CITIZEN-CENTRIC CYBERSECURITY Page

CITIZEN-CENTRIC CYBERSECURITY

With digital technology permeating every aspect of our lives, the associated risks have grown exponentially and need urgent corrective action.

Tobby Simon is the Founder and President of the Synergia Foundation and a member of the Trilateral Commission

Your network has been breached and all data was encrypted. The message on the screens of NIMHANS desktops provided a link to connect with the sales department of the ransomware and mentioned that the user has to purchase its decryption software, alluding to blackmail.’

NIMHANS, a world-renowned centre for mental health and neurosciences institute, faced cyber security threats following a ransomware attack in March 2022.

While there are concerns about patient data being compromised and the functioning of the causality department, the director contended that only some computers were infected.

In a new avatar of digital crime, several consumers of Bescom, the public utility that supplies electricity in Bangalore, have received specious communication conveying that the power connections to their respective homes will be severed due to the default in payment of electric bills. Those who reacted to this communique had their bank accounts compromised.

As civil society is encouraged to embrace digital technology, they are at greater risk of disruptions by various cybersecurity incidents. The marginalization of civil society in the broader political discourse and cybersecurity ecosystems at the global and national levels renders it vulnerable to policy and practice.

While governments around the globe spend billions of dollars on protecting state-owned critical infrastructure (CI) and private corporations have generous cyber security budgets, the participation of civil society in cybersecurity rarely goes beyond tokenism. For one, civil society seldom represents a significant commercial threat which merits the kind of expenditure commercial CI warrants.

As civil society is often outside the ambit of CI, it is not subjected to legal provisions of cybersecurity laws. Furthermore, tech companies do not find it financially stimulating to invest in technology to secure smartphones sold off the shelf for mass consumption.

The marginalisation of civil society in the broader political discourse and cybersecurity ecosystems at the global and national levels renders it vulnerable to policy and practice.

A BOUQUET OF THREATS

The penetration of smartphones into our daily lives needs no further elucidation. A recent study published in February observes that India alone has over 750 million smartphone users, expected to rise to over a billion by 2026, driven by sales in its vast rural hinterland. Few of these users understand the threats that online hackers pose.

Despite Google’s claims to the contrary, experts have continued to detect malware in the so-called sanitized Google Play app. Apart from apps with overtly malicious intents,

there are scammer apps on Google Play that pose as bonafide services like applications for social welfare payments but hijack the user data or even freeze the device in return for payment of a fee.

Banking Trojans are even more fatal, allowing hackers to access the user’s current session and personal mobile banking account without knowing the login password. Another app can take screenshots of the user’s screen, thus recording critical data related to banking transactions. Finally, spyware like the infamous Pegasus could easily hack into almost any smartphone.

The current cybercrime scenario is disquieting as predators send umpteen messages to consumers to play on ignorance and more on their greed. With the latest technology, predators can alter existing videos and photographs to create fake content; with Artificial Intelligence (AI), ‘deepfakes’ can be fabricated, which are almost impossible to differentiate from genuine ones. Such technology has great potential for digital manipulation and fraud.

When an email is sent, an online search is done, or a photo is shared on social media, we are sure to have left behind a trail of personal data that represents our ‘digital footprint.” These digital footprints are permanent and extremely hard to erase. The data includes the activities we perform in apps and online and consists of the geographical coordinates - as we take our devices with us just about everywhere, we go.

An example would be that the email provider has the bandwidth to scan the contents of our personal email, and the provider can trace our digital records and the websites we surf. Once we have browsed a website, we are edged to accept “cookies” - it’s either first party or third party. A “first party cookie” permits a site to monitor our behaviour and propose specific content. A “third party cookie” allows other companies, including advertisers or analytical platforms, to understand our browsing habits.

When we consent to a third-party cookie, we concede that we would share information about ourselves with external organizations - some entirely unfamiliar.

THE WAY AHEAD

A “national security-centric” narrative currently triumphs over cybersecurity policies and practices. Extracted from a realist theory of geopolitics, where nation states compete, the principal cybersecurity threats are characterized as those that cause damage to critical infrastructure within their territorial jurisdictions.

The preferred alternative would be to adopt a “citizen-centric” approach to digital security that strives for indivisible network security, assured data privacy and the broadest possible scope of homo-centric experience. It would seek to ensure that such essentials are vigorously supervised and guarded by multiple layers of independent oversight and review.

