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The three Baltic states jointly announced on Jan. 19, 2024, their intention to build a defensive line along their borders with Russia and Belarus. Initial details are scarce. The defensive line will not include coastal defenses — Baltic coasts will be defended against the Russian Baltic Sea Fleet in other ways, such as anti-ship missile capabilities and sea mines. Estonia, which divulged the greatest amount of detail, estimated that it would build 600 bunkers, together with support points and distribution lines, for a cost of €60 million starting in 2025. There are no plans to place mines, barbed wire, or dragon’s teeth (anti-tank defenses) during peacetime, although the necessary supplies are anticipated to be held in local reserve for quick deployment if and when necessary. At the very least, Estonia also anticipates some difficulties in situating bunkers on private land near the border, which will take time and negotiation with potentially thousands of landowners to resolve. A Baltic defensive line is a huge project. It is worth reflecting on its origins, challenges, and operational-strategic implications. The Baltic ministers of defense identified two primary points of origin for such a defensive line. First is NATO’s communiqué from the 2023 Madrid Summit, which confirmed that the alliance would fight for every meter of its ground. The proposed defensive line reflects a Baltic intention to take this pledge seriously. Second, the Baltic defense ministers also pointed to their lack of substantial geographical depth. The Baltic states believe that they cannot give up ground, which means recognizing that they need to be prepared to contest a Russian invasion from the first moments following the violation of Baltic borders. An obvious third point may also be added: In the face of Russian genocidal atrocities in Ukraine, Baltic governments cannot be seen to be abandoning their populations to the Russians, nor do they want to do so. In Ukraine, the Russians have committed multiple known mass murders (such as at Bucha and Izyum), they have kidnapped children and fast-tracked their adoption and citizenship in Russia, and they are already settling new colonizers on occupied land, especially in the cities. Any one of these is fundamentally unacceptable, and Russia is actively pursuing all three. For the Baltic states, giving up land means giving up people — especially for Estonia and Lithuania, which have substantial population centers on or not far from the border, such as Narva and Vilnius. In this specific regard, Latvia is slightly better placed as its easternmost province of Latgale is also one of the most sparsely populated, with an overall population density of 46 per square mile. Challenges for the defensive line are substantial. First are the lengths of each national border. Estonia’s hostile border is the shortest at 183 miles, most of which is covered by Lakes Peipus and Pihkva or strengthened by the Narva River. Latvia’s borders with Russia and Belarus are 133 and 107 miles, respectively, bereft of natural boundaries. Lithuania’s borders are the longest, reaching nearly 422 miles with Belarus and nearly 171 miles with Russia’s Kaliningrad oblast. These are substantial distances. Estonia’s planned 600 bunkers, likely to be concentrated on the 129 miles of border north and south of Lake Peipus, suggest a density of four to five bunkers per linear mile — yet defensive lines are not simply built linearly but also in depth. Nonetheless, Latvia would need to build 1,116 bunkers and Lithuania 2,758 at similar densities. Bunkers are stationary objects whose effectiveness decreases the better their exact positions are known. The defensive line is likely to incur a challenge to Baltic counterintelligence to prevent Russia from identifying bunker locations in overly substantial detail. However, bunker density is unlikely to be consistent along the entire combined Baltic border as not every part of the border is equally useful for Russian invasion, which necessarily requires roads and railways. Again, Estonia is best placed. North of Lake Peipus, there is only a single crossing point over the Narva River at Narva itself, although there are roads on the Russian side of the river that would enable some degree of near-and even cross-river Russian logistical sustainment. South of Lake Peipus are two major roads and one rail crossing, but also a handful of minor cross-border roads could be used to distribute advancing Russian forces across a broader front. Latvia has one rail and two major road crossings apiece with both Russia and Belarus, along with at least a handful of minor roads directly crossing the border and other Russian roads leading to or running alongside the border. Lithuania has two rail crossings apiece with both Russia and Belarus, along with up to seven major road crossings, two with Russia and five with Belarus, besides various minor roads as well. These are places where bunkers are likely to be concentrated. It is unrealistic to sustain major operations nearly, if not actually, totally off-road. The final challenge is bunker placement in a tactical sense. It seems unlikely for bunkers to be within line of sight from the far side of the Baltic borders, merely giving Russians a chance to scout them during peacetime without danger or even controversy. Higher ground is generally more tactically advantageous than lower ground, and bunkers positioned to generate enfilading fire and be mutually supporting rather than isolated from one another are preferable. While Russian logistical demands lead to a focus on roads and rail, the same is true for Baltic and NATO forces; units fighting on the defensive line have to be logistically sustained as well. These are all lower-level details that will be crucial to the success of the defensive line in case of actual invasion. Finally, what are the operational-strategic implications of the defensive line once it is built? First, it runs counter to the doctrinally preferred Western — and especially American — defensive posture, which is an operationally elastic defense premised upon maneuver warfare. In maneuver defense, terrain (and, by implication, the people populating that terrain) is not valued highly in an operational sense; the land is to be given up if necessary and then recaptured later in the course of counterattacks. The main premise is to engineer the best circumstances in which to destroy advancing enemy forces with as disproportionately few friendly losses as possible, all other considerations being secondary at best. A good in-depth defense premised on bunkers and trenches may provide tactical elasticity, but it clearly identifies operational elasticity as undesirable. There is clear incompatibility here, and in this Baltic case, NATO has politically positioned itself in a way that will require some sort of move away from maneuver defense, at least on a major geographical scale. An orientation toward an operationally static, even if in practice tactically elastic, defense will put emphasis on fires into the Russian rear and deep to attrite Russian forces and damage Russian logistics so that they experience difficulties deploying forces opposite the defensive line itself, let alone directly attacking it. Yet Western political leaders may be squeamish about such attacks — witness their present injunctions against Ukraine’s use of Western weapons against targets in Russia itself. The damage Russia has sustained inside its own borders suggests that the West’s fear of escalation is overblown and, given the combination of regime control over the media and the Russian population’s own considerable apathy, constant scenes of savaged Russian convoys and destroyed Russian transport infrastructure in Russia itself may contribute to turning the Russian population against a hypothetically ongoing Russian attempt to invade the Baltic states. Latvian, Lithuanian, and Estonian purchases of HIMARS rocket launchers and ATACMS (long-range, guided missiles with a range of up to 300 kilometers) demonstrate that the Baltic states are at least serious about having the capability to strike deep. However, in the event of a major Russian invasion, Baltic artillery, and emerging multiple-launch rocket system arsenals — the HIMARS the Baltic states have ordered from the United States — would be unlikely to sustain such interdiction for long. The ultimate hope is that the increasing preparedness of the Baltic states and the wider alliance to fight Russia, among which the construction of the Baltic defense line would be counted, would be sufficient to convince the Kremlin to be deterred. Neither the Baltic states nor the West as a whole has any direct control over the outcome of such a decision. At best, all it can do is present an intimidating picture of negative consequences for Russia to consider. If and when the Baltic defense line is completed, the prospect of denying Russia plausible victory in the Baltic theater in a war against NATO should be stronger and may weigh heavier on the minds of Russian decision-makers. Unfortunately, we can almost never know for sure, as there is no way to know why someone has not done something — deterred, never interested, or is it simply not time yet? The Baltic defensive line is a totally logical response to the particular geostrategic challenges Balts face against Russia, even though it will incentivize ways of fighting against Russians with which, for varying reasons, their Western allies may find themselves tactically, operationally, strategically, or even politically uncomfortable. However, preferred Western alternatives — maneuvering defense and possibly limiting strikes into Russia — would be politically, strategically, operationally, and tactically counterproductive for a NATO that fights against Russia on the eastern flank. The Baltic defensive line should nonetheless contribute to a geostrategic picture of denying the prospect of victory in the Baltic, which will hopefully help induce Russia to choose to be deterred. The views expressed in this article are those of the author alone and do not necessarily reflect the position of the Foreign Policy Research Institute, a non-partisan organization that seeks to publish well-argued, policy-oriented articles on American foreign policy and national security priorities.

