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4 or 5 Eyes Eye 5G, South Caucasus Ruckus and the Week in Review

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4 or 5 Eyes Eye 5G, South Caucasus Ruckus and the Week in Review

Remember to check out the latest episode of The Perch Pod: Dario Fabbri from the Italian geopolitical journal Limes joined us to argue with Jacob about Germany and to talk about the future of the European Union. Click here to listen. Also if you are desperate for more Perch in your life, you can check out Jacob’s interview on Bloomberg earlier this week by clicking here or the video podcast Jacob appeared on to talk about the chaos in the United States by clicking here. Finally, happiest of birthdays to Dana Baruch, the best Senior Strategic Adviser in all the land! Take care and stay safe out there, y’all.

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And then there were four? The United Kingdom is banning Huawei from the UK’s 5G network and requiring all current Huawei technology and equipment to be stripped from its telecoms network by 2027 at an estimated cost of £2bn. Meanwhile, New Zealand’s Minister for the Government Communications Security Bureau (GSCB), reportedly said that, “New Zealand does not ban any telecommunications vendor.”

What it means: There is a lot to unpack here, so let’s dive right in. The “Five Eyes” is the informal name of the intelligence-sharing alliance that exists between the UK, Australia, New Zealand, Canada, and the United States. As far back as December 2018, intelligence officials from these countries were meeting and attempting to convince their political leaders that Chinese-made telecoms gear, especially made by Huawei, represented a global national security threat.

In the years since, Australia and the United States have both banned Huawei and ZTE from their respective wireless networks. Canada has been more coy in terms of its official government policy but in practice, Huawei has found itself blocked there too. The British government took a different approach, at least initially. On the advice of the country’s National Cyber Security Centre (NCSC), the UK decided that it could manage the risk posed by Huawei as long as it maintained rigorous oversight over Huawei and restricted the parts of the telecoms system its gear could be used. As for New Zealand, it appeared to have banned Huawei last year as well.

What changed for the UK? Simply put, the United States made its risk mitigation strategy untenable. When the US restricted Huawei’s ability to use U.S. technology and software in the design and manufacture of semiconductors, it essentially made it impossible for chipmakers to supply Huawei and not avoid U.S. sanctions. By blocking Huawei’s access to these semiconductors, the NCSC assessed that Huawei’s ability to build products with state-of-the-art microchips would be severely damaged – and the engineering and reliability problems that emerged, as a result, meant the UK mitigation strategy had become untenable.

The UK did not want to take this step but felt it had no other choice. After the decision was announced, Huawei taunted the UK for moving “into the digital slow lane.” Huawei isn’t wrong about that – but Huawei also finds itself slowing down as well. Indeed, as a result of the U.S. moves, there is no digital fast lane anymore, as entire industries, supply chains, and companies have to be modified or even effectively started from scratch. Up to now the U.S.-China trade war has been more shadowboxing than true conflict, but the U.S. has upped the ante in the last few months and 5G rollouts everywhere in the world are going to slow down as a result.

As for New Zealand: relations between the US and New Zealand have been difficult before. In 1985, the United States suspended its security guarantee to New Zealand under the ANZUS treaty because the New Zealand government passed legislation to make New Zealand a nuclear-free country and thereafter refused a port visit by the USS Buchanan. China would love to sow more seeds of discord between New Zealand and the US, but the statement that New Zealand does not ban vendors should not be read as an embrace of Huawei. New Zealand, like the UK, has its own risk mitigation strategy, and no New Zealand telecoms providers are using Huawei in their 5G networks even if New Zealand telecoms companies have not explicitly ruled out using Huawei.

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What is going on in the South Caucasus? With the exception of Wednesday, there has been ongoing fighting between the Azerbaijani and Armenian militaries since the beginning of the week. Azerbaijan accuses Armenia of starting the conflict and Armenia accuses Azerbaijan of starting it. Most confusingly of all, the fighting is nowhere near the disputed territory of Nagorno-Karabakh, but farther north on the border between the two countries near Armenia’s Tavush province. At one point during the week, thousands of Azerbaijanis reportedly took to the streets to call for war against Armenia until dispersed by Azerbaijani security forces. As of writing, at least 16 soldiers have been killed, including an Azerbaijani Major-General and Colonel.

What it means: There is no reliable information available at this point over who started the conflict or what their objectives were. The first thing we would insist our readers take to heart is to take whatever they are reading or consuming on this issue with a grain of salt.

The second and more important thing to watch is the countries surrounding Armenia and Azerbaijan and what they do. Turkey has repeatedly announced its steadfast support for Azerbaijan. Russia, which generally speaking backs Armenia, has urged restraint on the part of both sides and offered to mediate between them. Iran has also pushed for restraint. How these countries approach the conflict going forward may well determine whether the fighting fizzles out or escalates even more.

That makes us slightly nervous, especially considering Turkey and Russia are on opposite sides of the ongoing civil war in Libya and have reached an uneasy understanding in coordinating their respective involvements in Syria. If both sides are not careful, the situation could very easily become another proxy conflict with Moscow and Ankara on opposite sides and with Iran facing the difficult challenge of being on all sides and on no one’s side at the same time. Not to mention ships in Iranian ports are spontaneously combusting, which is no doubt putting the Iranian government on edge.

It is also hard not to wonder whether COVID-19 disruptions are causing these sorts of border skirmishes and conflicts. We cannot say definitively for sure one way or the other, but between the deepening of Libya’s civil war, the India-China border spat, and now this Azerbaijan-Armenia border spat, there seems to be an awful lot of unease in the world right now, some of which is being expressed kinetically. No doubt at least part of the reason is the emergence of a more multipolar and competitive world and the continued recession of the U.S. role in that world, especially with the US firmly focused on its rapidly escalating trade war with China.  

Armenia and Azerbaijan should be able to deescalate their most recent spat sooner or later, but then again, there is still no clear reason why Armenia and Azerbaijan should have had a border spat right now. For now, all bets are off until more solid information is available.

Honorable mention

The General Court of the European Union (GCEU) annulled a 2016 European Commission (EC) decision that would have required Apple to pay €14.3bn (€13.1bn in back taxes and €1.2bn in interest) to Ireland.

Ethiopia said it began filling the Grand Ethiopian Renaissance Dam…only to clarify that it had not actually started even as Sudan claimed that the Nile’s water flow was significantly reduced.

U.S. Secretary of State Michael Pompeo updated the Countering America’s Adversaries Through Sanctions Act to include Nord Stream 2 and Turkstream2 and told companies involved in either project to “get out now or risk the consequences.”

Chinese and Indian army commanders met for over 14 hours and appeared to make progress towards de-escalating their border spat, though Indian media reported that withdrawal of deployments around Pangong Lake were still incomplete.

The Yahoo News report that the Trump Administration gave authorization to the Central Intelligence Agency to authorize its own covert cyber operations against countries including China, Russia, North Korea, and Iran is truly disturbing.

Reuters reported Foxconn was planning to invest $1 billion to expand a factory in southern India while Google announced it planned to invest $10 billion in India over the next five to seven years.

Incumbent Polish President Andrzej Duda narrowly defeated challenger and current Mayr of Warsaw Rafał Trzaskowski in the second and decisive round of Poland’s presidential elections by a margin of 51 to 49 percent.

The local administration for the Quissanga district in Cabo Delgado province in Mozambique has been forced to leave Quissanga and take up residency in the Metuge district due to the threat posed by Islamist insurgents.

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