A citizen centric approach to cyber-security codifies people when evaluating cybersecurity hazards. It recognizes that people’s converging identities shape their cybersecurity needs and experience of cyber incidents. Consequently, cybersecurity measures should be tailored to address structural disparity which lead to uncertainty.” TOBBY SIMON Founder and President of the Synergia Foundation.

CONQUERING WITHOUT FIGHTING

Will China subdue the United States without risking a war to dominate the Indo-Pacific?

Dr Patrick Mendis is a former American diplomat, a military professor in the NATO and Indo-Pacific Commands of the US Department of Defence , and a non-resident senior fellow of the Synergia Foundation.

President Gotabaya Rajapaksa officially declared on June 22, 2022, that the Sri Lankan economy had “completely collapsed.” A month earlier, the increasingly debt-laden island nation of 22 million people defaulted on its US$50 billion foreign debt to China and other international creditors, bringing the entire country to a grinding economic standstill. Massive protests in the capital city of Colombo erupted on July 9, with the ransacking of the presidential secretariat and the newly appointed Prime Minister Ranil Wickremasinghe’s official residence, followed by his private home being set ablaze. President Rajapaksa fled the city and later the country, leaving behind a country with a shredded economy.

The so-called “perfect tropical paradise” that is shaped like a teardrop falling from the southern tip of India has indeed now become an island of tears. This reality is largely a result of the autocratic and corrupt Rajapaksa family, who has ruled the strategically located island in the Indian Ocean—except for a brief period from January 2015 to November 2019—for almost two decades.

For the past several months, however, shortages of fuel, gas, electricity, food items and medicines, coupled with staggering double-digit inflation, have prompted the people to protest peacefully against the government. The protesters demanded the resignation of Gotabaya, his eldest brother Prime Minister Mahinda, his youngest brother, former Finance Minister Basil, and other ministers and family members in the parliament.

In The Art of War, Chinese General Sun Tzu once advised that a leader must remember that “to fight and conquer in all your battles is not supreme excellence; supreme excellence consists in breaking the enemy’s resistance without fighting.”

THE MARITIME GAME

After winning the nearly 30-year “civil war” in May 2009, the triumphant Gotabaya was made secretary of the Ministry of Defence and Urban Development under his brother, President Mahinda. At the third Galle Dialogue on Maritime Security in December 2012, Gotabay assured India that Hambantota Port was a “purely economic” investment and was not part of China’s “string of pearls” military strategy to encircle India or to keep the United States away from the Indian Ocean. At over US $1 billion, the port was meant for the transhipment of Chinese goods and resources from the Middle East and Africa.

Indeed, Sri Lanka is the “crown jewel” of China’s multibillion-dollar Belt and Road Initiative (BRI) across the Indo-Pacific region, which connects the Hambantota Port, the Colombo Port City (CPC), the Colombo Lotus Tower, and many other overwhelming infrastructure projects. As the BRI gains momentum in the Indo-Pacific region, it invokes the “universal virtue” of harmony and revives the coveted noble concepts of equality and freedom, rooted in the sutras of Buddhism as opposed to Confucian hierarchy.

These ports could easily be converted into dual-purpose military and civilian use compounds, making Sri Lanka a potential “unsinkable aircraft carrier” for China. With President Xi’s “New Era” of national rejuvenation, Sri Lanka has now discreetly become a strategic “colony” of battleships with massive projects to advance Chinese interests against India and the United States in the Indian Ocean. In The Art of War, Chinese General Sun Tzu once advised that a leader must remember that “to fight and conquer in all your battles is not supreme excellence; supreme excellence consists in breaking the enemy’s resistance without fighting.” Xi seems to believe he can strategically achieve his national goals by peacefully defeating his enemies—India and the United States—before the war even breaks out. Now, a key opportunity has presented itself to Beijing, with the collapse of the Sri Lankan economy, to get the upper hand over the United States and India in the Indian Ocean and beyond.

CHINA’S EYES ON THE CROWN JEWEL

For the last phase of the civil war that ended in 2009, China provided the much needed “economic support, military equipment, and political cover at the United Nations to block potential sanctions.” During these years of bloodshed and human rights violations on both the government and LTTE sides, the Rajapaksa government was afraid of the powerful lobbying efforts by the Tamil diaspora in the West, encouraging the Western governments to support UN sanctions against Sri Lanka. The Colombo administration had been equally distressed by another “direct Indian intervention”—with the mounting pressure coming from India’s southern state of Tamil Nadu—in neighbouring Sri Lanka’s internal affairs.

