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Russia strides into diplomatic void after Myanmar coup

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Myanmar’s military junta marked Armed Forces Day in the capital Naypyidaw with a parade featuring tanks, missiles and a flyover of military aircraft, including Russian-made MiG-29 combat jets.

Seven Asian countries sent low-profile delegations to the event hosted by coup leader General Min Aung Hlaing last week. But the highest-ranking official to attend was from further afield: Alexander Fomin, Russia’s deputy defence minister.

Russia is striding into a diplomatic void left by the world’s other leading powers, as they deliberate over whether — and to what extent — to engage with the junta that on February 1 seized power from Aung San Suu Kyi’s democratically elected government. Moscow’s attitude has echoes of its 2015 decision to lend military support to President Bashar al-Assad’s pariah regime in Syria, helping to turn the tide of the civil war in the dictator’s favour.

“In terms of appearance, yes, it’s a big middle finger to the west: ‘We can do what we want’,” said Alexander Gabuev, chair of the Russia in the Asia-Pacific Program at the Carnegie Moscow Center, of the decision to send a top official to Naypyidaw. 

As Min Aung Hlaing surveyed his troops last weekend, an estimated 169 people were killed by the regime, including at least 14 children, a nurse and a Mandalay snack vendor who was shot and burnt alive by troops, according to local media.

The conflict has showed signs of broadening into an international one in recent days, as refugees escaping air strikes in an area of eastern Myanmar controlled by an ethnic Karen militia army fled into Thailand. Three other minority armed groups said they planned to join what they called the “spring revolution” being fought in Myanmar’s cities if the military did not stop its killing, according to Reuters.

Demonstrators displaying an anti-fascist banner during a protest in Yangon
Protests against the coup have continued, despite an intensifying military crackdown that has been condemned by much of the international community © STRINGER/EPA-EFE/Shutterstock

“Myanmar could easily become a failed state within a matter of months, with violent urban unrest, a fast escalation of ethnic-based armed conflicts, and a widespread humanitarian emergency,” said Thant Myint-U, a historian and author. “The economy is in freefall, imperilling the lives and livelihoods of tens of millions of people.” 

Russia’s decision to deal openly with a government most of the world has shunned was opportunistic, driven largely by the prospect of increased arms sales, analysts said. But Moscow also has less to lose from the worsening civil conflict than Myanmar’s Asian neighbours.

“Myanmar is not on Russia’s doorstep, so they don’t have to worry about the fallout, and don’t have to deal with the refugee crisis,” said Hervé Lemahieu, director of the Power and Diplomacy Program at the Lowy Institute, an Australian think-tank. 

Moscow’s ties with Myanmar date to the country’s former military regime and continued during the decade of democracy. Russia has been courting closer political and economic ties with Asian countries since being targeted by western sanctions after Moscow’s 2014 annexation of Crimea.

Fomin has longstanding relationships with Myanmar officials due to his former job as head of the defence ministry’s military-technical co-operation department. He helped to sell some of the Russian hardware displayed in the armed forces parade.

Russia is Myanmar’s second-largest supplier of weaponry after China, according to the Stockholm International Peace Research Institute, a think-tank. Myanmar’s military is awaiting delivery of six Sukhoi Su-20 advanced fighter jets ordered in 2019 and the two sides signed contracts for a Russian air defence system and a suite of tactical surveillance drones in January, according to the Centre for Analysis of Strategies and Technologies, a Moscow-based defence think-tank. 

Bar chart of trend-indicator value* (2010-20, $bn) showing top arms exporters to Myanmar

“They see an opening here to increase their market share at the expense of China and others,” Gabuev said. “Even if there is a democratic government in the future, the more you sell now, the more you lock the armed forces into training programmes and additional sales.” 

Moscow’s gambit in Myanmar also underscores the disarray and mixed messages emanating from the wider international community after the coup. 

The US has been most blunt in denouncing the junta’s seizure of power, imposing sanctions on top military officials and their businesses. Washington also froze a trade deal with Myanmar this week. Japan, Myanmar’s biggest aid donor, suspended new development assistance in what its foreign minister called a “clear position”. 

However, India and China, Myanmar’s big neighbours, have been more reserved in their public remarks and sent representatives to the military parade. 

Beijing, which had good relations with Aung San Suu Kyi’s government, has been particularly guarded in its public stance after widespread anti-Chinese sentiment erupted among anti-coup protesters.

Beijing’s most forceful remarks came last month, when the foreign ministry voiced concern about “the safety of Chinese institutions and personnel” after some garment factories in Yangon were set alight. 

The junta will be seeking new business partners in Russia and elsewhere as more sanctions are imposed, investors withdraw and credit lines dry up. “We are waiting for your businessmen,” Min Aung Hlaing told the editor of Moskovsky Komsomolets, a Moscow-based newspaper, who was part of the Russian delegation. 

