The Unrepentant Banker: How Banks Rig the Markets

Many of the big market-manipulation scandals over the past decade have much in common: huge fines for the investment banks, criminal charges for the traders and an embarrassing paper trail revealing precisely what bank employees got up to. Interest-rate traders who manipulated the London Interbank Offered Rate (LIBOR)… infamously called a chat room in which they discussed rigging exchange rates “the cartel”.

The case against JPMorgan Chase for manipulating precious-metals and Treasury markets has many of the usual features. On September 29th, 2020 it admitted to wrongdoing in relation to the actions of employees who, authorities claim, fraudulently rigged markets tens of thousands of times in 2008-16. The bank agreed to pay $920m to settle various probes by regulators and law enforcement… Some of the traders involved face criminal charges. If convicted, they are likely to spend time in jail.

The traders are alleged to have used “spoofing”, a ruse where a market-maker seeking to buy or sell an asset, like gold or a bond, places a series of phony orders on the opposite side of the market in order to confuse other market participants and move the price in his favor. A trader trying to sell gold, for instance, might place a series of buy orders, creating the illusion of demand. This dupes others into pushing prices higher, permitting the trader to sell at an elevated price. Once accomplished, the trader cancels his fake orders… According to prosecutors one JPMorgan trader described the tactic as “a little razzle-dazzle to juke the algos”. In the past two years Deutsche Bank, HSBC, Merrill Lynch and UBS have all paid penalties on spoofing charges…

Excerpt from Spoof proof: JPMorgan Chase faces a fine of $920m for market manipulation, Economist, Oct. 3, 2020

Paper Parks, their Elephants and Marginal People

Since 2010 Chad has taken a step that other African countries are increasingly following. It handed management of its national park to an NGO. Since African Parks took over, the elephant population has begun to rise. In 2011 just one calf was born; in 2018, 127 were. The revival is emblematic of broader success that public-private partnerships (PPPs) are having in conserving some of the most precious parts of the planet.  Sixty years ago, when decolonization was sweeping the continent, the UN counted 3,773 “protected areas” in Africa and its surrounding waters. By 1990 the figure was 6,075; today it is 8,468. Some 14% of the continent’s land has been categorized as protected, according to the World Database on Protected Areas…

Most “protected areas” are “paper parks”, argues Peter Fearnhead, the chief executive of African Parks. In theory their demarcation denotes stewardship; in practice there is often very little care. Since its founding in 2000 the NGO has grown to manage 19 parks in 11 countries. It is the largest of an expanding number of ppp operators across the continent. The African Parks model relies on “three ms”, explains Mr Fearnhead: a clear mandate from a government (which keeps ownership of the area but hands over the running to the NGO); sound management; and money from donors such as the EU.

Zakouma is African Parks’ flagship operation. When it took over its management the priority was security. The national park was caught up in Chad’s civil conflicts in the 2000s, when rebel groups, some backed by Sudan, took on government forces. Janjaweed militias, notorious for mass murder and rape in Darfur, took advantage of the vacuum to slaughter Zakouma’s elephants and launch attacks on nearby villages.
The approach to security is a blend of low and high tech. It relies on residents of surrounding areas to alert it to poachers. Local intelligence is then combined with satellite tracking of the elephants. This helps anti-poaching rangers to know where to go.

Winning the support of people on the edge of the park has been crucial. Locals are happy to help report sightings of the Janjaweed, since they fear being robbed or murdered by them. African Parks also negotiates with nomads to ensure their caravans of camels do not go through the park.

Excerpts from Elephants’ graveyard no more: African governments are outsourcing their natural areas, Economist, Oct. 22, 2020

Modern Slavery and the Collapse of Fisheries

Illegal, unreported and unregulated fishing accounts for a staggering 20-50% of the global catch. It is one reason fish stocks are plummeting: just a fifth of commercial species are sustainably fished. Illegal operators rob mostly poor coastal states of over $20bn a year and threaten the livelihoods of millions of small fishermen. A huge amount of illicit fishing happens on licensed boats, too. They might catch more than their quota, or falsely declare their catch as abundant albacore tuna instead of the more valuable bigeye. In port fisheries inspectors are always overstretched. If an operator is caught, for instance, fishing with too fine a net, the fine and confiscation are seen as a cost of doing business. Many pay up and head straight back out to sea.

The damage from illicit fishing goes well beyond fish stocks. Operators committing one kind of crime are likely to be committing others, too—cutting the fins off sharks, or even running guns or drugs. Many are also abusing their crews… A lot of them are in debt bondage…. Unscrupulous captains buy and sell these men and boys like chattel

Too often, the ultimate beneficiaries of this trade are hard to hook because they hide behind brass-plate companies and murky joint ventures. Pursuing them requires the same kind of sleuthing involved in busting criminal syndicates. An initiative led by Norway to go after transnational-fisheries crime is gaining support. Much more cross-border co-operation is needed.

At sea, technology can help. Electronic monitoring promises a technological revolution on board—Australian and American fleets are leading the way. Cameras combined with machine learning can spot suspicious behavior and even identify illicit species being brought on board…. Equally, national regulators should set basic labor standards at sea. If countries fail to follow the rules, coastal states should bar their fishing fleets from their waters. Fish-eating nations should allow imports only from responsible fleets.

Above all, governments should agree at the World Trade Organization to scrap the subsidies that promote overfishing. Of the $35bn a year lavished on the industry, about $22bn helps destroy fish stocks, mainly by making fuel too cheap. Do away with subsidies and forced labor, and half of high-seas fishing would no longer be profitable. Nor would that of China’s environmentally devastating bottom-trawling off the west African coast. 

Excerpt from Monsters of the deep: Illicit fishing devastates the seas and abuses crews, Economist, Oct., 22, 2020

What really happens in the seas? GlobalFishing Watch, Sea Shepherd, Trygg Mat Tracking

The Plight of Electric Cars: Cobalt Batteries and Mining

About 60% of the world’s cobalt is found in Congo, scattered across the copperbelt that stretches east into Zambia. The people of Kawama, Gongo grumble that too much land has been sold to mining firms. “We used to dig freely,” says Gerard Kaumba, a miner. “But now the government has sold all the hills.” There are still some sites where miners can turn up and dig, but they have to sell to whoever owns the concession. A sweltering day’s work might earn you $7. Many people have found they can make more at night, pilfering cobalt from industrial mines.

Glencore, a commodities giant with two mines in Congo, reckons that some 2,000 people sneak into its pits every day. Other companies have even more robbers to contend with. In 2019 Congolese soldiers chased thieves out of a mine owned by China Molybdenum where, it was reckoned, 10,000-odd people were then illegally digging. Sneaking into Glencore’s mines is hardest, says a Kawaman, as its guards do not collude with thieves—and often chase them away with dogs.

Congo’s industrial miners are not all angels.  Gécamines, the state-owned company, has enriched crooked politicians for half a century. Global Witness, a watchdog based in London, says Congo’s treasury lost $750m of mining revenues to graft between 2013 and 2015. ENRC, which has mines in Congo, has faced allegations of corruption and an investigation by Britain’s Serious Fraud Office (it denies wrongdoing). So has Glencore, which has worked with Dan Gertler, an Israeli billionaire. Mr Gertler, a close friend of a former Congolese president, Joseph Kabila, is under American sanctions… 

While big firms rake in millions, many of the little guys languish in jail. The prison in Kolwezi, the largest city in the mining region, is crammed with men caught stealing copper and cobalt. More than a hundred inmates occupy one stinking room, sitting in rows on the ground, each wedged between another’s legs. Prissoners are allowed to use the toilet only once a day, so they often urinate in their clothes

Excerpt from Cobalt blues: In Congo the little guys are jailed for stealing minerals. Economist, Oct. 17, 2020

Just Forbid It – Fishing: Fishing and Marine Protected Areas

Fish, whether wild caught or farmed, now make up nearly a fifth of the animal protein that human beings eat….In this context, running the world’s fisheries efficiently might seem a sensible idea. In practice, that rarely happens. Even well-governed coastal countries often pander to their fishing lobbies by setting quotas which give little respite to battered piscine populations. Those with weak or corrupt governments may not even bother with this. Deals abound that permit outsiders legal but often badly monitored access to such countries’ waters. And many rogue vessels simply enter other people’s fishing grounds and steal their contents.

There may be a way to improve the supply side: increase the area where fishing is forbidden altogether.  This paradoxical approach, which involves the creation of so-called marine protected areas (MPAs), has already been demonstrated on several occasions to work locally. A new study “A global network of marine protected areas for food “in the Proceedings of the National Academy of Sciences…explores the idea of extending MPAs elsewhere. If the right extensions are picked designating a mere 5% more of the world’s oceans as MPAs—which would triple the area protected—could increase the future global catch of the 811 species they looked at by more than 20%. That corresponds to an extra 10m tonnes of food a year.

The idea that restricting fishing would permit more fish to be caught may seem counterintuitive, but the logic is simple. Fish in MPAs can grow larger than those at constant risk of being pulled from the ocean. Larger fish produce more eggs. More eggs mean more fry. Many of these youngsters then grow up and move out of the safe zone, thus becoming available to catch in adjoining areas where fishing is permitted…

MPAs are especially beneficial for the worst-managed areas, most of which are tropical—and in particular for overfished species…They also have the virtue of simplicity. The setting of quotas is open to pressure to overestimate of how many fish can safely be caught…This is difficult enough for countries with well-developed fisheries-research establishments. For those without such it is little more than guesswork…Setting the rules for an MPA is, by contrast, easy. You stick up a metaphorical sign that says, “No fishing”. Knowing who is breaking the rules is easy, too. If your gear is in the water, you are fishing illegally.

Excerpt from Fishing: Stopping some fishing would increase overall catches. Economist, Oct. 31, 2020

The Industrial Chicken and the US-China Rivalry

Animal diseases, the US-China trade war and covid-19 have all disrupted, or threatened to disrupt, industrial chicken supplies and supply chains…The unsentimental logic of high-performance poultry-rearing is easy to grasp. “White-feather meat chickens”, as they are known in China, grow to 2.5kg in 40 days. Homegrown varieties of “yellow-feather chicken”, descended from backyard fowl, take twice as long to mature and will only ever weigh half as much…

Half a century ago meat in China was a rare luxury. Now, many see it as a daily necessity. In the meantime, the country’s supplies of farmland and clean water have not grown. Agriculture remains blighted by food-safety scandals, the rampant use of fake or illegal animal medicines, and disease outbreaks. Small surprise, then, that Chinese leaders give frequent speeches about food security. A puzzle lurks, though. Leaders also call for self-reliance in key technologies. And in the case of broiler chickens, those two ambitions—rearing meat efficiently and avoiding dependence on imports—are in tension.

The chicken imported into China are the fifth-generation descendants of pedigree birds whose bloodlines represent 80 years of selection for such traits as efficient food-to-meat conversion, rapid growth, strong leg bones and disease resistance. After waves of consolidation, the industry is dominated by two firms, Aviagen (based in Alabama and owned by the ew Group of Germany) and Cobb (owned by Tyson, an American poultry giant).

The most valuable pedigree birds never leave maximum-security farms in America and Britain: a single pedigree hen may generate 4m direct descendants. Their second-generation offspring are flown to breeding sites dispersed between such places as Brazil, Britain and New Zealand, in part to hedge against supply shocks when avian influenzas and other diseases close borders. Day-old third-generation chicks are air-freighted to Jinghai Poultry, a company in China, and other places, which spend six months growing them and breeding them in climate-controlled, artificially lit indoor facilities. In all, China imports 1.6m third-generation white-feather chicks a year.

Jinghai  Poultry hatches 8m fourth-generation, “parent stock” chickens annually. The company sells some to other agri-businesses. It breeds from the rest to produce fifth-generation chicks. These are “meat chickens”, consumed in fast-food outlets, schools and factory canteens, or as chicken parts sold in supermarkets. Yellow-feather chickens, deemed tastier by Chinese cooks, account for most whole birds sold in markets.

Chinese breeders have long tried to create local varieties with bloodlines available in-country… In September 2019, the State Council, China’s cabinet, issued a paper on livestock-rearing that set self-sufficiency in poultry as a goal, calling meat-chicken breeding a priority. Big foreign firms have resisted appeals from officials to send second-generation stock to China….Dependence on foreign bloodlines does carry risks. For several months recently New Zealand was one of the only countries able to send third-generation chicks to China, after other exporters suffered bird-flu outbreaks.

Li Jinghui, president of the China Broiler Alliance, an industry association, calls conditions ripe for China’s “brilliant” scientists to develop local birds… But to develop a domestic breed from scratch would take years, and if it does not meet market needs, a firm could spend a fortune “without much to show for it”…Without a stronger animal-health system and environmental controls, biotechnology alone cannot help China to develop world-class agriculture. Moreover, a long-standing Chinese strategy—bullying foreign firms to hand over intellectual property—is counter-productive now.

Excerpts from High-tech chickens are a case study of why self-reliance is so hard, Economist, Oct. 31, 2020

Lots of Money Forever for Waste that Lasts for Forever: Nuclear Waste in Japan

Since August 2020, two local governments on the western shore of Hokkaido in Japan have said they will apply to the central government for a survey that could eventually lead to their municipalities hosting a permanent underground repository for high-level radioactive waste. The fact that these two localities made their announcements about a month apart and are situated not far from each other was enough to attract more than the usual media attention, which revealed not only the straitened financial situations of the two areas, but also the muddled official policy regarding waste produced by the country’s nuclear power plants.

The respective populations of the two municipalities reacted differently. The town of Suttsu made its announcement in August 2020, or, at least, its 71-year-old mayor did, apparently without first gaining the understanding of his constituents, who, according to various media, are opposed to the plan…. Meanwhile, the mayor of the village of Kamoenai says he also wants to apply for the study after the local chamber of commerce urged the village assembly to do so in early September 2020. TBS asked residents about the matter and they seemed genuinely in favor of the study because of the village’s fiscal situation. Traditionally, the area gets by on fishing — namely, herring and salmon — which has been in decline for years. A local government whose application for the survey is approved will receive up to ¥2 billion in subsidies from the central government… Kamoenai, already receiving subsidies for nuclear-related matters. The village is 10 kilometers from the Tomari nuclear power plant, where some residents of Kamoenai work. In exchange for allowing the construction of the plant, the village now receives about ¥80 million a year, a sum that accounts for 15 percent of its budget. According to TBS, Kamoenai increasingly relies on that money as time goes by, since its population has declined by more than half over the past 40 years.

Since Japan’s Nuclear Waste Management Organization started soliciting local governments for possible waste storage sites in 2002, a few localities have expressed interest, but only one — the town of Toyo in Kochi Prefecture — has actually applied, and then the residents elected a new mayor who canceled the application. The residents’ concern was understandable: The waste in question can remain radioactive for up to 100,000 years.

The selection process also takes a long time. The first phase survey, which uses existing data to study geological attributes of the given area, requires about two years. If all parties agree to continue, the second phase survey, in which geological samples are taken, takes up to four years. The final survey phase, in which a makeshift underground facility is built, takes around 14 years. And that’s all before construction of the actual repository begins.

Neither Suttsu nor Kamoenai may make it past the first stage. Yugo Ono, an honorary geology professor at Hokkaido University, told the magazine Aera that Suttsu is located relatively close to a convergence of faults that caused a major earthquake in 2018. And Kamoenai is already considered inappropriate for a repository on a map drawn up by the trade ministry in 2017.

If the Nuclear Waste Management Organization’s process for selecting a site sounds arbitrary, it could reflect the government’s general attitude toward future plans for nuclear power, which is still considered national policy, despite the fact that only three reactors nationwide are online.

Japan’s spent fuel is being stored in cooling pools at 17 nuclear plants comprising a storage capacity of 21,400 tons. As of March 2020, 75 percent of that capacity was being used, so there is still some time to find a final resting place for the waste. Some of this spent fuel was supposed to be recycled at the Rokkasho Reprocessing Plant in Aomori Prefecture, but, due to numerous setbacks, it doesn’t look as if it’s ever going to open, so the fuel will just become hazardous garbage.

According to some, the individual private nuclear plants should be required to manage their own waste themselves. If they don’t have the capacity, then they should create more. It’s wrong to bury the waste 300 meters underground because many things can happen over the course of future millennia. The waste should be in a safe place on the surface, where it can be readily monitored.  However, that would require lots of money virtually forever, something the government would prefer not to think about, much less explain. Instead, they’ve made plans that allow them to kick the can down the road for as long as possible.

Excerpt from PHILIP BRASOR, Hokkaido municipalities gamble on a nuclear future, but at what cost? Japan Times, Oct. 24, 2020

How to Exploit the Secrets of the Ocean: DARPA

PARC, A Xerox Company, announced on October 22, 2020,  it has been awarded a contract by the Defense Advanced Research Projects Agency (DARPA) for the next development phase in the Ocean of Things. Initially announced by DARPA in 2017, the Ocean of Things project is deploying small, low-cost floats in the Southern California Bight and Gulf of Mexico to collect data on the environment and human impact. This includes sea surface temperature, sea state, surface activities, and even information on marine life moving through the area.

Xerox Ocean Float is Equipped with Camera, GPS and other sensors. Ocean of Things

“Oceans cover more than 70 percent of the earth’s surface, but we know very little about them,” said Ersin Uzun, vice president and general manager of the Internet of Things team at Xerox. “The floats gather data that we could never track before, enabling persistent maritime situational awareness.” Each solar-powered drifter has approximately 20 onboard sensors, including a camera, GPS, microphone, hydrophone, and accelerometer. The different  sensors can provide data for a broad array of areas including ocean pollution, aquafarming and transportation routes…Among other things, the float needed to be made of environmentally safe materials, be able to survive in harsh maritime conditions for a year or more before safely sinking itself, and use advanced analytic techniques to process and share the data gathered…PARC built 1,500 drifters for the first phase of the project and will deliver up to 10,000 that are more compact and cost-effective for the next phase. 

Excerpt from DARPA Awards PARC Contract to Expand Ocean Knowledge, XEROX Press Release, Oct. 22, 2020

By Hook or By Crook (or Both): How Iran Beats US Sanctions

Persian Gulf waters off Iraq have become a new, important waypoint for Iranian oil smugglers looking to avoid U.S. sanctions…Iranian tankers now regularly transfer crude to other ships just miles offshore the major Iraqi port of Al Faw, according to the officials. The oil is then mixed with cargoes from other places to disguise its origin, and it eventually ends up on sale in world markets, they say.


In one example from March 2020,  according to a shipping manifest reviewed by The Wall Street Journal, 230,000 barrels of oil from the state-run National Iranian Oil Co. were transferred to a vessel moored in Iraqi waters. The cargo was blended with Iraqi oil and passed to other ships, according to people familiar with the operation. The ultimate destination of the oil wasn’t clear.

The people familiar with the transfer said the operation was part of an increasingly common and lucrative business that involves transferring and mixing cargoes with other vessels multiple times and then selling the oil with documents that declare it is as Iraqi. Iraqi oil can be sold at a significant premium to oil of Iranian origin.