Against this backdrop, paying tribute to Chinese patronage at the third Galle Dialogue, Defence Secretary Rajapaksa reaffirmed that “China was an obvious nation to approach” among other traditional donor nations such as Japan, India, South Korea, and the United States. Victorious as war heroes during the decade 2005-2015, his elder brother Mahinda—then-president of Sri Lanka—and his three brothers controlled “many government ministries and around 80 per cent of total government spending.” These strongmen also “negotiated directly” with China while considering the island nation as an extended family business enterprise.

12 years later, President Gotabaya Rajapaksa—until recently in office since November 2019 with family members still sitting in parliament—has brought the paradise island into an unprecedented socio-economic turmoil with mismanaged economic policies and systemic corruption by successive governments. Once the leading nation in the UN Human Development Index for life expectancy, literacy rate, and GNP per capita in South Asia, Sri Lanka is now entangled in enormous “debt trap” projects with China and loans from Japan and international financial institutions. Such ventures involve Chinese “white elephant” schemes, including the US$104 million Colombo Lotus Tower for Beijing’s “espionage” operation in South Asia and the US$209 million Mattala Rajapaksa International Airport in Hambantota—the “emptiest” airport in the world. Moreover, the massive Sooriyawewa Cricket Stadium and the International Conference Hall in Hambantota, as well as the nearly US$200 million unused roads and bridges, made Rajapaksa’s ancestral home district with golden statues “a throne to the vanity of a political dynasty.” Like other nationalist and narcissistic dictators do, the Rajapaksa clan bloated the bureaucracy and enlarged the military with their associates and supporters while erecting tributes to themselves at the expense and suffering of ordinary citizens.

THE PEACEFUL ‘ARAGALAYA’

The economic collapse has devolved into mass protest (“aragalaya”, or struggle) in Colombo and elsewhere in the country. Violence erupted when the Rajapaksa allies attacked the peaceful protesters who demanded the embattled President Gotabaya’s resignation, chanting “Gotta Go home” for several months. His elder brother Mahinda—the prime minister who had previously been president—was forced out of power in May, and his other brother Basil—the finance minister—resigned from the cabinet in June 2022. Gotabaya himself has now surrendered to the power of the people, leaving the island nation after relentless calls for him to do so.

The complete removal of the pro-Chinese Rajapaksa family presents an existential threat to China’s interests in Sri Lanka—especially when President Gotabaya appointed five-time Prime Minister Ranil Wickremasinghe back to the post for just two months, replacing the president’s brother Mahinda. The unpopular but veteran prime minister and his United National Party have only one seat out of 225 in the parliament. At the same time, however, pro-American Wickremesinghe had been viewed by protesters as a strange bedfellow in the name of political expediency and a crisis manager for Gotabaya, who wanted to remain in the powerful presidency to protect his family’s financial interests and political ambitions.

The new prime minister promised the nation that he would resolve the current shortages of oil, gas, electricity, medicine, and other imports necessary for daily survival. Wickremesinghe also vowed to negotiate with the International Monetary Fund (IMF), the World Bank, and other lenders. It was a matter of concern for China because the transparency required by these institutions would expose the nature of Chinese loans and bribery schemes, its exorbitant interest rates and kickbacks, and the secret negotiations conducted by the members of the Rajapaksa family and their associates. After learning that the “20 per cent” kickback “monies were paid as commissions” to the Rajapaksa family and associates, the Aragalaya protesters have been pushed to the brink, taking to the streets.

THE CHINESE PARADOX AND AUTOCRATIC REGIMES

State Councilor and Foreign Minister Wang Yi arrived in Sri Lanka in January 2022 to restructure debt payments and alleviate financial troubles. During the visit, the Chinese Foreign Ministry announced that Western media was “unfairly hyping [the] debt issue,” adding that “calling the cooperation projects between China and Sri Lanka ‘white elephants’ is completely untrue” as “bilateral cooperation is welcomed by local people.”

It is true that debt owed to China now accounts for only 10 per cent of Sri Lanka’s total US$35 billion of foreign debt, similar to Japan, making China only the fourth-largest lender, preceded by the international financial markets, the Asian Development Bank, and Japan. Unlike the other lenders, however, China’s motivations are driven by its communist statecraft and geopolitical calculus in the Indian Ocean region. When Sri Lanka failed to repay Chinese debt stemming from the Hambantota Port, for example, the Colombo government agreed to a debt-for-equity swap and gave Beijing a 99-year lease of the port with the 15,000 acres neighbouring the wildlife sanctuary.

