Real Debt Trap: Sri Lanka Owes Vast Majority to West, Not to China

Editor’s Note: The following represents the writer’s analysis.

With Russia recognizing on February 21 two breakaway republics in Ukraine’s Donbass region, war between Russia and U.S.-backed Ukraine appears closer than ever. However, such an escalation means Europe is bound to face an energy crisis, as sources of oil and gas remain too small or unreliable to meet its needs.

The United States and the European Union are expected to impose severe sanctions on the Russian Federation. The United Kingdom, on the other hand, announced it will impose sanctions on Russian banks. The United States could eventually pressure all European countries to stop purchasing Russian energy, one way or another. U.S. President Joe Biden issued an executive order immediately after Russia recognized the two republics. The order bans business that would develop the Donetsk People’s Republic and the Lugansk People’s Republic. Although the order states medical supplies and other basic needs would not be barred, U.S. sanctions have been found to shrink economies and kill people by denying materials to produce medicines. Moreover, Biden announced today the “first tranche,” which includes restrictions on Russia’s sovereign debt.

“That means we’ve cut off Russia’s government from Western financing,” Biden said.

Europe’s Energy Conundrum

With the march toward war, Germany halted approval for Nord Stream 2, an undersea pipeline that would have doubled the amount of natural gas flowing from Russia to Germany via the Baltic Sea, bypassing the U.S.-backed Ukraine. 

About 43 percent of natural gas consumed in the EU comes from Russia. Moreover, Russia is the main supplier of crude oil to the EU, making the alliance of European states heavily dependent on Russian energy. If the EU completely cuts energy ties with Moscow, power outages could become the norm, especially given European gas storages are already half-empty. Even if the United States pressures other producers to increase energy supplies to Europe, it remains uncertain what can replace Russian oil, gas and coal in the interim.

Europe is not the only place that will suffer from what seems to be an inevitable war between Russia and Ukraine. The two countries are the world’s fourth and seventh largest producers of cereals, respectively. That means West Asian countries, significant importers of the Russian and Ukrainian foodstock, are expected to experience food shortages if Ukrainian sea ports are blocked due to a war or if Russia is cut off from the global financial system.

Still, it remains to be seen if such severe sanctions will come as a result of the Kremlin’s recognition of the Donbass republics, or if the West will wait for major clashes between Russian and Ukrainian forces.

Why Russia Recognized Breakaway Republics

The Kremlin’s recognition of the self-proclaimed Donetsk People’s Republic and Lugansk People’s Republic is only the beginning of a large-scale conflict between Russia and Ukraine. The two republics, located in the coal-rich Donbass region of eastern Ukraine, are now Moscow’s allies, which means Russia will openly support them if Kyiv does not end hostilities that erupted in 2014.

Ukraine has been firmly in the U.S. geopolitical orbit since violent neo-Nazi protests in Kyiv’s Maidan Square resulted in the 2014 overthrow of the allegedly pro-Russian president, Viktor Yanukovych. Yet, Russia did not attempt to help the then-Ukrainian leader stay in power. As Russian President Vladimir Putin said in 2018, Washington had asked him to persuade Yanukovych not to use force against “peaceful protesters.” Putin agreed. As a result, anti-Russian forces came to power in Kyiv, leading the people of the Donbass region to vote in favor of leaving Ukraine.

“I don’t think anyone can claim that the Ukrainian regime, since the 2014 coup d’état, represents all the people living on the territory of the Ukrainian state,” said Russian Foreign Minister Sergey Lavrov on February 22.

In 2014, however, Russia recognized the results of the Ukrainian presidential election, organized by the post-Maidan authorities. Lavrov even called newly elected President Petro Poroshenko the “best chance” for Ukraine. Eight years later, the Kremlin has completely changed its rhetoric on Ukraine. Now, Lavrov openly questions the very sovereignty of Ukraine, while Putin indirectly threatens to continue the process of fragmentation of the Eastern European country. In his speech on February 21, Putin said the Soviet Ukraine is the result of the Bolsheviks’ policy and can be rightfully called “Vladimir Lenin’s Ukraine.”

“You want decommunization? Very well, this suits us just fine. But why stop halfway? We are ready to show what real decommunizations would mean for Ukraine,” Putin stressed.

Does that mean Russia plans to seek pre-Bolshevik borders with Ukraine, which would include incorporating the Crimean peninsula into the Russian Federation?