Iran has increasingly tried to find ways to get its crude to market despite the U.S. sanctions. Iran’s daily crude and condensates exports averaged 827,000 barrels a day in the first six months of this year, according to U.S. shipping-information company TankerTrackers.com. That is up 28% from the previous six months, but far below the level of 2.7 million barrels a day in May 2018 before the sanctions.

“We While some of Iran’s oil exports go to countries not aligned with the U.S., such as Syria and China, they often pass through allies such as the United Arab Emirates or Iraq, where their origin is being concealed, according to U.S. officials.

Excerpt from Sarah McFarlane and Benoit Faucon, Iraq Emerges as Hurdle to Enforcing Iran Oil Sanctions, WSJ, Oct. 24, 2020

The Unbankables: Fossil-Fuel Companies

Defenders of the oil-and-gas industry in Washington are fighting back against big banks who want to stop financing new Arctic-drilling projects, fearing it could be a harbinger of an unbankable future for fossil-fuel companies. Five of the six largest U.S. banks— Citigroup, Goldman Sachs,  JPMorgan Chase, Morgan Stanley, and Wells Fargo have pledged over the past year to end funding for new drilling and exploration projects in the Arctic.  Alaska Sen. Dan Sullivan has been lobbying the Trump administration to examine whether the federal government can prevent banks from cutting off financing.

“That these banks would discriminate against one of the most important sectors of the U.S. economy is absurd,” Mr. Sullivan said in an interview. “I thought it was important to push back.” The American Petroleum Institute, one of industry’s most influential lobbying groups, has said it is working with the Trump administration on the issue, which it called a “bad precedent.” API, Mr. Sullivan and others have also suggested the White House should examine whether it could cut off the banks’ access to funding under coronavirus relief packages.

Wall Street has been pulling back from the oil-and-gas industry after years of dismal returns from it and is under increasing pressure from environmentalists and others to limit fossil-fuel lending. While broader market conditions during the coronavirus pandemic this year have dried up capital for new exploration, some analysts have said a lack of bank financing could deter drilling in the Arctic National Wildlife Refuge, which the administration opened to exploration in August 2020…

Capital flight remains one of the primary risks facing the oil industry, according to Moody’s Corp. If the world were to accelerate a transition to renewable sources of energy, oil-and-gas reserves could become uneconomic and turn into a credit liability for producers, making it difficult to access longer-maturity loans, Moody’s said.

Alaska’s economy is almost entirely dependent on the fossil-fuel industry, which has historically funded about 90% of the state’s general fund through tax revenues. Energy executives worry the pledges that banks are making could spread to other regions and parts of the industry as pressure mounts from environmental groups, and companies face the prospect of tighter government regulations. This week, JPMorgan pledged to push clients to align with the Paris climate accord and work toward global net zero-emissions by 2050.

“If it is successful, why would they stop with the Arctic?” said wildcatter Bill Armstrong, founder of Armstrong Oil & Gas Inc., which has discovered more than 3 billion barrels of oil in Alaska. “A lot of misguided people are trying to make oil and gas the new tobacco.

Excerpt from Christopher M. Matthews and Orla McCaffrey, Banks’ Arctic Financing Retreat Rattles Oil Industry, WSJ, Oct. 9 2020

The $1Million Narco-Submarines

South America is awash with cocaine, and traffickers are turning to new ways of getting it to Europe…. Submarines that carry illicit drugs dubbed ‘narco-subs’ are described as low-tech, uncomfortable and hazardous, earning them the nickname ‘water coffins.’

Narco-subs have ferried cocaine from Colombia to Central America since the 1990s and recently proliferated. Rarely true submarines, they are generally semisubmersibles that float mostly but not completely below the waterline and are nearly undetectable. Most are built out of sight in South American jungles for around $1 million a piece. The discovery of a narco-sub, in November 2019,  off Spain’s northwestern coast, according to law-enforcement officials, was the first confirmation of rumors that such a vessel could reach Europe.

Excerpt from James Marson, Narco-Submarine’ Caught After Crossing the Antic,  WSJ, Oct. 18, 2020

Who is Afraid of a Nuclear Weapons Ban?

The United States is urging countries that have ratified a U.N. treaty to ban nuclear weapons to withdraw their support as the pact has reached the 50 ratifications needed and will enter into force on January 22, 2021. The U.S. letter to signatories, obtained by The Associated Press, says the five original nuclear powers — the U.S., Russia, China, Britain and France — and America’s NATO allies “stand unified in our opposition to the potential repercussions” of the treaty.  It says the treaty “turns back the clock on verification and disarmament and is dangerous” to the half-century-old Nuclear Nonproliferation Treaty, considered the cornerstone of global nonproliferation efforts.

“Although we recognize your sovereign right to ratify or accede to the Treaty on the Prohibition of Nuclear Weapons (TPNW), we believe that you have made a strategic error and should withdraw your instrument of ratification or accession,” the letter says. The treaty requires that all ratifying countries “never under any circumstances … develop, test, produce, manufacture, otherwise acquire, possess or stockpile nuclear weapons or other nuclear explosive devices.” It also bans any transfer or use of nuclear weapons or nuclear explosive devices — and the threat to use such weapons — and requires parties to promote the treaty to other countries.

Beatrice Fihn, executive director of the International Campaign to Abolish Nuclear Weapons, the 2017 Nobel Peace Prize-winning coalition whose work helped spearhead the nuclear ban treaty, told The Associated Press Tuesday that several diplomatic sources confirmed that they and other states that ratified the TPNW had been sent letters by the U.S. requesting their withdrawal.  She said the “increasing nervousness, and maybe straightforward panic, with some of the nuclear-armed states and particularly the Trump administration” shows that they “really seem to understand that this is a reality: Nuclear weapons are going to be banned under international law soon.”…Fihn stressed that the entry into force of the treaty will be “a really big deal” because it will become part of international law and will be raised in discussions on disarmament, war crimes and weapons.”And I think that over time pressure will grow on the nuclear-armed states to join the treaty,” she said.

Excerpts from US Lobbies Against UN Nuke Treaty, Associated Press, Oct. 22, 2020

1 Million Tons Radioactive Water Release at Sea: Fukushima, Japan

On October 19, 2020, China urged the Japanese government to “cautiously” consider whether to release treated radioactive water in the sea from the Fukushima No. 1 nuclear power plant. China’s remarks came days after it was reported by Japanese media that an official decision on the discharge of the water from the nuclear plant may be made by the end of October 2020. The water has been treated using an advanced liquid processing system, or ALPS, to remove most contaminants other than the relatively less toxic tritium and is stored in tanks on the facility’s premises.

But space is expected to run out by the summer of 2022, with contaminated water increasing by about 170 tons per day. As of September 2020, the stored water totaled 1.23 million tons and continues to grow.

China urges Japan to cautiously consider nuclear plant water release, Japan Times, Oct. 19, 2020

New Fait Accompli in Space: the Artemis Accords

Seven countries have joined the United States in signing the Artemis Accords on October 13, 2020, a set of principles governing norms of behavior for those who want to participate in the Artemis lunar exploration program: Australia, Canada, Japan, Luxembourg, Italy, the United Arab Emirates and the United Kingdom….The accords outline a series of principles that countries participating in the Artemis program are expected to adhere to, from interoperability and release of scientific data to use of space resources and preserving space heritage. Many of the principles stem directly from the Outer Space Treaty and related treaties.

NASA was originally focused on having the document apply to lunar and later Martian exploration. Japan wanted to include asteroid and comet missions as well, based on that country’s program of robotic asteroid missions like the Hayabusa2 asteroids sample return spacecraft. The document now includes asteroid and comet missions, as well as activities in orbit around the moon and Mars and the Lagrange points of the Earth-moon system.

NASA is implementing the Artemis Accords as a series of bilateral agreements between the United States and other countries, which allows them to move more quickly than if NASA sought a multilateral agreement under the aegis of the United Nations…Frans von der Dunk, a professor of space law at the University of Nebraska, drew parallels with development of international civil aviation regulations, which started with bilateral agreements between the United States and United Kingdom that were later copied among other nations. “That is something that will possibly happen here as well,” he said.

The bilateral nature of the accords, though, do present restrictions. China, for instance, cannot sign on, because NASA, under the so-called “Wolf Amendment” in US law, is restricted from bilateral cooperation with China.

The accords are outside the traditional UN framework of international space law – such as the UN Committee on the Peaceful Uses of Outer Space. The requirement to sign bilateral agreements with the US can be viewed as a way of trying to impose US preferences on how to regulate space on others. Russia has already stated that the Artemis Program is too “US-centric”.  India, Germany, France and the European Space Agency (ESA) have not yet signed on to the accords.

Excerpt from Jeff Foust ,Eight countries sign Artemis Accords, Space News, Oct. 13, 2020

What is the Sea Train? DARPA

DARPA’s The Sea Train program aims to demonstrate long range deployment capabilities for a distributed fleet of tactical unmanned surface vessels. The program seeks to enable extended transoceanic transit and long-range naval operations by exploiting the efficiencies of a system of connected vessels (Sea Train). The goal is to develop and demonstrate approaches that exploit wave-making resistance reductions to overcome the range limitations inherent in medium unmanned surface vessels. DARPA envisions sea trains formed by physically connecting vessels with various degrees of freedom between the vessels, or vessels sailing in collaborative formations at various distances between the vessels. The weak of October 5, 2020, DARPA awarded Gibbs & Cox a separate $9.5 million contract to develop a “Connectorless Sea Train” concept. 

Dr. Andrew Nuss, Sea Train

Turtle Eggs Can Fool Poachers

The InvestEGGator is used to reveal illegal trade networks and better understand what drives sea turtle egg poaching. The scientists deployed around a hundred of the fake eggs in sea turtle nests across four beaches in Costa Rica and waited. Each egg contained a GPS transmitter set to ping cell towers every hour, which would allow scientists to follow the InvestEGGator eggs on a smartphone app…Five of the deployed eggs were taken by unsuspecting poachers. The shortest route was roughly a mile, but one InvestEGGator traveled more than 80 miles, capturing what researchers were hoping for: the complete trade route, from the beach to the buyer. “Having that moment where the trade chain was complete….that was obviously a very big moment,” says Pheasey.

The InvestEGGator was the invention of Kim Williams-Guillén… The trick, says Williams-Guillén, was designing a device that looked and felt like a sea turtle egg while being precise enough to reveal trade routes. Sea turtle eggs are the size of ping pong balls, but unlike brittle chicken eggs, their shell is leathery and pliable. “Making [the trackers] look like eggs from far away was not going to be an issue, it was more making them feel like turtle eggs,” says Williams-Guillén. “One of the ways that [poachers] know that a turtle egg is good when they’re sorting their eggs is that it’s still soft and squishy.”…

Of the nests containing decoy eggs, a quarter were illegally harvested. Some of the eggs failed to connect to a GPS signal, while other eggs were spotted by poachers and tossed aside. Five of those poached eggs gave the team useful tracking data…This illegal trade network revealed that eggs are sold and consumed locally… The routes they discovered also suggest that most egg poachers in the area are individuals looking to make quick money, not an organized network.

Excerpt from Corryn Wetzel, 3-D Printed Sea Turtle Eggs Reveal Poaching Routes, SMITHSONIANMAG.COM, Oct. 7, 2020

The Nuclear Waste Buried in the Sahara Desert

France should take initiative to solve the problem of the nuclear waste buried in the Algerian Sahara in the early 1960s, as no one knows its exact location, which is a classified military secret…In an interview with Radio France Internationale, Patrice Bouvre (head of the Paris-based Observatory for Armaments) said: “When France suspended its nuclear tests in 1966, it simply buried the waste of the 17 experiments it conducted over the years.” He added that Paris classified the location or locations of the buried nuclear waste and the documents related to the affair as “a military secret”, which remains to date.

As a result, there is no information available about the exact location of the nuclear waste buried in the Algerian desert. He called on the French authorities to reveal the truth about this file and to cooperate with Algeria to clean up the areas contaminated by the nuclear waste that still exposes these regions to serious environmental damages.

France conducted 17 nuclear tests between 1960 and 1966 in the Algerian Sahara, and the waste from these experiments is buried in an unknown location in the area, hindering attempts to remove the radioactive materials and protect the population and the environment

Calls for France to reveal location of nuclear waste dumped in Algeria, MiddleEastMonitor, Oct. 13, 2020

Government Intervention is Great: What China is Learning from the United States

A study published by the China Aerospace Studies Institute in September 2020′China’s Space Narrative: Examining the Portrayal of the US-China Space Relationship in Chinese Sources‘ used publicly available Chinese language resources to draw insights on how the Chinese view the U.S.-China space relationship. According to the study:

“Chinese sources weave a space narrative that portrays China as a modernizing nation
committed to the peaceful uses of space and serving the broader interests of advancing humankind through international space cooperation, economic development, and scientific discovery. Chinese sources minimize the military role of China’s space program.

In contrast, the same sources portray the United States as the leading
space power bent on dominating space, restricting access to space, and limiting international space cooperation to countries with similar political systems and level of economic development.

The report concludes that the United States and China are in a long-term competition in space in which China is attempting to become a global power, in part, through the use of space. China’s primary motivation for developing space technologies is national security…China’s space program is one element of its efforts to transition the current U.S.-dominated international system to a multipolar world….

Many Chinese writings on commercial space analyze the experiences of U.S. companies, with a particular focus on SpaceX. Chinese space experts call SpaceX the “major representative company” for commercial space worldwide. A report from Hong Kong media claims that Chinese investors view SpaceX as the “benchmark company” for emerging commercial space companies in the mainland. Chinese authors also follow developments in other U.S. commercial space companies, such as Digital Globe
and Rocket Lab.

Chinese authors also pay attention to the ways in which the U.S. government uses various policies and incentives to create a favorable ecosystem for the growth of new commercial space companies. Chinese writings analyze ways in which NASA has supported private companies with funding, technology transfer, consulting, and infrastructure leasing. Although their specific recommendations vary, Chinese authors view strong government oversight and intervention as crucial toward the success of the domestic commercial space industry.”

Tracking the Enemy: U.S. Space Force in Qatar

The newly formed U.S. Space Force is deploying troops to a vast new frontier: the Arabian Peninsula. Space Force now has a squadron of 20 airmen stationed at Qatar’s Al-Udeid Air Base in its first foreign deployment. The force, pushed by President Donald Trump, represents the sixth branch of the U.S. military and the first new military service since the creation of the Air Force in 1947.   Concerns over the weaponization of outer space are decades old. But as space becomes increasingly contested, military experts have cited the need for a space corps devoted to defending American interests…

In the spring of 2020, Iran’s paramilitary Revolutionary Guard launched its first satellite into space, revealing what experts describe as a secret military space program. The Trump administration has imposed sanctions on Iran’s space agency, accusing it of developing ballistic missiles under the cover of a civilian program to set satellites into orbit.

“The military is very reliant on satellite communications, navigation and global missile warning,” said Capt. Ryan Vickers, a newly inducted Space Force member at Al-Udeid. American troops, he added, use GPS coordinates to track ships passing through strategic Gulf passageways…

Isabel Debre, US Space Force deploys to vast new frontier: Arabian Desert, Associated Press, Sept. 21, 2020

De-Extinction: Horse Revival


A little baby horse named Kurt is a symbol of renewed hope for the survival of his kind. Born on 6 August 2020, he is the world’s first ever successfully cloned Przewalski’s horse, an endangered wild horse native to the steppes of central Asia. What makes Kurt even more exciting is that he was cloned from genetic material cryopreserved 40 years ago – reviving genetic diversity thought to have been lost decades ago…

Przewalski’s horses roaming the steppes declined dramatically after World War II, due to a combination of factors such as hunting, competition with livestock as humans moved into their territory, and severe winters. The last confirmed sighting of a Przewalski’s horse in the wild was in 1969. Luckily, some of the horses still remained in zoos. But not many. A total of 12 horses made up the ancestors of a captive breeding program – 11 Przewalski’s horses wild-caught between 1899 and 1902, and another caught in 1947. Thanks to this breeding program, there are around 2,000 individuals today. That’s incredibly impressive, but the growing population isn’t without problems.

Those 12 ancestor individuals represent what is known as a population bottleneck – when a species undergoes a severe reduction in numbers. From that point, a population can recover, but it can also be the beginning of the end. One of the reasons for that is lower genetic diversity. With less variation, a population is less able to adapt to potential stressors or changes to their environment…

Enter a Przewalski’s horse named Kuporovic, who lived from 1975 to 1998. An analysis of the captive breeding pedigree revealed that Kuporovic’s genome had unique ancestry from two wild founders. This meant he offered significantly more genetic variation than any of his living relatives, so in 1980, scientists took a sample and preserved it in San Diego Zoo’s Frozen Zoo.  San Diego Zoo partnered with wildlife conservation group Revive & Restore and pet cloning company ViaGen Equine to create an embryo using Kuporovic’s genetic material. This embryo was implanted in a domestic horse (Equus ferus caballus) surrogate, and was born healthy after a normal pregnancy.

Excerpt from Scientists Clone an Endangered Przewalski’s Horse For The First Time, Science Alert, Sept 7, 2020

Your Brain on Electro-Magnetic Fields

Current cockpits are flooded with radio frequency (RF) noise from on-board emissions, communication links, and navigation electronics, including strong electromagnetic (EM) fields from audio headsets and helmet tracking technologies. Pilots often report minor cognitive performance challenges during flight, and from 1993 to 2013, spatial disorientation in US Air Force pilots accounted for 72 Class A mishaps, 101 deaths, and 65 aircraft lost. It has been hypothesized that the cockpit RF and EM fields may influence cognitive performance including task saturation, misprioritization, complacency and Spatial Disorientation. However, EM fields and radio waves in cockpits are not currently monitored, little effort has been made to shield pilots from these fields, and the potential impacts of these fields on cognition have not been assessed.

Recent DARPA-funded research has demonstrated that human brains sense magnetic fields, like those used by animals for navigation, and that this process is “jammed” (i.e., disrupted) by radio waves (RF), impacting brainwaves and behavior. Furthermore, recent findings were the first to show that even weak RF fields and “earth strength” magnetic fields have measurable, reproducible effects on human brainwaves and unconscious behavior in a controlled environment. Current tactical audio headsets project magnetic fields up to 10 times earth strength, the effects of which can now be measured experimentally in a similar controlled environment.

[Phase II of the project will involve] developing next generation sensor suite capable of measuring the ambient EM/RF conditions in a military aircraft cockpit environment or a suitably similar analogue. This system must enable measurement of RF intensity vs frequency as well as RF absorption by various tissues in the human body and brain…The goal of Phase II experimentation will be to, not only identify any impacts of the cockpit EM/RF conditions that negatively impact pilot cognitive function or physiological sensor function, but also to develop and test various mitigation strategies to protect against these effects…


If this research and development effort reveals negative impacts of cockpit EM/RF environments on human cognitive function or physiological sensor performance, it is expected to generate interest from the commercial airline industry as well as other industries in which humans are exposed to similar EM/RF conditions

Excerpts from Impact Cockpit Electro-Magnetics on Aircrew Neurology (ICEMAN), DARPA, 2020
 
 
 
 
 
 
 
 
 

Beautiful Coal and Other Maladies

President Trump hasn’t been able to bring back “beautiful, clean coal” as he promised four years ago. As mines and power plants continue to close, the question many are asking in the diminishing American coal industry is—what now?

