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Diplomacy
The Sino-Russian biotechnology collaboration

Global implications of the Sino-Russian biotechnology collaboration

by Shravishtha Ajaykumar

The Sino-Russian biotechnology collaboration, augmented by its strategic focus on pharmaceuticals and economic growth, has called for a global concern on the future of globalisation. In 2019, China and Russia reinforced their collaboration in scientific innovation and technology. This collaboration, traced back to the 1990s, was relaunched in a signed letter by Chinese President Xi Jinping in March 2023, before he visited Russia. In 2021, Russia and China launched their lunar research and exploration roadmap. The collaboration between these two countries has also included remote sensing, electronic components for space flight applications, and space debris monitoring. In nuclear technology and energy cooperation, the two countries have undertaken the construction of the seventh and eighth power units. The Tianwan Nuclear Power Plant's third and fourth power units of the Xudabao Nuclear Power Plant in China were launched in May 2021. Additionally, the countries have promised the completion of a cross-border pipeline to supply natural gas across the Beijing, Shanghai and Tianjin routes. Additionally, the Russia-China Investment Fund was established by the Russian Direct Investment Fund and China Investment Corporation. Much of the funding and investments upcoming in this area of collaboration between China and Russia are attributed to the Belt Road Initiative, which is expanding research in university research centres in biology, material sciences, and space exploration. This history of cooperation underpins a strategic convergence towards the biotechnology sector, as both nations recognise the potential of this field to not only drive their scientific advancement but also reshape the global scientific landscape. There are multifaceted dimensions of the Sino-Russian biotechnology collaboration, delving into its historical roots, far-reaching implications, hurdles, and potential consequences, including its impact on biowarfare and biosecurity. China has outlined biotech goals in its Made in China 2025 strategy, including innovative medicine. Similarly, Russia released its Pharma 2030 strategy in December 2021. This strategy aims to enhance the production of medicine and medical equipment and innovation, One of the pivotal domains of this collaboration lies in genetics and genomics. The immense genetic diversity within both nations provides an unprecedented platform for joint research to unravel the intricate genetic underpinnings of various diseases. By pooling their vast resources, expansive datasets, and scientific expertise, China and Russia can accelerate the pace of genomic research and chart the course for personalised medicine and innovative approaches to disease prevention. This has implications for their populations and the broader global healthcare and biotechnology innovation landscape. Both countries have seen an increase in biotechnology capacities in the last decade. China, for example, has a biotechnology market value of nearly USD 4 billion as of 2021. Similarly, Russia has also begun expanding research and market investment in biotechnology, especially since the advent of their SARS-Cov vaccine, Sputnik V. Though Russia’s market expansion is yet to grow to compete with other larger economies, its collaboration with China may indicate future growth in this area. Despite limitations in their national biotech industries, Russia and China have increased collaboration in the field of biotechnology; one notable example includes the Russian company Biocad and Chinese manufacturer Shanghai Pharmaceuticals Holding (SPH) collaborating to commercialise medicines in the Chinese market. This venture received significant funding, with SPH holding 50.1% and Biocad 49.9%.Global ImplicationsHowever, the growth of Chinese and Russian biotech programmes and their collaboration has sparked concerns in other countries. Many countries, including the United States (US), highlighted them as countries to monitor due to “unreliable information”, as stated in the Biodefence Posture Review 2023. In 2022, the US released a renewed National Biodefence Strategy and Implementation Plan and its Biodefence Posture Review 2023. The 2023 Biodefence posture review highlights the need for a biosecurity approach to biodefence. Similarly, the United Kingdom (UK) has released a biological security strategy, where the Russian invasion of Ukraine has been highlighted in a case study linked to an increase in the Avian Flu. Outside of concerns directly related to Russia and China, these strategies, including India’s Biosafety Manual for Public Safety Laboratories, highlight a pressing need for biowarfare preparedness and underscores the significance of collaboration in the biotechnology realm to address non-reported activities or non-state actors and bioterrorism. In response to the global shift in investment and innovation into biotechnology, preceded by the concerns of the pandemic and the potential for future pandemics, other regions, including the European Union and Africa, are also prioritising biosafety and biosecurity strategies. Biosafety and Biosecurity are growing concerns for nation-states in the coming decade, so many have highlighted these areas in their strategies. However, with collaborations between countries attributed to unreliable, this strategy must also consider responding to misinformation and malintent.Responding to Sino-Russian collaborationAs the potential threat of biowarfare looms, strategies are not enough and collaborative efforts of larger economies can prove to become pivotal in developing advanced strategies for detecting, preventing, and mitigating bioterrorist threats. Their combined expertise in genetics and biotechnology offers the potential to create rapid response systems, advanced diagnostics, and countermeasures against potential biowarfare agents. Such collaboration can address strategies' applications and concerns around Sino-Russian cooperation, non-state actor threats and future pandemics. Creating a collaborative bilateral alliance between India and the USA in the field of biotechnology growth and innovation can help counter the potential of the Sino-Russian collaboration that does not inhibit global development but still prioritises the needs of other economies. Such an alliance can also be developed under multilateral partnerships like the Quad (Quadrilateral Strategic Alliance (India, Japan, Australia, US)) or I2U2 (India, Israel, UK, US). We have already seen India progress in the global market with collaborative advancements in vaccine development. The same expanded diagnostics and surveillance technologies testify to their commitment to international security and preparedness.  They provide the global south and upcoming economies with a more significant platform to compete with economies like Russia and China. The journey of Sino-Russian biotechnology collaboration, specifically emphasising biowarfare preparedness, is challenging. Geopolitical considerations, intricacies surrounding medical innovation, trade and investment, and the complexities of regulatory harmonisation necessitate navigation. Sustaining the success of this collaboration demands cultivating further global partnerships between other countries at bilateral/trilateral levels, mutual trust, equitable resource allocation, and sharing knowledge in an atmosphere of camaraderie.ConclusionThe recent strides taken during the COVID-19 pandemic highlight the urgency and effectiveness of global cooperation in addressing emerging infectious diseases and bioterrorist threats. The international community witnessed how rapid vaccine development and distribution can be achieved through collaborative cross-border efforts. Joint initiatives are poised to yield breakthroughs in biopharmaceuticals, regenerative medicine, bioinformatics, and biowarfare preparedness. The Sino-Russian biotechnology collaboration, augmented by its strategic focus on pharmaceuticals and economic growth to space and BRI applications, has called for a global concern on the future of globalisation. Additional concerns around biowarfare preparedness symbolise the evolving landscape of scientific partnership and balancing the same with geopolitical alliances. By harnessing their complementary expertise in genetics, genomics, healthcare, and biowarfare preparedness, China and Russia stand poised to redefine the contours of the biotechnology industry, revolutionise global health outcomes, stimulate economic growth, and enhance global security. As they adeptly navigate challenges and seize the opportunities that lie ahead, other leading economies, including India, must also further their growth in biotechnology and address global markets through collaboration.

