We are living in the dangerous time
Updated: Feb 24
The Munich Security Conference (MSC) 2023 has captured global attention this year by shining a spotlight on the ongoing conflict in Ukraine. Following the World Economic Forum (WEF) conference in late January, the MSC has taken center stage on the world's radar for European security issues in late February. Next, the IISS Shangri-La Dialogue (SLD) will draw attention to security issues in Asia, taking place from June 2-4, 2023. After that, the global focus will shift to the Aspen Security Forum, which will center on America's strategy toward global security issues and will take place the following month from July 18-21, 2023. These three pivotal events will provide insight into security issues in the world's three major economic zones: Europe, Asia, and America.
In addition to the crucial track-two Western-aligned hosting conferences such as the IISS Shangri-La Dialogue (SLD), which is an annual intergovernmental security forum held in Singapore and organized by the British IISS and the Singaporean government, there will be other alternative non-Western conferences. These include the Valdai Club, which is convened by Russia and organized by the Valdai International Discussion Club Foundation, with support from the Russian government and other organizations, and is expected to take place in October. There is also the Beijing Xiangshan Forum, organized by China's Ministry of National Defense and expected to take place in October, as well as the Belt and Road Forum for International Cooperation and the Boao Forum for Asia Annual Conference, among others.
MSC 2023 has shone a spotlight on Ukrainian President Volodymyr Zelenskyy, German Chancellor Olaf Scholz, and French President Emmanuel Macron this year. While Zelenskyy has committed to resisting Russia's invasion in Ukraine, Scholz mentioned the more complicated mechanisms regarding operation complex security platforms, such as the Leopard tank, but promised that Germany will deliver it "sooner" than expected. Macron, on the other hand, while aligned with his European counterparts, still left room for possible negotiations with Russia. It's worth noting that key leaders in this conflict, such as US President Joe Biden, Russian President Vladimir Putin, and Chinese President Xi Jinping, were not in attendance. The key messages regarding the ongoing conflict in Ukraine will likely come from these three leaders who did not participate in MSC 2023.
US Vice President Kamala Harris has surprisingly condemned Russia's invasion, stating that Russia has committed crimes against humanity in Ukraine. This signifies that President Biden has tasked her with a more important role in international missions, starting from the APEC conference in Bangkok last year, and continuing with MSC 2023 this year. It's unusual for such strong words to be directed at a major nuclear power like Russia, especially one sitting on the UN Security Council. This is consistent with Biden's decision to run for the 60th quadrennial presidential election in 2024 with Harris as his vice presidential candidate. Biden will be 82 at the time of the election, and giving Harris a more important role signifies her potential to become the first female president of the US in case of an emergency. However, Biden still expresses confidence in running for the presidential job, no matter who his GOP competitor may be.
The important stages are outside MSC 2023. Biden led a surprise visit to Kiev, Ukraine, with prior informing the Kremlin, albeit with a response by failed intercontinental ballistic missile test from Russia per CNN. In response, Putin released his Presidential Address to the Federal Assembly, stating that Russia is fighting against "long centuries of colonialism, diktat, and hegemony" from Western powers, starting from the 2014 Euromaidan movement in Ukraine. This affirms Russia's legitimate invasion of special operations in Ukraine since last year. Putin didn't forget to mention the "endless stream of accusations against Russia" in MSC 2023. The former GRU officer has stated that Russia is now in the state of war and Russian people will support it no matter they will like it or not. However, Biden countered with a powerful speech in Poland, praising the "fight for liberty" and affirming that the US will stand by Ukraine as long as necessary.