The use of coal to generate electricity in the U.S. is expected to fall more than a third during Mr. Trump’s first term, data from the U.S. Energy Information Administration show, as a glut of cheap natural gas unlocked due to fracking and increasingly competitive wind and solar sources gained market share. More than half of that drop happened before the new coronavirus outbreak. That compares with a decline of about 35% in coal consumed for power generation during Mr. Obama’s eight years in office.

In 2019, the U.S. consumed more renewable energy than coal for the first time since the 1880s, federal data show…“Coal isn’t coming back. You can’t legislate it,” said Karla Kimrey , previously a vice president at Wyoming-based coal producer Cloud Peak Energy Inc., which filed for bankruptcy protection last year. Domestic demand has continued to drop as utilities retire coal power plants and turn to cheap natural gas and renewables to make electricity, trends that have only accelerated as economies have slowed due to the pandemic. With less demand for power, many utilities have cut back on coal generation first, as it is generally more expensive

Meanwhile the rise of “ESG” or environmental, social and governance investing is constricting the industry’s ability to obtain capital, current and former executives say.  As major investors such as JPMorgan Chase & Co. and BlackRock Inc., the world’s largest asset manager, turn away from coal over concerns about climate change, coal companies are struggling to secure the insurance they need to operate. That hurts not only companies that mine the thermal coal used to generate electricity, but also those that mine metallurgical coal to make steel.

Excerpts from Rebecca Elliott and Jonathan Randles, Trump’s Promise to Revive Coal Thwarted by Falling Demand, Cheaper Alternatives, WSJ, Sept. 17, 2020

Addictive Ads and Digital Dignity

Social-media firms make almost all their money from advertising. This pushes them to collect as much user data as possible, the better to target ads. Critics call this “surveillance capitalism”. It also gives them every reason to make their services as addictive as possible, so users watch more ads…

The new owner could turn TikTok from a social-media service to a digital commonwealth, governed by a set of rules akin to a constitution with its own checks and balances. User councils (a legislature, if you will) could have a say in writing guidelines for content moderation. Management (the executive branch) would be obliged to follow due process. And people who felt their posts had been wrongfully taken down could appeal to an independent arbiter (the judiciary). Facebook has toyed with platform constitutionalism now has an “oversight board” to hear user appeals…

Why would any company limit itself this way? For one thing, it is what some firms say they want. Microsoft in particular claims to be a responsible tech giant. In January  2020 its chief executive, Satya Nadella, told fellow plutocrats in Davos about the need for “data dignity”—ie, granting users more control over their data and a bigger share of the value these data create…Governments increasingly concur. In its Digital Services Act, to be unveiled in 2020, the European Union is likely to demand transparency and due process from social-media platforms…In the United States, Andrew Yang, a former Democratic presidential candidate, has launched a campaign to get online firms to pay users a “digital dividend”. Getting ahead of such ideas makes more sense than re-engineering platforms later to comply.

Excerpt from: Reconstituted: Schumpeter, Economist, Sept 5, 2020

See also Utilities for Democracy: WHY AND HOW THE ALGORITHMIC
INFRASTRUCTURE OF FACEBOOK AND GOOGLE MUST BE REGULATED
(2020)

A Perpetual State of Competition: US-China-Russia

The US Secretary of Defense stated in September 2020 that America’s air, space and cyber warriors “will be at the forefront of tomorrow’s high-end fight.” That means confronting near-peer competitors China and Russia. That means shifting the focus from defeating violent extremist groups to deterring great power competitors. It means fighting a high-intensity battle that combines all domains of warfare. “In this era of great power competition, we cannot take for granted the United States’ long-held advantages,” Esper said. 

The last time an enemy force dropped a bomb on American troops was in the Korean War. “China and Russia, seek to erode our longstanding dominance in air power through long-range fires, anti-access/area-denial systems and other asymmetric capabilities designed to counter our strengths,” he said. “Meanwhile, in space, Moscow and Beijing have turned a once peaceful arena into a warfighting domain.” China and Russia have placed weapons on satellites and are developing directed energy weapons to exploit U.S. systems “and chip away at our military advantage,” he said.

Russia, China, North Korea, Iran and some violent extremist groups also look to exploit cyberspace to undermine U.S. security without confronting American conventional overmatch. “They do this all in an increasingly ‘gray zone’ of engagement that keeps us in a perpetual state of competition,’ the secretary said…The fiscal 2020 Defense Department research and development budget is the largest in history, he said, and it concentrates on critical technologies such as hypersonic weapons, directed energy and autonomous systems. 

“In the Air Force, specifically, we are modernizing our force for the 21st century with aircraft such as the B-21, the X-37 and the Next Generation Air Dominance platform,” Esper said. “Equally important, we are transforming the way we fight through the implementation of novel concepts such as Dynamic Force Employment, which provides scalable options to employ the joint force while preserving our capabilities for major combat.”

To realize the full potential of new concepts the department must be able to exchange and synchronize information across systems, services and platforms, seamlessly across all domains, he said. “The Department of the Air Force is leading on this front with the advancement of Joint All-Domain Command and Control,” Esper said.  This concept is part of the development of a Joint Warfighting concept that will drive transition to all-domain operations, he said. “

For these breakthroughs to succeed in any future conflict … we must maintain superiority in the ultimate high ground — space,” Esper said…In collaboration with academia and industry, the Air Force’s AI Accelerator program is able to rapidly prototype cutting-edge innovation,” Esper said. One example of this was the AI technology used to speed-up the development of  F-15EX.


F-15EX

Excerpts from Esper: Air Force, Space Force Leading Charge to New Technologies, DOD News, Sept. 16, 2020

Conquering Space: China’s X-37B and the United States

Ever since China claimed success in the secretive launch of an experimental spacecraft, experts have been pondering over what it could be and what it did in space.The spacecraft – mounted on a Long March 2F rocket – was launched from the Jiuquan Satellite Launch Centre in northern China on Sept. 4, 2020 and safely returned to Earth after two days in orbit…Unlike recent Chinese high-profile space missions, very few details have emerged about the vehicle and no visuals have been released. Chinese authorities have been tight-lipped about the nature of the short-duration excursion and what technologies were tested. The exact launch and landing times were not revealed, nor was the landing site although it is thought to be the Taklamakan Desert, which is in northwest China.

Three years ago, China said it would launch a space vessel in 2020 that “will fly into the sky like an aircraft” and be reusable. A reusable spacecraft – as the name implies can undertake multiple trips to space – thereby potentially lowering the overall cost of launch activity. A traditional one-off spacecraft – costing tens of millions of dollars – is practically rendered useless after a single mission.

The experimental vessel reached an altitude of about 350km, which is in line with China’s previous crewed flights. The spacecraft also released an unknown object into the orbit before returning to Earth…Once the testing is complete, such a vehicle could be used to launch and repair satellites, survey the Earth, as well as take astronauts and goods to and from orbit, possibly to a planned future Chinese space station.

The Chinese craft’s size and shape remain unclear but it is widely believed to be some sort of uncrewed space plane similar to the X-37B Orbital Test Vehicle operated by the US Air Force. The recent mission could be linked to the Shenlong – or divine dragon – space plane project, which has been in development for some time, according to reports. A second Chinese reusable space plane called Tengyun, or cloud climber, is also in the works. If confirmed as a space plane, China would become only the third country to have successfully launched such a vehicle into orbit after the US and the former Soviet Union. The European Space Agency is working on its own reusable orbital vehicle called Space Rider, while India is also said to be developing a space shuttle-like craft.

The X-37B, resembling a miniature space shuttle, has been in orbit since late May 2020 following its launch on its sixth assignment. Very little is known about the X-37B’s missions, prompting speculation that the planes could be used for spying activity or testing space weapons.

x-37b

According to Bleddyn Bowen, China’s spacecraft launch is “just another part of China becoming a comprehensive space power that utilizes space technology for the purposes of war, development, and prestige like all others”.

Pratik Jakhar, China claims ‘important breakthrough’ in space mission shrouded in mystery, BBC, Sept. 9, 2020

How to Fight: Laugh, Bleed, Kill

The U.S. response to the 9/11 attacks launched an Air Force special operations unit into more than 6,900 days, or nearly two decades, of continuous deployments and combat operations in the Middle East, officials said. Within weeks of the terrorist attacks on the U.S., the 17th Special Tactics Squadron deployed with Army Rangers on raids into southern Afghanistan on Oct. 19, 2001. Since then, the squadron has had no breaks in deployment. “We fight, bleed and laugh beside [the Rangers],” said Staff Sgt. Ryan Duhon, a tactical air control party operator quoted in last month’s statement. “We win as a team or fail as a team.”….

The Special Tactics community, whose airmen conduct personnel recovery, precision strike missions and battlefield surgery, is the most highly decorated in the Air Force since the Vietnam War. 

Excerpt from CHAD GARLAND, Air Force special ops members ‘fight, bleed and laugh’ on nearly 7,000 days of deployments, Stars and Stripes, Sept. 10, 2020

Underused but Still Useful: US Military Footprint in the Pacific

The Republic of Palau has asked the Pentagon to build ports, bases and airfields on the island nation.The request came during a visit in September 2020 by Defense Secretary Mark Esper, the first-ever trip by a U.S. Pentagon chief to the tiny republic, which is made up of hundreds of islands in the Philippine Sea and is closely aligned diplomatically with Taiwan. Mr. Esper traveled to Palau as part of a U.S. effort to realign its military footprint in the region, adhering to the 2018 National Defense Strategy, which calls for enhanced steps to meet security challenges posed by China

In September 2020, Mr. Remengesau, the President of Palau, handed Mr. Esper a letter requesting that the U.S. enter into a broader, longer-term relationship with the island nation, where the U.S. has had a small but permanent presence for decades. The Palauans said they think the republic has been underused by the U.S. military for years.  “Palau’s request to the U.S. military remains simple—build joint-use facilities, then come and use them regularly,” according to a copy of the letter reviewed by The Wall Street Journal. The letter, while not spelling out details, indicated that the Palauans were willing to allow the U.S. to host bases, construct port facilities, build airfields and host more troops.

Excerpts from Gordon Lubold, U.S. Military Is Offered New Bases in the Pacific, WSJ, Sept. 8, 2020

When Restoration Is Eradication: Palmyra Atoll

On the Palmyra Atoll in the central Pacific Ocean, conservation biologists are in the midst of a massive, unprecedented experiment. They are trying to rid this remote island of all but a few coconut palms. The gangly tree is an icon of idyllic tropical islands, but also an aggressive invasive species that crowds out native plants and animals. By removing 99% of Palmyra’s millions of palms, biologists hope to create more room on the atoll’s three dozen islets for indigenous forests and seabirds, including the world’s second largest colony of red-footed boobies…

Red footed booby

Ripping out the palms has long been on the list of restoration projects on Palmyra. First, however, managers decided to attack another invader, black rats, which likely arrived on ships during World War II. With no predators, rats multiplied into the tens of thousands. They ate the seeds and gnawed the saplings of native trees and attacked seabird colonies, including those of sooty terns, which nest on the ground. Rats are the key suspects behind the absence on Palmyra of eight other species of ground or burrow-nesting birds, including shearwaters and petrels, all found on central Pacific islands that have remained rat-free. The first attempt to eradicate the rats in 2002 failed, partly because Palmyra’s abundant land crabs out-competed the rodents for the poisonous bait. The crabs’ physiology allowed them to eat the poison—the anticoagulant brodifacoum—without ill effect.

The second effort was successful only after [researchers] radio-collared rats and discovered that the rodents liked to hang out in the crowns of coconut palms. The crowns became a convenient platform for stashing cotton gauze sacks of poison bait, delivered by workers firing slingshots or dangling from helicopters. Crabs do not reach the palm tops.

Once rats were exterminated in 2011, researchers watched with delight as native tree saplings began to spring from the forest floor. There were also happy surprises. Scientists discovered two additional species of land crabs that had likely gone undetected because voracious rats suppressed their numbers. And researchers realized they were no longer being bitten by Asian tiger mosquitoes, a pest that attacks during the day and can carry dengue and yellow fever. It appears the mosquitoes depended on rats rather than humans or birds for blood meals…

Excerpts from Ridding Paradise of Palms, Science, Aug. 28, 2020, at 1047

Electrical Bacteria as Ecosystem Engineers

Electric bacteria join cells end to end to build electrical cables able to carry current up to 5 centimetres through mud. The adaptation, never seen before in a microbe, allows these so-called cable bacteria to overcome a major challenge facing many organisms that live in mud: a lack of oxygen. Its absence would normally keep bacteria from metabolizing compounds, such as hydrogen sulfide, as food. But the cables, by linking the microbes to sediments richer in oxygen, allow them to carry out the reaction long distance…

The more researchers have looked for “electrified” mud, the more they have found it, in both saltwater and fresh. They have also identified a second kind of mud-loving electric microbe: nanowire bacteria, individual cells that grow protein structures capable of moving electrons over shorter distances. These nanowire microbes live seemingly everywhere—including in the human mouth… Scientists are pursuing practical applications, exploring the potential of cable and nanowire bacteria to battle pollution and power electronic devices…

The Center for Electromicrobiology was established in 2017 by the Danish government. Among the challenges the center is tackling is mass producing the microbes in culture…Cultured bacteria would also make it easier to isolate the cable’s wires and test potential applications for bioremediation and biotechnology…

Electrical bacteria are everywhere. In 2014, for example, scientists found cable bacteria in three very different habitats in the North Sea: an intertidal salt marsh, a seafloor basin where oxygen levels drop to near zero at some times of the year, and a submerged mud plain just off the coast…Elsewhere, researchers have found DNA evidence of cable bacteria in deep, oxygen-poor ocean basins, hydrothermal vent areas, and cold seeps, as well as mangrove and tidal flats in both temperate and subtropical regions.

Nanowire bacteria are even more broadly distributed. Researchers have found them in soils, rice paddies, the deep subsurface, and even sewage treatment plants, as well as freshwater and marine sediments. They may exist wherever biofilms form, and the ubiquity of biofilms provides further evidence of the big role these bacteria may play in nature.

The microbes also alter the properties of mud, says Sairah Malkin, an ecologist at the University of Maryland Center for Environmental Science. “They are particularly efficient … ecosystem engineers.” Cable bacteria “grow like wildfire,” she says; on intertidal oyster reefs, she has found, a single cubic centimeter of mud can contain 2859 meters of cables, which cements particles in place, possibly making sediment more stable for marine organisms.

Excerpts from Elizabeth Pennisi, The Mud is Electric: Bacteria that Conduct Electricity are transforming the way we see sediments, Science, Aug. 21, 2020, at 902

Severe Damage to Beliefs Lasting a Lifetime: covid-19

According to a new study  “Scarring Body and Mind: The Long-Term Belief-Scarring
Effects of COVID-19
” the largest economic cost of the COVID-19 pandemic could arise from changes in behavior long after the immediate health crisis is resolved. A potential source of such a long-lived change is scarring of beliefs, a persistent change in the perceived probability of an extreme, negative shock in the future. Even if a vaccine cures everyone in a year, the COVID-19 crisis will leave its mark on the US economy for many years to come because of the mass revision of beliefs that lasts through a lifetime. Even before the COVID-19 pandemic, people were aware of the disruptive impacts that a pandemic could theoretically have on their lives and the economy. But the tangible, persistent and severe harms associated with an actual pandemic change beliefs about the probability of another similar shock in ways that abstract knowledge cannot.

Excerpts from Free Exchange: Razing Hopes, Economist, Aug. 29, 2020 [adapted]

China’s Nuclear Triad: Land, Sumbarines and Bombers

Based on United States Report released in 2020 “Military and Security Developments Involving the People’s Republic of China” by the Secretary of Defense, China’s progress in upgrading its strategic bombers to carry nuclear payloads puts it on the cusp of achieving a “triad” of delivery systems ((1) land-launched nuclear missiles, (2) nuclear-armed submarines, and (3) aircraft delivered nuclear bombs).  The development of a nuclear triad raises the long-term stakes in the complex relationship between Beijing and Washington. …The heavy emphasis on China’s nuclear improvements will probably be used by the Pentagon to press lawmakers and the public to support the massive reinvestment already underway in modernized nuclear weapons. This includes the B-21 bomber, an $85 billion Ground Based Strategic Deterrent ICBM program and the $128 billion Columbia-class ballistic missile submarine.

China’s defense ministry denounced the report as a document created with a “zero-sum-game mindset and Cold War mentality,” saying that the U.S. had “misinterpreted” the country’s nuclear policy and stirred up confrontation with Taiwan. “It’s extremely wrong and China firmly rejects it.”  As part of President Xi Jinping’s efforts to build a “world class” military by 2049, the Defense Department report said the People’s Liberation Army has already achieved parity with or exceeded the U.S. in at least three key areas: shipbuilding, land-based conventional ballistic and cruise missiles and integrated air defense systems.

While the country has one overseas military base, in the East African nation of Djibouti, China’s government “is very likely already considering and planning for additional overseas military logistics facilities to support naval, air and ground forces…”.  China’s current nuclear arsenal includes 100 silo or road-mobile intercontinental ballistic missiles, as many as six Jin-class nuclear missile submarines capable of carrying 12 missiles each and a new air-refuelable H-6N long-range bomber. The bomber is an upgrade on a previous model and comes with a modified fuselage “that allows it to carry either a drone or an air-launched ballistic missile that may be nuclear-capable. 

Excerpts from Anthony Capaccio, Pentagon Warns China Is Nearing a Milestone in Nuclear Weapons Buildup, Bloomberg, Sept. 1, 2020

China denounced the Pentagon report. According to Xinhua, the Pentagon report is crowded with anti-China hogwash. Fear-mongering over China has always been the Pentagon’s trick to demand more appropriations from the U.S. Congress. A fabricated grave threat to world peace can also help Washington sell more weapons to its allies, and serves as an excuse for America’s pursuit of global domination…While Washington is selling its latest “China-scare” fiction to the world, it is hard to overlook such facts that the United States spent more on military than 144 countries combined in 2018 and maintains nearly 800 military bases in over 70 countries.

Excerpt from Commentary: Lies, conspiracies behind Pentagon’s China military report, Xinhua, Sept. 5, 2020


Living Insecticides: OX5034 Mosquito Obliterates Iteslf

A plan to release over 750 million genetically modified mosquitoes into the Florida Keys in 2021 and 2022 received final approval from local authorities, against the objection of many local residents and a coalition of environmental advocacy groups. The proposal had already won state and federal approval.

