Turkish and UN diplomats have spent the last several weeks trying to forge a deal between Ukraine and Russia that would see Kyiv’s embargoed wheat be able to reach ports around the world. There have been several challenges facing Ukraine’s exports, not the least of which is the fact that Kyiv mined many of its own seaways in an attempt to stymie hostile Russian naval activity in the region.
This week marked the first shipment of grain under a newly forged agreement between Russia and Ukraine, and while many are hopeful the deal will facilitate greater global grain supplies there are a few reasons to remain skeptical.
The Speaker of the US House of Representatives, Nancy Pelosi, has arrived in Taiwan. As such, she is the highest-ranking US official to make a visit to the island since her predecessor, Speaker Newt Gingrich, visited in 1997. While there is likely little both would agree on, the former Speaker has been quite supportive of Speaker Pelosi’s decision to visit Taiwan. China has been huffing and puffing about the visit since it was announced, but there’s very little Beijing could do short of shooting down Pelosi’s plane. Which isn’t likely to happen.
Beijing has viewed Taiwan as a breakaway province since the time of Mao, and has worked diligently to erode international recognition of Taipei under its One China Principle. The US since Nixon has held off formally recognizing Taiwan as an independent country, but since the end of the Cold War Washington has moved steadily toward an economic and security relationship with Taiwan that falls just short of official recognition, to Beijing’s dismay.
The United States announced August 1 that it had killed the ideological head of al Qaeda, Ayman al Zawahiri, in a drone strike, over the previous weekend. Reportedly battling a long-time illness, al Zawahiri’s actual level of control over al Qaeda (and its regional affiliates) is debatable. His role in the September 11 attacks against the United States in 2001 and in inspiring campaigns of militancy that killed thousands is decidedly less so.
I do take note of al Zawahiri’s presence in a home inside Kabul. The US–primarily its intelligence agencies–still maintain considerable capabilities in a country with no formal military presence. And they are more than happy to remind any number of bad actors of the fact.
Gazprom, the Russian state’s gas monopoly notified its European customers that it was declaring force majeure in its supply contracts going back to June 14, citing “extraordinary circumstances” preventing the delivery of natural gas. It’s easy to guess what the circumstances referenced are–the conflict in Ukraine, sanctions, etc. Is this just Russian brinksmanship? A negotiating chip?
Maybe. Probably not. We shouldn’t forget that Nord Stream 1, the direct gas pipeline between Russia and Germany, is currently undergoing routine maintenance until later this week. There’s still no strong indication that Russian gas supplies will resume in whole or in part, and with today’s declaration Moscow has legal cover to halt energy supplies to the economic heart of Europe. As if legal cover is all Russia needs.
In the links below, we’ve included a series of videos I’ve recorded over the past few months that outline Russia’s strategy, Europe’s rather pitiful few options, and the rather bleak reality that Russia increasingly sees itself not just at war with Ukraine, but in direct conflict with Europe. To expect energy supplies to continue as normal is a fantasy that not even the most optimistic German industrialists can pretend to believe in anymore. The EU–especially Germany–and Russia both saw the increase of energy interconnectivity and pipeline politics (or “diplomacy”) or the past few decades as a game of increasing leverage. The question was always, for whom? Europe always hoped that it could entice Russian good behavior through economic linkages and purchase contracts. We’re likely to see in coming days where the power in this relationship, pun intended, really flows from.
Not a normal grouping of places or policies or politics. Especially when one wants to talk about energy. All four, however, are in the midst of a transition to renewable or green energy production and find themselves with having to grapple with energy reality, popular expectations, the vagaries of climate and weather, and rising costs. And all are experiencing a mix of successes and failures, both in and out of their control.
I recently had the pleasure of joining Eurasia Group founder Ian Bremmer on Sam Harris’ podcast, Making Sense. We discussed my new book The End of the World is Just the Beginning and had a wide-ranging conversation on a variety of issues from demography and population collapse to the war in Ukraine, the differing fates of China and the United States, and other topics I think my subscribers would enjoy.
Inflation in the United States has reached a four-decade high, according to data released by the U.S. Labor Department July 13th. Gasoline costs are leading the pack of consumer goods facing rising prices, but it’s a good mix of everything. Which makes sense, given how many supply chain dislocations across the globe.