We should pay attention to China's ambiguous stance, as demonstrated by Wang Yi's speech at MSC 2023. In ancient times, there was a practice of recording what the emperor said and did separately in different historical books. In traditional Chinese historiography, the roles of the Historian of the Left (zuoshi 左史) and the Historian of the Right (youshi 右史) were distinct, with the former responsible for recording words and the latter for recording deeds, as exemplified by the saying "左史記言，右史記事". Deutsche Welle (DW) had a rare interview with a former Chinese military senior officer who stated a clearer stance of China, namely that China does not support the violation of a country's sovereignty, territory, and integrity as recorded in the UN Charter. At the same time, China has promoted peace talks and further investigation of the root causes of the conflict, whereas Israel was also among the key peace broker during early period of war with a clear mandate from the US and E3 (France, Germany and the UK). He also mentioned the difficult relationship between China and Russia, stating that Russia is an immediate neighbor and a nuclear power that China cannot afford to have an antagonistic relationship with, while relations with the US are to oppose its hegemonic behavior. Several reports indicate that China does not want to see Russia defeated or weakened by a long war in Ukraine, as it is important for China to have a close relationship with Russia to counterbalance the US's hegemonic role in world affairs.
As US President Joe Biden prepares to meet with leaders of the Bucharest Nine - Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, and Slovakia - during his visit to Poland this week, the region's increasing significance will be on full display. While the eastern flank has urged its western partners to supply weapons to Ukraine, the power balance has not shifted completely, as Washington officials still hold the most sway in the Western alliance, followed by several western European capitals. "Without the Germans, things don't move - without the Americans, things don't move for sure," a senior western European diplomat said, speaking anonymously as they are not authorized to speak publicly. Priorities differ among like-minded countries, depending on their locations, and there are even some Russia-friendly outliers, such as Hungary, which does not provide any weapons aid to Ukraine and maintains a relationship with the Kremlin. Budapest has become so isolated in Western policy circles that no Hungarian officials attended the Munich Security Conference.
Key military operations surrounding Bakhmut, "the meat grinder", February 8-19, 2023. Source: Jomini of the West.
The situation is not only about the big picture, but also the leaks of documents about the relationship between Russia and Belarus. Belarus' President, Alexander Lukashenko, is able to maintain his power with Putin's help, but Putin has a broader plan beyond just having a close relationship with Belarus - he wants to integrate Belarus into the broader Union States of Russia scheme within 2030. And it would pose a threat to the baltic states such as Latvia, Lithuania and also Poland. Despite their close ties, both Lukashenko and Putin do not like each other and are unlikely to work together in the long term. Belarus is still resisting Russia's pressure to launch an offensive operation in parallel with Russian military operations in Ukraine. Some Ukrainian intelligence officers have said that the pressure from Russia on Belarus is overwhelming. Russia has mentioned suspending of the Nuclear Arms Treaty with the US and has made statements about its strategic nuclear arms readiness. The Ukrainian army has performed outstandingly in the war, which makes the insurgency scenario predicted during the early period of the war unlikely, in part because of Putin's overconfident and miscalculation at Napoleonic magnitude under the heavy pressure of a declining national population. However, the medium scenario after the major battle in summer is a protracted war in Ukraine, but the worst-case scenario is Russia using tactical nuclear weapons on the battlefield once its offensive is pushed back as we've formerly warned it.
We are really living in dangerous times.
Correction and further developments afterwards
(1) A report to confirm "zero" measurement or an assassination to deal with traitors in Wagner group. February 24, 2023.
(2) UNGA's eleventh emergency and special session resumed, with the introduction of a new draft resolution (A/ES-11/L.7) and two proposed amendments, with 141 votes in favor, 7 against and 32 abstention. February 24, 2023.
(3) Unclear China's peace framework and Xi Jinping's schedule to visit Moscow. February 24, 2023.
(3.1) Updated: See China's Position on the Political Settlement of the Ukraine Crisis, with 12 principles. February 24, 2023.