Approved by the Environment Protection Agency in May 2020, the pilot project is designed to test if a genetically modified mosquito is a viable alternative to spraying insecticides to control the Aedes aegypti. It’s a species of mosquito that carries several deadly diseases, such as Zika, dengue, chikungunya and yellow fever.  The mosquito, named OX5034, has been altered to produce female offspring that die in the larval stage, well before hatching and growing large enough to bite and spread disease. Only the female mosquito bites for blood, which she needs to mature her eggs. Males feed only on nectar, and are thus not a carrier for disease. The mosquito also won federal approval to be released into Harris County, Texas, beginning in 2021, according to Oxitec, the US-owned, British-based company that developed the genetically modified organism (GMO)…

In 2009 and 2010, local outbreaks of dengue feverleft the Florida Keys Mosquito Control District desperate for new options. Despite an avalanche of effort — from aerial, truck and backpack spraying to the use of mosquito-eating fish — local control efforts to contain the Aedes aegypti with larvicide and pesticide had been largely ineffective.
And costly, too. Even though Aedes aegypti is only 1% of its mosquito population, Florida Keys Mosquito Control typically budgets more than $1 million a year, a full tenth of its total funding, to fighting it…

The new male mosquito, OX5034, is programmed to kill only female mosquitoes, with males surviving for multiple generations and passing along the modified genes to subsequent male offspring….Environmental groups worry that the spread of the genetically modified male genes into the wild population could potentially harm threatened and endangered species of birds, insects and mammals that feed on the mosquitoes.


Excerpt from Sandee LaMotte, 750 million genetically engineered mosquitoes approved for release in Florida Keys, CNN, 

Under Zero Trust: the U.S. Chip Resurgence

The Defense Advanced Research Projects Agency launched its Electronic Resurgence Initiative (ERI)  to help reboot a domestic chip industry that has been moving steadily offshore for decades…. Program officials and chip industry executives foresee the emergence of a “5th generation of computing” based on current cloud infrastructure while combining AI, the Internet of Things (IoT) and 5G wireless networks to deliver big data.

“The U.S. microelectronics industry is at an inflection point,” Ellen Lord, undersecretary of defense for acquisition and sustainment, told the virtual ERI summit. After decades of offshoring of chip fabrication, packaging and testing capabilities, “How do we reverse this trend?”  The Defense Department is expanding its technology base efforts by implementing a “step-by-step process for reconstituting the microelectronics supply chain,” focusing on various segments of the semiconductor ecosystem, including memory devices, logic, ICs and advanced packaging along with testing and assembly.

“While DoD does not drive the electronics market,” constituting only about 1 percent of demand, “we can drive significant R&D,” ERI is advancing public-private partnerships that provide a framework for commercial innovation. The result would be “pathfinder projects” geared toward a renewal of U.S. chip manufacturing. As trade frictions with China grow, ERI is placing greater focus on ensuring the pedigree of U.S. electronics supply chain. “We need to find a path to domestic sources,” said Lord.

While nurturing government-industry partnerships as part of an emerging next-generation U.S. industrial policy, this year’s DARPA summit also emphasized chip standards and processes for securing fabs, foundry services, devices and foundational microelectronics. In that vein, U.S. officials stressed new chips metrics like “quantifiable assurance” to secure dual-use devices that could end up in weapons or an IoT device.

“Our interests to protect both the confidentiality and the integrity of our supply chain are aligned with commercial interests, and we will continue to work across government and industry to develop and implement our quantitative assurance strategy based on zero trust,” said Nicole Petta, principal director of DoD’s microelectronics office. The “zero trust” approach assumes no device is safe, and that all microelectronics components must be validated before deployment. The framework marks a philosophical departure from DoD’s “trusted foundry” approach instituted in the 1990s, largely because “perimeter defenses” failed to account for insider threats…

DARPA Chip Efforts Pivots to Securing US Supply Chain, https://www.hpcwire.com, Aug. 24, 2020

Buy Carbon Stored in Trees and Leave it There

For much of human history, the way to make money from a tree was to chop it down. Now, with companies rushing to offset their carbon emissions, there is value in leaving them standing. The good news for trees is that the going rate for intact forests has become competitive with what mills pay for logs in corners of Alaska and Appalachia, the Adirondacks and up toward Acadia. That is spurring landowners to make century-long conservation deals with fossil-fuel companies, which help the latter comply with regulatory demands to reduce their carbon emissions.

For now, California is the only U.S. state with a so-called cap-and-trade system that aims to reduce greenhouse gasses by making it more expensive over time for firms operating in the state to pollute. Preserving trees is rewarded with carbon-offset credits, a climate-change currency that companies can purchase and apply toward a tiny portion of their tab. But lately, big energy companies, betting that the idea will spread, are looking to preserve vast tracts of forest beyond what they need for California, as part of a burgeoning, speculative market in so-called voluntary offsets.

One of the most enthusiastic, BP PLC, has already bought more than 40 million California offset credits since 2016 at a cost of hundreds of millions of dollars. In 2019, the energy giant invested $5 million in Pennsylvania’s Finite Carbon, a pioneer in the business of helping landowners create and sell credits. The investment is aimed at helping Finite hire more foresters, begin using satellites to measure biomass and drum up more credits for use in the voluntary market.  BP has asked Finite to produce voluntary credits ASAP so they can be available for its own carbon ledger and to trade among other companies eager to improve their emissions math. As part of its shift into non-fossil-fuel markets, BP expects to trade offset credits the way it presently does oil and gas.“The investment is to grow a new market,” said Nacho Gimenez, a managing director at the oil company’s venture-capital arm. “BP wants to live in this space.”

Skeptics contend the practice does little to reduce greenhouse gases: that the trees are already sequestering carbon and shouldn’t be counted to let companies off the hook for emissions. They argue that a lot of forest protected by offsets wasn’t at high risk of being clear-cut, because doing so isn’t the usual business of its owners, like land trusts, or because the timber was remote or otherwise not particularly valuable.

If other governments join California and institute cap-and-trade markets, voluntary offsets could shoot up in value. It could be like holding hot tech shares ahead of an overbought IPO. Like unlisted stock, voluntary credits trade infrequently and in a wide price range, lately averaging about $6 a ton, Mr. Carney said. California credits changed hands at an average of $14.15 in 2019 and were up to $15 before the coronavirus lockdown drove them lower. They have lately traded for about $13.

These days, voluntary offsets are mostly good for meeting companies’ self-set carbon-reduction goals. BP is targeting carbon neutrality by 2050. Between operations and the burning of its oil-and-gas output by motorists and power plants, the British company says it is annually responsible for 415 million metric tons of carbon emissions.

Excerpts from Emissions Rules Turn Saving Trees into Big Business, WSJ, Aug. 24, 2020

The Green Climate Fund and COVID-19

 The Green Climate Fund has promised developing nations it will ramp up efforts to help them tackle climate challenges as they strive to recover from the coronavirus pandemic, approving $879 million in backing for 15 new projects around the world…The Green Climate Fund (GCF) was set up under U.N. climate talks in 2010 to help developing nations tackle global warming, and started allocating money in 2015….

Small island states have criticised the pace and size of GCF assistance…Fiji’s U.N. Ambassador Satyendra Prasad said COVID-19 risked worsening the already high debt burden of small island nations, as tourism dived…The GCF  approved in August 2020 three new projects for island nations, including strengthening buildings to withstand hurricanes in Antigua and Barbuda, and installing solar power systems on farmland on Fiji’s Ovalau island.

It also gave the green light to payments rewarding reductions in deforestation in Colombia and Indonesia between 2014 and 2016. But more than 80 green groups opposed such funding. They said deforestation had since spiked and countries should not be rewarded for “paper reductions” in carbon emissions calculated from favourable baselines…. [T]he fund should take a hard look at whether the forest emission reductions it is paying for would be permanent.  It should also ensure the funding protects and benefits forest communities and indigenous people…

Other new projects included one for zero-deforestation cocoa production in Ivory Coast, providing rural villages in Senegal and Afghanistan with solar mini-grids, and conserving biodiversity on Indian Ocean islands.  The fund said initiatives like these would create jobs and support a green recovery from the coronavirus crisis.

Excerpts from Climate fund for poor nations vows to drive green COVID recovery, Reuters, Aug. 22, 2020

New Loan Sharks? Microfinance

Bangladesh may be the homeland of microcredit, but no country is keener on it than Cambodia. According to its central bank, there were some 160,000 branches of microfinance institutions around the country in 2016—one for almost every square kilometre of Cambodian territory. Almost 2.2m of Cambodia’s 10m-odd adults have a microcredit loan outstanding, according to the Cambodian Microfinance Association (CMA), an industry group. The average debt is $3,320—roughly twice the country’s annual gdp per person. Credit is growing by 40% a year.

The microfinance boom has brought many benefits. An obvious one is a decline in the use of loan sharks….But the industry’s breakneck growth may not be sustainable. Household debt has swollen as the size of loans has ballooned. According to the World Bank, the average loan grew “more than tenfold” over the past five years. …“[Cambodia] probably should have had a crisis by now,” admits Daniel Rozas, an adviser to the cma, “but somehow it hasn’t.”

That may be in part thanks to the efforts of the National Bank of Cambodia, the central bank, to tame the industry…Some regulations, however, may be exacerbating the industry’s excesses. The central bank’s introduction of an interest-rate cap of 18% a year in 2017 seems to have backfired. Because of the cap, the CMA says, microfinance institutions can turn a profit only by lending more than $2,000. The number of loans of $500 or less declined by 48% after the rule’s introduction, the World Bank estimates. Some fees rose, too.

The CMA says defaults are minimal, with only 1% of loans in serious arrears at the beginning of the year. But there are hints that borrowers are getting into difficulty. The typical loan uses land as collateral... Lenders seldom take borrowers to court to repossess land; it is not worth the time and expense for a loan of just a few thousand dollars. But many conscientious borrowers appear to sell their land voluntarily to pay up. Government surveys show that the proportion of people who are landless rose from 32% in 2009 to 51% in 2016. Among the many reasons given for selling land, one of the most common was to repay debts. Given that the government does little to monitor the conduct of lenders, and many land sales are informal, it is hard to tell how voluntary such transactions really are.

Excerpts from Service Economy: Development in Cambodia, Economist, Aug. 15, 2020

Forest Infernos and Food Self-Sufficiency

The Mega-Rice Project (MRP) — the conversion of 10,000 square km of peat forest into rice paddies — that was adopted in Indonesia in 1997, was a mega-failure. It produced hardly any rice because the peaty soil lacks the requisite minerals. Instead of spurring farming, the draining of the waterlogged forest with a 6,000km network of canals fuelled fire…. It was the biggest environmental disaster in Indonesia’s history.  Burning peat in 1997 on Kalimantan and the nearby island of Sumatra generated the equivalent of 13-40% of the average annual global emissions from fossil fuels. The MRP was abandoned in 1999 but its legacy endures in the infernos that have ravaged Kalimantan almost every year since.

As work begins in 2020 on the new plantation, is history poised to repeat itself? The government says it has learned from the past. Nazir Foead of the Peatland Restoration Agency says that tractors will steer clear of what remains of Central Kalimantan’s pristine peatlands…but the rest is covered in “shallow peat”, no more than 50cm deep, and so can be cultivated without cataclysm, he says.  Environmentalists are not convinced… Smouldering swamps belch vast amounts of carbon. In 2019, the fires that swept Indonesia emitted 22% more carbon than the conflagration in the Amazon rainforest did. 

But the government argues it must go ahead with the plantation, and quickly, in case covid-19 brings about food shortages… For decades the political elites “have been chasing this ideal of food self-sufficiency”, says Jenny Goldstein of Cornell University. Prabowo Subianto, the defence minister, is one of its greatest champions.

Excerpts from For Peat’s Sake: Indonesia’s Environment, Economist, Aug. 15, 2020

War and the Innocent Bystanders

During a visit to Tokyo in 2017, Donald Trump called on Japan to buy “massive” amounts of American weaponry. At the time, North Korea was testing new rockets regularly. For the Japanese government, buying Aegis Ashore, a pricey American missile shield, allayed both concerns. Not all Japanese, however, were happy with the purchase, especially in Araya, a quiet residential neighbourhood of low-slung homes next to the sea in Akita city—and the site of a proposed Aegis base.

Akita City, Japan

Jittery locals fretted about electromagnetic waves from the system’s radar and debris from its rockets. They worried about becoming a target in a conflict, as the city’s oil refineries were during the second world war. “Why, why here?” asks Sasaki Masashi, a retired railway worker and head of a neighbourhood council. “It says: ‘Please attack us’,” complains Sakurada Yuko, another anti-Aegis campaigner. They have collected signatures, harangued officials and voted against the ruling Liberal Democratic Party  which unexpectedly lost a seat in Akita in elections to the upper house of parliament last year.

In June 2020  Akita received unexpected but welcome news: the government declared it was scrapping the $4.2bn purchase of Aegis Ashore. Kono Taro, the defence minister, cited the ballooning cost of ensuring that boosters did not fall on civilian property….

Excerpts from Anti-anti-missile systems, Economist, Aug. 15, 2020

Trade in Human and Animal Hair in the 21st Century

“My outfit for the day determines what hair I will be wearing,” says Olayinka Titilope, a Nigerian wigmaker. She has a different peruke for each day of the month…She sells wigs for between $60 and $800. Those at the top end are made of human hair from Cambodia, she says.  Some African feminists argue that to wear a long, straight-haired wig or hair extension is to grovel to Western ideals of beauty. Yet wig-buyers in Nigeria seem to enjoy variety. Sellers advertise hair from everywhere. Brazilian is praised for its sheen and durability; Vietnamese, for its bounce; Mongolian, because it is easy to curl. One seller in Lagos offers “Italian posh hair” which is supposedly odour-free. Whatever the label says, much of the hair really comes from elsewhere, often China, a source some buyers deem downmarket.

It is hard even for the most conscientious hair-traders to trace where their wares came from. Most of the hair that reaches Africa travels via factories in China, where it is sorted and often treated, dyed or curled. Bundles of human hair may be bulked up with horse mane or goat thatch….“The demand for hair generally exceeds supply, fuelling an almost constant sense of scarcity,”…

In the past decade Myanmar has quadrupled the volume of hair it ships out and is now the world’s fourth-largest exporter. Nay Lin, a hair-trader in the former capital, Yangon, says he knows when the economy is bad because more women turn up at his shop to sell their tresses. …Some 500km north of Yangon, in the town of Pyawbwe, farmers who once harvested onions and chillies now spend their days unpicking hairballs. These are often gathered by door-to-door collectors, who buy hair from people’s combs and bathroom plugs. Some hairballs arrive in sacks from India and Bangladesh. Workers in Pyawbwe (which has earned the nickname “Hair City”) make about $1.20 a day untangling them and removing lice or white strands. This hair is so common in Chinese factories that it is referred to as “standard hair”. It costs more than the fake stuff, but less than locks cut straight from a head. “We call that stuff factory trash,” scoffs Ms Titilope, who insists that none of it goes into her products…

Excerpts from Nigeria’s demand for fancy wigs fuels a global trade, Economist, Aug. 15, 2020

Everything Moving in Space Is a Weapon? Yes.

Kosmos 2542, a Russian satellite that was launched in November 2019, was “like Russian nesting dolls”. Eleven days after its launch it disgorged another satellite, labelled Kosmos 2543. Then, on July 15th, Kosmos 2543 itself spat out another object, which sped off into the void.  Merely a “small space vehicle” to inspect other satellites, said the Russians. Nonsense, said the Americans; it was a projectile. The intentl.. was to signal Russia’s ability to destroy other nations’ satellites….In January 2020, America complained that Kosmos 2542 and 2543 had tailed a spy satellite in an “unusual and disturbing” way (American satellites have also sidled up to others in the past). 

Anti-satellite weapons are not new. During the cold war, America and the Soviet Union developed several ways to blow up, ram, dazzle and even nuke each other’s satellites. The countries conducted two-dozen anti-satellite tests between them. Ten were “kinetic”, involving a projectile physically striking a target. But new competitors, and new technologies, mean anti-satellite warfare is a hot topic once again. China has conducted ten tests over the past 15 years, including a kinetic one in 2007 that created a great deal of space debris. India conducted its first kinetic test in 2019. America, Russia and China have all manoeuvred their satellites close to others, sometimes provocatively so. New methods of attack are being tested, including lasers and cyber-attacks.

Some satellites, such as America’s GPS constellation, blur the distinction between military and civilian assets. Over the past decade, America’s armed forces have put payloads on three commercial satellites, and plan to pay Japan to host others on its own navigation satellites….Then there is the question of what counts as an attack. Michael Schmitt, a law scholar, and Kieran Tinkler, a professor at the us Naval War College, say it is unclear whether jamming a civilian satellite would violate the general prohibition on attacking civilian objects. Blowing up a military one, meanwhile, might or might not constitute an indiscriminate (and hence illegal) attack, depending on whether it could have been disabled by other means and how much debris was produced.

Perhaps the biggest difference between space war and terrestrial war is how long the consequences can last. Much of the debris from China’s 2007 test, for instance, will still be in space at the turn of the next century. The more debris, the greater the likelihood of accidental collisions with other satellites, which generates more debris in turn. Enough debris could lead to a chain reaction known as Kessler syndrome, which could render entire swathes of near-Earth space unusable for decades…

Space Junk

The Outer Space Treaty of 1967 requires states to consult each other on actions that “would cause potentially harmful interference”, though the rule has rarely been heeded. Most countries accept that, in wartime, a body of existing laws known as international humanitarian law would apply, as on Earth—something America confirmed in its “Spacepower” doctrine, published on August 10, 2020. International humanitarian law is based on principles such as distinction (between combatants and civilians) and proportionality (between civilian harm and military advantage). But how to apply such ideas in a place with few humans is not always obvious.

The Manual on International Law Applicable to Military Uses of Outer Space (MILAMOS) is being spearheaded by McGill University, in Montreal, and a separate Woomera Manual by the University of Adelaide. Both hope to publish their documents 2020…

Russia and China would like a formal treaty banning all weapons in space. Both are keen to prevent America from deploying space-based anti-missile systems which might threaten their own nuclear forces. America and its allies resist this. They argue that it is impossible to define a space weapon—anything that manoeuvres in orbit could serve as one—and that it would be easy to cheat. The European Union has instead proposed a voluntary code of conduct. Many non-Western countries would prefer a binding treaty…. Though most are not space powers, many are likely to become so in the future, so their buy-in is important.

Excerpts from Satellite warfare: An arms race is brewing in orbit, Economist, Aug. 15, 2020

The End of the Mindless Self-Indulgence: the Gulf States

Algeria needs the price of Brent crude, an international benchmark for oil, to rise to $157 dollars a barrel. Oman needs it to hit $87. No Arab oil producer, save tiny Qatar, can balance its books at the current price, around $40 (summer 2020)….The world’s economies are moving away from fossil fuels. Oversupply and the increasing competitiveness of cleaner energy sources mean that oil may stay cheap for the foreseeable future. 