From the Russian perspective, recognition of the Donbass republics will not resolve the problem Moscow has with Washington. The United States is using Ukraine merely as an instrument against Russia. This comes as the Kremlin uses its Donbass proxies as a tool against the U.S.-backed Ukraine in an escalation of a Cold War game between the two nuclear powers that was sparked with the 2014 Maidan events and Russia’s subsequent actions in Crimea and Donbass. But the latest developments suggest Moscow intends to raise the stakes. Quite aware Ukrainian authorities will never recognize the secession of breakaway provinces and will continue to fight, the Kremlin hardly has a choice but to eventually install a Russia-friendly regime in Kyiv.

Such an operation undoubtedly means war. But war is inevitable, one way or another. Russia has deployed troops to the newly recognized Donbass republics. If Ukrainian forces do not end hostilities, the Russian Army is in the very near future expected to engage in a direct confrontation against Ukraine. Given that the Eastern European country has received at least $200 million in U.S. “lethal aid” as well as other Western-made weapons over the past two months, it is not probable Kyiv will accept a new geopolitical reality. Ukraine is not in a position to refuse to accept Western arms and Ukraine has often said it would never capitulate to Russia. Refusing arms would mean a de facto capitulation to Russia.

The Inevitability of War

Sooner or later, the Donbass conflict will escalate. Shelling has increased along the entire front line, which seems to be part of preparations for a military offensive. Ukraine aims to restore its sovereignty over the Donbass, while the Lugansk People’s Republic demands Kyiv withdraw its troops from the entire Lugansk Oblast (region). Both republics control relatively small portions of Ukraine’s Donetsk and Lugansk Oblasts. Two-thirds of the regions are still controlled by Kyiv. Given that on May 12, 2014, a referendum on the status of Donetsk and Lugansk was held on the entirety of the two oblasts, it is entirely possible Moscow also sees the two republics as part of a much bigger territory than what is currently under control of the pro-Russian forces. Their final borders, however, are likely to be determined after a war.

For now, the region will remain in a state of limbo. If Ukraine breaks off diplomatic ties with Russia, something Ukrainian President Volodymyr Zelensky announced, it will be a clear indication the two countries are on the brink of war.

That several Western countries have moved their embassies from Kyiv to the western Ukrainian city of Lviv, and that around 10 airlines have canceled their flights to Ukraine, suggests the breakout of war is just a matter of time.

Nikola Mikovic is a Serbia-based contributor to CGTN, Global Comment, Byline Times, Informed Comment, and World Geostrategic Insights, among other publications. He is a geopolitical analyst for KJ Reports and Enquire.

This article was produced by Peoples Dispatch/Globetrotter News Service.

As Afghanistan’s economy continues to spiral, as many as 34 million Afghans are living below the poverty line, says a new UN report. The “Afghanistan Socio-Economic Outlook 2023” report released by the United Nations Development Programme (UNDP) on April 18 highlights the impact of cuts in international aid to Afghanistan since the Taliban took power.

The report notes that the number of people below the poverty line in Afghanistan has increased from 19 million in 2020 to 34 million today. It also adds, “Even if the UN aid appeal for international assistance to reach $4.6 billion in 2023 succeeds, it may fall short of what is needed to improve conditions for millions of Afghans.”

The UNDP report comes after the UN said that it was “reviewing its presence” in Afghanistan following the Taliban’s ban on Afghan women from working for the international organization earlier this month. The UN statement suggested that it may be planning to suspend its operations in the country.

The report also notes that Afghanistan is currently facing a severe fiscal crisis after the ending of foreign assistance “that previously accounted for almost 70 percent of the government budget.” A severe banking crisis also continues. In 2022, Afghanistan’s GDP contracted by 3.6 percent. The report adds that the average real per capita income has also declined by 28 percent from the 2020 level.

On May 1, the UN began holding crucial talks regarding Afghanistan in Doha. The participants include the five permanent UN Security Council members, countries in the region such as Pakistan, India, Uzbekistan, and Tajikistan, and key players such as Saudi Arabia and Turkey. Notably, the de facto Taliban government of Afghanistan was not invited to participate. “Any meeting about Afghanistan without the participation of the Afghan government is ineffective and counterproductive,” said Abdul Qahar Balkhi, Taliban foreign ministry spokesman.

Editor’s Note: The following is the writer’s analysis of Russia-Sudan relations.

Russia’s ambitious plans to establish a naval base in Sudan could soon be thwarted. The northeast African country is reportedly trying to “blackmail” Moscow by demanding a review of a deal allowing construction of a Russian naval facility on Sudan’s Red Sea coast.

