zelle, have long enabled exchanges across the globe, twenty-four hours a day, seven days a week. A tourist from Omaha, Nebraska, can use an ATM card from a local Omaha bank just about anywhere on Earth to digitally authorize an instantaneous currency transaction between his or her local bank account and the currency of the nation he or she is visiting. The digital yuan lacks any such support, or any other similar financial support.

As China’s economy grows, the yuan will gain traction as a portion of global trade, currency trading, and even reserves held by the world’s central banks. It will, however, take a long time to challenge the dollar, especially now that China’s economy and trade will likely grow at a slower pace than they did previously. What is more, the undeniable affection for control exhibited by the country’s leadership makes it doubtful that China will ever permit the open, flexible financial markets needed to support a global reserve currency. Unless China changes dramatically, it is more likely that some other currency or system will replace the dollar before the yuan has a chance, though nothing is presently on the horizon. Far from making the required changes, it is not even apparent that Xi or the Chinese Communist Party is aware of what is needed.

Milton Ezrati is a contributing editor at The National Interest, an affiliate of the Center for the Study of Human Capital at the University at Buffalo (SUNY), and chief economist for Vested, the New York-based communications firm. His latest books are Thirty Tomorrows: The Next Three Decades of Globalization, Demographics, and How We Will Live and Bite-Sized Investing.

Image: Pla2na/Shutterstock.com.

A credible military threat might be enough.

Iran’s transformational season of protest.

With overwhelming bipartisan support and his infamous sharpie in hand, former President Donald Trump made Ronald Reagan’s dreams a reality. Nearly four decades after the Cold War-era president called for the weaponization of space, the Trump administration created the first new military branch since 1947: the United States Space Force (USSF).

The USSF’s inception expanded on Washington’s existing and persisting goals to expand U.S. influence in space. Since 2017, NASA and the State Department have worked to recruit signees to the Artemis Accords, a seven-page document outlining Washington’s vision for space governance. While typical Washington partners—including Japan, the United Kingdom, and the United Arab Emirates—were quick to join as founding members, the twenty-one country list of signees is notably missing Russia and China as terrestrial rivalries threaten to go interstellar.

In an effort formally initialized under the uniquely space-forward Trump presidency, Washington is trying to call dibs on writing the rules in space, eager to create a model that mirrors America’s terrestrial geopolitical and commercial preeminence. But Russia and China aren’t going to sit idle, and, according to some, Moscow and Beijing—not Washington—are leading the charge.

In the last two years, China and Russia expanded their in-orbit assets by 70 percent following their already impressive three-fold increase in space presence from 2015 to 2018. While large swaths of this growth have—thus far—been civilian-led, the same technologies that achieve scientific goals could also achieve military goals. But even those more peaceful commercial endeavors make Washington nervous, and rightfully so. The prospect of losing out on a $1.4 trillion industry risks undercutting U.S. dominance, both in space and on earth. If the quest for geopolitical clout wasn’t going to force confrontation, economic interests will.

Beijing and Moscow understand this, so they’ve been preparing. The core of this conversation is satellites, the backbone of U.S. command and control and prime targets of preliminary strikes preceding a broader conflict. As early as 2007, China was bolstering its ability to take out satellites in low earth orbit (LEO), where over 80 percent of the world’s satellites are located. Chinese defense academics haven’t been vague about the purpose of these ground-based anti-satellite (ASAT) systems, frequently arguing that they could be used to “blind and deafen the enemy” by targeting the communication, navigation, and early warning systems that help protect Washington from attacks. Putin, not one to let Russia lag behind, reminded the world of Moscow’s space abilities by testing one of its ASAT systems on an inactive Russian satellite. That satellite is now some 1,500 pieces of space debris.

These ground-based capabilities, however, only scratch the surface, as Russia and China work to take out U.S. satellites with “on-orbit” technology “via jamming, cyberspace, [and] directed-energy weapons,” or lasers. Russia, for example, has proved it can now launch ASAT missiles from satellites. Exciting, right?