Arab leaders knew that sky-high oil prices would not last for ever. Four years ago Muhammad bin Salman, the de facto ruler of Saudi Arabia, produced a plan called “Vision 2030” that aimed to wean his economy off oil. Many of his neighbours have their own versions. But “2030 has become 2020…” 

Still, some see an upside to the upheaval in oil-producing states. The countries of the Gulf produce the world’s cheapest oil, so they stand to gain market share if prices remain low. As expats flee, locals could take their jobs…

Remittances from energy-rich states are a lifeline for the entire region. More than 2.5m Egyptians, equal to almost 3% of that country’s population, work in Arab countries that export a lot of oil. Numbers are larger still for other countries: 5% from Lebanon and Jordan, 9% from the Palestinian territories. The money they send back makes up a sizeable chunk of the economies of their homelands. As oil revenue falls, so too will remittances. There will be fewer jobs for foreigners and smaller pay packets for those who do find work. This will upend the social contract in states that have relied on emigration to soak up jobless citizens….With fewer opportunities in the oil-producing states, many graduates may no longer emigrate. But their home countries cannot provide a good life. Doctors in Egypt earn as little as 3,000 pounds ($185) a month, a fraction of what they make in Saudi Arabia or Kuwait. A glut of unemployed graduates is a recipe for social unrest…

For four decades America has followed the “Carter Doctrine”, which held that it would use military force to maintain the free flow of oil through the Persian Gulf. Under President Donald Trump, though, the doctrine has started to fray. When Iranian-made cruise missiles and drones slammed into Saudi oil facilities in September 2019, America barely blinked. The Patriot missile-defence batteries it deployed to the kingdom weeks later have already been withdrawn. Outside the Gulf Mr Trump has been even less engaged, all but ignoring the chaos in Libya, where Russia, Turkey and the UAE (to name but a few) are vying for control.

A Middle East less central to the world’s energy supplies will be a Middle East less important to America. ..As Arab states become poorer, the nature of their relationship with China may change. This is already happening in Iran, where American sanctions have choked off oil revenue. Officials are discussing a long-term investment deal that could see Chinese firms develop everything from ports to telecoms… Falling oil revenue could force this model on Arab states—and perhaps complicate what remains of their relations with America.

Excerpts from The Arab World: Twilight of the Petrostates, Economist, July  18, 2020

A Dream Come True? the Saudi Nuclear Program

Saudi Arabia has constructed with Chinese help a facility for extracting uranium yellowcake from uranium ore, an advance in the oil-rich kingdom’s drive to master nuclear technology…Even though Riyadh is still far from that point, the facility’s exposure appears certain to draw concern in the U.S. Congress, where a bipartisan group of lawmakers has expressed alarm aboutabout Saudi Crown Prince Mohammed bin Salman’s 2018 vow that “if Iran developed a nuclear bomb, we will follow suit as soon as possible.” ….Saudi Arabia has no known nuclear-weapons program, operating nuclear reactors or capacity to enrich uranium. But it says it wants to acquire nuclear plants that Saudi authorities say will generate power and reduce its reliance on oil, its principal export…

“Yellowcake” is a milled form of uranium ore which occurs naturally in Saudi Arabia and neighboring countries such as Jordan. It is produced by chemically processing uranium ore into a fine powder. It takes multiple additional steps and technology to process and enrich uranium sufficiently for it to power a civil nuclear energy plant. At very high enrichment levels, uranium can fuel a nuclear weapon…Olli Heinonen said that…yellowcake facility alone wouldn’t mark a significant advance unless the yellowcake is converted into a compound known as uranium hexafluoride and then enriched. But Mr. Heinonen said of the Saudis, “Where is the transparency? If you claim your program is peaceful, why not show what you have?”

One Western official said the facility is located in a remote desert location in the general vicinity of al Ula, a small city in northwest Saudi Arabia. Two officials said it was constructed with the help of two Chinese entities. While the identities of these entities couldn’t be learned, the China National Nuclear Corp. signed a memorandum of understanding with Saudi Arabia in 2017 to help explore its uranium deposits. A second agreement was signed with China Nuclear Engineering Group Corp. That followed a 2012 pact announced between Riyadh and Beijing to cooperate on peaceful uses of nuclear energy.

Riyadh has expressed a desire to master all aspects of the nuclear fuel cycle. It is constructing with Argentina’s state-owned nuclear technology company a small research reactor outside of Riyadh. In recent years, the Saudis have significantly expanded their nuclear workforce, experts say, through academic nuclear engineering programs and growing research centers. In addition to its agreement with Argentina, the Saudis are collaborating with South Korea in refining the design of a small commercial reactor to be built in Saudi Arabia, and that could also be marketed to other nations in the Middle East and Southeast Asia. It also has public cooperation agreements with Jordan on uranium mining and production.

Excerpts from  Warren P. Strobel et al., Saudi Arabia, With China’s Help, Expands Its Nuclear Program, WSJ, Aug. 4, 2020

How to Poison a Population: War and Persistent Oil Pollution

Oil pollution in Syria has been a growing concern since the 2011 onset of a civil war that has taken a toll on oil infrastructure and seen rival powers compete over control of key hydrocarbon fields. In the Kurdish-held northeast, a large storage facility in the Rmeilan oil field in Hasakeh province is of particular concern, according to the Dutch peace organisation PAX. [A River of Death, pdf] Oil leaks from the Gir Zero storage facility have been suspected since at least 2014, the latest in March 2020, it said in a June report. Thousands of barrels have leaked out into creeks in the area over the past five years, threatening the health and livelihoods of people in dozens of villages….

The major Rmeilan field controlled by the Kurdish administration, located near a US airbase, has been among the Syrian Kurds’ most prized assets since regime forces withdrew early on in the war. But oil wealth comes at a heavy cost for livestock farmers
whose sheep and cows have died because they drank oil contaminated water.

Residents too suffer heavily from the pollution because  of the foul odour of gas and crude oil wafting over the area… Compounding the situation, makeshift oil refineries have cropped up across the northeast in recent years, dumping oil waste in the waterways…These informal refineries receive oil from nearby fields and process it to provide benzine, gasoline and diesel to locals.

Excerpts from Delil SouleimanBlack waters: Oil spills pollute northeast Syria creeks
by Delil Souleiman, AFP, July 23, 2020

Global Nuclear Waste Movements: from Estonia to Utah

Regulators are weighing whether a local uranium company can import the material for processing at a mill near the border of a Native American reservation. For Energy Fuels Inc , the shipment represents an economic lifeline, after the company posted an operating loss of $7.8 million for the first quarter of 2020. Its president in March 2020 described the U.S. uranium industry as being “on the cusp of complete collapse.”
But for the Ute Mountain Ute Tribe living near the facility – the only operational uranium mill in the United States – the proposal has stoked fears that tribal land will become a dumping ground for global radioactive waste. Both the White Mesa mill and the tribal reservation are in San Juan County, Utah’s poorest.

The mill, built in 1979, was only meant to process conventional uranium ores from the Colorado Plateau for up to 20 years, the tribe says. The Navajo Utah Commission and Navajo Nation have also that the company’s application be rejected. “The state of Utah must recognize and acknowledge the reality that the mill is far past its design life and no longer a conventional uranium mill, but, instead, a radioactive waste dump seeking to operate for decades, if not a millennium,” the Ute Mountain Ute Tribe said in a document submitted to the state….

The 660 tons of powdered material in question, now sitting in 2,000 drums at a plant on the Estonian coast near the Russian border, would be Energy Fuels’ first-ever radioactive import from outside North America. The powder is a byproduct from tantalum and niobium mining by Estonian company Silmet, which contains uranium. But it cannot stay within Estonia, where there is no licensed facility for reprocessing radioactive material. Energy Fuels says there is enough uranium in that byproduct that it is worth processing. Opponents say Energy Fuels is simply taking in waste, which would be stored on site. According to Energy Fuels business from the shipment would help the company keep its 70 workers employed.

Energy Fuels anticipates demand for domestic uranium could rise, after the Trump administration in April 2020 proposed a $1.5 billion federal uranium reserve that would purchase uranium from domestic producers. Such a reserve, however, would need Congressional approval – a major hurdle. The reserve was one of the main proposals to come from a federal Nuclear Fuel Working Group aimed at reviving the U.S. uranium and nuclear industry. The United States currently imports over 90% of its uranium from abroad for its reactors.

Excerpts from Valerie Volcovicin Utah, a Debate Stirs Over Estonian Radioactive Waste, Reuters, July 16, 2020

Fatalism about Plastics: Intractable Plastics Pollution

The annual inflow of plastic could nearly triple from 2016 to 2040, the study found, and even if companies and governments meet all their commitments to tackle plastic waste, it would reduce the projection for 2040 by only 7%, still a more-than twofold increase in volume.  The study’s authors, the nonprofit Pew Charitable Trust and sustainability consulting firm Systemiq Ltd., set out a range of measures to stem the flow and called on businesses and governments to do more to reduce the use of plastic. 

The study attributes the surge to a growing global population using more plastic per person. Other factors include greater use of nonrecyclable plastics and an increasing share of consumption occurring in countries with poor waste management. China and Indonesia are likely the top sources of plastic reaching the oceans, accounting for more than a third of the plastic bottles, bags and other detritus washed out to sea, according to a study published in 2015 by Jenna Jambeck, an environmental engineer at the University of Georgia.

Over the past two years China has been making strides to improve waste management, including banning the import of plastic and other waste from developed countries like the U.S., which for decades have shipped much of their trash overseas. Indonesia has implemented its own restrictions on trash coming in from overseas, while lawmakers in the U.S. are increasingly trying to find ways to improve the country’s domestic recycling rates as export markets vanish.

They found that flexible plastic packaging—particularly items like potato-chip bags and food pouches, which are made of several materials and typically aren’t recycled—accounts for a disproportionate amount of ocean plastic. The As You Sow report said companies should stop selling products in flexible plastic until it is recycled or composted in significant amounts. Companies, in response, have been redesigning flexible packaging to promote recycling. For example, Nestle recently began selling a line of Gerber baby-food pouches made from a single material. But hurdles remain, particularly around collection and sorting of the packaging…

The amount of plastic flowing into the oceans could be reduced by as much as 80% over the next 20 years through a combination of reduced plastic use, increased recycling, alternatives to problematic packaging like plastic pouches and better waste management, the Pew-Systemiq study said…

Excerpts from Saabira Chaudhuri, Ocean Plastic Is Getting Worse and Efforts to Stem the Tide Fall Short, Study Finds, WSJ, July 23, 2020

Radioactive Water Dumping and Human Rights

In the aftermath of the Fukushima Daiichi nuclear disaster, [UN Special Rapporteurs  have] consistently raised concerns about the approaches taken by the government of Japan. UN Special Rapporteurs have been concerned that raising of “acceptable limits” of radiation exposure to urge resettlement violated the government’s human rights obligations to children.

UN Special Rapporteurs have been concerned of the possible exploitation of migrants and the poor for radioactive decontamination work. Their most recent concern is how the government used the COVID-19 crisis to dramatically accelerate its timeline for deciding whether to dump radioactive wastewater accumulating at Fukushima Daiichi in the ocean

The communities of Fukushima, so devastated by the tragic events of March 11, 2011, have expressed their concerns and opposition to the discharge of the contaminated water into their environment. It is their human right to an environment that allows for living a life in dignity, to enjoy their culture, and to not be exposed deliberately to additional radioactive contamination. Those rights should be fully respected and not be disregarded by the government in Tokyo. The discharge of nuclear waste to the ocean could damage Japan’s international relations. Neighboring countries are already concerned about the release of large volumes of radioactive tritium and other contaminants in the wastewater.

Japan has a duty under international law to prevent transboundary environmental harm. More specifically, under the London Convention, Japan has an obligation to take precaution with the respect to the dumping of waste in the ocean.

Indigenous peoples have an internationally recognized right to free, prior and informed consent. This includes the disposal of waste in their waters and actions that may contaminate their food. No matter how small the Japanese government believes this contamination will be of their water and food, there is an unquestionable obligation to consult with potentially affected indigenous peoples that it has not met…The disaster of 2011 cannot be undone. However, Japan still has an opportunity to minimize the damage…There are grave risks to the livelihoods of fishermen in Japan and also to its international reputation. Again, I urge the Japanese government to think twice about its legacy: as a true champion of human rights and the environment, or not.

Excerpts from, Baskut Tuncak [UN Rapporteur], Fukushima nuclear waste decision also a human rights issue, Kyodo News, July 8, 2020

The Deterrent Power of 44 000 tonnes Assault Ships: Sea Dragon Commandors v. US Marines

China launched its military build-up in the mid-1990s with a top priority: keep the United States at bay in any conflict by making the waters off the Chinese coast a death trap. Now, China’s People’s Liberation Army (PLA) is preparing to challenge American power further afield.

China’s shipyards have launched the PLA Navy’s first two Type 075 amphibious assault ships, which will form the spearhead of an expeditionary force to play a role similar to that of the U.S. Marine Corps. And like the Marines, the new force will be self-contained – able to deploy solo with all its supporting weapons to fight in distant conflicts or demonstrate Chinese military power.

The 40,000-tonne Type 075 ships are a kind of small aircraft carrier with accommodation for up to 900 troops and space for heavy equipment and landing craft, according to Western military experts who have studied satellite images and photographs of the new vessels. They will carry up to 30 helicopters at first; later they could carry fighter jets, if China can build short take off and vertical landing aircraft like the U.S. F-35B…Chinese military commentators say China’s shipyards are now building and launching amphibious ships so rapidly it is like “dropping dumplings” into water.

As shipyards churn out amphibious vessels, China is expanding its force of marines under the command of the PLA Navy. These troops are being trained and equipped to make landings and fight their way ashore. China now has between 25,000 and 35,000 marines, according to U.S. and Japanese military estimates. That’s a sharp increase from about 10,000 in 2017…“Without an amphibious force, any military force is greatly constrained in where and how it can conduct operations,” said Grant Newsham, a retired U.S. Marine Corps colonel… “Jets can drop bombs and ships can fire missiles at the shore – but you might need infantry to go ashore and kill the enemy and occupy the ground.” In China, the state-controlled media regularly reports on the gruelling training and military skills of the Jiaolong, or Sea Dragon commandos – a unit from the marines special forces brigade based on Hainan Island off southern China.

“We are currently only seeing the tip of the iceberg,” said Ian Easton, the senior director of the Project 2049 Institute, an Arlington, Virginia-based security research group. “Ten years from now, China is almost certainly going to have marine units deployed at locations all over the world. The Chinese Communist Party’s ambitions are global. Its interests are global. It plans to send military units wherever its global strategic interests require.”…

[China has learnt lessons from the U.S.]——U.S. expeditionary flotillas, packed with marines, all their heavy equipment and air support, are a potent reminder of American power. A raw demonstration came in the tense period in 1999 when an Australian-led United Nations peacekeeping force intervened to stop violence in what was then Indonesian-controlled East Timor. American forces didn’t become heavily involved on the ground. But the presence of the USS Belleau Wood, a 40,000-tonne amphibious assault ship carrying 900 marines and heavy lift and attack helicopters, served as formidable back-up as the UN troops restored order without any significant resistance from Indonesia.

Excerpts from DAVID LAGUE, China expands its amphibious forces in challenge to U.S. supremacy beyond Asia, Reuters, July 20, 202

The Global Gold Rush and Plunder of Congo

Since March 2020, record amounts of gold dug from artisanal mines in the conflict zones of Eastern Congo have been smuggled across the porous border with Uganda, where it is being stamped with fake certifications before being shipped to international markets in Dubai, Mumbai and Antwerp, according to Ugandan security officials, smugglers and traders. Much of the gold is reaching these overseas markets using cargo planes returning from Uganda after delivering Covid-19 aid and other essential supplies, according to plane manifests seen by The Wall Street Journal.

The trade in conflict gold isn’t new, but it has perhaps never been more lucrative: Gold prices at illegal and unregulated Congolese mines, where supply chains have been disrupted by coronavirus shutdowns and renewed violence between militant groups, have dropped over 40% since April 2020, according to local traders, while on global markets, prices are up by almost a third…Activists and U.N. investigators have long accused Uganda and several of Congo’s neighbors of being complicit in the plunder of Congolese gold…The calls to end the illicit trade grew louder last year after Uganda’s gold exports overtook coffee to become the leading export commodity for the first time—despite the country producing very little bullion.

U.N. investigators estimate that each month between 2 tons and 3 tons of Congo’s conflict gold—with a market value of over $100 million—is crossing the Ugandan frontier, passing border crossings patrolled by heavily armed guards, with metal fencing and razor wire erected to reduce the flow of people due to coronavirus fears…

Smugglers and police say the gold is secreted in trucks that are allowed to bypass coronavirus restrictions to deliver “essential goods” from fuel to food supplies. The yellow bars, weighing between 5 to 20 kilograms, are stuffed underneath truck cabins, inside battery compartments and emptied gasoline tankers. Once inside Uganda, the truckers sell the bars to traders who purchase forged documents in Kampala that disguise the gold’s origin.

The scramble is fueling violence in the eastern Congolese province of Ituri…Fresh spasms of violence have left more than 1,300 civilians dead since March 2020, in what the U.N. says may amount to war crimes. Some six million people are displaced. Armed groups are carrying out predatory raids on mines in search of gold.

In the meantime on Wall Street, on July 24, 2020, gold futures were priced at $1,897.50 a troy ounce eclipsing their August 2011 peak of $1,891.90. The coronavirus has ignited a global gold rush, with physical traders around the world trying to get their hands on more metal and individuals around the world ordering bars and coins.

Excerpts from Nicholas Bariyo and Joe Parkinson, Under Cover of Coronavirus Lockdown, a Booming Trade in Conflict Gold, WSJ, July 9, 2020, Gold Climbs to a High, Topping Its 2011 Record, WSJ, July 24, 2020

Water Conflicts: Who Owns the Nile River

The Grand Ethiopian Renaissance Dam is a giant edifice that would span the Blue Nile, the main tributary of the Nile river.  Half a century in the making, the hydro-electric dam is Africa’s largest, with a reservoir able to hold 74bn cubic metres of water, more than the volume of the entire Blue Nile. Once filled it should produce 6,000 megawatts of electricity, double Ethiopia’s current power supply. Millions of people could be connected to the grid for the first time. More than an engineering project, it is a source of national pride.

For Egypt, however, it seems a source of national danger. Over 90% of the country’s 100m people live along the Nile or in its vast delta. The river, long seen as an Egyptian birthright, supplies most of their water. They fear the dam will choke it off. Pro-regime pundits, not known for their subtlety, have urged the army to blow it up….Ethiopia wants to start filling the reservoir during this summer’s rainy season. On June 26th, 2020 after another round of talks, Egypt, Ethiopia and Sudan pledged to reach a deal within two weeks. Ethiopia agreed not to start filling the dam during that period.