In November 2020, the Kremlin announced plans to build a seaport technical facility in the city of Port Sudan, guaranteeing Russia’s first substantial military foothold in Africa since the former Soviet Union was dismantled. The two countries reached a deal that would allow Russia’s navy a 25-year lease in Port Sudan, housing up to four ships and 300 soldiers, in exchange for weapons and military equipment for the northeast African country.

But now, a Russian state news agency, RIA Novosti, reports Sudan wants to re-negotiate the deal. One Russian publication went so far as to call it “blackmail.” In exchange for providing the land for a naval base to Russia, Khartoum reportedly has asked Moscow to arrange payments to the country’s central bank during the first five years of the lease, with the option of extending the deal to 25 years.

The Kremlin has not yet responded to the proposal, although Russian Deputy Foreign Minister Mikhail Bogdanov said the two countries’ militaries continue negotiations on the creation of a naval logistics base for Russian warships in the Red Sea. Sudan’s officials, on the other hand, strongly deny their country has been trying to “blackmail” Moscow.

“It is not true. This news is not true. This is groundless news. The Sudanese side is not asking for any payments in connection with the military base agreement,” said Onur Ahmad Onur, charge d’affaires of Sudan’s embassy in Moscow.

Whether or not Sudan really asked Russia for financial compensation, the Kremlin’s struggle to improve its positions in northeast Africa is unlikely to be an easy one. Back in June, it became obvious Russia could face many obstacles in its attempts to establish a material-technical support facility in the strategically important region located between the Gulf of Aden in the south and the Suez Canal in the north. Such a facility could provide material support in the form of ships and soldiers and technical support in the form of command, control, communication, computer and intelligence operations.

On June 1, Sudanese Armed Forces Chief of Staff Muhammad Usman al-Hussein announced the revision of the agreement. About three weeks later, the Sudanese Minister of Defense Yasin Ibrahim Yasin traveled to Moscow to discuss Russian-Sudanese military cooperation with his Russian counterpart, Sergey Shoigu.

In an interview with Russian state-owned news agency RIA Novosti, Al-Mahdi openly stressed Sudan needs Russia’s help regarding the country’s dispute with neighboring Ethiopia, which is building the Grand Ethiopian Renaissance Dam (GERD)—a hydroelectric-power gravity dam on the Blue Nile River.

“Thanks to its good relations with Ethiopia, Russia can try to convince the Ethiopian side to listen to the voice of reason and come to an agreement that will not do harm to Sudan, as was the case when the dam was first filled,” Al-Mahdi said.

Khartoum fears Ethiopia’s apparent determination to fill the GERD would “threaten the lives of half the population in central Sudan.” In addition, the two countries have a decades-old border dispute, and some analysts claim Sudan and Ethiopia are on the verge of a wide-scale confrontation. It is worth noting Russia and Ethiopia signed a military cooperation agreement in July, and Kremlin officials claim the deal “does not have any destabilizing character.” However, Sudan recently seized Russian-made weapons—72 boxes of arms and night-vision binoculars—that were reportedly smuggled to Khartoum from Ethiopia. This was seen as an “attempt to destabilize the country.” It is entirely possible Russia is trying to balance between the two regional rivals, although Moscow could attempt to indirectly pressure Sudan to give the green light for the establishment of the Russian naval base in the Red Sea.

At this point, it remains uncertain if the Sudanese parliament will ratify the agreement on the Russian base in Port Sudan. Some Russian experts think the construction of a Russian military facility on the Red Sea is unlikely.

“Russia is not going to pay Sudan to host a base in Port Sudan,” said Dmitry Zakharov, head of the Eurasian Institute of Youth Initiatives. “Due to the unthinkable corruption in the African country, the Russian government has no desire to invest in such a project.”

Unlike the Kremlin, the United States seems willing to provide limited financial assistance to Sudan. On August 29, Sudan’s Ministry of Finance and the U.S. Agency for International Development (USAID) signed an agreement for a $5.5 million development grant to support “democratic transition” and to promote economic growth. This is part of a total estimated amount of $200 million to be granted by 2024.

Overall, it is Russia, rather than Sudan, that seeks to strengthen its geopolitical positions in the strategically important region. Thus, the coming days and weeks will show if Russia will adopt a more proactive approach regarding this sensitive issue. One thing is for sure: The naval base on the Red Sea would be just the first step in Russia’s ambitions plans to return to Africa, a region that has ceased to be in Moscow’s geopolitical orbit in the post-Soviet years.

Nikola Mikovic is a Serbia-based contributor to CGTN, Global Comment, Byline Times, Informed Comment, and World Geostrategic Insights, among other publications. He is a geopolitical analyst for KJ Reports and Global Wonks.