Moreover, the nearby Mattala Rajapaksa International Airport was built with the possible intention of being a dual civil-and-military installation for future use. With China’s first military base at Djibouti in the Horn of Africa and the latest Ream naval base in Cambodia, Beijing may aim to use the world’s emptiest international airport in Sri Lanka to develop its emerging Indian Ocean military theatre against the United States, its allies, and India. All these projects were initially promoted within the BRI as development assistance. In fact, the BRI has been the ambitious foreign policy strategy of China to bring developing countries under its realm of influence, as shown in the “cautionary tale” of Sri Lanka.

AMERICAN INTERESTS

When China refused to extend additional credits for oil import, President Gotabaya Rajapaksa called on President Vladimir Putin for oil shipments in July. Understanding the desperate measures taken by Gotabaya, US Ambassador to Sri Lanka Julie Chung reminded that Sri Lanka must consider “our sanctions globally on Russian banks, logistics, transportation, and financing.” However, she assured that “the US does not have sanctions against third world countries on the import of oil.”

To remove misinformation that the United States and the international community are holding back support during a time of need, Ambassador Chung announced that President Biden had granted US$20 million in “humanitarian assistance including for the most vulnerable segments of society,” the poorest of the poor. In addition, the US Development Finance Corporation (DFC) committed US$150 million for private sector-led initiatives and US$80 million for renewable energy, as well as recent commitments to technical support for the Sri Lankan Treasury. widespread during the brief but tumultuous administration of President Maithripala Sirisena (2015-2019); since then, anti-American sentiments have prevailed.

When visiting US Deputy Assistant Secretary for South and Central Asia, Alice Wells, for example, referred to Sri Lanka as an important piece of “real estate” for its strategic location in major maritime shipping routes. It was perceived as real estate owner-turned-President Donald Trump’s vision of transactional, American-centric diplomacy. The pro-western Sirisena administration, however, favoured striking deals with the Trump administration, especially when Sri Lanka renewed its Acquisition and Cross-Servicing Agreement (ACSA) with the United States for another ten years. The ACSA allowed the transfer and exchange of logistical supplies and refuelling services for US military operations in the Indian Ocean rim region. The pro-China Gotabaya Rajapaksa administration had refused to cooperate with American initiatives, demonstrating that Sri Lanka had chosen to partner with Beijing instead of Washington. In fact, the United States failed to renew its Status of Forces Agreement (SOFA) with Sri Lanka, even after pledging $480 million in development aid via the Millennium Challenge Compact (MCC). Both countries spent months debating the MCC compact that promised infrastructure development projects, similar to China’s BRI projects in Sri Lanka. In the end, Gotabaya declined to sign the MCC offer and refused to renew the SOFA, speculating that the United States intended to establish a military base to counter Chinese influence in South Asia and the Indian Ocean rim countries.

THE SINO-AMERICAN ENDGAME

The immediate goal is to stabilize the collapsed economy and alleviate human suffering while helping the island recover from foreign debts. As China has remained relatively muted during the Aragalaya, US Ambassador Chung has seized the opportunity to encourage peaceful protest, restrain violent military response, and protect freedom of speech and Internet communications.Indeed, it is morally imperative for all lenders—including the Asian Development Bank and the IMF—to jointly help the paradise-island nation. For China, as Sun Tzu counselled, President Xi would most likely build for his Indian and US opponents a “golden bridge” to retreat across; otherwise, the opponent “will engage in battle and fight like a caged and cornered tiger,” when economic incentives run out for India and the United States. Both democracies need to realize the importance of economic development within the island over their own military interests in a geopolitical endgame with China.

Thus, the tragic saga of the teardrop island might remain as China tries to use its economic power to advance Beijing’s ultimate goal: to be the comprehensive global power in the Indian Ocean and beyond. Given the latest events in Colombo, however, it appears that the paradise island may not be completely turned into a Chinese colony—as long as the Sri Lankan people continue to advocate for their own destiny as a free nation.

GIORGIA MELONI’S MOMENT

The Meloni government represents more continuity with Berlusconi’s 2001-06 and 2008-11 spells than change.

William John Emmott is an English journalist, author, and consultant, best known as the editor-in-chief of The Economist newspaper from 1993 to 2006. For the time being, these neo-fascist associations are unimportant, because there is no sign of any up swell of support for violent methods or for subverting democracy.

When a “shock” or “extremist” election result comes with record-low voter turnout and a big yawn from financial markets, it is time to find new descriptors. The decisive victory in Italy’s general election by the coalition led by Giorgia Meloni’s Brothers of Italy party, putting her in line to be the country’s first female prime minister and the first to claim an unambiguous line back to Benito Mussolini, is certainly striking. But there is little reason to believe it will change Italy’s course in ways that matter either to markets or to the country’s international partners.