Diplomats say most of the issues are resolved. But the outstanding one is big: how to handle a drought. Egypt wants Ethiopia to promise to release certain amounts of water to top up the Nile. But Ethiopia is loth to “owe” water to downstream countries or to drain the reservoir so much that electric output suffers. It wants a broader deal between all riparian states, including those on the White Nile, which flows out of Lake Victoria down through Uganda and Sudan.

Even if talks fail and Ethiopia starts filling without a deal, Egyptians will not find their taps dry. There is enough water in the reservoir behind Egypt’s Aswan High Dam to make up for any shortfall this year. But the mood in both countries is toxic. Egyptians have cast Ethiopia as a thief bent on drying up their country. In Ethiopia, meanwhile, Egypt is portrayed as a neocolonial power trampling on national sovereignty. The outcome of the talks will have political consequences in both countries, and perhaps push them to the brink of conflict—at a time when Egypt is already contemplating involvement in a war in Libya.

Ethiopia’s grand dam became a reality and a national obsession under Meles Zenawi, the longtime prime minister who ruled until 2012. His political masterstroke was asking Ethiopians to finance it through donations and the purchase of low-denomination bonds…. Most contributed voluntarily, but there was always an element of coercion. Civil servants had to donate a month’s salary at the start. Local banks and other businesses were expected to buy bonds worth millions of birr. ….

Excerpts from The Grand Ethiopian Renaissance Dam: Showdown on the Nile, Economist, July 4, 2020

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How to Make Friends: Load Them Up with Debt

“It’s no secret…China is by far the largest bilateral creditor to African governments,” said Mike Pompeo, America’s secretary of state, in June 2020, blaming it for creating an unsustainable debt burden. The World Bank disclosed ib July 2020, how much governments owe to China (and other lenders). The World Bank report revealed that developing countries owed $104 billion to China at the end of 2018. The total includes soft loans from China’s government, semi-soft loans from “policy banks”, such as China Development Bank, and profit-seeking loans from state-owned commercial lenders. The same countries owed $106bn to the World Bank and $60bn to bondholders…

The new figures confirm Mr Pompeo’s observation that China is by far the biggest bilateral creditor to Africa, and in many poor countries elsewhere. It accounts for about 20% of the total foreign debt owed by the 73 governments eligible for the G-20 moratorium on debt payments due to the COVID-19 pandemic (the Debt Service Suspension Initiative (DSSI)). That is more than all of the Paris Club lenders, including America, Britain and Japan, combined.

Excerpts from Public Finance: The Debt Toll, Economist, July 4, 2020

The Worst Murderer: Jihadists or Governments?

Sahel: West Africa’s most populous countries, along the Atlantic coast, have become vulnerable to the predations of jihadists spilling out of failing states farther north in the Sahel on the borders of the Sahara desert. Jihadists seized control of chunks of Mali in 2012 and were stopped from overrunning Bamako, its capital, only after thousands of French troops were hurriedly flown in. The insurgents have since pushed across the border into Niger and Burkina Faso. In those three countries alone, 4,800 people lost their lives in the conflict last year. Fully 1.7m people have been forced to flee their homes. Now the war is beginning to jump borders again, putting at risk some of Africa’s fastest-growing economies, including Benin, Ghana and Ivory Coast.


This war in the Sahel has been growing rapidly. Ten times more people were killed last year than in 2014 (excluding deaths in north-eastern Nigeria, which faces its own jihadist insurgents). Two main jihadist groups are behind most of the fighting: the Islamic State in the Greater Sahara (ISGS) and Jama’at Nasr al-Islam wal Muslimin (JNIM), which is linked to al-Qaeda. These groups have extended their reach, even though thousands of international peacekeepers and local and Western soldiers have been deployed to stop them. France has sent some 5,100 troops to the Sahel, while the United States has provided another 1,200. In addition, the un has 15,000 blue helmets there, including about 350 Germans, plus 250 British soldiers who are soon to arrive. With American forces leaving Afghanistan, the Sahel will soon be the West’s biggest combat zone.

Worse, the jihadists are expanding in three directions at once. To the south they threaten Benin, Ghana, Ivory Coast and Togo. To the west there has been a spate of attacks in Mali close to its border with Senegal; and to the east with Nigeria’s insurgent groups. The jihadists already have a “de facto safe haven in northern Mali”, says General Dagvin Anderson, in charge of America’s commandos in Africa. He frets that as they expand they will have more scope to plan attacks on American soil.

The weakness of governments and the feebleness of their public services are helping the jihadists. In the neglected hinterlands of the Sahel the rebels offer themselves as an alternate state, serving up sharia and medical aid. Moreover, the jihadists have been adept at exploiting ethnic faultlines, for instance between largely Muslim and seminomadic Fulani herders and more settled farming communities, which have their own armed groups of traditional hunters known as Dozos. =

Trade and commerce also provide an incentive for the jihadists to expand their reach. The migration corridor between Burkina Faso and Ivory Coast is the busiest in Africa. Jihadists cash in by taxing traders and smuggling stolen livestock, drugs and guns. The gold mines in Burkina Faso have become a target. Much of the gold is smuggled out through Togo, which officially exported seven tonnes of the metal to the United Arab Emirates in 2018, despite mining very little itself. Gold is also pulling jihadists towards Senegal…

But in 2020, more civilians in the Sahel have been killed by government soldiers than by jihadists, says José Luengo-Cabrera of the International Crisis Group (icg), a Brussels-based ngo. “When soldiers kill the head of the family, they almost throw his sons and nephews into the arms of bearded men in shorts hiding in the bush,” one villager told Human Rights Watch, a global monitor. It says in the town of Djibo alone, in Burkina Faso, evidence suggests government forces have murdered 180 men—many of them were blindfolded and had their hands bound before they were shot. In Burkina Faso… citizens may feel safer living among terrorists than with their own country’s security forces.

Governments in the region and some Western forces have made matters worse by supporting militias. In 2018 the French army allied itself with Tuareg militias from Mali to fight against ISGS. They clobbered the jihadists but also killed scores of civilians, aggravating ethnic tensions and fuelling recruitment by the insurgents….Above all, governments need to regain legitimacy by providing services and holding themselves to account. “It is not possible to win the war if there is not trust from the population,” says Niagale Bagayoko of the African Security Sector Network…But good governance and decent services in the region are scarce. At a meeting of Sahelian leaders with Mr hard. In Burkina Faso alone, the jihadists have forced about 2,500 schools to close.

Excerpts from Jihad in the Sahel: Fighting a Spreading Insurgency, Economist, July 11, 2020

Air Pollution: the Microplastics We Breath

 Scientists measured microplastics — tiny particles and fibers of plastic that can float in the air like dust — and found that over 1,000 tons a year are falling into wilderness areas and national parks in the western U.S.  Janice Brahney of Utah State University and her team identified samples of microplastics and other particulates collected over 14 months in 11 national parks and wilderness areas to create the study published in the journal Science, on June 12, 2020.  Pieces of plastic less than 5 mm in length, or microplastics, occur in the environment as a consequence of plastic pollution…

The presence of microplastics in oceans and water supplies has been a matter of concern for some time, but the impact of airborne microplastics is a relatively new area of study. Though microplastics are found nearly everywhere on Earth, the sources and processes behind their ubiquitous distribution, or the “global plastic cycle,” remain vaguely understood.  Initially overlooked, recent studies have suggested that long-range atmospheric transport plays an important role in carrying microplastic pollution vast distances and to remote locations

Examination of weekly wet and monthly dry samples from 11 sites allowed the authors to estimate that more than 1,000 tons of microplastics are deposited onto protected lands in the western U.S. each year, equivalent to more than 123 million plastic water bottles.

The ubiquity of microplastics in the atmosphere has unknown consequences for humans and animals, but the research team observed sizes of particles that were within the ranges that accumulate in lung tissue. Moreover, the accumulation of plastic in the wilderness areas and national parks could well influence the ecosystems in complicated ways.

Excerpts, VICTORIA PRIESKOP, Scientists Find Tons of Microplastics Polluting National Parks, Courthouse News Service, June 11, 2020

I Can’t Imagine Germany without China

Germany is struggling to pick sides in the escalating dispute between the U.S. and China over issues including trade and human rights, amid mounting American pressure and Beijing’s authoritarian drift. Of all advanced economies outside Asia, Germany has the deepest economic ties in both camps and would have the most to lose from a Cold War between Washington and Beijing.

Berlin’s snaking trade links with China and the U.S. have served Germany well in the past two decades, providing it with steady growth, near full employment and full public coffers that have allowed the deployment of more than €1 trillion ($1.13 trillion) in measures to support its economy during the pandemic.  Now, Germany’s reluctance to take sides is diluting Europe’s broader efforts to present a united front to China, undermining the bloc’s power to shape a new global architecture…

Germany’s export-oriented economic model means it can’t really choose at all. It needs both the US and China.  China is Germany’s largest trading partner; the U.S. its biggest export market. And they stand neck-and-neck: Last year, Germany exported €119 billion of goods to the U.S. and €96 billion to China….Around 28% of jobs in Germany are directly or indirectly linked to exports, and in manufacturing that figure is 56%, according to the German Ministry for Economic Affairs. Germany exports nearly as much as the U.S. despite having only one-quarter the population.

Germany’s world-beating engineering companies supplied the factory equipment and the infrastructure that powered China’s transformation into the world’s top manufacturer. Harnessed to the fast-growing giant, Germany rebounded strongly after the financial crisis and weathered the eurozone debt crisis…

“I can’t imagine Volkswagen without China,” said Ferdinand Dudenhoeffer, director of the Center Automotive Research at the University of Duisburg-Essen.  Volkswagen CEO Herbert Diess, who refers to China as his company’s “second home,” has recently praised China’s handling of the coronavirus pandemic. The company in May said it would pour $2 billion into China’s electric-car market….

Excerpts from Tom Fairless et al., U.S.-China Tensions Leave Germany Squirming in the Middle, WSJ, June 24, 2020

An Impossible Made Possible: the Green Energy Revolution

Since the cost of renewable energy can now be competitive with fossil fuels. Government, corporate and consumer interests finally seem to be aligning.  The stock market has noticed. After years of underperformance, indexes that track clean-energy stocks bottomed out in late 2018. The S&P Global Clean Energy index, which covers 30 big utilities and green-technology stocks, is now up 37% over two years, including dividends, compared with 18% for the S&P 500.

This year’s Covid crisis will delay some renewable projects, but could speed up the energy transition in other ways. Alternative-energy spending has held up much better than spending on oil and gas. Globally, clean-energy investment is now expected to account for half of total investment in the entire energy sector this year, according to UBS.  Moreover, the crisis has pushed governments to spend money, including on renewable technologies. The massive stimulus plan announced by the European Union last month is decidedly green. The German government increased electric-car subsidies as part of its pandemic-related stimulus package rather than rolling out a 2009-style “cash-for-clunkers” program. China’s plans include clean-energy incentives, too.

Solar and wind are now mature technologies that provide predictable long-term returns. Big lithium-ion batteries, such as those that power Teslas, are industrializing rapidly. More speculatively, hydrogen is a promising green fuel for hard-to-decarbonize sectors such as long-haul transport, aviation, steel and cement.  Many big companies—the likes of Royal Dutch Shell, Air Liquide and Toyota —have green initiatives worth many hundreds of millions of dollars. They are, however, a relatively small part of these large businesses, some of whose other assets may be rendered obsolete by the energy transition… Early-stage electric-truck maker Nikola jumped on its market debut this month to a valuation at one point exceeding that of Ford.

Investors might be better off looking at the established specialists in between. Vestas is the world’s leading manufacturer of wind turbines. Orsted, another Danish company, has made the transition from oil-and-gas producer to wind-energy supplier and aspires to be the first green-energy supermajor. More speculatively, Canadian company Ballard has three decades of experience making hydrogen fuel cells.

Rochelle Toplensky, Green Energy Is Finally Going Mainstream, WSJ, June 24, 2020

The Cracks on the Nuclear Runit Tomb

Excerpts from the US Department of Energy Report on the Nuclear Runit Dome

The Runit Dome is a containment structure on Runit Island, located on Enewetak Atoll.  Enewetak Atoll is a former U.S. atmospheric nuclear weapons test site located approximately 2,300 miles west of Hawaii in the northwest Pacific Ocean. The Runit Dome,  which was built in the late 1970s, contains over 100,000 cubic yards of contaminated soil and  debris [from the US nuclear weapons testing] that were encapsulated in concrete inside an unlined nuclear test crater, the Cactus Crater, on the north end of Runit Island. The site has remained a concern to the people of Enewetak. 

The Runit Dome is not in any immediate danger of collapse or failure, and the exterior concrete covering the containment structure is still serving its intended purpose, effectively reducing the natural erosion of the waste pile below by wind and water. Visual surveys of the exterior  concrete of the Cactus Crater containment structure have revealed the presence of cracks and spalls in the concrete cap. However, these cracks and spalls in the exterior concrete cap do not form sites for external or internal radiation exposure that impact or endanger human health or
the environment, or wildlife.

DOE has performed preventative maintenance on exterior surfaces of the containment structure, which will aid in the determination of any changes that
may occur in the condition of the concrete in the future. Any concerns about the imminent failure or collapse of the structure are unfounded.

The main safety concern to humans associated with leakage of radioactive waste from the Cactus Crater containment structure is the uptake of fallout radioactivity in marine foods. There are no data to suggest that the Cactus Crater containment structure, or more specifically, the radioactive material encapsulated in Cactus Crater, is currently having a measurable adverse effect on the surrounding environment or on the health of the people of Enewetak. However, DOE is in the process of establishing a groundwater radiochemical analysis program that is designed to provide scientifically substantiated data that can be used to determine what, if any, effects the dome contents are having, or will have, on the surrounding environment now
and in the future.

Long-term trends in the concentration of Pu in lagoon waters derived from retrospective analysis of a coral core collected off Runit Island show levels of Pu in lagoon waters are systematically decreasing. These data provide compelling evidence that the construction of the Runit Dome has had, and continues to have, a negligible impact on the wider marine environment….

The Cactus Crater containment structure remains vulnerable to wave driven over wash and flooding caused by storm surge and potential effects of sea level rise… It is
anticipated that any measured or modeled effects of storm events may help provide a better understanding of the long-term consequences of sea-level rise on mass-transport of dome derived radionuclides.

Everyone for Themselves: COVID-19 Drug Reserved for U.S.

On June 29, 2020 the US Department of Health and Human Services (HHS) announced an agreement to secure large supplies of the drug remdesivir for the United States from Gilead Sciences through September, allowing American hospitals to purchase the drug in amounts allocated by HHS and state health departments….HHS has secured more than 500,000 treatment courses of the drug for American hospitals through September. This represents 100% of Gilead’s projected production for July (94,200 treatment courses), 90% of production in August (174,900 treatment courses), and 90% of production in September (232,800 treatment courses), in addition to an allocation for clinical trials. A treatment course of remdesivir is, on average, 6.25 vials.

Hospitals will receive the product shipped by AmerisourceBergen and will pay no more than Gilead’s Wholesale Acquisition Price (WAC), which amounts to approximately $3,200 per treatment course.

Excerpts from Trump Administration Secures New Supplies of Remdesivir for the United States, June 29, 2020

No Clean-Up, No Justice: Ogoniland, Nigeria

The UN Environment Programme in 2011 proposed the creation of a $1 billion fund to repair the damage done by decades of crude spills in the Ogoniland area in southeastern Nigeria. However, progress has been poor and the little work that has been done is sub-standard, advocacy groups including Amnesty International reported in June 2020.  “Research reveals that there is still no clean-up, no fulfillment of ‘emergency’ measures, no transparency and no accountability for the failed efforts, neither by the oil companies nor by the Nigerian government,” the groups said.

Shell’s Nigerian unit pumped oil in Ogoniland until 1993, when the company withdrew amid increasing protests against its presence. Even though the Hague-based company no longer produces crude in the area, a joint venture operated by Shell Petroleum Development Company, or SPDC, still owns pipelines that crisscross the region.

A government agency responsible for overseeing the clean-up, the Hydrocarbon Pollution Remediation Project, known as Hyprep, was finally set up in 2017 after several false starts, but it’s failing to deliver. …“Hyprep is not designed, nor structured, to implement a project as complex and sizable as the Ogoniland clean-up,” the report cites UNEP as saying in 2019

Excerpt from Clean Up Oil in Nigerial Lacks Progress, Bloomberg, June 18,, 2020

The $4 Trillion Blackmail: The Amazon is Ours not Brazil’s

More than two dozen financial institutions around the world are demanding the Brazilian government rein in surging deforestation, which they said has created “widespread uncertainty about the conditions for investing in or providing financial services to Brazil”. The call for action, delivered in a letter to the Brazilian government on June 23, 2020, comes as concerns grow that investors may begin to divest from Latin America’s largest economy if Jair Bolsonaro’s administration fails to curb environmental destruction. “As financial institutions, who have a fiduciary duty to act in the best long-term interests of our beneficiaries, we recognise the crucial role that tropical forests play in tackling climate change, protecting biodiversity and ensuring ecosystem services,” said the letter, signed by 29 financial institutions managing more than $3.7tn in total assets.

“Considering increasing deforestation rates in Brazil, we are concerned that companies exposed to potential deforestation in their Brazilian operations and supply chains will face increasing difficulty accessing international markets. Brazilian sovereign bonds are also likely to be deemed high risk if deforestation continues.” Deforestation in the Amazon rainforest has surged in Brazil since the election of Mr Bolsonaro, a rightwing former army captain, who supports opening the protected lands to commercial activity. In the first four months of 2020, an area twice the size of New York City was razed as illegal loggers and wildcat gold miners

Investors said they are particularly concerned about Brazil’s meatpacking industry, which risks being shut out of international markets over its alleged role in deforestation. Brazil’s JBS has been repeatedly accused by environmentalists of buying cows from deforested lands in the Amazon. In May 2020 more than 40 European companies, including Tesco and Marks and Spencer, warned they would boycott Brazilian products if the government did not act on deforestation. 

Excerpts from Investors warn Brazil to stop Amazon destruction, FT, June 23, 2020

Oil Spills of Sudan, Humanity for Africa, and East African Court of Justice

The East African Court of Justice delivered in June 2020 a temporary injunction order to the country’s Minister for Justice, the Greater Pioneer Operating Company (GPOC), and the Dar Petroleum Operating Company. The Court approved the application by Hope for Humanity Africa (H4HA), a non-governmental organization (NGO), which sought to highlight the environmental damage caused by oil spills… The NGO contends that: “Over 47,249 of the local population in Upper Nile State and 60,000 in Unity State are at risk of being exposed to the oil pollution this is because the local population depends on the wild foods for survival, the contaminated swamps, streams and rivers waters for cooking, drinking, washing, bathing and fishing.”…

The H4HA is looking for an injunction to stop multiple companies from exporting oil from the region, including CNPC of China, Petronas of Malaysia, and Oil & Natural Gas Corp. of India (ONGC) 

Excerpts South Sudan Suspended by African Union, Barred From Exporting Oil by East African Court, https://www.youngbhartiya.com, June 24, 2020

Leave No Oil Under-Ground: OPEC against US Frackers

In 2014-16, the OPEC waged a failed price war to wipe out American frackers. Since then the cartel and its partners, led by Russia, have propped up oil prices enough to sustain shale, but not enough to support many members’ domestic budgets. In March 2020 Saudi Arabia urged Russia to slash output; Russia refused, loth to let Americans free-ride on OPEC-supported prices. The ensuing price war was spectacularly ill-timed, as it coincided with the biggest drop in oil demand on record.  The desire to chasten American frackers remains, though. OPEC controls about 70% of the world’s oil reserves, more than its 40% market share would suggest… If the world’s appetite for oil shrinks due to changing habits, cleaner technology or greener regulations, countries with vast reserves risk having to leave oil below ground. 