Energy & Economics
Italian Prime Minister Giorgia Meloni during her speech at COP28 for the High-Level Segment for Heads of State and Government.

President Meloni's speech during the COP28 High-Level Segment for Heads of State and Government

by Giorgia Meloni

Dear colleagues, Dear guests, This Summit, for which I thank the leadership of the United Arab Emirates, is a key moment in our efforts to contain global temperature rise to within 1.5°C. We have reached the first Global Stocktake, and while there are reasons to be optimistic, the goal remains far off. COP28 must be a turning point. We are called upon to set a clear direction and enact concrete actions – reasonable but concrete - such as tripling the world’s renewable energy generation capacity by 2030 and doubling the global rate of annual energy efficiency improvements, as also outlined by the Presidency. Italy is doing its part in the decarbonization process, and it does it in a pragmatic way, that means with a technology-neutral approach, free from unnecessary radicalism. My idea is that if we want to be effective, if we want environmental sustainability that does not compromise the economic and social sphere, what we must pursue is an ecological transition, and not an ideological one. We are gradually replacing coal-fired power generation with renewables, we have adopted a new Energy and Climate Plan, and we are investing resources and attention on biofuels, so much so that we are among the founders of the Global Biofuels Alliance. In the European context, we have charted a path to carbon neutrality by 2050 and to reduce emissions by at least 55 percent by 2030. But we are also committed to ensuring, through the EU "Fit for 55" program, a multi-sectoral approach that strengthens labor markets and mitigates the impact on our citizens. And this is an essential point, because if we think that the green transition can result in unbearable costs, particularly for the most vulnerable, we condemn it to failure. Italy intends to direct an extremely significant share of the Italian Climate Fund – whose overall endowment is 4 billion euro – to the African continent. Not, however, through a charitable approach, because Africa does not need charity. It needs to be put in the condition to compete on an equal footing, in order to grow and prosper thanks to the multitude of resources that the continent possesses. A cooperation between equals, rejecting paternalistic and predatory approaches. Energy is one of the cornerstones of the Mattei Plan for Africa, the cooperation and development plan on which Italy is working with great determination to build mutually beneficial partnerships and support the energy security of African and Mediterranean Nations. And we are also, in this way, working towards becoming a strategic hub for clean energy, by developing the necessary infrastructure and generation capacity, in our homeland and in the Mediterranean. After the Rome Conference on Development and Migration, two new financial instruments were established to address the root causes of migration, combat human traffickers, and guarantee the right not to emigrate. We will continue to support the Green Climate Fund also in the next cycle, and as I’ve already announced yesterday, we will contribute with 100 million euro to the new loss and damage fund, strongly pursued by the Emirates’ Presidency. And all these priorities will also be at the heart of Italy's G7 Presidency, in 2024. I want to thank, in conclusion, the Emirati Chair and Sultan Al Jaber and express my congratulations for a COP28 of absolute success. We are all aware, colleagues, that many of the efforts we are making today will likely produce visible results when many of us no longer have roles of responsibility. But doing it anyway – not for ourselves but for those who will come after us – defines the value of our leadership. As Warren Buffet wrote, "There is someone sitting in the shade today because someone else planted a tree long ago." Thank you.

Defense & Security
A plane of the Russian airline Aeroflot takes off.