How are the fluctuating tensions between Washington and Beijing over Taiwan expected to affect Israel? On January 13, William Lai, the leader of the Democratic Progressive Party (DPP), was elected president of Taiwan. A few days earlier, for the first time in four years, the United States-China Defense Policy Coordination Talks took place in Washington, marking the end of a prolonged round of tension between the two powers, which had peaked in August 2022 when the speaker of the US House of Representatives visited Taiwan. Taiwan is a major point of friction in the already tense relations between the two powers. Managing the disagreements between them has broad implications, including for Israel. The ongoing strategic rivalry between the two superpowers—the United States and China—is the most important geostrategic factor of our time. The two countries are vying for technological dominance and control over resources, that will shape our future, and infrastructure that is critical for civilian, economic, and military purposes. The United States and China are also competing for global influence by forming partnerships and trying to influence world order, including its values, institutions, and mechanisms that regulate it. Can they shape the rules of the competition between them without spiraling into a military conflict that would have devastating global consequences? Taiwan may be the most volatile flashpoint in the complicated relationship between the two powers. For China, the “reunification” with Taiwan is one of its “core interests”—a top objective and a flagship issue in its foreign policy. Although the United States has repeatedly declared that it is committed to the “one China” policy, it is also an ally of Taiwan. The United States has warned China to refrain from making unilateral, aggressive moves vis-à-vis Taiwan, while supplying Taiwan with military resources to deter China and prevent a forceful takeover. Since assuming power in 2013, President Xi Jinping of China has repeatedly emphasized Taiwan’s unification with China as a key objective. During a meeting with President Joe Biden in November 2023, President Xi said that China “prefers” a peaceful unification, but he did not dismiss the use of force. On the eve of Taiwan’s 2024 elections, President Xi further stated that unification is “inevitable.” The tensions between the powers over Taiwan had escalated following the previous elections on the island in 2020. During this period, senior American officials visited Taiwan, and the United States and Taiwan signed weapons deals in August and September of that year, followed by a marked increase in Chinese military aircraft penetrating the island’s air defense identification zone and crossing the “midline” between the island and mainland China. China’s perception of encirclement was further heightened by the United States’ strengthening of its alliances and initiatives in the Indo-Pacific region (such as QUAD, AUKUS, and IPEF) and by the increased diplomatic pressure exerted on China, through boycotting the 2022 Winter Olympics and protesting its human rights record. But even during this period, despite rising tensions, the two nations maintained ongoing communications, including the Alaska talks in March 2021—although they were notably tense—and the meeting between the presidents in November of that year. The tension peaked in April 2022, when then Speaker of the US House of Representatives Nancy Pelosi announced her intention to visit Taiwan. China strongly protested, and the White House even recommended Pelosi to reconsider her visit due to concerns about potential military escalation. Pelosi refused and proceeded with her visit in August, delivering a speech at the Taiwanese legislature and advocating for increased American–Taiwanese cooperation. In an article published in the United States before her visit, Pelosi wrote that “at a time when the world faces a choice between autocracy and democracy . . . it is essential that America and our allies make clear that we never give in to autocrats.”   In response to Pelosi’s visit, China held a large-scale military exercise that disrupted air and maritime traffic in the region and released a white paper emphasizing “The Taiwan Question and China’s Reunification in the New Era.” Furthermore, as a countermeasure to Pelosi’s visit, the Chinese Ministry of Foreign Affairs announced that it was suspending all dialogue and cooperation with the United States, including dialogues between the military commands, the ministries of defense (DPCT), and the maritime military coordination (MMCA), and cooperation in the fields of illegal immigration, criminal legal assistance, transnational crimes, counternarcotics, and climate change. In November 2022, presidents Biden and Xi met in Bali, Indonesia, in an attempt to put the relations between the two powers back on track. After the meeting, the White House issued a statement announcing that the United States will continue to compete actively with China, but the two countries must manage their competition responsibly, without letting it escalate, while maintaining open channels of communication and continuing to cooperate on global issues such as climate change, counternarcotics, debt relief, health, and food security. Regarding Taiwan, the United States reiterated its commitment to the one China policy but strongly opposed China’s aggressive actions, which violate peace and stability in the Strait and in the entire region. The Chinese also released a statement, noting that President Xi highlighted that Taiwan is a core Chinese interest and constitutes a red line that is nonnegotiable in the relations between the two countries. It was anticipated that the year 2023 would begin on a more positive tone, with US Secretary of State Antony Blinken’s scheduled visit to China in February. The visit was canceled when a Chinese balloon was discovered floating over US territory for a week until the US Air Force intercepted it. Although the White House at first tried to downplay the incident, with President Biden initially referring to it as a “minor breach” and said that the Chinese government was unaware of the issue. China claimed that a weather monitoring and research balloon had strayed off course. Public pressure, however, led the administration to cancel Blinken’s visit. Subsequently, the US Department of Commerce imposed restrictions on six Chinese companies linked to balloon and aviation technologies that are used by the Chinese military, requiring that they receive special approval to access American technology. In April and May, China retaliated at a relatively low bar by imposing sanctions on a US member of Congress who visited Taiwan and sentenced an American citizen living in Hong Kong to life imprisonment, for alleged espionage for the United States. These actions reflect the efforts of both China and the United States to take focused, restrained measures, to avoid escalating tensions. The absence of a strong reaction from China to the establishment of a select committee within the US House of Representatives, focused on examining the US–China strategic competition, suggests that China sought to prevent further escalation of the conflict.   Efforts to end the crisis and restore talks were renewed in May 2023 when the head of the CIA met with his Chinese “counterparts.” In June, US Secretary of Defense Lloyd Austin and Chinese Minister of Defense Wei Fenghe met on the sidelines of the Shangri-La conference in Singapore. Secretary of State Blinken’s anticipated visit to China took place later that month. In July, US Special Envoy for Climate John Kerry and Secretary of the Treasury Janet Yellen traveled to China, followed by a visit of US Secretary of Commerce Gina Raimondo in August. These high-level meetings concluded on a note of cautious optimism, with both sides acknowledging “progress” but not a “solution,” as the purpose of the meetings was to stabilize relations rather than to resolve the issues in dispute. In September 2023, Secretary of the Treasury Yellen and Chinese Finance Minister He Lifeng launched two new working groups on economic and financial issues. Moreover, Pentagon officials and their Chinese counterparts met and discussed the US Department of Defense’s cyber strategy, followed by a meeting of the American and Chinese presidents in San Francisco in November. The American efforts to renew the military dialogue between the two countries was initially met with refusal by China until December, when General Brown, the chairman of the Joint Chiefs of Staff, spoke with his Chinese counterpart General Liu Zhenli. In early January 2024, a few days before the elections in Taiwan, the annual Defense Policy Coordination Talks between the two countries were held at the Pentagon for the first time in four years. These developments reflect China’s acute sensitivity toward the Taiwan issue and its willingness to take significant measures against perceived violations of its One China Policy, especially by the United States. Despite numerous disputes, the growing rivalry between them, the defiant measures, and the reciprocal sanctions, these events highlight that the two powers recognize the importance of keeping channels of communication open. This dialogue is crucial for pursuing shared interests, resolving disputes, and minimizing the risk of military escalation that could have far-reaching consequences for both nations as well as the global community. The ongoing tension between the United States and China over Taiwan also has implications for Israel. First, the increasing friction between the powers has accelerated the formation of two opposing camps and has limited Israel’s ability to maneuver between them. As demonstrated (again) since the outbreak of the war between Israel and Hamas, the United States is Israel’s greatest friend and its most important strategic ally. While China is an important economic partner of Israel, its policy is not that of a friend, and its oppositional stance toward Israel has the potential to cause significant damage. The United States expects its allies to stand by its side and to align more closely with its policies vis-à-vis China, especially concerning advanced technologies and critical infrastructure. Failing to meet US expectations could strain US–Israel relations. Second, a military escalation between the United States and China would also have global economic consequences, seriously disrupting supply chains of raw materials and essential goods crucial to Israel. Finally, the US administration recently linked the military aid granted to Israel to that of both Taiwan and Ukraine, framing them as three democracies under threat. While this linkage underscores the US commitment to its allies, it also creates constraints and interdependencies. The attention and resources that the United States currently allocates to Israel and to the broader challenges in the Middle East could be compromised if the United States faces serious military crises elsewhere in the world, and this could have far-reaching impacts on Israel.

2024 looks set to be an even more perilous year than 2023 on the Korean Peninsula as nuclear threat and counter threat have escalated even further since the beginning of January. On New Year’s Day, South Korea’s defence ministry repeated previous threats to destroy the North Korean “regime” if it uses nuclear weapons. This was a response to North Korean leader, Kim Jong Un’s speech the day before in which he told his military to prepare for possible war. Since then, Kim has said he has given up on the idea of peaceful reunification with South Korea designating it a hostile state and again warned of possible war. In the past week alone, Kim has called for a change in the constitution to designate Seoul as Pyongyang’s “primary foe” and a confidence building military agreement with the South agreed in 2018 has started to fall apart as the South Korean armed forces resumed frontline aerial surveillance in the wake of North Korean artillery exercises near a South Korean island on the maritime border between the two states. The expected change in the constitution of the Democratic People’s Republic of Korea (North Korea’s official name) follows an amendment last year that enshrined nuclear weapons in it. This week has also seen the North testing what it says is a solid-fuelled hypersonic missile and an underwater nuclear drone in response to what some observers say is the largest ever joint naval exercise between South Korea, the United States and Japan. Analysts believe Pyongyang is developing both so-called strategic and tactical nuclear weapons in order to deter the US which is committed to use nuclear weapons in South Korea’s defence. North Korea has been testing more and more advanced ballistic missiles and warheads, some with the range to reach the US and has also said it is developing ship-launched cruise missiles, while the Americans have been mounting repeated shows of force including military exercises using nuclear-capable aircraft and the visit of a nuclear-armed submarine to South Korea. Last year, the US and South Korea agreed to increase their cooperation on the planning for the use of nuclear weapons following earlier statements by South Korean President, Yoon Suk Yeol, that suggested Seoul might develop its own nuclear weapons. Yoon has since cooled talk of acquiring nuclear weapons, but the debate continues in policy circles. Another escalatory move has been increasing military cooperation between the US, South Korea, and Japan, which also endorses the use of American nuclear weapons in its defence. In the light of this, some analysts see the Korean Peninsula as the most dangerous nuclear flashpoint in a world that currently has no shortage of conflict involving nuclear-armed states in Ukraine and Gaza. Alicia Sanders-Zakre, ICAN’s Policy and Research Coordinator, called for restraint on all sides: “Inflammatory nuclear rhetoric and threats, accompanied by military exercises and weapons tests, ramp up tensions and bring us closer to the brink of catastrophe. All nuclear-armed states, including North Korea and the US, as well as those allied on nuclear policies, such as Japan and South Korea, need to take urgent steps to de-escalate tensions and to break free from the dangerous doctrine of nuclear deterrence. Joining the Treaty on the Prohibition of Nuclear Weapons is a crucial step to delegitimise nuclear deterrence and eliminate nuclear weapons.” North Korea uses the same justification for its actions as the US, and the other declared nuclear-armed states. Just like Washington, Pyongyang says it is committed to disarmament, but argues the security threats it faces mean it needs nuclear weapons to deter its enemies. The doctrine of deterrence is based on the threat to use nuclear weapons with all the catastrophic consequences that would entail for the whole world. As the states parties to the Treaty on the Prohibition of Nuclear Weapons (TPNW) declared at their recent meeting in New York: “the renewed advocacy, insistence on and attempts to justify nuclear deterrence as a legitimate security doctrine gives false credence to the value of nuclear weapons for national security and dangerously increases the risk of horizontal and vertical nuclear proliferation.” The TPNW is growing in strength and has just welcomed its 70th state party while a further 27 countries are signatories. These states recognise that the total elimination of nuclear weapons is a global imperative and they are showing responsible leadership by championing the treaty as the best way to end the existential threat posed by nuclear weapons.