Excerpts from Crude Oil: After the Fall, Economist, June, 13, 2020

Praying for Renewable Energy

In the wake of the Fukushima nuclear disaster in 2011, Fukushima prefecture itself pledged to get all its power from renewable sources by 2040.  The hoped-for transformation, however, has been “slow and almost invisible.”…Renewable generation has grown from 10% of the power supply in 2010 to 17% in 2018, almost half of which comes from old hydropower schemes. Most nuclear plants, which provided more than a quarter of the country’s power before the 2011 disaster, have been shut down… But for the most part they have been replaced not by wind turbines and solar panels but by power stations that burn coal and natural gas. The current government wants nuclear plants to provide at least 20% of electricity by 2030. It also wants coal’s share of generation to grow, and has approved plans to build 22 new coal-fired plants over the next five years. The target for renewables, by contrast, is 22-24%, below the current global average, and far lower than in many European countries.

Geography and geology provide part of the answer. Japan is densely populated and mountainous. That makes solar and onshore wind farms costlier to build than in places with lots of flat, empty land. The sea floor drops away more steeply off Japan’s coasts than it does in places where offshore wind has boomed, such as the North Sea. And although geothermal power holds promise, the most suitable sites tend to be in national parks or near privately owned hot springs.

Government policies also help stifle the growth of renewable energy. Since the end of the second world war, privately owned, vertically integrated regional utilities have dominated the electricity market. These ten behemoths provide stable power within their regions, but do little to co-ordinate supply and demand across their borders…The limited transmission between regions makes it even harder than usual to cope with intermittent generation from wind turbines and solar panels. It also reduces competition, which suits the incumbent utilities just fine…Recent reforms have attempted to promote renewables both directly and indirectly…The “feed-in tariff”, obliging utilities to pay a generous fixed price for certain forms of renewable energy—a policy that has prompted investors to pile into solar and wind in other countries. In 2016, the government fully liberalised the retail electricity market. It has also set up new regulatory bodies to promote transmission between regions and to police energy markets. In April 2020 a law came into force that requires utilities to run their generation, transmission and distribution units as separate businesses. These reforms constitute a policy of “radical incrementalism”.

Critics say the steps have been too incremental and not radical enough. Utilities continue to make it time-consuming and costly for new entrants to get access to the grid, imposing rules that are “not fair for newcomers”, according to Takahashi Hiroshi of Tsuru University. Existing power plants are favoured over new facilities, and the share of renewables is limited, on the ground that their intermittency threatens the grid’s stability.

But even if the government is timid, investors can still make a difference…. Several of Japan’s big multinationals have pledged to switch to clean power on a scale and schedule that put the government’s targets to shame. Environmental activism has made banks and businesses wary of investments in coal. Even big utilities have come to see business opportunities in renewables, especially in the government’s imminent auction of sites for offshore wind plants. Two of them, Tohoku Electric Power and Tokyo Electric Power (TEPCO), have announced plans this year to issue “green bonds” to finance renewables projects. In March 2020, TEPCO established a joint venture with Orsted, a Danish oil firm that has become a pioneer in offshore wind. 

Exceprts from Renewable Energy in Japan: No Mill Will, Economist, June 13, 2020

Amazon Rainforest: Source of Food for Vegans, Meat-Lovers

In the first four months of 2020 an estimated 1,202 square km (464 square miles) were cleared in the Brazilian Amazon, 55% more than during the same period in 2019, which was the worst year in a decade…Less attention has been paid to the role of big firms like JBS and Cargill, global intermediaries for beef and soya, the commodities that drive deforestation.  The companies do not chop down trees themselves. Rather, they are middlemen in complex supply chains that deal in soya and beef produced on deforested land. The process begins when speculators, who tend to operate outside the law, buy or seize land, sell the timber, graze cattle on it for several years and then sell it to a soya farmer. Land in the Amazon is five to ten times more valuable once it is deforested, says Daniel Nepstad, an ecologist. Not chopping down trees would have a large opportunity cost. In 2009 Mr Nepstad estimated that cost (in terms of forgone beef and soy output) would be $275bn over 30 years, about 16% of that year’s GDP.

Under pressure from public opinion, the big firms have made attempts to control the problem. In 2009, a damning report from Greenpeace led JBS, Marfrig and Minerva, meat giants which together handle two-thirds of Brazil’s exports, to pledge to stop buying from suppliers that deforest illegally. (The forest code allows owners to clear 20% of their land.) JBS, which sources from an area in the Amazon larger than Germany, says it has blocked 9,000 suppliers, using satellites to detect clearing.

The problem is especially acute in ranching, which accounts for roughly 80% of deforestation in the Amazon, nearly all of it illegal. “Cows move around,” explains Paulo Pianez of Marfrig. Every fattening farm the big meatpackers buy from has, on average, 23 of its own suppliers. Current monitoring doesn’t cover ranchers who breed and graze cattle, so it misses 85-90% of deforestation. Rogue fattening farms can also “launder” cattle by moving them to lawful farms—perhaps their own—right before selling them. A new Greenpeace report alleges that through this mechanism JBS, Marfrig and Minerva ended up selling beef from farms that deforested a protected Amazon reserve on the border between Brazil and Bolivia. They said they had not known about any illegality.

One reason that soya giants seem more serious than meat producers about reducing deforestation a network of investors concerned about sustainability, is that most soya is exported. The EU is the second-top destination after China. But companies struggle to get people to pay more for a “hidden commodity”… But few people will pay extra for chicken made with sustainable soya, which explains why just 2-3% is certified deforestation-free. ….Four-fifths of Brazilian beef, by contrast, is eaten in Brazil. Exports go mostly to China, Russia and the Middle East, where feeding people is a higher priority than saving trees. Investors, for their part, see beef firms as unsexy businesses with thin margins

According to soya growers, multinational firms failed to raise $250m to launch a fund for compensating farmers who retain woodland. “They demand, demand, demand, but don’t offer anything in return,” complains Ricardo Arioli….

Reducing deforestation will require consensus on tricky issues like the fate of tens of thousands of poor settlers on public lands in the Amazon, where half of deforestation takes place….

Excerpts from The AmazonL Of Chainshaws and Supply Chains, Economist, JUne 13, 2020

China’s Nuclear Secrecy

Since testing its first nuclear bomb 56 years ago, China has never revealed even a ballpark figure for the size of its arsenal. …America…would like it if China were to make its intentions so clear. It wants the country to end its obsessive secrecy and join America and Russia in setting limits to the size of their nuclear arsenals. The DF-41s, a new kind of intercontinental missile capable of hitting anywhere in America, first displayed in public in October 2019 at a National Day parade in Beijing are one reason why America is growing ever more keen to get China talking. They are China’s first missiles with such a range that can go on roads, making them more difficult for American weapons to knock out than ones fired from silos or fixed launchers. They can probably carry multiple warheads, making it even harder to protect America from their devastation.

By most estimates, China has less than 1,000 warheads—about 300 is widely considered to be a reasonable guess. By contrast, America and Russia have around 4,000 apiece. But whereas those two countries, over the decades, have signed pacts to prune their arsenals, China has sat out arms-control. Its nuclear forces have been growing in size and sophistication, in part to ensure that they could survive a surprise strike from America’s increasingly accurate weapons….

In 2019 America pulled out of a treaty with Russia banning medium-range missiles fired from land. It did so ostensibly because of Russian cheating, but the Pentagon made no secret of its desire to match China’s unchecked build-up of such weapons. Now China casts a shadow over the one nuclear pact that still binds America and Russia, the New start treaty. Signed in 2010, it caps “strategic” (ie, long-range) weapons and allows each side to inspect the other’s 18 times a year. It expires in February 2021, but could be renewed if both agree.  Vladimir Putin, Russia’s president, says he is game. But Donald Trump and many of his advisers want China to sign up first. “The administration’s goal is to keep China’s stockpile from growing,” says Tim Morrison of the Hudson Institute…But China’s tradition of military secrecy is “deeply rooted”. Opening up will require trust. What little there is between China and America is being threatened by the pandemic. 

Excerpts from Arms Control: Be Afraid America, Economist, May 23, 2020

The Big Trash Burners: Does it Make Sense to Incinerate Waste?

Global waste is expected to hit 3.4 billion tons by 2050 from 2.01 billion tons in 2016, according to the World Bank. As recycling programs encounter challenges and landfills in the U.S. and Europe reach capacity or face regulations making them more expensive, incinerators are becoming the most viable option for many municipalities to deal with much of their garbage. England now burns more municipal waste than it recycles or landfills. China—already the world’s biggest trash burner—is building more incinerators. And incineration companies say, for the first time in years, expansion projects are on the table in the U.S., although the industry faces significant legal and community challenges. Overall, incinerator-plant capacity is forecast to rise 43% globally between 2018 and 2028, according to Ecoprog, a consulting firm…..

Another growth driver is a European Union target for member states to cap the amount of municipal trash they send to landfill at 10% by 2030. Local communities and environmental groups have launched strong opposition to expansion of incineration plans, citing environmental and public-health concerns. Incinerator plants are also called waste-to-energy plants since the heat from burning trash is used to generate electricity, and many governments classify that electricity as renewable energy, a characterization opponents dispute…..But advocates for clean energy…say that while some energy is recovered by burning, recycling or composting garbage would save far greater amounts of energy.

Critics also say cities that own their incinerator plants have little incentive to pursue waste-reduction efforts because the plants are designed to run at full capacity. “Many countries are over-investing in incineration to cut down on landfilling, which will eventually lock them into burning,” said Janek Vähk, development and policy coordinator for Zero Waste Europe.

Excerpts from Saabira Chaudhuri, Trash Burning Ignites as World’s Waste Swells, WSJ, June 10, 2020

The Nuclear Option: Chopping off Hong Kong from the Dollar System

China and America have begun the fraught business of disentangling their financial systems. Chinese firms with shares listed in New York have rushed to float in Hong Kong, too, after the White House signalled they are not welcome on Wall Street….But now Hong Kong itself, the world’s third-biggest international financial centre, has become a geopolitical flashpoint. Its unique role as the conduit between global capital markets and China’s inward-looking financial system means that both sides must tread carefully.

On May 28, 2020 China said it would enact a new national-security law for Hong Kong, undermining the formulation of “one country, two systems” in place since 1997, under which the territory is supposed to be governed until 2047. In response, America has said it may downgrade the legal privileges it grants Hong Kong, which treat it as autonomous from China

Hong Kong’s place in the world depends on having the rule of law, a trusted reputation and seamless access to Western financial markets. Other Chinese cities have big stock exchanges: shares listed in Shanghai and Shenzhen are together worth a lot more than those in Hong Kong. But neither has fair courts, an independent central bank, free movement of capital or a mix of Western and Chinese firms. These foundations are the basis for $9.7trn of cross-border financial claims, such as loans, that are booked in the territory. Hong Kong is also where mainland Chinese firms and banks go to deal in the dollar, the world’s dominant currency. Some $10trn of dollar transactions flowed through Hong Kong’s bank-to-bank payments system last year.

Until recently, conventional wisdom held that Hong Kong’s position would be assured for 20-30 years, because it would take that long for China either to upgrade its markets to Western standards or to become so powerful that it could impose mainland practices, and the yuan, on the rest of the world. But the trade war, a year of street protests and China’s iron-fisted response to them raise new questions about Hong Kong’s durability. Bullying from Beijing erodes the sense that it is autonomous. And there is an outside chance that America could impose sanctions or other restrictions that would stop some Hong Kong officials, firms or banks from using dollars….. America’s might bring into question whether money parked in Hong Kong is still fully fungible with money in the global financial system. If these worries spread, they could destabilise Hong Kong and cause a financial shock in China and well beyond it.

The good news is that so far there is no sign of capital flight. Hong Kong’s vast deposit base has been stable in recent weeks, say its bankers. Investors are reassured by its $440bn or so mountain of foreign reserves and a long record of capable financial management. The rush of Chinese listings will bring in new cash and drum up business in the city….Nonetheless, for China the prudent policy is to try to speed up the development of the mainland’s financial capabilities so that it is less exposed to potential American punishment…Italso means another big push to boost the global role of the yuan and reduce China’s dependence on the dollar…

Excerpts from Hong Kong: Conduit’s End, Economist, June 6, 2020

Selling War Services: the Mercenaries

Despite a UN treaty banning mercenaries, their day is far from over. Some analysts think there are now more of them in Africa than ever. But can they ever be a force for good?  ….In the years after most African countries gained independence, mercenaries were notorious for supporting secessionist movements and mounting coups. 

Western governments have in the past winked at mercenary activity that served their commercial interests. But nowadays Russia is seen as the leading country egging on mercenaries to help it wield influence. It does so mainly through Wagner, ***whose founder, Yevgeny Prigozhin, is close to President Vladimir Putin.

Wagner has been hired to prop up a number of shaky African regimes. In Sudan it tried to sustain the blood-drenched dictatorship of Omar al-Bashir. He was ousted last year after big protests. In 2018 hundreds of Wagner men arrived in the Central African Republic to guard diamond mines, train the army and provide bodyguards for an embattled president, Faustin-Archange Touadéra. In Guinea, where Rusal, a Russian aluminium giant, has a big stake, Wagner has cosied up to President Alpha Condé, who has bloodily faced down protests against a new constitution that lets him have a third term in office. In Libya, despite a un arms embargo, Wagner is reported to have deployed 800-1,200 operatives in support of a rebel general, Khalifar Haftar, who has been trying to defeat the UN-recognised government….

Mercenaries have three main advantages over regular armies. First, they give plausible deniability. Using them, a government such as Russia’s can sponsor military action abroad while pretending not to. Second, they tend to be efficient, experienced, nimble and flexible. Third, they are cheaper than regular armies. Whereas soldiers receive lifelong contracts and pensions, mercenaries are often paid by the job..

***Other firms include Dyke Advisory Group (DAG) , OAM Middle East

See also The UN Working Group on the Use of Mercenaries

Excerpts from Soldiers of misfortune: Why African governments still hire mercenaries, Economist, May 30, 2020

Your Death, My Life: Ericsson versus Huawei

The Trump administration’s increasingly aggressive effort to cripple China’s Huawei has presented Ericsson the opportunity to lead the rollout of 5G technology around the world.  The Swedish company is emerging as the steadiest player in the $80-billion-a-year cellular-equipment industry, telecommunications executives and analysts say, because it makes a technically advanced product that one rival, Nokia,was late to develop and that Huawei may not be able to make in the future because of recent U.S. measures.

The Trump administration last month stepped up efforts to hamper Huawei by imposing export restrictions that make it harder for the company to buy computer chips that are produced using U.S.-designed equipment —a move that could prevent it from manufacturing advanced 5G hardware. The U.S. has also sought to boost Huawei’s rivals by providing loans to wireless carriers in developing countries so they can buy equipment from non-Chinese suppliers, among other moves.

U.S. Attorney General William Barr in February suggested that the U.S. government take a financial stake in Ericsson or Nokia, or both, to “make it a more formidable competitor and eliminate concerns over its staying power.”

The White House quickly backed away from the idea….Ericsson provides equipment for all three major U.S. carriers: AT&T Inc., Verizon Communications Inc. and T-Mobile US Inc….

Ericsson struggled in the cellular-equipment industry against China’s Huawei and ZTE Corp., which sold comparable products, often at lower prices. Among Ericsson’s key innovations are cellular antennas. Ericsson’s use a new technology, called massive multiple-input multiple-output, or massive MIMO, that sends wireless signals in strong jets to different devices. Typical cellular antennas, which sit on steel towers or rooftops, send wireless signals in a wide cone, similar to the way a garden hose sprays water.

Wireless carriers want Ericsson’s concentrated wireless technology because it enables fast connections and allows them to serve more customers using existing cellular towers. Building new towers is unattractive because it is a bureaucratic process that can cost tens of thousands of dollars….Ericsson notched a victory the spring of 2020 when it joined Huawei in winning 5G contracts to supply all three major wireless carriers in China, the world’s second-biggest telecom-equipment market

The big question for wireless carriers and equipment makers is whether Huawei can continue making massive MIMO 5G equipment with the quality that wireless carriers have come to expect. The technology requires supplies from the world’s top semiconductor companies, but the Trump administration’s recent actions may mean even foreign chip suppliers must seek Washington’s approval to sell to Huawei. For now, Ericsson is assuming China has advanced its own semiconductor industry enough to continue supplying Huawei.

Excerpts from Stu Woo, Ericsson Emerges as 5G Leader After U.S. Bruises Huawei, WSJ,  June 2, 2020

Japan’s Nuclear Bombs

On May 13, Japan’s Nuclear Regulation Authority announced that the nuclear fuel reprocessing plant in Rokkasho, Aomori Prefecture, had met new safety standards created after the March 11, 2011, earthquake and tsunami….The Rokkasho plant is a 3.8 million square meter facility designed to reprocess spent nuclear fuel from the nation’s nuclear reactors.  Construction began in 1993. Once in operation, the plant’s maximum daily reprocessing capacity will be a cumulative total of 800 tons per year.  During reprocessing, uranium and plutonium are extracted, and the Rokkasho plant is expected to generate up to eight tons of plutonium annually.

Both are then turned into a mixed uranium-plutonium oxide (MOX) fuel at a separate MOX fabrication plant, also located in Rokkasho, for use in commercial reactors. Construction on the MOX facility began in 2010 and it’s expected to be completed in 2022.  Japan had originally envisioned MOX fuel powering between 16 and 18 of the nation’s 54 commercial reactors that were operating before 2011, in place of conventional uranium.  But only four reactors are using it out of the current total of nine officially in operation. MOX fuel is more expensive than conventional uranium fuel, raising questions about how much reprocessed fuel the facilities would need, or want.

The Rokkasho reprocessing plant can store up to 3,000 tons of spent nuclear fuel from the nation’s power plants on-site. It’s nearly full however, with over 2,900 tons of high-level waste already waiting to be reprocessed.

Why has it taken until now for the Rokkasho plant to secure approval from the nuclear watchdog?   Decades of technical problems and the new safety standards for nuclear power that went into effect after the 2011 triple meltdown at the power plant in Fukushima Prefecture have delayed Rokkasho’s completion date 24 times so far. It took six years for the plant to win approval under the post-3/11 safety standards…By the time of the NRA announcement on May 13, 2020, the price tag for work at the Rokkasho plant had reached nearly ¥14 trillion.