War in Ukraine Disrupts Russian Civilian and Commercial Aviation

by Hlib Parfonov

Originally published by Hlib Parfonov at The Jamestown Foundation on 13. December 2023 Publication: Eurasia Daily Monitor Volume: 20 Issue: 190 Over the past month, as many as ten forced landings of civilian aircraft have taken place in Russia. The most serious of these happened over the past week. On December 7, a fire on board an Aeroflot Airlines Boeing 777 forced the aircraft to make an emergency landing. The plane was flying from Kamchatka to Moscow when a passenger noticed smoke coming from under his seat. The preliminary investigation attributed the fire to a short circuit of wiring in the main cabin (T.me/aviatorshina, December 7). That same day, a Tu-204S cargo plane of Aviastar-Tu Airlines with registration number RA-64024 was returning from Zhengzhou airport in China. After takeoff, the pilot reported to air traffic controllers that the left engine had stalled and requested an emergency landing at Ulan-Ude airport (Ruavia.su, December 7). And on December 8, a Siberian Airlines Boeing 737 traveling from Novosibirsk to Moscow made an emergency landing in Tolmachevo. Immediately after takeoff, both of the aircraft’s engines caught fire (T.me/aviatorshina, December 8). These incidents highlight growing problems for Russia’s civilian and commercial aviation. Many of the technical difficulties are tied to Western sanctions prohibiting the import of critical components for the proper maintenance of aircraft. The recent forced landings represent another example of the war in Ukraine increasingly being brought home to Russia. Western sanctions and a critical shortage of technical personnel have hampered Russian civilian aviation since the beginning of the war (see EDM, July 3, September 8). Due to a lack of specialists and necessary spare parts, negligence of management, and Moscow’s fundamental departure from the rules for servicing foreign-made aircraft, much of the Russian civilian fleet could be grounded over the next year, with few prospects for reversing that trend. This is evidenced by the fact that, compared to 2022, the number of flight delays for the Urals MTU of the Federal Air Transport Agency (Rosaviatsia) increased by 44 percent this year (880 in 2023 compared to 490 in 2022). At the same time, there have been 739 cases of flights being unable to depart on time due to technical malfunctions (Insightnews.media, December 7). The lack of access to software updates and proper technical advice, as well as skipping regular maintenance intervals, have led many of Russia’s civilian aircraft to gradually break down. Most often, engines, landing gear, and brakes are the first to fail. Problems with flaps, air conditioning and de-icing systems, or internal wiring are less common but have been seen increasingly in recent weeks. Thanks to the Kremlin’s orders not to record any defects in pilots’ logbooks, all civilian aircraft appear to be perfectly serviceable on paper (Insightnews.media, December 7). Moscow’s problems with domestic aviation extend beyond civilian flights to the commercial sector. Russia’s air freight industry is stagnating fast, as it is dominated by the outdated Soviet Ilyushin Il-76 and Ukrainian Antonov AN-24 and AN-26 cargo aircraft. On November 8, the Federation Council held a roundtable discussion on the state of the country’s air transit capabilities (Gazeta.ru, November 9). Some participants expressed fear that up to 25 percent of the commercial fleet will be inoperable in less than five years. The average age of Russian commercial cargo aircraft is 50 years old. These aircraft have not been properly upgraded and maintained due to the mass transfer of foreign aircraft to Russia before the war; the lack of economic feasibility in completing such an overhaul, with costs estimated at billions of rubles; and the inability to gain access to necessary parts to upgrade the Ukrainian cargo planes. The repercussions of Moscow’s war against Ukraine have forced Russian operators to pay minimal attention to the maintenance of civilian and commercial aircraft. While companies can still source some spare parts for the 50-year-old aircraft, they have run into problems tracking down components for more modern equipment, such as parts for Motor Sich engines. In another example, the aircraft of Abakan Air, which operates international flights for Russian entities and provides transportation services for clients from other countries, are constantly out of order. According to internal documents, engines, air conditioning systems, and even radios often fail, and the company has been unable to bring in the necessary parts and technical expertise to solve these issues (24tv.ua, December 5) Similar problems also extend to helicopter aviation. The main bottleneck involves flagging production of modern engines. For example, in April, Russian Minister of Trade and Industry Denis Manturov announced that a shortage of VK-2500 engines was slowing down the production of Mi-8 transport helicopters. For VK-2500 engines, only a single production center was created in St. Petersburg, with a maximum volume of 200 engines annually. Manturov pointed out that Russian officials had tried increasing the volume to 300, though production has struggled to keep up. Today, demand sits at over 500 for these engines (Interfax, April 11). In addition, extending the service life of transport helicopters has further hurt the industry. As early as 2022, Russian airline Utair asked Rosaviatsia to extend the maximum allowable service life of engines for the Mi-8 and Mi-172 helicopters. The airline asked to increase the period from 7,500 to 9,000 hours, arguing that “the resource condition of TV3-117 engines” is already close to the maximum permissible level. According to aviation experts, such a request is madness and will likely lead to more serious technical issues in the near future (RBC, August 16, 2022) All this points to Moscow’s war against Ukraine increasingly coming home to the Russian public, disrupting their everyday lives. The current trend in Russian civilian and commercial aviation points to the possibility that these two sectors cannot adequately support the country’s transit demands. This will result in a redistribution to the already overloaded Russian railways. That reality will have severe economic consequences and further limit the effectiveness of military logistics in resupplying the frontlines with manpower and munitions in a timely fashion.

Energy & Economics
EURO vs. Yuan. European and Chinese flags

Overcoming an EU-China trade and trust deficit

by Shairee Malhotra

Beijing seeks normalisation of ties with Europe; however, for Brussels, reconciliation will be conditional on Beijing’s willingness to address fundamental divergences On 7-8 December, European Commission President von der Leyen and European Council President Charles Michel will be in Beijing for the 24th European Union (EU)-China summit, but the first in-person one in four years, taking place at a critical juncture in EU-China ties. At the previous EU-China virtual summit in April 2022, the Ukraine conflict was the primary talking point for the Europeans and other issues such as climate and economics were relegated to the back burner. This time, the focus is likely to be economics. A relatively constructive meeting between United States (US) President Joe Biden and Chinese President Xi Jinping on 15 November, which led to the resumption of US-China high-level military dialogue and Xi’s assurances on Taiwan, has contributed to paving the way for the EU to focus on ironing out economic irritants. Deficits, dependencies and de-risking With daily EU-China trade amounting to 2.2 billion euros, the EU is concerned about its widening goods trade deficit with China—400 billion euros in 2022—referred to by EU Ambassador to China, Jorge Toledo, as the “highest in the history of mankind”. In the context of China’s restrictive environment for foreign companies, the EU is keen for a level playing field and greater reciprocity in trade. Another major area of contention is Chinese overcapacity through subsidies in key industrial export sectors such as electric vehicles (EVs) that are undermining European automotive industries. The European Commission has already launched a probe for the EVs sector and is now considering other major sectors including wind energy and medical devices. In addition, Europe is heavily dependent on critical raw materials such as lithium and gallium from China, which are intrinsic to its green transition. While over 90 percent of the EU’s supply of raw materials comes from China, the EU aims to address this dependency through its Critical Raw Materials Act. Factors such as Chinese aggression in the South China Sea, human rights violations in Xinjiang, and pandemic-era supply chain disruptions have deteriorated European perceptions of China. The downswing in EU-China ties was further accentuated by Beijing’s posture in the Russia-Ukraine conflict and the failure of European leaders to coax China to positively use its influence with the EU’s most immediate security threat, Moscow. Thus, a major trust deficit has accompanied the trade deficit. On 6 November, only a month before the summit, von der Leyen in her speech warned against “China’s changing global posture” with its “strong push to make China less dependent on the world and the world more dependent on China”. While acknowledging China as Europe’s most important trading partner, she emphasised the “explicit element of rivalry” in the relationship. Another dialogue of the deaf? The EU and its member states are recalibrating their China policies, with countries such as Germany even releasing China-specific documents outlining their approach. The EU’s “de-risking” strategy aims to reduce dependencies in critical sectors, and through an expansion of its policy toolbox, the Union is implementing a range of measures including greater scrutiny of inbound-outbound foreign investments, anti-coercion instruments, and export controls for dual-purpose technologies. In this context of an evolving European approach, the upcoming summit is a much-anticipated one for EU-China watchers. Despite the strain in relations, high-level diplomatic exchanges have continued in full swing, many of which, such as von der Leyen’s visit to China in April, EU Trade Commissioner Valdis Dombrovskis’s visit in September, and EU Foreign Policy Chief Josep Borrell’s visit in October were conducted in preparation for this summit. A sluggish Chinese economy gives Europe room to wield its economic leverage. However, grey areas in Europe’s China policy remain, especially with regard to the implementation of measures and the need for more effective coordination, often compromised by a lack of unity amongst member states and tendencies of leaders such as French President Emmanuel Macron and German Chancellor Olaf Scholz to prioritise business interests over all else. Thus, straddling the fine balance between economic opportunities and security risks will continue to be a test for how Europe manages its interdependence with the lucrative Chinese market. Previous EU-China summits have not produced a joint statement, and according to sources, this summit is unlikely to produce one as well. Yet it is an opportunity for the EU to put forward unresolved concerns and forge some common ground. Without concrete deliverables, the upcoming summit risks being another “dialogue of the deaf” as Borrell famously described the previous one. Amidst renewed transatlantic solidarity, Beijing’s rhetoric indicates that it seeks normalisation of ties with Europe and a more independent European policy towards China away from Washington’s influence. Yet for Brussels, reconciliation will be conditional on Beijing’s willingness to address fundamental divergences.