As Beijing and Moscow push the needle on offensive space capabilities, Washington has started to grapple with whether it should pursue space-based missile defense systems. For fear that the ability to reliably intercept missiles would undermine the stabilizing theory of mutually assured destruction (MAD), these capabilities have been put on the back burner as State Department and Department of Defense officials heed the warnings of domestic critics. At least for now, that is.

Navigating arms races on earth is difficult and dangerous enough, but this trend towards militarization in space carries heightened risks as countries face minimal restrictions from credible, widely agreed-upon international institutions and norms. While the half-century-old Outer Space Treaty (OST) calls for peaceful space exploration and the UN Moon Agreement of 1979 limits inequitable commercial exploitation of space resources, the OST lacks actionable detail, and the UN failed to get the United States, Russia, and China on board. Even though the Artemis Accords are relatively benign in substance and just a series of bilateral agreements, a “revolutionary” U.S.-centric model has deterred even some of Washington’s closest partners—Germany, France, and others—from joining on.

And to be sure, the United States is not exactly a benevolent actor. Trump was clear that “space is a war-fighting domain, just like the land, air, and sea,” and the Biden administration gave permanence to this policy as it backed the USSF’s creation with “full support.” So, yes, Washington is not some space arbitrator, but that's to be expected. As threats from its near-peer rivals abound, the United States has to be able to protect itself and threaten its adversaries. It's too late for pacifism.

At the very least, Washington must support a concerted effort to reduce its vulnerability and create redundancies. Historically, America has relied on large satellites that accomplish many different goals. Though logistically simpler, this “all-eggs-in-one-basket” architecture increases the potential damage done by a single attack. But now, the Pentagon is pursuing a redesign of its space presence to deploy thousands of satellites—what it is calling constellations—in LEO to create system resilience that ensures Washington is able to fight, no matter how unexpected or successful a preliminary strike is. While the immediate development and deployment of space-based missile defense might be a step too far, Washington must also take steps to explore direct counters—preferably defensive, though maybe offensive—to Russia and China’s growing militarized space presence.

The goal of efficacious space capabilities isn’t to win an arms race; it's to make sure what happens in space stays in space. Paired with careful diplomacy and the expansion of a space-specific rules-based order, advancements in U.S. space capacity both deter and inhibit adversarial adventurism, limiting the scope of potential confrontation.

But if the United States lacks first-class diplomatic, strategic, and technological space infrastructure, a future president, faced with a space-based attack on significant U.S. military or commercial assets, may be pressured to expand the conflict horizon and take terrestrial action. Developing a wide array of measures helps ensure no U.S. president has to make an all-or-nothing decision.

Kendall Carll is an undergraduate at Harvard studying History and Government. His interests are primarily in grand strategy, great power competition, East Asia, and weapons of mass destruction.

Image: DVIDS.

Last month, the Yemen War Powers Resolution (YWPR), which, if passed, would have ended direct U.S. military involvement in Saudi Arabia’s war against the Houthis in Yemen, was withdrawn from an impending Senate vote by its sponsor, Sen. Bernie Sanders (D-VT). This move came after President Joe Biden and his administration promised to veto the resolution if it passed and urged other senators to vote against the bill. While the resolution has likely not seen its last bit of daylight, this was another major setback in the effort to terminate U.S. involvement in a conflict that has produced one of the most devastating and least discussed humanitarian crises of our time. The war has brought immense suffering to the Yemeni people, with civilian casualties, diseases, internal displacement, and famine ravaging the populace.

Ending U.S. involvement in this conflict has garnered bipartisan support in Congress over the years despite various failed attempts to pass forms of a YWPR. The movement has hit many roadblocks, such as several vetoes of legislation by President Donald Trump, but has also seen some recent success, with Biden shifting some policies held by his predecessors, vowing to stop supporting offensive Saudi military operations and moving the Houthis off the terrorist designation list. However, these shifts have largely failed to address the key issues that have kept this conflict and all associated atrocities in motion. The United States has remained Saudi Arabia’s primary arms supplier, and many U.S.-made planes and weapons used in offensive operations by the coalition receive maintenance and support from the U.S. military and U.S. contractors well after Biden’s pledge to cease such support. The Biden administration justified its decision to lobby against the current iteration of the YWPR by claiming that the situation on the ground has changed, as a UN truce had managed to reduce violence for much of 2022 and keep Saudi airstrikes at bay—even after the truce ended in October. The administration worries that passing the YWPR would harm the peace process by reducing Saudi Arabia’s position at the negotiating table, while critics of the move argue that this leaves the door open for Saudi Arabia to open a new bombing campaign with U.S. assistance.