(4) The U.S. and Germany have warned China not to deliver weapons to Russia. Der Spiegel gives more details on the said weapon that they are kamikaze drones, ZT-180, that is capable of carrying a 35- to 50 kilogram warhead manufactured by Xi'an Bingo Intelligent Aviation Technology. It may deliver the drones as soon as this April. Previously, companies under the control of China's People's Liberation Army (PLA) had planned to deliver replacement parts for Russia's SU-27 fighter jets and other models. Last month, the NOS, a public broadcaster in the Netherlands, published an article stating that microchips from Dutch manufacturers had been supplied to the Russian defense industry through intermediaries in China. The article further revealed that an examination by Ukrainian military forces of confiscated Russian weaponry, including rockets, drones, and helicopters, revealed that around 10 out of 27 weapons contained microchips believed to be of Dutch origin. Chinese companies, such as Changsha Tianyi Space Science and Technology Institute, have been providing satellite images of combat zones in Ukraine to the Russian side. It's said that the images were used by the Wagner group. The U.S. government recently placed the Chinese satellite company on its sanctions list. February 24, 2023.
(5) Former Russian President Dmitry Medvedev said in Telegram in response with Biden's visiting to Kiev that “If the United States wants to defeat Russia, then we have the right to defend ourselves with any weapon, including nuclear.” February 24, 2023.
(6) Russia's economic data may have been fabricated as the country has stopped submitting export and import figures to the World Bank and IMF since Q2/2022, per DW. See list of companies pulled out from Russia. The cost of oil extraction in Russia stands at USD 45 plus an additional shipment cost of USD 10-20 for every barrel. This is in line with our previous analysis in Geopolitics of Energy. In the extreme case, we must prepare for the collapse of Russia. According to the Atlantic Council, 40% of foreign policy experts believe that Russia will break up by 2033. February 24, 2023.
(6.1) Check out the research paper "Business Retreats and Sanctions Are Crippling the Russian Economy" on SSRN, and a visual data slide deck compliments this research paper led by Jeffrey A. Sonnenfeld from the Yale Chief Executive Leadership Institute, as well as the criticisms of this research team from Yale regarding the IMF's report on Russia's economy. There is also an assessment to compare both Yale's and IMF's report over Russia's economy. February 24, 2023.
One of major argument from Yale's CELI is about difficulties to shift Russian Gas from West to East
(6.2) Forbes has compiled Ukrainian military estimates indicating that Russia has spent around USD 82 billion on its war with Ukraine over the past nine months. The money has been used for various purposes, including USD 29 billion in support of the army, USD 16 billion in soldiers' salaries, USD 9 billion to pay compensation to families of soldiers killed in action, USD 7.7 billion for families of those wounded, and nearly USD 21 billion for equipment losses. According to Wilson Center's Kennan Institute, Russia's military spending is rapidly increasing and was projected to reach 3.5 trillion rubles in 2022, but it's suspected that the actual spending on the war exceeded that amount by September, and this spending is only a portion of the military budget, which is disguised as spending on other sectors; in fact, military expenditures may surpass 5 percent of GDP in 2022, the highest level since the USSR's dissolution. February 24, 2023.
(6.3) WSJ has published a report suspecting economic data from the Russian Federal State Statistics Service (Rosstat) in which it halted publication of many economic statistics during early weeks of invasion on Ukraine. Doubts about the independence and integrity of Rosstat have persisted since it was placed under Putin's Economic Ministry in 2017, and there are further reasons to question the reliability of the few statistics that still come out. Russia has a system of "hidden unemployment" where companies send workers on mandatory unpaid "vacations" during downturns to avoid layoffs, resulting in an unemployment rate that would have been 2.5 percentage points higher if the hidden unemployed were included in the calculation. While Soviet economic data was unreliable, with Mikhail Gorbachev revealing in 1989 that the Soviet Union had concealed its military spending to be four times higher than officially reported. February 24, 2023.
(6.4) The CIA's report has summarized possible manipulation of economic data in Soviet era that Soviet officials have followed a policy of selective release of data, withholding information either for security reasons or to avoid reflecting unfavorably on the regime. Although they have made no secret of manipulating data for propaganda purposes, their statistics must be screened carefully and not assumed to be comparable to US figures without rigorous analysis, due to significant conceptual differences between East and West. February 24, 2023.