Diplomacy
Vladimir Putin with President of the United Arab Emirates Sheikh Mohammed bin Zayed Al Nahyan

Russia-UAE talks

by Vladimir Putin

Vladimir Putin held talks with President of the United Arab Emirates Sheikh Mohammed bin Zayed Al Nahyan in Abu Dhabi. The agenda included the current state of multifaceted Russia-UAE cooperation and prospects for the further expansion of ties, as well as topical international issues with a focus on the situation in the Middle East. Before the consultations began, an official welcoming ceremony for the Russian President was hosted by the President of the UAE at the Qasr Al Watan Palace. Foreign Minister Sergei Lavrov, First Deputy Prime Minister Andrei Belousov, Deputy Prime Minister – Minister of Industry and Trade, Russian co-chair of the Russian-Emirati Intergovernmental Commission on Trade, Economic and Technical Cooperation Denis Manturov, Deputy Prime Minister Alexander Novak, Deputy Chief of Staff of the Presidential Executive Office – Presidential Press Secretary Dmitry Peskov, presidential aides Igor Levitin, Maxim Oreshkin and Yury Ushakov, Russia’s Ambassador to the UAE Timur Zabirov, as well as Head of the Chechen Republic Ramzan Kadyrov, Central Bank Governor, heads of the Roscosmos State Corporation, Russian Direct Investment Fund, Rosatom State Corporation, Rosoboronexport, VEB.RF State Development Corporation, and other officials took part in the talks on Russia’s side. * * * Beginning of Russia-UAE talks President of the United Arab Emirates Sheikh Mohammed bin Zayed Al Nahyan (retranslated): Welcome, my dear friend Vladimir Putin, to the United Arab Emirates. I am glad to see you again. Let me begin by emphasising the historical nature of relations between the Russian Federation and the UAE. Over the past years, we have witnessed a substantial push to develop these relations in various spheres for the mutual benefit of our nations and people. I would like to express my great appreciation for your personal and effective contribution to strengthening our bilateral relations. In this context, I would like to say that the UAE is Russia’s biggest trade partner in the Middle East and in the Gulf Region. Let me note that the UAE is a major investor in the Russian economy. Investment in the non-oil sector increased by 103 percent over the past year. I would like to specifically mention that this is an unprecedented breakthrough which demonstrates the special nature of relations between our countries. I will be glad to continue working together on strengthening bilateral cooperation in various spheres. Of course, promoting development in energy, infrastructure, and high technologies, as well as elsewhere has special priority. In addition to this, I would like to mention that the United Arab Emirates and the Russian Federation have been working together and cooperating within various international frameworks. For example, we work together within BRICS and the Shanghai Cooperation Organisation, where the Emirates were granted dialogue partner status in May 2023. We are also developing and promoting the strategic dialogue between the Russian Federation and the Gulf Cooperation Council. This helps us reinforce our relations and expand them in various spheres, promoting a proactive exchange of views on key international and regional matters, as well as on key items on our bilateral agenda. Once again, Mr President, welcome to the United Arab Emirates. I wish progress and prosperity to the Russian Federation and its people. President of Russia Vladimir Putin: Your Highness, friends, First of all, I would like to thank you for inviting us and for this colourful and friendly welcome. The other day, the United Arab Emirates celebrated the 52nd anniversary of its founding. I want to congratulate you on this and I want to recall that the Soviet Union was among the first to recognise this independent, self-reliant, and sovereign state. Today, our relations – thanks to the position you have taken – have reached unprecedented heights. You and I are in constant contact, and our colleagues work together on a permanent basis. In fact, the United Arab Emirates is Russia’s main trade partner in the Arab world. Last year, trade grew by 67.7 percent. This year, I think, the figures will be even higher. The same goes for investment activity. There is also progress in industrial cooperation, by which I mean cooperation to build certain industrial facilities in the United Arab Emirates and in the Russian Federation. A number of major oil and gas projects are being implemented. We also cooperate through OPEC Plus. We certainly attach due importance to humanitarian ties. Tourist exchanges are making headway: last year, almost one million tourists from Russia – a little over 900,000 – visited the UAE. A Russian school has been opened, and we are grateful to you for ordering land set aside to build a Russian Orthodox church. We also cooperate internationally. As a non-permanent member of the UN Security Council, the United Arab Emirates makes a huge contribution to stabilising the situation in the world. We will certainly discuss with you the situation in the main hot spots, primarily, of course, the Arab-Palestinian-Israeli conflict. I will certainly inform you of the developments in the context of the Ukraine crisis. I am quite pleased that the United Arab Emirates is beginning to work within the BRICS system. In 2024, Russia will chair this organisation. We will continue contacts on this. We look forward to meeting you at the [BRICS] summit in Kazan in October 2024. The UAE is currently hosting one of the world’s most important environmental forums. The first results of the effort to implement the Paris Agreement are being summed up. As expected, you are holding this event at the highest level, and very many people in the world, even those who do not identify themselves with environmental movements, are certainly grateful to you for this work. A Russian delegation is also involved in this work at the highest level. We wish you success. I have no doubt that it will be so. Shukran! <…>