In March 2021, the container ship Ever Given ran aground in the Suez Canal. The six days the canal remained closed raised a wave of concern worldwide as it blocked passage through this strategic route, which handles 30% of the world's container traffic. The incident caused serious delays in global supply chains, with its effects still being felt months after the crisis. The concern over the Ever Given case now pales in comparison to that provoked by attacks from the Houthi rebels, a Yemeni insurgent group, in the vicinity of the Bab el-Mandeb Strait, at the entrance of the Red Sea, on the route from European markets through the Suez Canal. In early November 2023, this rebel group began bombarding Israeli and American targets in support of the Palestinian group Hamas. Their attacks, which have extended to commercial traffic venturing through the area, aim to provoke a collapse that forces Israel to halt its offensive in Gaza. Cost overruns and longer distances The impact of this situation on the global economy is not easily quantifiable, but initially, it has led to higher insurance costs for those who continue to use this route. Also, there are additional costs for shipping companies that, to avoid the area, have decided to divert traffic towards the route around the Cape of Good Hope. At 9,000 kilometers and 14 days longer, this route is currently safer than the Suez Canal. Furthermore, it can be expected that sustained tension in this area will eventually lead to an increase in energy prices. Approximately 12% of the world's traded oil passes through the Suez, first passing through the Bab el-Mandeb Strait. All of this adds to the extra costs generated by delays resulting from circumnavigating Africa and the possibility of imbalances between supply and demand for inputs. All these factors create a scenario that, if sustained, will likely translate into an increase in consumer prices and a resurgence of inflation. This situation directly affects Europe, but also countries like China or India, not to mention the very negative effect it has on the economy of Egypt, the country that controls the Suez Canal. Difficulties and Risks This is not the only maritime passage facing difficulties. In Panama, the decrease in the depth of the canal, as a result of a prolonged drought, prevents the passage of heavier vessels, which must seek alternatives, often more expensive. Furthermore, it cannot be ruled out that, due to their location in areas of great geostrategic importance, the Strait of Hormuz (Persian Gulf) or the Strait of Malacca (Southeast Asia) may also become sources of instability, crucial points for international maritime transport. If instability persists, the search for alternative routes becomes an evident necessity. In fact, it is already underway. Besides the one around Africa, other routes to connect Asia and Europe could be explored: the Arctic route, limited by environmental and geopolitical reasons, could contribute, albeit probably modestly, to alleviating the situation. Others that combine land and sea segments could also do so. However, this latter option is complicated by the topography and the difficulty of finding routes that bypass conflict-ridden areas or do not give China the key to access them. Vulnerable Supply Chains Given the difficulties global supply chains have faced in less than five years (the COVID-19 lockdowns, the war in Ukraine, and now the attacks at the entrance of the Red Sea), it is pertinent to consider how to mitigate their vulnerability, whether it is advisable to redesign them, and even if free and globalized trade remains viable as it is known today. Issues such as redundancy in supply chains and diversification of suppliers and markets allow for the creation of resilient systems that ensure the flow of resources. Reconsidering the balance between just-in-time logistics and accumulation logistics to achieve greater autonomy would help cushion the effects of an interruption like the one currently experienced in the Red Sea. The other question is how to create an environment that restores freedom of navigation through the Suez Canal. The United States launched the "Guardian of Prosperity" operation, which has not been supported by all countries trading through the canal and has also raised suspicions among those who see it as an undesirable alignment with Israel or as a safe path to the regional extension of the war in Gaza. Finding a solution that does not involve increased costs at all levels of global supply chains will be difficult. Rather, the goal is to calculate whether this increase compensates for what could be lost if the current situation, increasingly subject to the instability of the international system, is maintained.

The EU should try to attract more business from Taiwan, though Taiwan’s January 2024 election hasn’t made the job easier Taiwan’s economy has transformed since 2016 under the leadership of the Democratic Progressive Party (DPP). In particular, the Taiwanese economy has diversified away from mainland China, while reliance on semiconductors is now even more acute than eight years ago. In elections in January, the DPP won the presidency for a third term but lost overall control of Taiwan’s parliament, the Legislative Yuan. In contrast to the previous two terms, the DPP therefore needs to agree policy, including economic policy, with other parties. this could signal a softer approach in relation to the continuation of diversification away from the mainland. Ongoing diversification Mainland China remains Taiwan’s biggest export and investment destination, despite the share of Taiwan’s exports that go to China reducing from 40 percent on average between 2016 and 2019 to 35 percent in 2023 (Figure 1). This has happened even though Taiwan signed a free trade agreement with mainland China in 2010 – the Economic Cooperation Framework Agreement (ECFA) – which at the time led to an increase in Taiwanese exports to the mainland. The COVID-19 pandemic in 2020 also triggered a sharp increase as the rest of the world entered a deep recession, but the trend has not lasted. Since 2021, the share of Taiwanese exports going to the mainland has dropped significantly, influenced by US export controls on high-end semiconductors, with a clear knock-on effect on Taiwanese exporters.   Taiwanese FDI into mainland China has also shrunk rapidly, from 65 percent of total Taiwanese FDI on average from 2008-2016 to 34 percent on average from 2017-2023 (Figure 2). The difference between these periods is that in the former, Taiwan was governed by the Kuomintang (KMT, Chinese Nationalist Party), which favours closer relations with the mainland, while in the latter period the DPP was in charge. There are both geopolitical and economic reasons for mainland China’s falling share of Taiwanese FDI. First, the ECFA trade and investment agreement, reached under the first term of KMT President Ma Ying-jeou, was not extended when a new round of negotiations started in 2012, to include technological cooperation, finance and people-to-people exchanges. A broader economic agreement between Taiwan and the mainland, mostly focusing on services – the Cross-Strait Service Trade Agreement (CSSTA) – fell victim to lack of consensus among Taiwan’s main political parties, increased tensions in the Taiwan Straits and student protests in Taiwan (the so-called Sunflower movement) in 2014.1 Second, with the DPP victory in 2016, the new Southbound Policy 2 was launched, offering incentives for Taiwanese companies investing in 18 Asian countries, including ASEAN 3, India and other South Asian and Australasian nations. In addition, rising labour costs in mainland China, the ongoing trade war between the US and China, an increased regulatory burden in the mainland and political tensions between the two sides of the Taiwan Strait also pushed Taiwanese businesses to look elsewhere to invest. -    The new political reality and geographical diversification While the election-winning DPP wants to see further diversification away from the mainland, the more pro-China party, the KMT, wants reinforced economic relations with China.4 Because of the now-hung parliament, the DPP will need to take some of the KMT’s wishes into account it wants pass new rules, including those related to geographical diversification. Beyond the two parties’ preferences, two other important issues also need to be factored in. First, geographical diversification requires open markets but Taiwan is increasingly unable to open any market through trade or investment deals. Taiwan has spent the last eight years negotiating bilateral deals with its closest allies, Japan and the US, but the DPP administration has not even been able to complete these. Incoming President Lai has said that Taiwan should continue to push to be part of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), to which it applied in September 2021, but the reality is that Taiwan’s application has little hope of success. China officially applied to be a member of the CPTTP only a couple of days before Taiwan. Since then, the United Kingdom has become a member of CPTTP, but the negotiation processes with Taiwan and mainland China have not started. Australian’s prime minister, Anthony Albanese, has expressed severe doubts about Taiwan’s ability to become member of CPTTP because of lack of international recognition of it as a nation-state.5 Second, while the DPP is likely to continue to offer more fiscal incentives to promote diversification in Southeast Asia and India (under the Southbound Policy), the fastest-growing destination for both exports and foreign direct investment from Taiwan is the United States, followed by Japan. This can be explained by the ongoing artificial intelligence revolution, which needs semiconductors, and the decisions of some key Taiwanese chip companies (especially TSCM) to open factories overseas for chip production, with the US and Japan as the most important destinations. In other words, the DPP’s push for geographical diversification might not be the main reason why diversification has happened; rather, it has been driven by market forces and business opportunities. This also means that the KMT push to maintain – if not deepen – economic ties with mainland China might not succeed unless China’s currently underwhelming economic performance turns around. Implications for the European Union So far, the EU has benefitted little from Taiwan’s trade and investment diversification, at least when compared to the US and the rest of Asia. The EU’s export share into Taiwan has remained practically stagnant (while the US has doubled its share), notwithstanding a large increase in exports from the Netherlands for a single item – ASML’s lithography machines for chip production. The EU lacks a trade or investment deal with Taiwan, but so do some of Taiwan’s other trading partners, including the US. Considering that the EU is the largest foreign direct investor in Taiwan, the question arises of whether the EU should do more to foster more bilateral economic relations. The gains could be substantial, especially from inbound FDI as Taiwanese