Russia v. USA, Israel v. Iran, Peru Elections, China Government Flexes and the Week in Review

Blog / Weekly Review

Russia v. USA, Israel v. Iran, Peru Elections, China Government Flexes and the Week in Review

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Adversaries. The Russian Navy is holding drills in the Black Sea and warned U.S. warships to stay away from Crimea “for their own good.” Russia’s Deputy Foreign Minister described the U.S. as an “adversary.” On Tuesday, U.S. President Joe Biden called Russian President Vladimir Putin to propose a summit to reduce tensions. Kremlin spokesman Dmitry Peskov said on Thursday that the issue was “still being analyzed” and that it would be impossible to organize a bilateral meeting quickly. On Thursday, the U.S. followed up with wide-ranging sanctions against Russia and expelled 10 Russian diplomats for their alleged role in 2020 election interference and the SolarWinds hack. The sanctions also prohibit U.S. financial institutions from participating in the primary market for ruble or non-ruble denominated bonds issued after June 14, 2021.

What it means: Remember, back in June, when we warned that U.S.-Russia relations were going to get worse under Biden? There’s a fundamental lack of understanding and trust between Washington and Moscow right now. The U.S. sees Russia as both a peer competitor/military threat in Eastern Europe and as an ideological threat to democracy. Russia thinks all this talk of ideology is nonsense and just wants some pragmatic, interest-based talks (that result in getting a chunk of, if not all of, Ukraine, which is a nonstarter for the U.S.). Russia and the U.S. actually have some common interests, but as long as mistrust and ideology continue to define the relationship, there’s no chance for any improvement in ties, and with the way Russia is deploying troops near the Ukrainian border, the chance of some kind of conflict, while still low, is rising.

Peru’s elections. Peru held the first round of its election and, it looks like Pedro Castillo and Keiko Fujimori will advance to a run-off. Castillo garnered just 18.9 percent of the vote to Fujimori’s 13.2 percent.

What it means: First of all, your weekly reminder to hop on over to to sign up for thrice-weekly updates on the most important geopolitical issues happening in Latin America. Castillo is a former teacher and union leader, as well as a self-professed Marxist and Leninist. It isn’t exactly surprising that Peruvians are desperate for change, but Castillo would represent a pretty radical shift, potentially include nationalizing key industries. Peru is the top-ranked global exporter of lead and the second-ranked global exporter of zinc and copper, so that is potentially a very big deal. The results also show how divided Peru is. At least 8 candidates garnered 5 percent of the vote. Rafael López Aliaga, an “an ultra-conservative member of Opus Dei who practices celibacy and says he wears a sackcloth to keep his physical desires in check,” garnered just 1.4 percent less of the overall vote than Fujimori. What a world we live in.

Kowtow. China’s State Administration for Market Regulation fined Alibaba Group 18.23 billion yuan (~$2.8 billion) for anti-competitive behavior. China’s Cyberspace Administration and Taxation Administration hosted officials from 34 Chinese tech companies and told them to “learn from Alibaba” and complete “comprehensive self-inspections” within a month. A number of Chinese companies published statements acknowledging the message and promising to fall in line with China’s regulators.

What it means: Alibaba’s punishment wasn’t as harsh as it could have been. This was more of a slap on the wrist – and a warning to China’s other tech companies. Just nine months ago, Chinese President Xi Jinping couldn’t get top officials from some of these companies to come to listen to him lecture entrepreneurs about the national duties. What a difference a few months and a strong policy push from the Chinese government makes. Alibaba and the others won’t be ignoring Xi’s directives again anytime soon. This emperor has plenty of clothes.

Israel and Iran. An Iranian government official said Israel was to blame for an explosion at Iran’s Natanz nuclear site, resulting in the destruction of the site’s electric grid, as well as a large number of centrifuges. Israel implied but did not publicly confirm that it was behind the attack. U.S. and Israeli officials met to discuss Iran policy going forward and the U.S. insisted it was not involved in the attack on Natanz.

What it means: Israel really, really doesn’t want the U.S. and Iran to rejoin the JCPOA.

Honorable mention

Unusually cold conditions in France led to three days of frost that reportedly affected 80 percent of French vineyards.

Canada canceled arms export licenses to Turkey for high-tech drone systems after concluding that Canadian technology was given to Azerbaijan in last year’s war over the disputed Nagorno-Karabakh region.

Panama’s Foreign Minister Erika Mouynes told Colombian Foreign Minister Claudia Blum that Panama was in danger of being overwhelmed by migrants seeking to cross from Colombia through Panama and on to (eventually) the United States and that “if action is not taken quickly.”

The United Kingdom and the European Union held technical discussions on disagreements over Northern Ireland that led to an official meeting between Commission vice president Maros Sefcovic and British negotiator David Frost.

The spokesman for the U.S. Embassy in Berlin reportedly said that the U.S. is “determined to use all available levers to prevent the completion of Nord Stream 2.”

Ecuador held a run-off presidential election between left-wing economist Andres Arauz and millionaire former banker Guillermo Lasso. Lasso won handily, securing 52.4 percent of the vote to Arauz’s 47.6 percent.

Turkey’s new central bank governor Şahap Kavcıoğlu kept interest rates unchanged after presiding over his first policy meeting.

Uganda and Tanzania signed a series of deals worth €3 billion with France’s Total and China’s Chinese National Offshore Oil Corporation to build a pipeline to carry Ugandan crude through Tanzania to the port at Tanga for export.

The African Union hopes to fund and build five research centers that could produce vaccines in and for Africa over the next 10-15 years, with a target of producing 60 percent of all vaccines used on the continent within the next 20 years.