Diplomacy
President Xi Jinping with Vladimir Putin

China Exploits Russia’s Vulnerabilities

by Ksenia Kirillova

According to reports from Chinese media in late November, Beijing has refused to invest in the construction of the Power of Siberia-2 natural gas pipeline, proposing instead that Moscow fully cover the multibillion-dollar project. China also insists on substantial discounts for Russian gas, demonstrating strong “bargaining power” in negotiations with the Kremlin (South China Morning Post, November 24). Power of Siberia-2 is pivotal for Russia in mitigating the losses incurred after Gazprom’s withdrawal from the European market. As Western sanctions have weakened Moscow’s geopolitical leverage with its energy resources, Beijing has capitalized on the situation to increase energy flows to China at cheaper prices. Most economists argue that Moscow cannot fully compensate for the losses resulting from limited access to European markets. They also point out that the gas supplies currently flowing through the Power of Siberia-1 pipeline are already being sold to China at almost half the price of rates for the European Union and Turkey. Russian oil and gas analyst Mikhail Krutikhin emphasizes that Beijing has little interest in the construction of the Power of Siberia-2 pipeline, as China does not require large quantities of natural gas. He notes that the planned capacity of the new pipeline is 50 billion cubic meters (bcm), while Gazprom, on average, has exported 155 bcm to the West. According to Krutikhin, with the discounts, Russian gas exports to China do not even cover the operational costs of their extraction and transportation. The Kremlin, nevertheless, is forced to construct a second gas pipeline because it cannot guarantee the promised gas supplies of existing agreements without it due to the limited gas deposits supporting Power of Siberia-1 (VOA Russian Service, November 28). China’s exploitation of Russian vulnerabilities should not come as a surprise. Experts observed last spring that Beijing only supports Moscow to serve Chinese interests, for example, leveraging Russian anti-Western narratives in its own propaganda and treating the Russian Far East as a “resource colony” (see EDM, February 6). China will not assist Russia to its own detriment. Marina Rudyak, a professor of Sinology at Heidelberg University, believes that the Chinese government may genuinely fear that a Russian victory in Ukraine could strengthen Moscow’s influence in Central Asia and beyond (Svoboda, May 21, 2022). At the same time, Beijing has provided practical assistance to Moscow for projects personally important to Russian President Vladimir Putin. For example, China has actively shared its experience with censorship and digital control over the Internet since 2015, offering insights on the functions and capabilities of China’s “Great Firewall” (Kremlin.ru, June 5, 2019; Radio Free Europe/Radio Liberty, April 5). This cooperation, however, does not prevent China from competing with Russia for influence in Central Asia, the South Caucasus, and other regions (Gazeta.ru, September 20, 2019; see EDM, October 5, 2022, November 15, 2022, May 24, August 10). Moscow’s predicament lies in unrealistic expectations for cooperation with its “Eastern partners,” including China and other “non-Western” countries. Putin has repeatedly stated that the expansion of the BRICS countries (originally Brazil, Russia, India, China, and South Africa) will become a movement “against the hegemony and neo-colonialism policy of the West” (Izvestiya, August 23). In contrast, the organization’s members are not planning to sever relations with Western countries and are attempting to extract maximum benefits in finding a balance between the East and West. Another of the Kremlin’s unrealistic hopes was the dream of creating a single currency for BRICS members to strengthen Moscow’s ability to circumvent sanctions. Such talks began emerging in the Russian press at the end of last year (Sibnovosti.ru, December 3, 2022). By mid-summer, central Russian media predicted that the currency would be created in August, noting that the realization of this idea was “closer than ever before” (Moskovskij komsomolets, July 9). Pro-Kremlin experts discussed how the new currency would replace the “toxic and inconvenient” US dollar and be used for intergovernmental payments and settlements (Vechernyaya Moskva, July 3). The most optimistic among them speculated that the dollar might not withstand this challenge (Iarex.ru, May 17). Following the August BRICS summit, Russian officials were compelled to acknowledge that their partners had no intention of creating a single currency in the near future. On August 24, Foreign Minister Sergei Lavrov officially relented on Moscow’s hopes for a unified currency at the summit in Johannesburg (Rossiyskaya gazeta, August 24). That same day, South African Finance Minister Enoch Godongwana announced that the creation of a single currency had never been discussed within the BRICS format, even informally (Forbes.ru, August 24). A parallel situation of unrealistic expectations for allies is unfolding for Russia with Iran. In early 2022, Russia extended a credit line of $1.4 billion for the construction of the Sirik thermal power station in Iran, a debt that Tehran has yet to settle. In July 2022, Gazprom and the National Iranian Oil Company signed a memorandum of understanding and cooperation, leading to agreements on projects valued at $40 billion. These projects encompass the development of the Kish and North Pars gas fields and Russia’s involvement in the operations of the South Pars field (Nezavisimaya gazeta, November 7, 2022). Even with the agreements in hand, little tangible progress has been made. The lack of progress in joint Russian-Iranian projects closely mirrors the breakdown in Russian-Chinese cooperation with Power of Siberia-2. Independent analysts noted last year that Moscow should not anticipate Iran’s assistance in modernizing underdeveloped infrastructure along the “North-South” corridor. Russia has sought to develop this route to connect with the Persian Gulf and Indian Ocean via the Caspian Sea and Iran. Even if the new corridor is further developed, it will not be able to wholly replace the traditional transit routes Russia utilized before its war against Ukraine (Carnegie Politika, October 28, 2022). Russia is being increasingly forced to supply strategic resources to partners on highly unfavorable terms in exchange for minor displays of political support and assistance. In the long run, such a policy will likely result in significant losses for Moscow. While cooperation with China and Iran has improved in some areas, the current circumstances underline that, in the end, both Beijing and Tehran will pursue their own interests, even at Moscow’s expense.

Diplomacy
Vladimir Putin and Crown Prince Mohammed bin Salman in the Saudi King’s al-Yamamah Palace.

Russian-Saudi talks

by Vladimir Putin

A meeting between Vladimir Putin and Crown Prince and Prime Minister of the Kingdom of Saudi Arabia Mohammed bin Salman Al Saud took place in the Saudi King’s al-Yamamah Palace. At the Conclusion of the Visit of Vladimir Putin to the Kingdom of Saudi Arabia a Joint Statement has been adopted. Beginning of Russian-Saudi talks Crown Prince, Prime Minister of the Kingdom of Saudi Arabia Mohammed bin Salman Al Saud (retranslated):We can find many topics and subjects of common interest, on which we are working together to promote stability and development around the world, including in the Middle East. Over the past seven years, we have achieved a lot in our bilateral relations, for example, in the energy sector, investment and agriculture. In addition, our political cooperation and interactions have had a positive influence on several Middle Eastern issues and helped enhance security. Moreover, our future political ties and cooperation will, no doubt, have a positive bearing on the international environment. We have broad and far-reaching opportunities ahead of us, and by seizing them we can work together for the benefit of our nations and the entire world. I would like to reiterate, Mr President, that you are a cherished guest here in Saudi Arabia. We welcome you on behalf of its government and its people. Welcome! President of Russia Vladimir Putin: Thank you. Your Highness, first, I would like to thank you for the invitation. We expected to see you in Moscow. I know that the circumstances have affected these plans. But, as I said, nothing can prevent the development of our friendly relations. Indeed, being in this region on a scheduled visit to the United Arab Emirates, I used your invitation to come and see you and all our friends that we have been vigorously developing our interaction with over the past seven years. That said, the next meeting will hopefully take place in Moscow. Mohammed bin Salman Al Saud (retranslated): Of course, we are ready. Vladimir Putin: Agreed. Indeed, the Soviet Union was among the first to recognise the independent state of Saudi Arabia. This was almost a hundred years ago. Our relations have developed in different ways during this time. Mohammed bin Salman Al Saud: I would like to note that it was the development of independence rather than the independence of a state that was recognised at that time. Vladimir Putin: In any event, we respected the will of the subjects of Saudi Arabia to build their future independently. Much has happened in our relations during this time, but over the past seven years, they have certainly reached a truly unprecedented level. This was achieved owing to the wise policy of your father, the Custodian of the Two Holy Mosques King of Saudi Arabia with your direct participation. We have stable, very good ties in political interaction, the economy and in humanitarian area. And, of course, it is now very important for all of us to exchange information and views on what is taking place in the region. No doubt, our meeting is timely. Thank you very much for your invitation, once again. Mohammed bin Salman Al Saud: Welcome! <…>