investment focuses on high-end manufacturing. There has been some movement. A €5 billion investment in France by a Taiwanese company (ProLogium) was announced in May 2023 to build a battery factory 6 . TSMC announced in August 2023 a €4.5 billion investment in a semiconductor factory in Germany 7 . But for the EU to catch up with Japan and the US as a recipient of outbound FDI from Taiwan, the result of Taiwan’s elections could be an obstacle. This is because the DPP will have less control of the economic agenda because it does not control the Legislative Yuan. The close-to-impossible negotiation of a trade and investment deal between the EU and Taiwan – as shown by Taiwan’s difficulties in relation to Japan, the US and the CPTTP – does not point to any improvement in the institutional framework for economic relations to improve. The question, then, is what can the EU offer to attract high-end foreign direct investment from Taiwan? Subsidies to attract semiconductor factories cannot be the only answer, given the very large amounts needed and the pressure such subsidies put on EU member states’ already stretched finances (Legarda and Vasselier, 2023). Working with business associations and chambers should be a key driving force to improve business relations between Taiwan and the EU, especially considering that the EU is the largest foreign foreign direct investor in Taiwan, while Taiwanese companies have been absent from the EU single market until recently. Overall, the US and the rest of Asia have been the main winners from Taiwan’s rapid diversification of its economy away from mainland China. The EU, which is lagging, should work to enhance its economic exchanges with Taiwan. Hopefully the January 2024 election results will facilitate this. Most importantly, the EU should aim to attract more high-tech FDI from Taiwan. Unfortunately, a better institutional framework through a trade/investment deal seems highly unlikely, for geopolitical reasons. This puts all the burden on chambers of commerce and other forums to improve business relations. References 1- The Sunflower Movement was a student-led protest that occuped Taiwan’s Legislative Yuan to put pressure on the KMT government against signing a second cooperation deal with mainland China. See Ho (2018). 2- See the New Southbound Policy portal at https://nspp.mofa.gov.tw/nsppe/. 3- Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam. 4- Alicia García-Herrero, ‘Taiwan’s future economic direction hinges on the election outcome’, First glance, 12 January 2024, Bruegel https://www.bruegel.org/first-glance/taiwans-future-economic-direction-… 5- Claudia Long and Stephen Dziedzic, ‘Albanese says Australia is unlikely to support Taiwan 6- France24, ‘Taiwanese battery maker Prologium to invest €5 billion in French factory’, 12 May 2023, https://www.france24.com/en/europe/20230512-taiwanese-battery-maker-pro…. 7- DW, ‘Taiwan’s TSMC to build semiconductor factory in Germany’, 8 August 2023, https://www.dw.com/en/taiwans-tsmc-to-build-semiconductor-factory-in-ge…. Ho, M.-S. (2018) ‘The Activist Legacy of Taiwan’s Sunflower Movement’, Carnegie Endowment for International Peace, 2 August, available at https://carnegieendowment.org/2018/08/02/activist-legacy-of-taiwan-s-sunflower-movement-pub-76966 Legarda, H. and A. Vasselier (2023) ‘Navigating Taiwan relations in 2024: Practical considerations for European policy makers’, China Horizons, 21 December, available at https://chinahorizons.eu/our-research/policy-briefs/278-navigating-taiwan-relations-in-2024-practical-considerations-for-european-policy-makers

Iran and Russia have entered a closer political, economic, and military relationship during the past two years, the trigger widely seen as the upsurge in defence cooperation following Russia’s full invasion of Ukraine in February 2022. This new relationship, described variously as a strategic alignment or strategic partnership, was seen by both Tehran and Moscow as necessary to meet mutual and separate critical national needs due to the restrictive effects on both of US and Western sanctions. Iran’s international affairs, since its 1979 Islamic revolution, have been largely shaped by two factors. The first is Iran’s strong adherence to national autonomy, maximum self-sufficiency, and non-alignment. The latter has included, as far as practical, a balance between East and West, or today, Global South and Global West. However, Iranians are cautious about trusting others. While, therefore, a strategic alignment with Russia, or potentially others, could be acceptable, a formal alliance that compromise’s autonomy, would not. The second factor is Iran’s relationship with the US, and in turn with Europe, other Western countries and the UN, and their use of sanctions to deter or change international adversarial differences. Iran-US relations since Iran’s 1979 Islamic revolution have been tense and conflicted, and especially with Iranian-supported regional state and non-state militia. Major US concerns include Iran’s support for “state and non-state terrorism,” human rights abuses, missile development, and their potential, some say intent, to develop a nuclear weapons capability. Decades of broadly-based US sanctions, along with EU and UN sanctions, the latter mostly nuclear related, have strongly impacted the nation. The one short period of Iran-US rapprochement commenced in 2016 when President Barack Obama successfully brought Iran onboard as a signatory to the Joint Comprehensive Plan of Action (the JCPOA) or nuclear agreement. Obama’s aim was to firstly resolve the nuclear issue and use this as the stepping-stone to negotiations on other regional security issues. But this two-step process was undone by President Donald Trump‘s 2018 decision to unilaterally withdraw from the JCPOA and reimpose US primary and secondary sanctions. Trump’s action, and President Joe Biden’s subsequent “failure” to rejoin the JCPOA and repeal related US sanctions, bitterly disappointed a large cast of international stakeholders, including Iran’s moderates and other JCPOA signatories. For Iran, the US could not be trusted to seriously seek rapprochement and repeal US sanctions either before, or foreseeably after, this year’s US presidential elections. This distrust extended also to the Europeans and others who would continue to remain subject to US secondary sanctions. Iran saw its future fundamentally with countries that were willing to openly trade with them, notwithstanding US sanctions, and other countries or organisations that were prepared to overlook or actively circumvent or evade sanctions. Multilateral outreach included Iran joining two major non-aligned groups in 2023, the SCO (Shanghai Cooperation Organisation) and BRICS+6 (Brazil, Russia, India, China, South Africa + 6). These comprise some 40 percent and 46 percent respectively of the world’s population, and some 20 percent and 30 percent of global GDP. BRICS also includes some 40 percent of global oil production. Key members of both include Russia, China, and India. Saudi Arabia, the UAE, and Egypt are part of the “+6 members” of BRICS, and are also Dialogue Partners of the SCO. Both organisations offer significant additional political and economic networking opportunities and economic options. Bilaterally, the relationship between Tehran and Moscow, from its imperialist Shah/Tsar and post-revolutionary Iran and USSR/Russia iterations to the late 1980s, has had its share of tensions and conflict, including territorial disputes. The past 30-year period from the early 1990s to 2021, however, has been relatively stable. Geographic proximity, including a maritime border across the Caspian Sea, facilitated a significant increase in trade, reportedly from some US$1 billion in 2005 to US$3.3 billion in 2021. Mutual security interests also saw an increase in regional military cooperation, including joint operations against ISIS in Syria, and increased Russian sales of military equipment to Iran. The relationship changed significantly in early 2022 due to Russia’s increased military equipment needs, and to help offset the broad impact of sanctions imposed by the US, the EU, and others on Russia in response to its invasion of Ukraine. Militarily, increased Iranian defence sales to Russia have included a range of munitions, UAV (unmanned aerial vehicles) systems, and potentially Iranian short range ballistic missiles (SRBMs). The UAV deal includes the construction of a factory for manufacturing thousands of Iranian drones in Russia’s Tartarstan province. In return Russia has sold, or agreed to sell, to Iran a range of advanced weapons systems, including the S-400 air-defence missile, helicopters, and SU 34 fighters. Enhanced cyber and satellite cooperation was also agreed. Russia has also passed to Iran many of the high technology Western weapons systems captured in Ukraine, enabling Iran to evaluate, copy, and develop counter-measures. Significantly, this new level of Iranian-Russian cooperation has lifted the military capability of both, with implications for the Middle East and Ukraine respectively. But how effective have the sanctions been? Iran has been subject to harsh sanctions since 1979, and developed a “resistance economy” involving official and extensive unofficial trade and financing arrangements. Because many related statistics are unreliable or unavailable, official GDP estimates may be highly inaccurate. Importantly, however, and despite fluctuations, the World Bank shows a consistent decline in Iran’s GDP since 1979. For Russia, due to shifting markets and higher prices for oil since early 2022, their GDP contracted some 2 percent only that year compared to a prediction of more than 11 percent, and has mostly recovered since. Economically, despite the challenges of sanctions, bilateral cooperation is strong, both economies still function, and their governments remain stable. Militarily, sanctions have facilitated closer cooperation between Iran and Russia, contrary to US, NATO, and allied interests. Are there areas for the US to negotiate the lifting of sanctions with Iran and Russia? US priorities for Iran could include rejoining the JCPOA, facilitating a reduction or cessation of state and non-state militia attacks against regional Israeli, US, and related maritime targets, and restricting specified military cooperation with Russia. US priorities for Russia could include various ceasefire compromises involving the war in the Ukraine, and restricting specified military cooperation with Iran. And the likelihood of progress? For the reasons above, progress on any issue between the US and Iran is very unlikely before this year’s US presidential elections. If or when afterwards would depend in large part on who was elected. For Russia, a ceasefire compromise in Ukraine could be possible if it gave them “temporary” retention of vast tracts of land captured post-2022. Timing will be dictated by battlefield outcomes, but the US Senate approval on 13 February of an additional US$60 billion of military assistance to the Ukraine, and its likely approval by Congress, makes a ceasefire in the foreseeable future unlikely.