This election was that rare modern case in which opinion polls got the outcome largely right. It has been clear for at least two years that if the three main right-wing parties held together, they would win an absolute majority. The only thing that has changed materially is the balance within the coalition: during the technocratic, national unity government led by Mario Draghi from February 2021 until July this year, votes shifted away from the right-wing party that joined Draghi’s government, the League, and to the party that stayed out, the Brothers of Italy.

This shift continued right up to the election, with the Brothers ending up with three times the vote share of either the League, led by Matteo Salvini, or Meloni’s other coalition partner, Silvio Berlusconi’s Forza Italia. This will greatly strengthen her position when forming her government, making it more likely than not that her government will last several years, or even the full five-year parliamentary term.

THE RISE OF THE RIGHT

The last time a coalition won a clear majority in an Italian general election was in 2008, when Berlusconi led the right to victory. Since 2011, there have been seven governments under six different prime ministers, two of which (Mario Monti and Draghi) were technocrats, while the other five relied upon creative and complex coalition negotiations. Compared with those, the Meloni victory promises simplicity and, at least in the medium term, stability.

In fact, Meloni’s victory largely reflects the instability of the last decade. Moreover, with Italy having been led mainly by leaders from the centre and left since 2011, it was arguably time for Italy to swing back to the right. And one of Meloni’s big attractions was that she is young (just 45 years old) and untainted by any recent governmental decisions, popular or otherwise.

The voter apathy that pushed turnout down to just 64 per cent had a lot to do with disillusion with the old political guard.

ly unimportant in her success. She leads a party that is unashamed of its origins among post-war supporters of Mussolini, the Fascist dictator. The Brothers even keep as their party symbol, a flame symbolizing loyalty to the late Duce. Some members wear black shirts and even use the Roman salute most commonly associated with German Nazis, though it was Mussolini who popularized it.

For the time being, these neo-fascist associations are unimportant, because there is no sign of any up swell of support for violent methods or for subverting democracy. Meloni’s signature issues are a Trump-like “Italy First” attitude toward illegal immigration and hostility to progressive social policies regarding LGBTQ communities or abortion. These are essentially consistent with the programs of previous Berlusconi-led rightwing governments in 2001-06 and 2008-11, and of the League in a left-right coalition in 2018-19. Her opposition to foreign ownership of flagship national companies such as the former Alitalia is also conventional.So, despite many Italians’ disappointment that progressive social policies may now be reversed, there is little that is genuinely new in the programme promised by Meloni. She will enter office not on a groundswell of enthusiasm but on a wave of disillusionment.

Moreover, unlike Salvini and Berlusconi, she has taken a resolutely anti-Russia and pro-Ukraine stance over the war, just like the outgoing Draghi. With Ukraine now making gains in that war, this is unlikely to change. Meloni may in the past have admired Vladimir Putin’s social conservatism, but she is not going to back a loser.

The big questions about the new government, at least for non-Italians, concern its economic policy. In his 18 months in office, Draghi put Italy’s economy in what might be described as a benign straitjacket: he wrote a public investment plan for Italy to receive €190 billion ($183.3 billion) from the European Union’s NextGeneration EU scheme over five years, four of which still lie ahead. This entailed establishing a rigorous system for auditing and monitoring that expenditure, and agreeing to meet stringent conditions set by the European Commission before each tranche of payment is released.

As a self-declared “sovereigntist,” Meloni is no fan of stringent conditions from Brussels. Nor, with the whole right-wing coalition backed by an array of vested interests among small and medium-size businesses, will she be a fan of pro-competition reforms or even rigorous auditing. But the large flows of cash involved will be crucial for Italy’s medium-term economic growth, implying that her sovereigntist instincts are set for a contest with pragmatic realism.

The new government will not be sworn in until late October, and yet will immediately have to prepare a budget for 2023. Meloni’s choice of finance minister will be the most keenly watched appointment of all. It is hard to imagine she will want to start her term by picking fights with the European Commission, especially with a tough winter of high energy prices and scarce gas ahead. But she is new and untested, so no one can be entirely sure.

UKRAINE WAR: 7 MONTHS & COUNTING!

Russia’s ‘special military operation’ in Ukraine has polarized the world, disrupted international supply chains and created economic distress in Europe

Maj. Gen. Moni Chandi is the CSO at Synergia Foundation & a former Inspector General of the elite National Security Guard.