Diplomacy
Pedro Sánchez at one of his election campaigns

Another Leftist Coalition Government in Spain, Though Just Barely

by Bonnie N. Field , Juan Rodríguez Teruel

Pedro Sánchez, Spain’s incumbent prime minister, was sworn into office for the third time on 17 November 2023. He once again heads a minority coalition government. This time, it includes the prime minister’s Socialist Party (PSOE) and Sumar (Sum or Add Up), a new left wing political platform launched by Yolanda Díaz, the incumbent and continuing labour minister and second deputy prime minister. While clear continuities exist, there are important changes regarding the junior party partner in the coalition. Sánchez’s previous cabinet, formed in 2020, included the radical left Unidas Podemos (United We Can), an alliance of Podemos and the United Left, the latter centred around the Spanish Communist Party. After much public discord, the weakened Podemos joined the Sumar alliance for the July 2023 parliamentary elections. Yet none of Sumar’s five ministerial posts (out of 22 total) in the new government went to Podemos. While Díaz hails originally from the United Left, Sumar is a more moderate ally for the Socialists, at least in terms of the likely tone and style of its government representatives. It remains to be seen how the disgruntled Podemos, with 5 of Sumar’s 31 seats in the Congress of Deputies, will affect governance and Díaz’s nascent platform. Continuing the practice on the political left of gender parity or majority women cabinets, the new government has 55 percent women ministers, four of whom are also deputy prime ministers. This government also confirmed Spain as a world leader in minority cabinets. Since Spain’s return to democracy in 1977, 75 percent of its cabinets have been minority ones, meaning the party or parties in the cabinet do not control a majority of seats in the parliamentary chamber to which the government is responsible. While Spain is used to making these cabinets (mostly) work, this may be the most complicated governing scenario to date. The leftist government faces a political right that is strong, angry, and mobilized—though this both challenges and serves as a buttress that could fortify the new government. The conservative Popular Party (PP), led by Alberto Núñez Feijóo, won the most votes and parliamentary seats in the July election, two percentage points and 14 seats more than the Socialists, yet far from a majority. As was already clear when the election returns came in, the PP candidate could not cobble together enough votes in parliament and failed in his attempt to become prime minister in September 2023. He received the votes of the PP, the far-right party Vox (Voice in Latin), and two representatives of right-leaning regional parties. Feijóo’s defeat was, in part, due to his party’s proximity and expected governing alliance with Vox. The political right is also strong in local and regional governments in Spain. Following the May 2023 subnational elections, the Popular Party leads 11 of Spain’s 17 powerful regional governments—in five it governs jointly with Vox. The Socialist Party only leads three regional governments. And the PP has a majority in Spain’s upper, though weaker, chamber of parliament, the Senate. The right has questioned Sánchez’s legitimacy, persona, and alliances stretching back at least to 2018 when he replaced PP Prime Minister Mariano Rajoy, whom parliament removed in a constructive vote of no confidence. Sanchismo has become a popular buzzword the right uses to capture its disdain for the prime minister. Nonetheless, the anger and mobilisation on the political right, particularly from Vox and its supporters, but also from the PP and its supporters, peaked once it became public that Sánchez and the PSOE would support an amnesty for those involved in the 2017 Catalan independence push, despite Sánchez’s prior opposition to an amnesty and his claim that it would be unconstitutional. An amnesty was part of a deal to gain the support of pro-independence Catalan parties, ERC and Junts per Catalunya (Together for Catalonia), for Sanchez’s election as prime minister. The controversial leader of Junts, Carles Puigdemont, who resides in Brussels to escape Spanish judges, and would be the main beneficiary of an amnesty, has forewarned that the party’s support for the new government depends on clear advances in the devolution of central state powers to Catalonia and the recognition of the Catalan national identity. Amid significant societal division over the agreement, far right groups, in Trumpist style, engaged in violent protests in front of the PSOE’s headquarters. Protesters frequently showed support for Francoism and denounced what they considered to be a coup-d’état by the parliamentary majority. The extremist tone has put the PP in an uncomfortable position – it has attempted to calibrate its response via numerous demonstrations, expressing firm opposition while also trying to avoid being linked to the autocratic values visible at other demonstrations. The agreement with Junts also met with unprecedented criticism in judicial circles, particularly furious because the agreement mentions alleged lawfare, in reference to what Catalan nationalists view as an excessive legal response to the Catalan push for independence and its leaders. In contrast, most of the electorate that supported the parties of the new majority are relieved that the right-wing forces did not take control of the Spanish government, even though 40 percent of the PSOE voters are against this amnesty. To pass legislation (and survive), the government will need to consistently forge agreements among the government partners and with a diverse set of regionally based parliamentary allies. The latter include Catalan separatists on the left (ERC) and right (Junts), the centre-right Basque Nationalist Party, the Basque left-wing separatist EH-Bildu, the Galician nationalist and left-wing BNG, and the centre-right Canary Coalition. The government has almost no margin. Jointly these parties’ votes add up to 179, only three votes over an absolute majority. The Catalan Junts, with seven seats, is the most significant wildcard. While relative majorities of more yes than no votes are sometimes sufficient in Spain’s parliament, the opposition sums 171 votes. The most relevant ministers that have surrounded Sánchez since he became prime minister remain in the new cabinet, ensuring continuity in the main policy areas (finance, security, external affairs), although the influential minister of economy, Nadia Calviño, is expected to leave the executive in the coming weeks to become President of the European Investment Bank. The newcomers are expected to provide loyalty and a leftist hue to the government agenda, seeking to maintain their voters’ support in a polarised environment. This may be particularly significant in the new legislative term since the new executive will face more dilemmas when negotiating the policy agenda with its parliamentary partners. It will need to rely more on right-wing parties (PNV and Junts) than the prior government. Policy contradictions among the government’s allies will necessarily arise as many of them (PNV and EH-Bildu, Junts and ERC) are electoral opponents that will compete in the regional elections in the Basque Country and Catalonia in the coming months. We’ll need to wait and see how well the Spanish prime minister can live up to the spirit of his book, published four years ago, Manual of Resistance. Keywords government spain pedro sánchez spain prime minister socialist communist party democracy elections