This decision has also appeared to be a serious reversal by Biden and several of his key foreign policy officials. Top confidants, such as national security advisor Jake Sullivan, signed letters to Trump supporting previous iterations of the YWPR, and Biden promised to make Saudi Arabia a pariah in his presidential campaign. The move to block the YWPR seems to be the latest instance of a major shift in the administration's attitude towards the Saudis, which has garnered much attention since Biden’s visit to Saudi Arabia this past July, which was marked by Biden’s failure to secure increased oil output by the Saudis and the rest of OPEC+. The administration blocking the resolution thus looks to be another effort to appease the Saudis, preceded by a recommendation from the administration to grant Crown Prince Mohammad bin Salman (MBS) immunity in a lawsuit by the fiancée of Jamal Khashoggi, as well as sustained weapons sales. Meanwhile, MBS recently hosted Chinese president Xi Jinping and signed several investment deals with Beijing. This was the latest move to increase bonds between Saudi Arabia and China, and it is apparent that this developing relationship, compared to a perceived fraying of U.S.-Saudi ties, is causing concern in Washington.

While it is true that such developments could cause significant changes to U.S. policy in the Middle East, the possible outcomes do not justify an alarmist reaction that includes appeasement, further facilitating catastrophes such as the war in Yemen. The United States has the capability to invest in alternative energy sources, including domestic oil production. A Saudi shift towards China would also motivate the United States to define its relationship more clearly with Saudi Arabia, unraveling itself from the often frustrating and contradictory status of quasi-alliance, which constrains U.S. policy flexibility in the region. Attempts to sway states away from their natural interests rarely lead to success, and it is reasonable to assert that the largest global oil exporter seeking closer relations with their biggest buyer is a natural development, especially since the Saudi economy is almost entirely reliant on oil exports. Additionally, China’s budding interest in Saudi Arabia will be complicated by its established affiliation with Iran.

The war in Yemen has been a disaster, and desperate and unnecessary attempts to prevent Saudi Arabia from pursuing alternative relationships are no reason for the United States to continue aiding in the destruction by providing direct military assistance. A resolution that seeks to curb that potential is worth the possible disruption of longstanding policy, especially when that policy is counterproductive to U.S. interests and more beneficial alternatives exist.

Chad Kunkle is a Recipient of a B.S. and M.S. in International Affairs from Florida State University and a former intern at the Hudson Institute.

Image: Salma Bashir Motiwala / Shutterstock.com.

The decision by the United States and NATO to provide Abrams and Leopard II main battle tanks to Ukraine for its war against Russia is a logical follow-on to the events of the past calendar year. Russian president Vladimir Putin’s decision to attack Ukraine in February 2022 did not turn out as well as the Kremlin expected. Instead of a coup de main that toppled the government in Kyiv, Russia has found itself locked into a costly protracted war of attrition. The Russian forces’ military performance has also been disappointing to its political and military leadership, and a periodic reshuffling of field commanders has not improved matters very much. Heavy fighting between Russian and Ukrainian forces continues in the east and south of Ukraine. Russia is now maintaining a 1,300-kilometer defensive line and regrouping in order for what many expect will be a major offensive later this year.

To meet the expected Russian offensive in the late winter or early spring, Ukraine needs additional components for modern air-land battle, including main battle tanks, armored personnel carriers, long-range artillery, advanced missile defense systems, and trained operators who can use this up-gunned equipment to good effect. Thus the announcements by President Joseph Biden and NATO secretary-general Jens Stoltenberg on January 25 that the United States would send thirty-one Abrams tanks to Ukraine—in order to clear the way for Germany, Poland, and other NATO members to send hundreds of Leopard tanks to that beleaguered country—appears as only an incremental upping of the ante. 