(6.5) Read the World Bank's research on why GDP data from weak and non-democratic countries cannot be trusted. The study compares reported GDP figures with nighttime lights recorded by satellites from outer space. The motivations for fabricating the data can either be to gain benefits in an election or to keep IDA flowing. February 24, 2023
(6.6) The former Chinese Premier Li Keqiang considers electricity consumption, rail cargo volume, and amount of loans disbursed as more reliable indicators of economic growth than GDP figures, which he says the report is "man-made" and therefore is "for reference only," per Wikileaks's cable 07BEIJING1760_a. February 24, 2023.
Possible Post-Russia Breakup: Source
(6.7) According to both English and Russian articles, in a "Post-Putin" scenario, there could be severe violence among political factions vying for control, including Yevgeny Prigozhin's group, the Wagner Group, Viktor Zolotov's group controlling the FSO (national guard), and Nikolai Patrushev's group centered around the Security Council Secretary. Each group has its own loyal military elements and financial resources, derived from banks, state corporations, and/or large companies. Additionally, there are other clans that control entire regions, such as the hard-line group led by Ramzan Kadyrov in Chechnya, and possible breakups from other oblasts. February 24, 2023.
(7) The geopolitical development of Post-Putin Russia scenario will be like this:
Best-case scenario: Poland, Turkey, and Japan work together to promote stability and democratic reforms in Russia, using their economic and diplomatic leverage to encourage pro-Western factions and opposition groups to cooperate and work towards a peaceful resolution. They provide support and resources to help build democratic institutions and promote human rights in Russia. By working together and engaging with the various factions vying for power, they are able to prevent further violence and foster a more stable and democratic political environment in Russia.
Worst-case scenario: Poland, Turkey, and Japan become embroiled in a complex web of alliances and conflicts within Russia, supporting rival factions and exacerbating the violence and instability. They pursue their own interests at the expense of the greater good, competing with each other and other international actors for control and influence in Russia. This leads to a protracted and bloody conflict, with various factions fighting for control and external powers intervening in the conflict. The situation deteriorates into a failed state, with the economy collapsing and human rights abuses becoming rampant. China's role: If Russia were to collapse, China's response would depend on the nature of the collapse. If the situation were to devolve into prolonged violence and instability, China would likely avoid direct involvement, instead focusing on strengthening its economic ties with other countries in the region. If the collapse were more gradual and peaceful, China may leverage its economic resources to invest in Russia's infrastructure and economy, potentially expanding its military presence in the region to secure its interests. The specific response would depend on China's strategic priorities, the nature of the collapse, and the reactions of other regional powers. February 24, 2023.
(8) There is a report of a possible stage setup for a patriotic concert in Moscow. February 24, 2023.
(9) Janet Yellen, the Treasury Secretary of the United States, has urged for more financing support to be given to Ukraine in order to help them fight against the Russian invasion that began a year ago. Additionally, the United States plans to provide USD10 billion in economic assistance to Ukraine in the coming weeks. February 24, 2023.
(10) Pentagon aims to send special force to help Ukraine in non-combatant mission, per Washington Post. February 24, 2023.
(11) Military lessons on future warfare from one year war in Ukraine, per Breaking Defense. February 24, 2023.
Geopolitics.Asia will provide serious policy analysis on Mondays, trend monitoring on weekdays, and cultural and lifestyle issues on weekends. Please note that our weekday situation monitoring will not include a trend radar or scenario analysis for the time being, as we work to fully automate these processes with AI. You can, however, access to our previous experiments on trend radar and scenario planning generated by the AI, 1) Simple scenario planning at Jan 26, 2023, 2) Double iteration scenario planning technique at February 2, 2023, 3) Triple iteration scenario planning technique at February 9, 2023, and 4) Hyperdimensional scenario planning technique at February 17, 2023.
Stay tuned for updates on this exciting development!