Each week we encounter mouthwatering policies implemented by the newly elected libertarian president of Argentina Javier Milei. He has the libertarian community in awe. His arrival to politics with an openly antisystem discourse shook not only the local scene in Argentina but also the rest of the world. But how? The respective libertarian parties in each country barely get enough votes to even appear on the main grid on election night! There are numerous reasons as to why this may be. We libertarians know ourselves well and no one with a minimum of self-criticism is surprised that our current situation in party politics is such. While political culture differs by country, our internal ideological discussions as libertarians are the same. While there’s no formula for liberty, one may find Milei’s Rothbardian pattern interesting. In a world sunk in destructionist trends, many voices of reason emerge. Are any of them following these same steps? Let’s now look at some factors that led Javier Milei to the presidency. Understanding of the Market Economics has been the main problem in Argentina for almost its entire history. Crisis after crisis has kept the country stagnant, and the application of different recipes, even with new parties in power, didn’t seem to produce any results. That is why the public interest has gradually turned to economists for answers. Javier Milei understood that need. He published successful books, articles, and even had his own comedic theatrical play on economic affairs. His repeated appearances on television since 2015 were because he knew how to have channels make money. Whenever he popped up at a talk show, there was a peak in ratings. Everybody wanted him! Despite his eccentric appearance, yelling, and proliferated insults, he exuded a magnetism that filled the viewer with curiosity. Although other valuable libertarian economists were gaining prominence, no one equaled him. Without understanding everything he said, the public still perceived he wasn’t talking nonsense—his speech and arguments were logical and made sense. For instance, on his explanation on the illegitimacy of taxes, he immortalized the phrase, “Are you in favor of stealing?” And he proceeded to explain how taxes were forcibly extracted, just like in a robbery. He’d even conclude by referring to Lysander Spooner’s analogy: “At least the robber has more honor than the politician; he shows his face and risks his life!” Education As Murray Rothbard says in the last chapter of For a New Liberty, A prime and necessary condition for libertarian victory . . . is education: the persuasion and conversion of large numbers of people to the cause. Libertarians must, therefore, engage in hard thinking and scholarship, put forth theoretical and systematic books, articles, and journals, and engage in conferences and seminars. On the other hand, a mere elaboration of the theory will get nowhere if no one has ever heard of the books and articles; hence the need for publicity, slogans, student activism, lectures, radio, and TV spots, etc. Milei’s simplicity in explaining the libertarian philosophy and economic principles from an Austrian perspective made people learn. Watching the night talk show with Milei’s presence wasn’t just another moment of mind-numbing TV garbage: it became an eye-opening experience. Moreover, he used to always carry a book with him. Whether it was one of his own or Economics in One Lesson or The Fatal Conceit. At times he’s been seen with Chaos Theory or Defending the Undefendable. In each of his appearances one could write down several authors or book titles, which he’d also often share in social media. The mention of names such as Ludwig von Mises, Murray Rothbard, or Friedrich Hayek on prime time was not in vain. Genuine Followers Young people composed his main harvest of followers. Accustomed to growing up seeing the same people in power, and a not-so-different opposition, they found in Milei’s speech a flame of hope which illuminated a possible future with features similar to wealthy countries. Followers began to mention Milei in conversations with their peers, behaving like someone newly converted to a religion and wanting everyone to know. Countless users began to create content on libertarianism, from quotes, infographics, and videos spreading the ideas, which soon became very popular. That is how the demonization of the ideas of liberty and capitalism was lifted. Social Media These mentioned followers became key, especially during the elections. Their exceptional communication and research skills served to unmask, expose, and humiliate politicians and supporters 24/7. The tireless work was impressive. It took the form of memes, slogans, or trending topics. X’s importance as a free-speech platform was extraordinary, unlike during Milei’s 2021 campaign for Congress where his main supporters were banned on Twitter and came back each time with a new account. The political class had fallen behind. It had no chance in the virtual world, which had been taken over years ago by libertarians while they neglected the people. Despite Milei’s opposition using public funds to plaster the streets with their faces and paying for highly invasive and disturbing ads against him on social media, his organic and decentralized activists communicated his message unceasingly, resisted endless attacks, and discredited operations. Paradigm Shift The then-current government, whose banners were “the people” and the working class, in practice dedicated itself to multiplying poverty. They themselves lived like kings in total dissonance with the needs of the common people. Their main followers are composed of themselves and people who benefit from the state’s parasitism machinery: union leaders, government employees, corporate media, “artists” and “intellectuals.” The working people, increasingly distanced from those who claim to represent them, resonated with Milei’s ideas. Why? Because they carry civilization and progress upon their shoulders. The political class was losing credibility, and with it the elections, for not seeing this change replicating all over the world. Today the political class at a global level is using different motives to drive the structure of systematic stealing. Race, immigration, climate change, digital currency—you name it. These ideas have been implanted by the elites through prominent figures and the media, financed by public funds. The more radical their attempts, the more they demonstrate their desperation. We have the opportunity for what seems to be a new beginning in the world with a subtle comeback of the ideas upon which civilization rests. If Mises called the twentieth century the century of socialism, may we be able to call the twenty-first century the century of libertarianism.

SUMMARY The Korean Peninsula seems always to be on the knife edge of calamity. North Korea’s growing nuclear arsenal, its more threatening language, and the potential for more provocative and aggressive actions are a volatile combination. Overreacting to Pyongyang’s inflammatory threatening language is dangerous, but so is dismissing potential signals of a resumption of deadly tactical attacks. Indications are that this year will be even busier for Korea watchers who long ago learned to keep both a pot of coffee and a bottle of scotch nearby to deal with the inevitable crises. KEY TAKEAWAYS 1. North Korea’s growing nuclear arsenal, its more threatening language, and the potential for more provocative and aggressive actions are a volatile combination. 2. Overreacting to Pyongyang’s inflammatory threatening language is dangerous, but so is dismissing potential signals of a resumption of deadly tactical attacks. 3. Reducing the potential for invasion while increasing transparency with respect to military forces can reduce the potential for miscalculation and a military clash. It appears that 2024 is going to be a year for greater North Korean provocations, heightened tensions, and increased potential for tactical military clashes along the inter-Korean border. Pyongyang’s rhetoric and military posture have become more threatening, and the regime recently abandoned a military tension-reduction agreement with Seoul. That said, Pyongyang is unlikely to start a major war with South Korea and the United States deliberately. In other words, put your helmets on, but there’s no need to get under the desk just yet. More Bombastic and Threatening Rhetoric During major speeches in December 2023 and January, North Korean “Supreme Leader” Kim Jong-un described the Korean Peninsula as being “on the brink of a nuclear war” and called on his military to accelerate preparations for “a great event to suppress the whole territory of South Korea by mobilizing all physical means and forces including nuclear forces.”1 Kim warned that North Korea “does not want war, but we also have no intention of avoiding it” and that a “physical clash can be caused and escalated even by a slight accidental factor in the area along the Military Demarcation Line.”2 Kim Yo-jong, Kim Jong-un’s powerful sister, declared similarly that “the safety catch of [the] trigger of the Korean People's Army (KPA) had already been slipped” and that Pyongyang “will launch an immediate military strike if the enemy makes even a slight provocation.”3 Kim Jong-un also abandoned decades of North Korean policy seeking reconciliation and reunification with South Korea, instead describing inter-Korean relations as now being between “two hostile and belligerent states.”4 This declaration is particularly noteworthy because Kim is implicitly criticizing the unification policy of both his grandfather Kim Il-sung and his father Kim Jong-il. Such blasphemous remarks coming from anyone else would have immediate and dire consequences. To emphasize the new policy, Kim disbanded all government agencies devoted to relations with South Korea and demolished the massive monument to Korean unification that had been commissioned by his father Kim Jong-il, describing it as an “eyesore.”5 North Korea backed up its diatribes with artillery fire along the naval boundary off the west coast of the Korean Peninsula. Pyongyang fired a total of 350 shells during three consecutive days in early January, and South Korea responded by firing 400 artillery rounds. While all shells remained on each country’s side of the disputed Northern Limit Line that delineates the de facto maritime border between the two Koreas, they did land in the former buffer zone created by the 2018 inter-Korean Comprehensive Military Agreement. That bilateral risk-reduction accord had proscribed artillery fire and military drills near the border area. Pyongyang’s nullification of the agreement in November 2023 will return armed North and South Korean troops back to closer contact. Seoul announced that it would resume army, navy, and Marine Corps live-fire artillery drills and regiment-level field maneuvers within five kilometers of the Demilitarized Zone (DMZ).6 North Korea’s belligerent declarations, along with escalating provocations, may be intended to influence both the April 10 South Korean National Assembly election and the November U.S. presidential election. However, such actions would more likely affirm pre-existing progressive and conservative views rather than they would to induce any voters to change sides. Inexorably Growing Military Threat North Korea has been on a multi-year binge of testing and deploying improved nuclear-capable systems that can target South Korea, Japan, and the continental United States. Most recently, Pyongyang successfully launched a solid-fueled ICBM, a solid-fueled intermediate-range missile with a hypersonic maneuverable warhead, its first military reconnaissance satellite, submarine-launched cruise missiles, and an underwater nuclear-capable drone. Knowing that he is backed in the U.N. Security Council by China and Russia could embolden Kim Jong-un to pursue even more provocative behavior. In the past, Beijing and Moscow were willing to impose U.N. resolutions and sanctions after North Korean ICBM and nuclear tests, but both countries now block new international actions in response to Pyongyang’s repeated violations of previous U.N. resolutions. North Korea could conduct its long-awaited seventh nuclear test—either of a new generation of tactical battlefield nuclear weapons or of Kim’s promised “super large” weapon. In its last nuclear test in 2017, Pyongyang exploded a hydrogen bomb at least 10 times as powerful as the 1945 atomic weapons used against Hiroshima and Nagasaki. The regime could also launch an ICBM over Japan and demonstrate multiple-warhead or re-entry vehicle capabilities. To date, all ICBM launches have been on a nearly vertical lofted trajectory to avoid flying over other countries. North Korean provocations are expected to increase in the run-up to the annual U.S.