But Russia may not see it that way. The problem of escalation in times of war has at least two parts: the military-technical and the political-psychological. The military-technical aspect is the conduct of battle and the provision of the necessary ingredients for doing so: troops; equipment; ammunition; command, control, and communications; intelligence; and so forth. These components of the effective management of the battlefield are challenging enough. Few battles ever go exactly as planned, and a great deal of uncertainty, chaos, and friction can be expected as the fighting continues. 

The political-psychological aspect of escalation is even more challenging. This aspect appears in two ways: first, in the perceptions and expectations of political leaders and their senior military advisors; and, second, in the views of the major domestic political forces in each country, including elite influencers of various sorts and the mass public. 

With respect to the political-psychological aspects of escalation, it appears that Russia has already taken a considerable hit. Its subpar military performance compared to prewar expectations has embarrassed the Kremlin’s leaders and senior military commanders. Troop morale has lagged and widespread resistance to calling up reserve forces has been outspoken. Putin appears to believe that he has convinced the Russian public of the necessity for this prolonged war. But that presumed approval is fragile, and it depends on the ability of Russian forces to provide convincing evidence of meaningful progress on the battlefield. Meanwhile, Ukrainian military forces have outperformed most prewar expectations. This has led Ukrainian president Volodymyr Zelenskyy and his advisors to believe that more state-of-the-art military equipment from NATO, together with other support that includes intelligence, training, logistics, and command-control systems, will permit Ukraine’s forces to go on the offensive and retake territory previously occupied or declared annexed by Russia.

Going forward, there are at least two potential scenarios of escalation: vertical and horizontal. Vertical escalation would imply the use of larger and more destructive conventional weapons and, in the worst case, the resort to short- or medium-range tactical nuclear weapons by Russia. Horizontal escalation implies an expansion of the conflict into other countries, including possibly some NATO member states. From Russia’s perspective, NATO is already engaged in a proxy war against Russia, and the symbolism of American tanks and trainers being forward deployed in Ukraine might appear as a very personal challenge to Putin and his military leadership by Washington.

In addition to horizontal and vertical escalation, either Russia or NATO might engage in domain escalation. One example of domain escalation would be large-scale cyberattacks by one side against the other side’s military, economic, or social assets. We know that major powers already have the capability for constant probing of one another’s military and civil computer and communications networks. In the event of war, even more aggressive efforts to steal secrets and to plant destructive bots can be expected. A side that feels it is losing the kinetic war might turn to cyber war in order to compensate by escalation into another domain

Another example of domain escalation could be more widespread uses of drones for attack or defense of military and other assets which Russia has already done much more than Ukraine. Both sides have used drones for reconnaissance, command control, and strikes. The expansion of limited drone attacks into more massive sorties as the technology improves will appeal to technology-minded commanders and software engineers.

Domain escalation might also take the form of targeted assassinations against political or military leaders, a tactic that Russia, not Ukraine, has repeatedly used. In fact, allegations of Russian clandestine efforts to take out Ukrainian leaders during the early stages of the war were widely reported. In addition to hit squads of commandos, Russia might also use advanced technologies for precision strikes with drones, microwaves, or lasers, among other possibilities, against individual Ukrainian leaders or vital centers of decisionmaking in Ukraine.

Finally, and most regrettably, escalation can take the form of crimes against humanity. The purposeful targeting of civilians for terror and shock effect, apart from any legitimate military purpose, is one option that appeals to frustrated leaders facing battlefield disappointments. In this regard, Russia has deliberately targeted missile strikes against Ukrainian civilians, including attacks on schools, hospitals, apartment buildings, and electric power grids. This shock and awe against civilians by Russia is intended to discourage support for the war, but it has had the opposite effect in Ukraine. Public support for the war against Russia and for the Zelenskyy government has remained strong—Russian atrocities only serve to delegitimate the Kremlin’s rationale for war, and thereby, serve to further empower Ukraine and NATO to accomplish their objective of preventing Russia from taking permanent control of any part of Ukraine, no matter how long it takes.

Stephen Cimbala is a Distinguished Professor of Political Science at Penn State, Brandywine.

Lawrence Korb is a Senior Fellow at the Center for American Progress and a former Assistant Secretary of Defense.

Image: DVIDS.

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