Japan is the only non-nuclear weapons state pursuing reprocessing. But as far back as the 1970s, as Japan was debating a nuclear reprocessing program, the United States became concerned about a plant producing plutonium that could be used for a nuclear weapons program.  The issue was raised at a Feb. 1, 1977, meeting between U.S. Vice President Walter Mondale and Prime Minister Takeo Fukuda.  “Reprocessing facilities which could produce weapons grade material are simply bomb factories,” noted a declassified U.S. State Department cable on the meeting. “We want to cooperate (with Japan) to keep the problem under control.”

The U.S. oppose the Rokkasho plant’s construction in 1993, following an agreement in 1988 between the two countries on nuclear cooperation. ..The U.S.-Japan nuclear agreement meant the U.S. would give advance consent for Japan to send spent nuclear fuel to the United Kingdom and France — states with nuclear weapons — for reprocessing until Rokkasho was running at full-scale.

Currently, Japan has nearly 45 tons of plutonium stockpiled, including 9 tons held by domestic utilities. Another 21.2 tons is in the United Kingdom and France is holding 15.5 tons under overseas reprocessing contracts.

Thus, Japan finds itself caught between promises to the international community to reduce its plutonium stockpile through reprocessing at Rokkasho, and questions about whether MOX is still an economically, and politically, viable resource — given the expenses involved and the availability of other fossil fuel and renewable energy resources.

Excerpts from Aomori’s Rokkasho nuclear plant gets green light but hurdles remain, Japan Times, May 31, 2020

Preserving Seeds that Feed the World: the Svalbard Global Seed Vault

Six hundred miles from the North Pole, on an island the size of West Virginia, at the end of a tunnel bored into a mountain, lies a vault filled with more than 1 million samples of seeds harvested from 6,374 species of plants grown in 249 locations around the globe.The collection, the largest of its kind, is intended to safeguard the genetic diversity of the crops that feed the world.  If disaster wipes out a plant, seeds from the vault could be used to restore the species. If pests, disease or climate change imperil a food source, a resistant trait found among the collection could thwart the threat.

While some countries have their own seed banks—Colorado State University houses one for the U.S.—the Svalbard Global Seed Vault serves as a backup. The vault, built in 2008 at a cost of about $9 million, is owned and maintained by Norway, but its contents belong to the countries and places that provide the samples.  “It works like a safe-deposit box at the bank,” said Cary Fowler, an American agriculturalist who helped found the vault. “Norway owns the facility, but not the boxes of the seeds.”

In 2015, after the International Center for Agricultural Research in the Dry Areas was destroyed in the Syrian civil war, scientists who had fled the country withdrew seeds to regenerate the plants in Lebanon and Morocco.  “It had one of the world’s biggest and best collections of wheat, barley, lentils, chickpeas, faba beans and grass pea,” Dr. Fowler said. “It was the chief supplier of a disease-resistant wheat variety for the Middle East.”  In 2017, the group returned copies of its seeds to the vault.

The 18,540-square-foot seed vault includes three rooms with the capacity to house 4.5 million samples of 500 seeds each—a maximum of 2.25 billion seeds. The environment’s natural temperature remains below freezing year round, but the seeds are stored at a chillier -18 degrees Celsius, or around -0.4 degrees Fahrenheit. They’re expected to last for decades, centuries or perhaps even millennia….

While dwindling diversity might not seem like an imminent threat, four chemical companies now control more than 60% of global proprietary seed sales…That concentration of power, some worry, could lead to less agricultural variety and more genetic uniformity…In the meantime, the seed vault (which doesn’t store genetically modified seeds) will continue to accept deposits in an effort to preserve all of the options it can.

Excerpts from Craven McGinty, Plan to Save World’s Crops Lives in Norwegian Bunker, WSJ,  May 29, 2020

Facebook Mobs and Facebook Profits

A Facebook team had a blunt message for senior executives. The company’s algorithms weren’t bringing people together. They were driving people apart. “Our algorithms exploit the human brain’s attraction to divisiveness,” read a slide from a 2018 presentation. “If left unchecked,” it warned, Facebook would feed users “more and more divisive content in an effort to gain user attention & increase time on the platform.”

That presentation went to the heart of a question dogging Facebook almost since its founding: Does its platform aggravate polarization and tribal behavior?  The answer it found, in some cases, was yes.  Facebook had kicked off an internal effort to understand how its platform shaped user behavior and how the company might address potential harms… 

But in the end, Facebook’s interest was fleeting. Mr. Zuckerberg and other senior executives largely shelved the basic research, according to previously unreported internal documents and people familiar with the effort, and weakened or blocked efforts to apply its conclusions to Facebook products…

An idea [proposed by those who wanted to reduce polarization at Facebook] was to tweak recommendation algorithms to suggest a wider range of Facebook groups than people would ordinarily encounter.  Building these features and combating polarization could have come, though, at the cost of lower engagement and it was “antigrowth” [meaning less profits for Facebook].

Excerpt from Jeff Horwitz and Deepa Seetharaman, Facebook Executives Shut Down Efforts to Make the Site Less Divisive, WSJ, May 26, 2020

Strangling China with Hong Kong: the Politics of Fear

The U.S. determination  that Hong Kong is no longer autonomous from mainland China, under the Hong Kong Policy Act of 1992, will have significant implications for the city’s exporters and businesses.  Sensitive U.S. technologies could no longer be imported into Hong Kong, and the city’s exports might be hit with the same tariffs levied on Chinese trade.

But the act doesn’t cover the far more extensive role Hong Kong plays as China’s main point of access to global finance.  As of 2019, mainland Chinese banks held 8,816 trillion Hong Kong dollars ($1.137 trillion) in assets in the semiautonomous city, an amount that has risen 373% in the last decade…. China’s banks do much of their international business, mostly conducted in U.S. dollars, from Hong Kong. With Shanghai inside China’s walled garden of capital controls, there is no obvious replacement.

While the U.S. doesn’t directly control Hong Kong’s status as a financial center, Washington has demonstrated its extensive reach over the dollar system, with penalties against Korean, French and Lebanese financiers for dealing with sanctioned parties. The U.S. recently threatened Iraq’s access to the New York Federal Reserve, demonstrating a growing willingness to use financial infrastructure as a tool of foreign policy.  Even though the U.S. can’t legislate Hong Kong’s ability to support Chinese banks out of existence, the role of an international funding hub is greatly reduced if your counterparties are too fearful to do business with you.

Putting the ability of Chinese banks to conduct dollar-denominated activities at risk would be deleterious to China’s ability to operate financially overseas, posing a challenge for the largely dollar-denominated Belt and Road global infrastructure initiative. It would also put the more financially fragile parts of the country, like its debt-laden property developers, under strain.  China’s hope to develop yuan into an influential currency also centers on Hong Kong’s remaining a viable global financial center—more than 70% of international trade in the yuan is done in the city.

Excerpts from Mike Bird, How the US Could Really Hurt China, WSJ, May 290, 2020

Mining the Moon: The First Mover Advantage

The US government is starting to lay down the groundwork for diplomacy on the moon. On 15 May, 2020 NASA administrator Jim Bridenstine released a set of principles that will govern the Artemis Accords on the exploration of the moon. The accords are named after NASA’s Artemis programme, the US initiative to explore the moon, with a planned launch of astronauts to the lunar surface in 2024. Other countries are also increasingly turning towards the moon, which is concerning when a landing on the moon can send up clouds of potentially hazardous dust that travel a long way across the surface and even into orbit…

At the moment, there is little practical international law governing activities on the moon. The Outer Space Treaty of 1967 deals with general space exploration, while the more specific Moon Agreement of 1984 states that “the moon and its natural resources are the common heritage of all mankind”, prohibiting the ownership of any part of the moon or any resources from the moon….However, no nation capable of human space flight has signed the Moon Agreement, effectively rendering it moot. In fact, in April 2020, US president Donald Trump issued an executive order supporting moon mining and taking advantage of the natural resources of space.

The Artemis Accords aim to protect historic locations like the Apollo landing sites but encourage mining in other areas. They also promote transparency and communication between nations, requiring signatories to share their lunar plans, register any spacecraft sent to or around the moon and release scientific data to the public.  That transparency requirement might be a stumbling block for potential parties to the accords, says Forczyk. “I really don’t know how much countries are going to be willing to share some of their more delicate, sensitive information,” she says. “

The rest of the stipulations of the Artemis Accords are about safety: nations will be able to set “safety zones” to protect their activities on the moon, they will have to work to mitigate the effects of debris in orbit around the moon and they will agree to provide emergency assistance to any astronauts in distress.

Rather than attempting to put together an international treaty, which could be difficult to negotiate before NASA’s next crewed launch to the moon, the US will sign bilateral agreements with individual countries.

Excerpts from Leah Crane, NASA’s Artemis Accords aim to lay down the law of the land on the moon, New Scientist, May 20, 2020

Choking the Water: Dams, Dams and More Dams

Since Tibet is part of China, Chinese engineers have been making the most of that potential. They have built big dams not only on rivers like the Yellow and the Yangzi, which flow across China to the Pacific, but also on others, like the Brahmaputra and the Mekong, which pass through several more countries on their way to the sea.

China has every right to do so. Countries lucky enough to control the sources of big rivers often make use of the water for hydropower or irrigation before it sloshes away across a border. But If the countries nearest the source of water, like China,  suck up too much of the flow, or even simply stop silt flowing down or fish swimming up by building dams, the consequences in the lower reaches of the river can be grim: parched crops, collapsed fisheries, salty farmland.

Tension and recrimination have been the order of the day for China and its neighbours… In part, this is because a river like the Mekong does not contain enough water to go round. China has already built 11 dams across the main river (never mind its tributaries) and has plans for eight more; the downstream states have built two and are contemplating seven more. Last year, during a drought, the river ran so low that Cambodia had to turn off a big hydropower plant. Even when rainfall is normal, the altered flow and diminished siltation are causing saltwater to intrude into the Mekong delta, which is the breadbasket of Vietnam, and depleting the fish stocks that provide the only protein for millions of poor Cambodians.

China has long resisted any formal commitment to curb its construction of dams or to guarantee downstream countries a minimum allocation of water. It will not even join the Mekong River Commission, a body intended to help riparian countries resolve water-sharing disputes…

China has not signed any agreements about managing the Mekong with the other countries it flows through, so is not obliged to share a particular amount of water with them, nor even provide data on the flow or any warning about the operations of its dams. It does provide the Mekong River Commission with a trickle of information about water levels and planned releases from dams, which helps with flood-control lower down the river

Excerps from Water Torture: Hydropower in Asia, Economist, May 16, 2020; Torrent to Tickle: the Mekong, Economist, May 16, 2020

The Game of Chicken in the Melting Arctic

In 2018 the NATO alliance, joined by Sweden and Finland, held Trident Juncture, its largest exercise since the end of the cold war, in Norway. That involved the first deployment of an American aircraft-carrier in the Arctic Circle for three decades. Western warships have been frequent visitors since. On May 1, 2020 a “surface action group” of two American destroyers, a nuclear submarine, support ship and long-range maritime patrol aircraft, plus a British frigate, practised their submarine hunting skills in the Norwegian Sea.

Such drills are not unusual. But on May 4, 2020 some of those ships broke off and sailed further north into the Barents Sea, along with a third destroyer. Although American and British submarines routinely skulk around the area, to spy on Russian facilities and exercises covertly, surface ships have not done so in a generation. On May 7, 2020 Russia’s navy greeted the unwelcome visitors by announcing that it too would be conducting exercises in the Barents Sea—live-fire ones, in fact. On May 8, 2020… the NATO vessels departed.

It is a significant move. The deployment of destroyers which carry missile-defence systems and land-attack cruise missiles is especially assertive. After all, the area is the heart of Russian naval power, including the country’s submarine-based nuclear weapons. Russia’s Northern Fleet is based at Severomorsk on the Kola peninsula, to the east of Norway’s uppermost fringes.

Western navies are eager to show that covid-19 has not blunted their swords, at a time when America and France have each lost an aircraft-carrier to the virus. But their interest in the high north predates the pandemic. One purpose of the foray into the Barents Sea was “to assert freedom of navigation”, said America’s navy. Russia has been imposing rules on ships that wish to transit the Northern Sea Route (NSR), an Arctic passage between the Atlantic and Pacific that is becoming increasingly navigable as global warming melts ice-sheets . America scoffs at these demands, insisting that foreign warships have the right to pass innocently through territorial waters under the law of the sea. Although last week’s exercise did not enter the NSR, it may hint at a willingness to do so in the future.

On top of that, the Arctic is a growing factor in NATO defence policy. Russia has beefed up its Northern Fleet in recent years…Russian submarine activity is at its highest level since the cold war…Ten subs reportedly surged into the north Atlantic in October 2019  to test whether they could elude detection….Russia’s new subs are quiet and well-armed. As a result, NATO’s “acoustic edge”—its ability to detect subs at longer ranges than Russia—“has narrowed dramatically.”

Russia primarily uses its attack submarines to defend a “bastion”, the area in the Barents Sea and Sea of Okhotsk where its own nuclear-armed ballistic-missile submarines patrol.  A separate Russian naval force known as the Main Directorate of Deep-Sea Research (GUGI, in its Russian acronym) might also target the thicket of cables that cross the Atlantic.

The challenge is a familiar one. For much of the cold war, NATO allies sought to bottle up the Soviet fleet in the Arctic by establishing a picket across the so-called GIUK gap, a transit route between Greenland, Iceland and Britain that was strung with undersea listening posts….The gap is now back in fashion and NATO is reinvesting in anti-submarine capabilities after decades of neglect. America has stepped up flights of P8 submarine hunting aircraft from Iceland, and Britain and Norway are establishing P8 squadrons of their own. The aim is to track and hold at risk Russian nuclear subs as early as possible, because even a single one in the Atlantic could cause problems across a large swathe of ocean.

GIUK (Greenland, Iceland, UK) gap. Image from wikipedia.

But a defensive perimeter may not be enough. A new generation of Russian ship-based missiles could strike NATO ships or territory from far north of the GIUK gap, perhaps even from the safety of home ports. “This technological development represents a dramatically new and challenging threat to NATO forces…. Similar concerns led the Reagan administration to adopt a more offensive naval posture, sending forces above the gap and into the maritime bastion of the Soviet Union. 

Excerpts from Naval Strategy: Northern Fights, Economist, May 16, 2020

Builiding a Nuclear War Chest: the US Uranium Reserve

The US electricity production from nuclear plants hit at an all-time high in 2019… generating more than 809 billion kilowatt-hours of electricity, which is enough to power more than 66 million homes.  Yet, despite operating the largest fleet of reactors in the world at the highest level in the industry, US ability to produce domestic nuclear fuel is on the verge of a collapse.  

Uranium miners are eager for work, the United States’s only uranium conversion plant is idle due to poor market conditions, and its inability to compete with foreign state-owned enterprises (most notably from China and Russia) is not only threatening US energy security but weakening the ability to influence the peaceful uses of nuclear around the world. Restoring America’s Competitive Nuclear Energy Advantage was recently released by the U.S. Department of Energy (DOE) to preserve and grow the entire U.S. nuclear enterprise…. The first immediate step in this plan calls for DOE to establish a uranium reserve.   Under the Uranium Reserve program, the DOE Office of Nuclear Energy (NE) would buy uranium directly from domestic mines and contract for uranium conversion services. The new stockpile is expected to support the operation of at least two US uranium mines, reestablish active conversion capabilities, and ensure a backup supply of uranium for nuclear power operators in the event of a market disruption [such as that caused the COVID-19 pandemic]. 

NE will initiate a competitive procurement process for establishing the Uranium Reserve program within 2021.  Uranium production in the United States has been on a steady decline since the early 1980s as U.S. nuclear power plant operators replaced domestic uranium production with less expensive imports. State-owned foreign competitors, operating in different economic and regulatory environments, have also undercut prices, making it virtually impossible for U.S. producers to compete on a level-playing field.  As a result, 90% of the uranium fuel used today in U.S. reactors is produced by foreign countries.

Establishing the Uranium Reserve program is exactly what United States needs at this crucial time to de-risk its nuclear fuel supply. It will create jobs that support the U.S. economy and strengthen domestic mining and conversion services….The next 5-7 years will be a whirlwind of nuclear innovation as new fuels and reactors will be deployed across the United States.

Excerpts  from USA plans revival of uranium sector, World Nuclear News, May 12, 2020.  See also Building a Uranium Reserve: The First Step in Preserving the U.S. Nuclear Fuel Cycle, US Office of Nuclear Energy, May 11, 2020.

Will Saudi Arabia Own the United States?

In the coronavirus pandemic’s financial fallout, Saudi Arabia’s $300 billion sovereign-wealth fund has emerged as one of the world’s biggest bargain hunters, taking minority stakes worth billions of dollars in American corporations.  Saudi Arabia’s Public Investment Fund  (PIF)  in the first quarter of 2020 bought shares valued at about half a billion dollars each in Facebook, Walt Disney,  Marriott International,  and Cisco Systems.  The fund bought financial stocks, investing $522 million in Citigroup, and $488 million in Bank of America while also spending $714 million on a stake in Boeing…Crown Prince Mohammed bin Salman, the kingdom’s day-to-day ruler, tasked the sovereign-wealth fund in 2015 with diversifying the country’s economy away from oil by investing in companies and industries untethered to hydrocarbons.

PIF’s recent buying spree highlights a bold strategy of piling into global stocks even as the novel coronavirus and a crash in oil prices mean that Saudi Arabia’s financial position is now the most precarious in a decade. The Saudi government in May 2020 tripled its value-added tax rate and cut subsidies to state employees as it contends with lower oil revenue and an economy weakening under coronavirus lockdown.

Many of the stocks that PIF has targeted are trading at historic lows, bruised by the fallout from the coronavirus and rock-bottom oil prices that have battered stocks of energy companies in 2020. Teh PIF bought in 2020 undisclosed stakes in a bevy of energy companies, including Equinor (Norway), Royal Dutch Shell, Total (France) and Eni (France). The PIF invested $484 million in Shell, $222 million in Total and previously unreported stakes of $828 million in BP $481 million in Suncor Energy and $408 million in Canadian Natural Resources.

It also purchased shares valued at roughly $80 million each in: Warren Buffett’s Berkshire Hathaway; chipmakers Broadcom and Qualcom ; IBM; drugmaker Pfizer;  Starbucks; railroad company Union Pacific; outsourcer Automatic Data Processing; and Booking.com….On top of the stakes in public companies, PIF is also awaiting regulatory approval for a roughly £300 million ($363 million) buyout of U.K. Premier League soccer team Newcastle United.

Excerpts from Rory Jones and Summer Said, Saudi Sovereign-Wealth Fund Buys Stakes in Facebook, Boeing, Cisco Systems, WSJ, May 18, 2020