Despite thousands of Ukrainians losing their lives, millions of others being displaced and infrastructure being bombed to rubble, there appears to be little prospects for peace. What sustains the belligerents, in stubbornly adopting such uncompromising positions, despite the staggering costs of the war?

Seven months have now elapsed, since Russia launched the ‘special military operation’, in Ukraine. Despite mounting civilian & soldier casualties, millions of displaced citizens, destruction of infrastructure and collapse of the domestic economy, the Volodymyr Zelenskyy Government does NOT appear inclined, either for ceasefire or settlement. On the other hand, the unprecedented Western economic sanctions against Russia, appear to have back-fired on the European Union, who appear to be heading towards, economic-recession, energy outages and a cold winter.

Why are there NO Prospects for Ceasefire, in the Ukraine Conflict? Original Perspectives of Key-Players. There are five key-players to the Ukraine Conflict and each had an independent original perspective: -

(A) THE RUSSIAN PERSPECTIVE.

ing NATO and also to stop NATO deployment in Ukraine. It was a position repeatedly articulated by Russia for several years, even before hostilities broke out, on 24 Feb, 2022.

Russia is now likely to attempt consolidating their hold in Eastern Ukraine, through referendums. After which, they will increase Ukraine’s cost of aggression by nuclear posturing (threatening use of tactical nuclear weapons) and augmenting soldier strength, on the frontlines.

(B) THE UKRAINE PERSPECTIVE.

Volodymyr Zelenskyy, the democratically elected President of Ukraine, was insistent on joining the EU. He was ambivalent on the issue of joining NATO; but, many European & American leaders expressed encouragement for NATO’s progressive Eastern deployment.

(C) THE US PERSPECTIVE.

Even before the commencement of the conflict, US President Joe Biden categorically stated that US troops would NOT be deployed in Ukraine. However, the US would continue to provide moral, economic and military hardware, to counter the Russian threat. The US was keen that Ukraine joined NATO and emphasized that Russia should NOT dictate Ukraine’s foreign policy choices.

The EU Parliament strongly supported the US perspective (Ukraine joining NATO, despite Russia’s concerns). Historical precedent supported this point of view; between 1991-2017, 15 European nations joined NATO. However, unlike the US, the EU was heavily dependent on Russia for imports; estimated at US$ 169B, in 2021. Imports included natural gas, crude-oil, metals, ores, fertilizer, machinery and food grains, amongst other products.

(E)REST OF THE WORLD.

With the exception of Canada, Australia and the UK, the rest-of-the-world adopted a more neutral posture. While they condemned the conflict and called for a ceasefire, they refused to take sides, in the obvious proxy war between the US and Russia.

7-Months Into the Conflict, Who’s Feeling the Pain?

(A)THE RUSSIAN PERSPECTIVE.

If the Russians had hoped for an early collapse of the Kiev Government that did NOT happen. 31 nations, including US and European nations poured considerable military assistance to Ukraine. The assistance includes the M-142 HIMARS (Lockheed Martin) rocket-missile system, with a range of 80-300 Km, Javelin (Lockheed Martin) anti-tank missiles and Stinger (Raytheon) anti-aircraft missiles, which have exposed vulnerabilities of Russian tanks, combat vehicles and aircraft. The introduction of drones into Ukrainian battlefields Switchblade (AeroVironment) and the M-9 Reaper (General Atomic Aeronautical Systems) have been game-changers, for conventional mobile operations. The recent Ukrainian counter-offensive in Izyum and Kupiansk, has won back Russian-seized territory, forcing Russia to strategically rebalance the war effort.

(B) THE UKRAINE PERSPECTIVE.

The big loser in this war has been the people of Ukraine. According to the UNHCR, 7.4M Ukrainian refugees have crossed into Europe and a further 2.4M have crossed into Belarus and Russia. According to one World Bank report, Ukraine would need US$ 349B to reconstruct the damages of the war. As a consequence of the war, President Zelenskyy has presided over the displacement of his citizens (externally displaced alone are approximately 25% of the 44M population) and destruction of infrastructure, which will need international assistance & decades to rebuild. In gambling, the Martingale Strategy, refers to doubling one’s bet with every loss, in the hope that one eventual win, will redeem all losses. Has the Zelenskyy Government adopted the Martingale Strategy, with Russia?

(C)THE US PERSPECTIVE.

The US has provided an estimated US$ 14.5B, in military assistance to Ukraine. The military assistance supports US national interests; it provides lucrative contracts for US defense industries, releases obsolete military inventory and encourages other European countries to invest more in US manufactured defense equipment. The Big Five US defense companies (Lockheed Martin, Raytheon, Boeing, Northrop Grumman and General Electric) are doing brisk business with order books filling up, into the future. Since the outbreak of the conflict, Lockheed Martin’s share-price has increased 12%; while that of Northrop Grumman’s has increased 20%.