Diplomacy
Flags of Taiwan and Estonia

Estonia Catches Taiwan Fever: What Will the Side Effects Be?

by Thomas J. Shattuck

In early November 2023, Estonia announced a decision to allow Taiwan to open an unofficial, non-diplomatic economic and cultural representative office in Tallinn. The opening of an office does not mean that Tallinn and Taipei are establishing official diplomatic relations, nor does it mean that Estonia is opening its own office in Taiwan. It is following in the footsteps of countries around the world that have unofficial ties with Taipei and want an unofficial government presence in the country to facilitate economic relations. For its part, Beijing has expressly condemned the decision by Tallinn to allow Taipei to decide if it wants an office in Estonia, with China’s Foreign Ministry making a clear statement calling for Estonia to reverse course. Estonia’s announcement occurred just before Taiwan’s Foreign Minister Joseph Wu embarked on a three-country tour of the Baltic states — a rare trip for the foreign minister to visit three countries with which Taiwan does not have formal diplomatic relations. Baltic leaders and ministers stated that they had no plans to meet directly with Wu, though Lithuanian Foreign Minister Gabrielius Landsbergis spoke at the same event as Wu, and his grandfather, the first president of post-Soviet, Lithuania Vytautas Landsbergis, did meet with Wu. Estonia’s move to open a representative office comes after Lithuania made a similar decision, sparking controversy and drawing political and economic ire from Beijing. The Vilnius office, which opened in November 2021, is called the “Taiwanese Representative Office in Lithuania,” which balks the traditional use of “Taipei” over “Taiwan” to avoid Beijing’s complaints and any alleged notions of formal relations. The opening of the Vilnius office resulted in the downgrading of the bilateral relationship with China and the expulsion of the Lithuanian ambassador from Beijing; the removal of Lithuania as a “country of origin” for Chinese trade; and a formal World Trade Organization complaint against China, supported by the United States and European Union. Beijing’s main complaint at the time was that the office provided legitimacy to Taiwan by using the word “Taiwanese,” thus the reason for the strong reaction. Lithuanian President Gitanas Nausėda conceded the point, “I think it was not the opening of the Taiwanese office that was a mistake, it was its name, which was not coordinated with me.” Now, with Estonia’s announcement, that complaint has proven hollow. It is not the “Taiwanese” reference with which Beijing has a problem — the real issue is the expansion of Taiwan’s international space. As I argued in January 2022, “The name of the office [in Lithuania] is the supposed sticking point, but the reality of the matter is that Beijing wants to prevent the expansion of Taiwan’s international space. The mere opening of an office, regardless of name, represents the expansion of Taiwan-Lithuania ties. Likewise, any new de facto embassy would be perceived as offensive to Beijing. … As more countries build ties with Taiwan, leaders will be able to better assess the risks and benefits of diplomacy with Taiwan. Beijing’s wolf warriors now cry foul at any perceived attempt to foster closer relations with Taipei.” Beijing perceives any “win” by Taiwan as a direct threat to its long-term plan to completely isolate Taipei. A possible office in Estonia provides Taipei with the ability to more easily interact with the Estonian people, expand bilateral trade, and demonstrate itself to be a good international partner — all of which threaten Beijing’s ability to shape the narrative regarding cross-Strait relations. As expected, PRC Foreign Ministry Spokesperson Wang Wenbin made clear the Lithuania office name issue was fake. During his regular press conference on November 8, Wang called for Estonia to change course, making no mention of the prospective name of a future office: “We firmly oppose any form of official interaction between the Taiwan region and countries having diplomatic ties with China and oppose any action supporting ‘Taiwan independence’ separatist forces. We call on Estonia to stay committed to its solemn commitment of adhering to the one-China principle, not to allow Taiwan to set up any organization of official nature, and earnestly safeguard the political foundation of its relations with China.” Wang’s language and warnings are less strident than what could be expected, but given that the announcement of the office in Estonia was just made, details are not yet firm. Estonian Foreign Minister Margus Tsahkna hinted to Politico that the office would be “representation—economical representation—of Taipei, not Taiwan,” which, if the name is the true issue, should appease Beijing’s concerns. As more is known, Beijing will assuredly increase its pressure on Estonia, which already includes the Chinese ambassador in Estonia threatening to leave the country if the office opens. The true test will come once details about the office are released. How will Beijing seek to punish Estonia for the move? Will the reaction be less severe than what China did to Lithuania? How will the European Union and the United States support Tallinn should Beijing utilize its coercive toolkit again? Beijing’s response to the office will demonstrate a few key things in the aftermath of the Lithuania example. How Beijing responded to Lithuania created immense international support and attention for Vilnius. Taiwan President Tsai Ing-wen opened up a $1 billion fund for joint Taiwanese-Lithuanian projects and another $200 million fund for Taiwanese investment in Lithuania’s industrial sector to show support for the decision, and the Biden administration announced a $600 million credit line. Because Beijing initiated pressure on other countries, such as Germany, to push Lithuania to change course, the overreaction became a critical case study in China’s coercive toolkit. The collective West closed ranks, supported Lithuania for the decision, and warned Beijing against further reprisals. If Beijing treats Tallinn in a similar way as Vilnius, then it will be clear that Beijing will ignore international warnings to serve its own goals — bluster over substance and compromise. The most important thing for Estonia to do in the coming days and weeks is to be resolute in the decision. Divisions within Vilnius prolonged Beijing’s attempt to pressure politicians into changing course. Knowing how angry President Nausėda was about the ordeal provided an opening, but other actors did not back down. At the moment, Estonia’s Foreign Minister Tsahkna is taking the lead in publicly responding, but the coalition government needs to adhere to the same line to diminish Beijing’s ability to pressure specific politicians. If Estonia does not back down, the country could stand to benefit from new Taiwanese-Estonian projects. Since the Taiwanese and Lithuanian offices opened in the respective capitals, Taipei has agreed to assist in building an 8-inch semiconductor wafer production line in Lithuania. The two also agreed to open a joint research center on laser technology in Taiwan. Lithuania is home to two projects funded by Taiwan’s National Development Fund (NDF). Another Lithuanian company, Solitek, received around $8.5 million from the $1 billion fund. During a recent visit to Taipei by Seimas Speaker Viktorija Cmilyte-Nielsen, the two sides signed a memorandum of understanding on health and made a decision to eliminate double taxation — the latter of which is still an issue that Taiwan has with the United States. Progress between Taipei and Vilnius has been slow, but it has gained steam with these investments. Tallinn can expect to reap some new investments with a Taiwan office and take part in the NDF. However, the benefits that Tallinn receives not only from Taiwan but also from the United States will likely depend on how loudly and forcefully Beijing complains — and acts on those complaints. No matter how much investment Estonia receives as a result of this new office opening, Tallinn is now a part of the cross-Strait competition — in an election year. With the upcoming January 2024 presidential election in Taiwan, Tallinn may have inadvertently become a foreign policy issue for the candidates, but that largely depends on Chinese retaliation. Any office will likely open under a new leader in Taipei, so while the announcement and prospective investment promises will occur under President Tsai, the implementation of such things will be up to her successor. After Lithuania defied China and its intense pressure to reverse course, Beijing is now in a situation where another Baltic country has allowed Taiwan to expand its unofficial international space — and thus expanded the threat landscape in its push to eliminate Taiwan’s presence abroad. The more these seemingly small countries defy China and the more they are backed by large countries (and, more importantly, fulfilled promises from Taiwan), the harder it will be for Beijing to keep the next case of Taiwan fever from spreading. The views and opinions expressed in this article solely belong to the author and do not represent the perspectives or stance of World and New World Journal, nor do they reflect the opinions of any of our employees. World and New World Journal does not endorse or take responsibility for the content, opinions, or information presented in this article. Readers are encouraged to consider multiple sources and viewpoints for a comprehensive understanding of the subject matter. Thank you for your understanding.