–South Korean large-scale military exercises in March. Trilateral Axis of Authoritarianism Pyongyang’s recently strengthened relationship with Moscow is another cause for concern. In return for shipping over a million artillery shells and rockets to Russia for Moscow to use in its attacks on Ukraine, North Korea is likely to receive some military technology. While some experts believe that this could include nuclear warhead, re-entry vehicle, or ICBM technology, Moscow is less likely to provide those “crown jewels” than it is to provide lower-level conventional weapon technology. However, any Russian assistance to improve North Korean weapons is worrisome to the U.S. and its allies. Both China and North Korea responded to Russia’s invasion of Ukraine by increasing their economic and military support to Moscow. There is growing apprehension of the risk of horizontal escalation in which Beijing or Pyongyang could take advantage of the global focus on crises in Ukraine and the Middle East to initiate their own coercive or military actions against Taiwan or South Korea. Clashes but Not War Some experts speculate that the situation on the Korean Peninsula is the most dangerous it has been since the 1950 North Korean invasion of the south and that Kim Jong-un has already made the strategic decision to go to war.7 However, despite its menacing posturing, Pyongyang would not have sent massive amounts of artillery shells and rockets as well as dozens of its new KN-23 missiles to Russia if it were contemplating starting a war with South Korea. Nor has any buildup of North Korea military forces along the inter-Korean border been detected. More probable is another tactical-level military clash along the DMZ or maritime Northern Limit Line. South Korean officials privately comment that they cannot rule out another deadly North Korean attack such as the 2010 sinking of the South Korean naval ship Cheonan and shelling of Yeonpyeong Island, which cumulatively killed 50 South Koreans. Danger of Stumbling Into Major Conflict Both Koreas have been more vocal in their vows to strike preemptively if they perceive—or misperceive—the other side as preparing for an attack. In 2022, North Korea revised its nuclear law and disturbingly lowered the threshold for its use of nuclear weapons. The regime is developing smaller tactical nuclear warheads for deployment to forward-based units, and their proximity to allied forces across the DMZ could lead to a “use it or lose it” strategy for its vulnerable nuclear arsenal during the early stages of a conflict. South Korean President Yoon Suk Yeol has shown a greater willingness to respond firmly to North Korean threats than his predecessor did. He directed enhancement of South Korea’s preemptive attack capabilities and declared, “Should North Korea make a provocation, we will punish it many times over.”8 He told his military to “immediately respond and retaliate before reporting to [higher authorities and] sternly and swiftly smash the enemy’s intentions to stage provocations on the spot.”9 The danger of miscalculated military action is real, even at a tactical level. In 2015, Seoul announced that North Korea had fired 13 artillery shells into South Korea and it had responded with 39 shells into the North. However, a subsequent investigation by United Nations Command revealed that there had been no North Korean military attack. Instead, South Korean counter-battery radar had misinterpreted a nearby lightning storm as inbound artillery fire. Luckily, North Korea did not respond to the unprovoked South Korean action. What Washington Should Do Washington must walk a fine line between maintaining a strong military posture to deter and if necessary respond to North Korean military actions while also minimizing the risk of inadvertent escalation into a strategic war. With this in mind, the U.S. should: • Enhance trilateral security cooperation. The U.S., along with South Korea and Japan, should continue ongoing efforts to increase coordination among their three militaries. South Korean President Yoon acknowledged the importance of Tokyo’s role in a Korean contingency, including the seven U.N. Command bases in Japan. During their August 2023 Camp David summit, the three leaders pledged even more extensive trilateral military exercises, real-time exchange of information on North Korean missile launches, and increased cooperation on ballistic missile defense. The leaders’ commitment to consult and coordinate responses to common security threats was a major step forward in trilateral military cooperation but stopped far short of formal alliance. The three countries should continue and expand the scope of the trilateral combined military exercises that resumed in 2022 after a four-year hiatus. The wide-ranging exercises reversed the degradation in allied deterrence and defense capabilities as did the resumption of U.S. rotational deployment of strategic nuclear-capable assets to the Korean theater of operations. • Ensure that military exercises are strong but constrained in location. The U.S. and its allies should be aware that any large-scale unannounced combined military operations close to North Korea’s borders run the risk of being misinterpreted by Pyongyang as preparations for an allied attack. Therefore, while maintaining high levels of military training, the exercises should be announced beforehand and not conducted close to North Korean forces along the DMZ. Washington should also counsel Seoul against highly escalatory responses to North Korean actions. However, appearing too heavy-handed in trying to curtail a South Korean response to a tactical-level attack risks undermining ongoing U.S. efforts to reassure Seoul of America’s commitment to its defense. After both 2010 North Korean attacks, South Korean officials privately complained that the U.S. had “sat on its ally” and prevented a South Korean retaliation. More recently, North Korea’s growing ability to hit the American homeland with nuclear weapons caused South Koreans to doubt the viability of the U.S. as an ally and led to greater domestic advocacy for an indigenous nuclear weapon program. • Push for risk-reduction talks. There seems to be little potential for a diplomatic off-ramp on the road to crisis with North Korea. Since late 2019, the regime has rejected all U.S. and South Korean entreaties for dialogue on any topic, including provision of humanitarian aid. Nor does Pyongyang’s cancelling the inter-Korean Comprehensive Military Agreement bode well for negotiations. However, the proximity of several militaries to each other, rising suspicions, and mutual threats of preemptive attacks are a recipe for disaster. Washington and Seoul should call on Pyongyang to discuss potential risk-reduction and military confidence-building measures similar to those in the Conventional Armed Forces in Europe Treaty and the accompanying Vienna Document of Confidence and Security Building Measures. Reducing the potential for either side to conduct a sudden-start invasion while increasing transparency with respect to military forces can lower tensions by reducing the potential for miscalculation leading to a military clash. Conclusion The Korean Peninsula seems always to be on the knife edge of calamity, but North Korea’s growing nuclear arsenal, its more threatening language, and the potential for more provocative and aggressive actions are a volatile combination. Overreacting to Pyongyang’s inflammatory threatening language is dangerous, but so is dismissing potential signals of a resumption of deadly tactical attacks. Indications are that this year will be even busier for Korea watchers who long ago learned to keep both a pot of coffee and a bottle of scotch nearby to deal with the inevitable crises.   References: 1- Korea Central News Agency, “Report on 9th Enlarged Plenum of 8th WPK Central Committee,” KCNA Watch, December 31, 2023, (accessed February 5, 2024). https://kcnawatch.org/newstream/1704027054-512008976/report-on-9th-enlarged-plenum-of-8th-wpk-central-committee/ 2- Ibid. and Brad Lendon and Gawon Bae, “North Korea’s Kim Vows to Dismantle Father’s Unification Arch as He Declares South Korea ‘Principal Enemy,’” CNN, January 16, 2024, https://www.cnn.com/2024/01/16/asia/north-korea-kim-unification-arch-intl-hnk/index.html (accessed February 5, 2024). 3- Reuters, “North Korea Vows Military Strike If Any Provocation, Fires Artillery Rounds,” January 7, 2024, https://www.reuters.com/world/asia-pacific/north-koreas-kim-yo-jong-vows-immediate-response-provocation-kcna-2024-01-07/ (accessed February 5, 2024). 4- Korea Central News Agency, “Report on 9th Enlarged Plenum of 8th WPK Central Committee.” 5- Lendon and Bae, “North Korea’s Kim Vows to Dismantle Father’s Unification Arch as He Declares South Korea ‘Principal Enemy.’” 6- Chae Yun-hwan, “Military Set to Resume Drills Halted Under 2018 Inter-Korean Accord Buffer Zones,” Yonhap News Agency, January 9, 2024, https://en.yna.co.kr/view/AEN20240109007400315#:~:text=SEOUL%2C%20Jan.,artillery%20firing%2C%20officials%20said%20Tuesday (accessed February 5, 2024). 7- Robert L. Carlin and Siegfried S. Hecker, “Is Kim Jong Un Preparing for War?” Henry L. Stimson Center, 38 North, January 11, 2024, https://www.38north.org/2024/01/is-kim-jong-un-preparing-for-war / (accessed February 5, 2024). 8- Sarah Kim, “After North Declares ‘Hostile’ Relations, Yoon Vows to ‘Punish’ Regime in Case of a Provocation,” Korea Joongang Daily, updated January 18, 2024, https://koreajoongangdaily.joins.com/news/2024-01-16/national/northKorea/Yoon-vows-to-punish-North-Korea-many-times-over-in-case-of-a-provocation-/1959411?detailWord= (accessed February 5, 2024). 9- Hyung-Jin Kim, “North Korea’s Kim Vows to Bolster War Readiness to Repel US-Led Confrontations,” Associated Press, updated December 28, 2023, https://apnews.com/article/north-korea-kim-party-meeting-missiles-27803fcfbfa9cb2a89d6fb5e824e9c0c (accessed February 5, 2024).