(D) THE EU PERSPECTIVE.

After Ukraine, the other big loser is the EU. Natural Gas prices are at 10-times the normal level, with prospects of black-outs and rationing, as winter advances. Many energy intensive companies in Aluminum, Fertilizer and Glass-manufacturing, are evaluating options of forced shutdowns or bankruptcy. Inflation in the Euro Zone reached 9.1% in August, 2022 and food shortages are expected in super markets. Public protests against inflation have been witnessed in the UK, Moldova, Italy, Germany, Austria, Czech Republic and even Belgium.

(E) REST OF THE WORLD.

The Rest-of-the-World, who largely adopted the neutral posture are becoming increasingly concerned with escalation, in the prolonging conflict. In the new dynamics of the multi-polar world, who should mediate when two superpowers engage in proxy war? With the US encouraging Ukraine’s Kamikaze approach, Russia escalating the costs of the war and Europe on the brink of economic disaster, it is time for sane & reasonable voices (Rest-of-the-World) to tell the belligerents to step back (ceasefire) and negotiate their seemingly irreconcilable differences. This is NOT the era of warfare!

What Does Russia’s Strategic Recalibration Involve?

There is increasing pressure on President Putin to bring the Ukraine conflict to a close. Even the PRC and India endorsed the need for ceasefire & negotiations, during the recently concluded SCO meeting at Tashkent, Uzbekistan. Russia’s strategic recalibration is

likely to involve the following: -

(A) REFERENDUMS IN RUSSIAN-SPEAKING EASTERN UKRAINE.

the installation and all six reactors have been brought to ‘cold shut-down’ state.

(D) PARTIAL MOBILIZATION.

Between 23-27 September, 2022, referendums will be conducted in Russia-recognized republics of Donetsk & Luhansk; as well as, the Russia-administered regions of Kerson and Zaporizhzhia. While Ukraine and the West have denounced the referendums, the result expected is predicted to be, in favor of merger, with the Russian Federation.

(B) RUSSIA’S NUCLEAR DOCTRINE.

Russia’s Nuclear Doctrine permits the use of Nuclear weapons, when the existence of the nation is threatened. Many Military analysts believe Russia would use nuclear threat for the newly acquired territories of Ukraine; firstly, to dissuade Ukraine from escalating the conventional conflict and secondly, to bring them to the negotiating table.

(C) ZAPORIZHZHIA NUCLEAR POWER PLANT.

The 5700 MW Zaporizhzhia Nuclear Power Plant is the largest nuclear power plant in Europe. It has six light-water nuclear reactors. The nuclear plant was captured by Russia, in the early stages of the war. In recent weeks, there has been fighting in the proximity of the plant, raising fears of damage to the reactors and the spread of nuclear contamination.

Both Russia and Ukraine blame each other for shelling in proximity to the nuclear installation. However, in fairness, it is challenging to understand why Russia would like to damage the installation, already in their possession. Despite other serious shortcomings of the UN, the IAEA has established ‘continuous presence’, at

On 21 Sept, 2022, President Putin announced partial national mobilization, to draft an additional 3L soldiers. At the commencement of the conflict, Ukraine had a standing army of 2L soldiers and 2.5L reserves. Ukraine has probably enrolled all reserves, by now. On the other hand, Russia commenced operations with an estimated strength of 1.9L soldiers and had been attempting to prosecute operations, with equipment superiority alone. Though it may take several weeks for additional manpower to be deployed in Ukraine, the 1000 Km frontline is in urgent need of manpower augmentation, on the Russian side.

Assessment

At this juncture, in the conventional war, despite catastrophic losses, Ukraine is inflicting pain on Russia. Russia is now likely to attempt consolidating their hold in Eastern Ukraine, through referendums. After which, they will increase Ukraine’s cost of aggression by nuclear posturing (threatening use of tactical nuclear weapons) and augmenting soldier strength, on the frontlines.

In the economic war, Europe faces the prospects of a cold winter, inflation, food shortage and public unrest. Why were Europe’s leaders unable to protect the interests of their citizens? For students of International Relations, the EU is the most successful form of multilateralism in history. However, in the face of the Ukraine War and pressure from the US, did European Commissioners forfeit citizen’s interests, in the boardroom of international diplomacy?

ECONOMIC OR POLITICAL GAMBLE?