Energy & Economics
The protesters back the EU's criticism of the Poland's government

Poland: hope for rule-of-law correction, but serious economic challenges ahead

by Marek Dabrowski

Obstacles created by Poland’s outgoing government and the deteriorating economic situation make the post-election outlook highly challenging. The victory of the opposition alliance in Poland’s 15 October elections showed that even an unfair and manipulated election can lead to a peaceful rejection of autocratic regime if society is mobilised sufficiently. However, tackling the populist legacy of the Law and Justice Party (Prawo i Sprawiedliwość, PiS) government will be neither easy nor fast, for several reasons. First, it remains unclear when a political transition can take place. President Andrzej Duda (closely associated with PiS) has sworn in a PiS minority government that is likely to be short-lived, and has made clear that he will defend PiS’s political and institutional legacy and use his veto power to stop legislation adopted by the new parliament. Overcoming a presidential veto requires a 60% majority in the Sejm (a lower house of the Polish parliament), which a democratic coalition is short of. This will make it challenging for a post-PiS government to restore constitutional principles of democracy, rule of law, the legal independence of many institutions (which have been packed with PiS loyalists, especially in the judiciary) and public media pluralism, at least until summer 2025, when President Duda’s term expires. Most of these changes will require new legislation. Rolling back unconstitutional PiS legislation in the Constitutional Court will be hard. The terms of PiS placemen and women in the court will expire between 2024 and 2031. The Constitutional Court can also block legislation passed by a new majority. This could mean difficulties with unfreezing money earmarked for Poland from the European Union’s Recovery and Resilience Facility. Access to the funds is conditional on meeting rule-of-law criteria that have been violated systematically by the PiS government. However, the most significant challenges wait for the new government in the economic sphere. Eight years of socioeconomic populism, with large-scale spending programmes (including generous family benefits, which will increase by 60% from January 2024), chaotic tax system changes and a freeze on energy tariffs, have led to an explosion of the general government deficit, set to reach 5.8% of GDP in 2023. The transparency of public finances deteriorated dramatically because of several off-budget funds and quasi-fiscal operations conducted by state-owned banks and energy companies. Therefore, the actual deficit may be higher than officially reported. Because of ultra-loose and politically motivated monetary policy since 2016, inflation has been above the National Bank of Poland target (2.5%) since December 2019. has been above the National Bank of Poland target (2.5%) since December 2019In March 2022, it jumped to a two-digit level, reaching 17.2% in March 2023. Since then, it has started decreasing, but its October 2023 level (6.3%) is still too high and may increase. Despite highly accommodating monetary and fiscal policies, the annual real GDP growth rate, once varying between 4% and 6%, is expected to decline to 0.4% in 2023. Thus, the Polish economy is experiencing stagflation. Meanwhile, a gradual increase in the retirement age to 67 for both men and women, introduced in 2013, was reversed by PiS in 2017, despite Poland’s shrinking working-age population – a consequence of population aging and large-scale emigration. The share of state ownership has been increased, especially in the banking and energy sectors. The latter became less competitive after several administrative mergers of state-controlled companies (for example, creating a super-conglomerate ORLEN). Investment in green energy has slowed in the face of various administrative and financial obstacles. To what extent a new government will be ready to tackle these problems remains unclear. During the election campaign, opposition parties sought to compete with PiS by offering more public spending programmes and lower taxes. They promised never to increase the retirement age. They were silent about privatisation, only pledging more professional and nepotism-free management of state-controlled companies. Since the election, several opposition promises detrimental to public finances have been repeated. The economic chapter in the coalition agreement between parties forming the future government is vague. The multi-party character of a future government (from the left to centre-right), and forthcoming local and European elections (both in spring 2024), may further discourage necessary economic reforms and fiscal adjustment. If such a political scenario prevails, the Polish economy risks slipping towards even deeper macroeconomic disequilibria and zero growth. This will not guarantee popularity and future election success for a coalition government. Therefore, despite all the political and legislative obstacles, the incoming government’s economic policy programme must address the root causes of the current troubles and respect fiscal constraints. Acknowledgements The author would like to thank Heather Grabbe, Ivo Maes, Lucio Pench, and Nicolas Veron for their comments and suggestions on a draft of this commentary.