Moscow, said analysts, has made an early bet on what it believes is the likelier winning side. 

“Russia is gambling that the army will prevail,” said Thant Myint-U. “It’s a low-risk gamble as Russia has little to lose if Myanmar descends into civil war, but if the army holds on to power Moscow will have a new friend on the Indian Ocean.” 



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Western unity is key to dealing with Russia

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In the army bases of southern Russia and the airfields of annexed Crimea, troops and tanks, helicopters and fighters are massing once again. The Pentagon says Russia’s military build-up on the borders of neighbouring Ukraine is bigger even than before its armed intervention in 2014-15; German chancellor Angela Merkel on Tuesday called the situation “extremely tense”. America’s ambassador to Moscow is flying home for consultations. What western countries say and do now may determine just how far Russian president Vladimir Putin is prepared to go.

The Kremlin critic Alexei Navalny, meanwhile, lies gravely ill in a prison hospital, after a three-week hunger strike. The opposition leader was jailed on a spurious pretext after his bold return to Russia from Berlin where he recuperated from an attempt to assassinate him using the novichok nerve agent. Half a million Russians have registered online to take part in protests in Navalny’s support on Wednesday, hours after Putin makes a State of the Union address.

Russia’s military manoeuvres near Ukraine, however, are far more than a diversionary tactic from the Navalny affair and domestic disquiet over a stagnant economy. The Kremlin is determined to prevent the integration into the west of what it views as a Slavic brother state and strategic buffer zone. The Minsk II accord that president Petro Poroshenko signed in 2015, his forces pinned down by Russian-led militias in eastern Ukraine, seemed to give Moscow leverage. It promised the breakaway Donbass republics a place in Ukraine’s power structures and an effective veto on its political course.

Six years on, much of the Minsk deal is unimplemented by either side, and Volodymyr Zelensky, the comic actor who succeeded Poroshenko as president in 2019, has proved less biddable than Moscow expected. Putin, some longtime Russia watchers suggest, wants closure. Only he and his inner circle know his real intentions, but Russia has proved ready both to rattle sabres to scare neighbours into concessions, and to use force directly — even in the heart of the European continent.

As they seek to respond to Russia’s challenges on multiple fronts, the first priority for western democracies must be clarity and consistency of messaging and action. French president Emmanuel Macron’s attempts at “trust-building dialogue” with Putin in recent years, though well intentioned, yielded little but muddied the diplomatic waters. For all Merkel’s concerns, her government still supports the Nord Stream 2 pipeline that will deliver more Russian gas direct to Germany.

It is vital the US and its allies are united in stressing that further Russian aggression towards its sovereign neighbour of more than 43m people would carry substantial costs. They should make clear their willingness to supply lethal and non-lethal military aid to Ukraine if it is attacked, including anti-tank and other defensive systems. Though Nato countries are rightly wary of being sucked into a conflict with a nuclear-armed Russia, they should be ready to strengthen their own forces in south-east Europe as a deterrent.

The US and EU should be ready, too, to step up economic sanctions. President Joe Biden last week banned US financial institutions from buying new Russian sovereign debt as punishment for alleged cyber hacking, signalling a willingness to use the US financial system against opponents. European countries should redouble efforts to reduce reliance on Russian fossil fuels, including finally blocking Nord Stream 2. If the west wants to appear serious about preventing Russia’s leader from trampling on international norms, it must be prepared to bear some costs.



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Toyota faces Thai bribery probe over tax dispute

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Toyota is under investigation in Thailand over allegations that consultants hired by the world’s largest carmaker tried to bribe local officials in a tax dispute, according to Thai authorities, court documents and a person with knowledge of the matter.

The probe followed a filing last month in which Toyota revealed that it had reported “possible anti-bribery violations” related to its Thai subsidiary to the US Department of Justice and Securities Exchange Commission.

Toyota is one of the biggest foreign investors in Thailand, where it makes a large range of cars, vans and pick-up trucks for the local market and for export. The country is Toyota’s biggest manufacturing hub in south-east Asia. Prior to the Covid-19 pandemic, car sales had been strong in a market, where it has a 31 per cent share.

This month, Thailand’s Court of Justice said in a statement that it would take action against any of its judges found to have taken bribes. The statement, which the court described as a move to “clarify facts” in a news report on a foreign website, directly referenced a tax dispute involving Toyota.

“If the Court of Justice has received information or explicitly found that any judge committed an act of corruption to their duty, whether it is about bribery or not, the Court of Justice will resolutely investigate and punish any action which dishonours judges, undermines the neutrality of the court, or causes society [to] lose faith in the Thai justice system,” it said.