Fuels, fertilizers, foods, industrial inputs–most of these were still in a state of flux even before one factors in China’s Zero Covid lockdowns. And the Russian invasion of Ukraine. And mass Boomer retirement. In fact, as we’ve been telling clients for months now, inflation has few places to go but up. Furthermore, the traditional tools at central banks’ disposal to tackle inflation are unlikely to have the same impact that they might once have had.
So what does that mean for the future? Well, for one: inflation is anything but transitory. And any relief is not going to come in weeks or months for much of the world, but in years. At least the parts of the world that will see any relief. And then there’s the United States. We’re in a tough spot to be sure, but thankfully the fundamentals of the American economic system remain sound. Which is not to diminish the increased costs at the pump or the grocery store, but as Americans have shown for the last several months these are costs that the consumer can keep up with–demand remains strong, especially for non-essentials: flights, restaurants, and screenings of the new Minions movie are all apparently quite full.
Germany shut down the Nord Stream 1 Pipeline today for a pre-scheduled 10-day maintenance period. Whether or not Russian natural gas will resume westward flows to Germany after repairs are made is anybody’s guess.
The 55 bcm/yr pipeline is a key component of the energy détente forged between Germany–the economic and manufacturing heart of Europe–and post-Cold War Russia. It has also inculcated a German dependency on Russian gas that has shaped German economic and security policy (and, by extension, Europe’s) since the project first entered the planning phase over 20 years ago.
For more information on the nature of Russian and German energy codependence, and the future of both, I would suggest the agriculture and manufacturing chapters of my newest book The End of the World is Just the Beginning as well as the Russia and Germany chapters of the last one, Disunited Nations.
Japanese society is reeling from the news that former Prime Minister Abe Shinzo had been assassinated. Political violence of this type is exceedingly rare in modern Japan, as are gun-related deaths. I will leave the particulars of the attack to those who are experts on personal/event security, but the shooter was arrested on site and appears to have used either a home-made or heavily modified gun. That the suspected shooter was allowed to walk up and fire not once, but twice, before Prime Minster Abe’s protective team was able to apprehend him is a scene that I am sure will be studied and replayed by protective service teams across the world.
While the motivations of Abe’s assassin are not yet clear, what we do know is that the former Prime Minister represented a powerful faction of Japan’s ruling Liberal Democratic Party (LDP) that wanted to see Japan take a more assertive role on the global stage. The Liberal Democratic Party, despite its name, is a broad coalition of several center-right-to-right wing political elements, including those with strong Monarchist, fascist and militarist ideologies. (In 1990, a far-right ideologue tried unsuccessfully to assassinate the then-mayor of Nagasaki for a criticizing former Emperor Hirohito’s actions during World War II. Incidentally, another mayor of Nagasaki was assassinated in 2007, though the culprits were local Yakuza.)
Prime Minister Abe was a key proponent of expanding Japan’s armed forces and strengthening ties across the broader Indo-Pacific–particularly between India and Japan. These moves required a… flexible understanding of Japan’s constitution and the kind of socio-cultural shift that has historically been difficult to implement across Japan, but popular within his faction of the LDP. Countries like Japan–resource poor and lacking internal geographic cohesion–require an incredible amount of time and energy to unite into a functioning nation state, assuming they ever can. But once they do, stability generates its own inertia, and change–especially one that threatens to upend prosperity or social cohesions–can be near impossible to inculcate.
Japan has managed such changes multiple times–consolidation under the shogunate, the Meiji restoration, Imperial Japan’s expansionism, surviving the post-War occupation, the economic boom times of the 1960s, 70s, and 80s, and arguably the extended economic plateau of the last two decades. The late former Prime Minister Abe and his allies seek to push Japan into another period of transformation–and this time, in an era of deglobalization, the Japanese are poised to bring the rest of the world along with them for the ride.
NB: At 5:08 in the video below I should have said Japan, not China. We regret the error.
I am happy to report that we have an update for those of you who have inquired about purchasing The End of the World is Just the Beginning internationally: it is now available in over a dozen countries outside of the US. Link to that information in the button below, and we will continue to update the website as distribution widens.
These are copies of the book in English. What about translations? They’re underway. The book is slated to be released in Korean, Spanish, Italian, and more. More info on the translated editions as it comes. Which brings me to my next update…
The End of the World is currently on its third week on the New York Times’ bestseller list. I am truly humbled and grateful for everyone’s continued support. Three weeks is not a fluke! I appreciate everyone recommending friends and family to pick up a copy.