Italy top, Vatican flop? The first war of aggression in Europe since 1945 is keeping two global players busy in Rome: the Italian government and Vatican diplomacy. While under the leadership of President Sergio Mattarella and Prime Minister Giorgia Meloni there is no doubt about Italy's unbroken solidarity with Ukraine, criticism of the Holy See's course to date is growing, and not just in Catholic circles. Is Pope Francis' longed-for reconciliation with the Russian Orthodox Church more important than the future fate of Ukraine? When the right-wing alliance of Giorgia Meloni, Matteo Salvini and Silvio Berlusconi took power in Rome in October 2022, there was concern in some European government headquarters that the Tiber might be about to change its stance on the war in Ukraine. This mistrust was less directed at the newly elected Prime Minister Giorgia Meloni, known as an Atlanticist, who had clearly positioned herself and her party "Fratelli d'Italia" against Moscow's war of aggression and Putin's expansionist ambitions during the election campaign, and more towards her two allies Lega and Forza Italia. Both parties were perceived internationally as Russia-friendly, albeit for different reasons: While in the case of Lega leader Matteo Salvini - similar to his ally Marine Le Pen in France - it was the ideological proximity of the anti-European right-wing populists to the authoritarian regime in Moscow, in the case of the bourgeois-conservative Forza Italia it was Silvio Berlusconi's long-standing personal friendship with Vladimir Putin that triggered fears of Italy's rapprochement with Moscow. These were further fueled by several erratic statements by Berlusconi during the coalition negotiations in autumn 2022, in which he openly adopted the Kremlin's view of the Ukraine conflict and thus caused severe irritation among the allies. His adlatus at the time, Antonio Tajani, felt compelled to fly to Brussels at short notice to hold talks with the heads of the EU Commission, NATO and the European People's Party to reassure them that the new right-wing government in Rome would by no means abandon the EU's common line, but would remain faithful to its commitments. Berlusconi's capers and Salvini's ricochet The situation was different in the case of the right-wing populist Lega, which had achieved a historically poor result of just eight percent in the early elections in September 2022. Giorgia Meloni therefore had her rival Matteo Salvini in her hands and was able to demand loyalty from the potential troublemaker. At the time, the designated head of government openly threatened her two partners with a collapse of the coalition negotiations: there would be "no joint government at any price". She played her cards close to her chest and in the end even brought Silvio Berlusconi into line, who had to make a pilgrimage to the Fratelli d'Italia party headquarters to recant his pro-Moscow remarks. A humiliation for which the Forza Italia patriarch has never forgiven her. Since Berlusconi's death, the capers have ceased: under the leadership of Foreign Minister Antonio Tajani, Forza Italia is clearly on the side of its Western allies and in line with the EPP. With the approval of the President (who can veto appointments to the government), Meloni chose Guido Crosetto, who originally came from the ranks of the Christian Democrats and is known as an anti-Russian hardliner, as Defense Minister. The fears of the Western partners that one of the most important NATO states could leave the joint phalanx against Putin were put to rest. Meloni counters Putin's friends Meloni set further signals: The memorable joint trip of the three European leaders Mario Draghi, Emmanuel Macron and Olaf Scholz to Kiev on June 16, 2022 was still fresh in the minds of Ukrainians suffering from a daily hail of bombs, as Meloni made one of her first trips abroad to Kiev in February 2023 to personally assure President Volodymyr Zelensky of Italy's unwavering solidarity. The two had previously met at various international summits and the chemistry between them was instant. Since then, they have openly celebrated their cordial friendship in front of the cameras at every meeting. Under Meloni's aegis, there has been no hesitation or dithering in Rome on the Ukraine issue to date: Italy is supplying Ukraine with weapons and, together with its German allies, is monitoring the airspace on Europe's south-eastern flank and in the Black Sea from Romania. Rome is also firm in its sanctions policy against Russia: Dozens of accounts, real estate, ships and works of art belonging to Russian oligarchs on the EU sanctions list have been confiscated by the "Guardia di Finanza", the state financial police. And in the area of energy policy, Meloni has maintained the course of her predecessor Mario Draghi, who concluded supply contracts with a whole series of African, Arab and Central Asian states in order to quickly free Italy from its energy dependence on Moscow. During a working visit to Berlin last November, when Meloni and German Chancellor Olaf Scholz were connected via video to the first OSCE meeting of heads of state and government since the start of the war, which was also attended by Vladimir Putin, she showed herself to be quick-witted. When the Kremlin ruler demanded a quick end to the war, Meloni immediately countered: "You can have that immediately. All you have to do is withdraw your troops." British Prime Minister Richi Sunak expressly thanked his counterpart for her "global leadership". And US President Joe Biden also never misses an opportunity to praise Meloni for her clear stance in the conflict. However, their closest ally in the Ukraine issue is President Sergio Mattarella. With all the authority of his office and his unbroken popularity, he explains the moral and ethical dimension of the major conflict to his fellow countrymen in detailed formulations at every available opportunity. In doing so, he takes the wind out of the sails of populists on the left and right who - as in Germany - criticize high military spending and complain about rising inflation as a result of "Western interference" in the war in Ukraine. In matters of foreign and security policy, head of state Mattarella, who is also commander-in-chief of the armed forces in accordance with the constitution, has so far had no reason to get in the prime minister's way. Is the Pope a friend of Russia? On the other side of the Tiber, in the Vatican, however, there are increasing question marks. Of course, the head of the Catholic Church has always and at every available opportunity lamented the suffering of the people in "martyred Ukraine" and called for an immediate end to the fighting. It goes without saying that the Holy See stands by the victims and is doing everything in its power to organize humanitarian aid and bring it into the country. Naturally, the Roman Curia has tried everything behind the scenes to mediate and explore possible negotiated solutions. Accusing the Pope of "moral equidistance" from the attackers and victims is therefore misguided. However, Francis does indeed have to put up with the accusation of "political equidistance". The Holy See is traditionally committed to a policy of neutrality, which aims to use the Pope's unbroken spiritual and moral authority as a non-partisan mediator to resolve a conflict. For this reason, the Holy See always acts discreetly on the international stage and has the long-term perspective in mind. Its actors are not subject to any democratic pressure to succeed and are generally not interested in winning points in the media. However, two years after the start of the Russian war of aggression against Ukraine, it is clear that the world's oldest diplomatic service has fallen far short of expectations. For many observers, the problem lies in particular in Pope Francis' unclear position. It took seven months after the start of the Russian invasion of Ukraine for the pontiff to name the attack as such for the first time and to publicly name Russia as the aggressor for the only time to date. Like so many other heads of state, the pontiff was probably unable to imagine until that February 24, 2022, that Putin would allow Russia's tanks to roll towards Kiev, triggering the biggest war in Europe since 1945. The Kremlin ruler had met Francis in person at the Vatican an astonishing three times in the preceding years. Is Francis a "Russia-understander" who is lenient with the aggressors? Many Vatican observers are now asking themselves this question. It is no secret that the Pope "from the other side of the world" (as Francis put it on the day of his election) has a different approach to European history and European sensitivities than his immediate predecessors John Paul II and Benedict XVI. Jorge Mario Bergoglio, an Argentinian who was influenced by social-authoritarian Peronism as a child, does not have an unreservedly positive attitude towards the Western model of order. The first pope to come from Latin America can be said to have a critical view of the USA. It can be assumed that his experiences with the Trump presidency have not diminished his prejudices towards Washington's claim to international leadership. On the other hand, he has a certain soft spot for Russian classics from literature and music as well as for Russian history, as he himself revealed in a video link to a meeting of Catholic youths in Saint Petersburg. Tensions between Pope and Parolin In terms of church policy, there are also two ambitious goals that the 87-year-old has set himself since his election in 2013: Understanding with Beijing and rapprochement with the Russian Orthodox Church. He has been lenient to the point of self-denial with the political leaders of both powers; he has remained silent about some human rights violations and repression - including against Catholic clergy. A strategy that has repeatedly caused heated discussions in the highest circles of the world church - and not only among notorious critics of Francis. Years ago, the Pope tasked his Secretary of State Cardinal Pietro Parolin, a career Vatican diplomat and conflict expert whom Bergoglio had already come to know and appreciate as Archbishop of Buenos Aires, with the diplomatic implementation. With his help, a bishop of Rome met with a patriarch of Moscow for the first time in February 2016. Today, the two former confidants Francis and Parolin are considered to be at odds - and this is precisely where Putin's war comes into play. Soon after the invasion, Francis caused head-shaking in many places when, from a pacifist position, he refused to supply any weapons to Kiev and thus indirectly denied Ukraine's internationally enshrined right to self-defense. Cardinal Secretary of State Parolin and the Vatican "Foreign Minister" Paul Richard Gallagher, a Briton, corrected these statements in several interviews and corrected their own boss. Of course, they both argued, Ukraine, as a sovereign state, had the right to defend its territorial integrity, and the supply of military equipment and weapons was ethically justifiable. The "Kyrill card" After Putin was unavailable for his calls, Francis played another card: his personal relationship with Moscow Patriarch Cyril. Here, too, the experts warned the Pope that the head of the Russian Orthodox Church would be in the service of the Kremlin. Nevertheless, the pontiff played the "Cyril card". Francis was probably hoping that he could "turn" the patriarch politically with Jesuit cunning. To this day, his literal response to Parolin and Gallagher's warnings is still reported: "But Cyril is still a shepherd!" As expected, the "Cyril card" failed. Francis' bitter realization that the patriarch was an "altar boy of the Kremlin" came too late. The view that the Pope was a "Russophile" had long since become firmly established in Kiev. The suspicion of Russia-friendliness is fueled less by concrete actions than by the pontiff's omissions: to date, he has never addressed Putin directly in all his countless appeals for peace. He could have borrowed from a great predecessor: Immediately before the start of the Iraq war in 2003, Pope John-Paul II addressed US President George W. Bush at the Sunday Angelus prayer in front of running cameras and fervently implored him to refrain from the planned attack. When the city of Sarajevo was besieged for months during the civil war in the former Yugoslavia, triggering a humanitarian catastrophe, the Pope from Poland appointed the archbishop of the bombed-out Bosnian capital, the then 48-year-old Vinco Puljic, as its first cardinal in history in 1994. Three consistories with the appointment of new cardinals have taken place in Rome since the beginning of the Russian invasion of Ukraine: But the Ukrainians have so far waited in vain for a similar sign, although a suitable candidate is available in the figure of the Greek-Catholic Grand Archbishop Svyatoslav Shevchuk of Kiev. Diplomatic self-restraint of the Pope Francis appointed a high-ranking special mediator far too late: However, Cardinal Matteo Zuppi's shuttle mission between Moscow, Kiev, Washington and Beijing is now considered a failure. It seems that Kiev has lost hope that Vatican diplomacy will have a positive effect. At the same time, Moscow seems to be relying more on the mediation of the United Arab Emirates as the representative of the "global South" than on the Holy See as the supposed representative of the Western world when it comes to humanitarian actions such as the exchange of prisoners. Most serious, however, is the fact that Francis has so far refused any invitation to Kiev. He always repeats the same mantra that he will only travel to the Ukrainian capital if he is allowed to visit Moscow first. Either there is a secret plan behind this curious self-restraint on the part of the pontiff, which even close confidants among the cardinals are unable to see through, or it is a diplomatic staircase joke: Putin is unlikely to have the slightest interest in such a double trip by the Roman pontiff. And even if he did, a visit to Moscow by the Pope would probably give Vladimir Putin the biggest propaganda coup in his long time in office. Months ago, President Zelensky's security advisor announced that Kiev was no longer interested in a Vatican mediation mission. A resounding slap in the face for the Holy See's diplomacy in the most dangerous crisis in Europe since the end of the Second World War.

Last Sunday, Chile made a U-turn in constitutional matters, that is to say, after four years of experimentation and going to the polls five times, it went back to square one. By 55.8% against 44.2%, citizens said no to the second constitutional proposal presented to them in little more than a year. In September 2022, the text of the first Convention had been rejected by 61.8%, with only 38% support. These are the six keys to understand the result: 1.- A process that started badly Last Sunday, the constituent process that began in November 2019 under the blackmail of violence came to an end. As a result of the outbreak that occurred in October of that year, the government of former President Piñera promoted a transversal agreement in Congress that began the replacement of the Constitution drafted during the Pinochet dictatorship, which had been extensively reformed in democracy. In fact, the last major reform to that text was in 2005 during the government of former President Lagos. The changes made there were so important that Lagos introduced a norm to replace Pinochet's signature and, when he promulgated the new text, he said that Chile finally had a fully democratic Constitution. Many say that if a plebiscite had been held there, the constitutional issue would probably have been settled. It was not done and, a few years later, the most extreme left began to demand a constituent assembly to draft a new Constitution made fully democratic. 2. The Constitution was never the problem, nor the solution. The first constitutional proposal was submitted to a plebiscite on September 4, 2022. The extreme left had the votes to draft a text as they wished and so they did. They put into it their refoundational political project, which destroyed liberal democracy, divided the Chilean nation, asphyxiated individual freedom, eliminated controls to political power and put an end to equality before the law. President Boric's government was its main promoter, and the text was rejected by a majority not only by the right but also by a large part of the center-left. Probably last Sunday's results can be explained by what happened there. Chileans, during the work of that convention and with the text proposed to them, understood that their problems were not constitutional as they had been led to believe for years. 3.- A hasty agreement Chile had approached the abyss and the triumph of the rejection of that first text was celebrated transversally by the democratic forces and by the citizens, who perhaps at one point agreed with a new Constitution, but not with a new country invented from scratch. A few days after that plebiscite, the opposition rushed to reach an agreement with the ruling party to initiate a second constituent process. It is true that this time limits were set to avoid the excesses of the first one, but the truth is that it was never understood that everything had to start all over again. It would have been more reasonable to redirect the constituent issue in the National Congress from where it should never have left. A Council was elected in which this time the Republican Party had a majority, the only one that left the agreement. That is to say, the people elected a majority of those who did not want to insist on the elaboration of a new proposal. Last Sunday, citizens were fed up with politicians from different parties who insisted, over and over again, that the constitutional issue was the problem. People felt, and rightly so, that they had already voted and never agreed with this second process. 4.- A plebiscite without drama Unlike last September's plebiscite in which Chile's democratic destiny was at stake, last Sunday people did not see drama or epic in what was being voted. That is to say, either a new text was approved, which for some updated and improved the current one (for the left it was a step backwards), or the same one was continued. After decades of attacks to the current Constitution, blaming it for all the injustices and claiming that they could not govern with it, the left arrived at last Sunday's plebiscite sunk in indignity. During the campaign, they went from talking about "Pinochet's Constitution" to "Ricardo Lagos' Constitution" and even declared to feel comfortable with it. 5.Government, relief rather than triumph Nobody would have imagined that this whole process would end with a leftist Government sleeping relieved because the current Constitution is still in force. The triumph of the proposed new Constitution would have meant its third consecutive electoral defeat. The first one was to the text of the Convention last year; the second one, in the election of councilors for the new process. A third one would have meant a very hard blow for a Government with scarce support and wide levels of popular rejection. On the other hand, there are no more excuses. Chile's most serious problems are not constitutional and the citizens seem tired of shouting without anyone listening to them. The Government, relieved, but with nothing to celebrate, must face a serious corruption scandal that has been installed at the doors of La Moneda; a country where nobody feels safe and authorities that lack credibility to face violence; a serious economic stagnation; an imminent crisis in the health system; and also face an education without an agenda and with thousands of children paying the costs of the bad reforms pushed and approved by those who govern today. 6.- Future of the opposition The right wing and the political forces of the center united to campaign in favor of this second constitutional proposal. Sunday's defeat does not change too much the configuration within the opposition. José Antonio Kast, former presidential candidate and leader of the Republican Party, who had the majority in this new constitutional council, obtains, in the end, the same percentage as in the last presidential second round. It is not enough for him to win, but he does not regress in popular support. And Republicans added to Chile Vamos (center-right coalition) maintain, practically, the same votes they obtained in the election of councilors. That is to say, the scenario remains open for the next presidential elections without any figure being irremediably damaged nor any particularly strengthened. President Boric, on Sunday night, wanted to take advantage of the result by forcing a wrong interpretation. He pointed out that people were asking for agreements and, therefore, he was calling the opposition to join his pension and tax reforms. The result of the plebiscite can be interpreted just the opposite, as the death of the last great political agreement, hasty, made with the people's back turned. That is to say, the Government hopes that the right wing has not learned anything from what happened; that to a bad constitutional agreement, which the people never supported, it will now add votes for a lousy tax and pension agreement. The right wing should devote itself to building a broad and coherent political project to solve the problems and not to aggravate them. Citizens seem to be fed up with ministers and parliamentarians signing agreements only because it suits them in the photo or they are uncomfortable to subtract themselves from it. Today there are many oppositions in Chile and it is essential that they have their own profile so that more citizens feel represented by them. It is necessary to add up and for that unity must be taken care of. It is not possible to disqualify them one day and the next morning try to close pacts with them. The opposition must be proportional to the damage that this Government is causing and, at the same time, it must quickly turn the page of the constitutional issue to build a recognizable political alternative. One cannot expect to win just because of how badly the left in power is doing. That is not enough. In what happened on Sunday there is also something to learn from that.