According to the court, the case involved a tax dispute worth Bt10bn ($320m) between Toyota Motor Thailand and tax authorities over imports of parts for its Prius hybrid model. 

The affair dates back to 2015, when Toyota’s Thai subsidiary was accused by local customs authorities of understating taxes by claiming that the imported Prius vehicles were assembled from completely knocked down kits, or imported parts that were later assembled in Thailand.

CKDs would have been subject to a discounted tax rate under a Japanese-Thai free trade agreement, but if the cars were fully assembled before being imported they would have attracted a much higher rate. 

Toyota appealed against a decision by customs authorities to impose a higher duty in 2015, but lost. 

Thailand’s Court of Justice has said that it had accepted a petition to review the case, but had not yet begun hearing it.

In its regulatory filing last month, Toyota warned that the US investigations regarding its Thai subsidiary could result in civil or criminal penalties, but the company has not disclosed any detail on the allegations.

In a statement, Toyota said it was co-operating with the investigations and declined to comment on the tax dispute in Thailand. “We take any allegations of wrongdoing seriously and are committed to ensuring that our business practices comply with all applicable government regulations,” it said.

The SEC and the DOJ declined to comment.



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Boris Johnson cancels India trip after Covid cases surge in country

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UK prime minister Boris Johnson’s trip to India this month has been cancelled as the country battles a new variant and a surge in coronavirus cases that is overwhelming hospitals.

A joint statement by the British and Indian governments said the decision to scrap the visit scheduled for next week was prompted by the “current coronavirus situation”.

The trip, during which Johnson had hoped to discuss the prospects of a closer trading partnership with India, was initially planned to run for four days but had been scaled back. The two leaders will speak remotely instead, with plans to meet in person later this year.

The cancellation came as India’s capital city region has been put under lockdown and authorities have prohibited the use of oxygen except for essential services, as the country battles a surge in coronavirus cases that is overwhelming hospitals.

India continues to set single-day records of coronavirus cases, reporting more than 273,000 new infections and 1,619 deaths on Monday, with the number of new cases growing by an average of 7 per cent a day, one of the fastest rates in any big country.

The surge is believed to be linked to a new B.1.617 variant that was first discovered in the country.

British health officials are investigating whether the variant should be reclassified from a “variant under investigation” to a “variant of concern” following the discovery of 77 cases in the UK.

“To escalate it up the ranking we need to know that it’s increased transmissibility, increased severity, or vaccine-evading, and we just don’t have that yet, but we’re looking at the data on a daily basis”, Dr Susan Hopkins, a senior medical adviser at Public Health England, said on Sunday.

Officials in Delhi announced it would impose a strict lockdown for a week, following Mumbai and other cities that have already placed curbs on movement.

States are running short of beds, drugs and oxygen, leading the central government to restrict use of the gas. “The supply of oxygen for industrial purposes by manufacturers and suppliers is prohibited forthwith from 22/04/2021 till further orders,” the central government said.

Arvind Kejriwal, chief minister of Delhi, said “oxygen has become an emergency” in the region because its quota had been diverted to other states. He warned there were “less than 100 ICU beds” available.

The new restrictions have been imposed even as Prime Minister Narendra Modi and his ruling Bharatiya Janata party have hosted huge political rallies and allowed religious festivals attended by tens of thousands of maskless people in recent weeks.

Amit Shah, India’s home minister, told the Indian Express newspaper that he was “concerned” about the variant and the “surge is mainly because of the new mutants of the virus”. But he was “confident we will win” over the disease and said there was not yet a need to impose a national lockdown.

Bed shortages in India have forced authorities to re-establish emergency coronavirus hospitals in banquet halls, train stations and hotels that had been shut down following the previous peak in September. Crematoriums in the state of Gujarat and Delhi are running 24 hours a day, while cemeteries are running out of burial spaces.

Coronavirus patients have also been struggling to access medicines. More than 800 injections of remdesivir, an antiviral drug commonly used in India as part of Covid-19 treatment, were stolen from a hospital in Bhopal, Madhya Pradesh, at the weekend.

India is also facing a vaccine supply crunch and has frozen international exports of jabs to meet domestic demand. New Delhi pledged on Friday to increase monthly production of Covaxin, a vaccine made by Indian manufacturer Bharat Biotech, to 100m from 10m by September. The government also said last week that it would fast-track the approval of foreign vaccines in an attempt to boost supply and cleared Russia’s Sputnik V for use in the country.

The majority of the more than 120m Indians that have been vaccinated have received the Oxford/AstraZeneca jab manufactured by Serum Institute of India, the world’s largest manufacturer. The Serum Institute has struggled to increase its monthly capacity of more than 60m doses a month due to a fire at its plant earlier in the year and equipment supply shortages from the US.

Additional reporting by John Burn-Murdoch in London





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