Liz Truss has thrown the dice to fulfil her promises; will it boomerang on her and her party’s fortunes?

William John Emmott is an English journalist, author, and consultant, best known as the editor-in-chief of The Economist newspaper from 1993 to 2006.

Two European countries have now chosen right-wing, avowedly radical female leaders, but so far, only one of them has caused a financial shock, and it isn’t Giorgia Meloni.

Liz Truss became Britain’s new prime minister only three weeks ago, and much of that time was taken up by the Queen’s state funeral. Nonetheless, in the short period available to her, Prime Minister Truss has driven the pound sterling to record lows and may be on course to trigger a downgrading of the UK by credit-rating agencies. The declared aim of this huge fiscal stimulus is to raise the UK’s economic growth in the short term to avoid a recession in the long term by boosting business investment and productivity. The combined effect of that inflation, higher borrowing and nervous investors could bring on precisely the recession that Ms Truss has pledged to avoid.

TOO EAGER TO PLEASE?

The specific action that caused this was a sudden but dramatic budget announced by her new Chancellor of the Exchequer, Kwasi Kwarteng. Both he and his boss have declared themselves believers in a small state and low taxes, calling on the hallowed memory of Margaret Thatcher.

They decided to implement this vision in a huge hurry, just days after announcing Europe’s most generous package of energy subsidies for households and businesses and ignored the inconvenient fact that Margaret Thatcher hated debt, public borrowing and inflation more than anything else. alarmed financial markets. The British economy is not yet in a recession but is experiencing price inflation, which is at the high end of the European range. The promise to cap energy prices by paying generous subsidies, if necessary, for as long as two years seemed to have dealt with the worst pressure on the cost of living and on business, albeit at the risk of higher public borrowing.

Yet it wasn’t enough for Ms Truss and Mr Kwarteng. So, with no preparation time, no accompanying plan announced for managing the public finances, and with the independent forecasting agency, the Office for Budget Responsibility, forbidden to produce new economic predictions, they announced the biggest round of tax cuts seen since 1971.

The declared aim of this huge fiscal stimulus is to raise the UK’s economic growth in the short term to avoid a recession in the long term by boosting business investment and productivity. Those seem like noble aims, but they are not believed in by financial markets, which promptly drove the value of the pound down to record lows against the US dollar, leaving it also down by about 7 per cent against the

POLITICAL COMPULSIONS VIS A VIS FISCAL PRUDENCE

It is hard to avoid the conclusion that the real aim of this hurried, radical, tax-cutting budget was for Ms Truss to stamp her authority on her own Conservative Party. Her victory in the vote among party members was not as decisive as she would have hoped, and she had fewer votes among MPs than her opponent did. Unlike Ms Meloni, her political position looks weak, and she is probably looking anxiously ahead to a potential general election in 2023 or early 2024.

In that light, attempting to stimulate economic growth in the short term and please voters by cutting their taxes might make sense. The first problem is that the tax cuts have only really pleased rich people and businesses, for they benefited far more from this budget than did poor or middle-class people. The second problem could be worse: like a boomerang, this budget could swing round and hit Ms Truss and the British economy quite hard.

On their own, tax cuts and extra public borrowing could indeed support faster economic growth in the short term, keeping unemployment close to its current shallow levels. However, by focusing the tax cuts on the rich, the budget risks this benefit being quite limited, as those on high incomes may well put their extra money into savings rather than spending it, and businesses may

The fall in the pound’s value, meanwhile, will add to price inflation by raising the cost of imported goods and is likely to force the Bank of England to raise official interest rates quite sharply. The combined effect of that inflation, higher borrowing and nervous investors could bring on precisely the recession that Ms Truss has pledged to avoid.

Britain’s new prime minister has defined her political and policy identity quickly and decisively. This may guarantee her a successful appearance at the Conservatives’ annual party conference, which opens next weekend. But if such a radical move boomerangs, her reputation and party support will quickly disappear.

The United Kingdom has the good fortune to borrow mainly in its currency, so it is not vulnerable to the acute financial crisis when foreign lenders lose confidence and start to bet against a nation’s debt. But it can suffer a slow but tight squeeze as lenders, whether British or foreign, demand higher interest rates on all their loans to the government and UK businesses.

As the UK already has the largest balance of payments deficit in Europe after Greece and the highest budget deficit in all of Europe, it is a country that needs to keep its lenders happy. To borrow a famous and very British wartime slogan, “Keep calm and carry on”,; Ms Truss’s gamble, with tax, borrowing, debt and inflation, is anything but calm.