Haq's Musings

Monday, February 20, 2023

India Emerges the Biggest Winner of the Ukraine War and Growing US-China Tensions

"It may be dangerous to be America's enemy, but to be America's friend is fatal" Henry Kissinger

India is emerging as the biggest beneficiary of the Ukraine War and the US efforts to check China's rise. Indian businesses are busting US sanctions to take advantage of the vacuum left in Russia by the exit of western businesses since the start of the Ukraine War. At the same time, the US is rewarding India by promoting it as an alternative to China in the global supply chain. Meanwhile, Beijing is warning New Delhi that India "will be the biggest victim" of America's "proxy war" against China.

L to R: Modi, Putin, Xi and Biden

Soaring Russia-India Trade:

Since the start of Russia's invasion of Ukraine, India has ramped up its imports of Russian oil by a whopping 33 times, according to the Christian Science Monitor. Dr. Nivedita Kapoor, an Indian expert at the Higher School of Economics in Moscow, told the Monitor: “Right now the focus is on pharmaceuticals, electronics, machinery, chemical products, medical instruments, and agricultural products,” says Dr. Kapoor. “We have already been exporting these goods to Russia, and there is potential for major increases. ... It may be harder to expand the list due to the threat of secondary sanctions. In this environment, the Indian private sector looks at Russia as a risky market. But the immediate potential is very big.”

“The best solution would be for Russia to make an early end to this war,” Kapoor said. “We can envisage a situation where Western companies have already exited the Russian market, and burned their bridges, while the Indian private sector no longer regards business with Russia as a risky proposition, carrying the threat of secondary sanctions. All that would go away for us, but we need to see an end to this war”, she added.

India in Global Supply Chain:

With growing Washington-Beijing tensions, the United States is trying to decouple its economy from China's. The Wall Street Journal has reported that the Biden administration is turning to India for help as the U.S. works to shift critical technology supply chains away from China and other countries that it says use that technology to destabilize global security.

The US Commerce Department is actively promoting India Inc to become an alternative to China in the West's global supply chain. US Commerce Secretary Gina Raimondo recently told Jim Cramer on CNBC’s “Mad Money” that she will visit India in March with a handful of U.S. CEOs to discuss an alliance between the two nations on manufacturing semiconductor chips. “It’s a large population. (A) lot of workers, skilled workers, English speakers, a democratic country, rule of law,” she said.

China-India Border Conflict:

India's unsettled land border with China will most likely continue to be a source of growing tension that could easily escalate into a broader, more intense war, as New Delhi is seen by Beijing as aligning itself with Washington.

In a recent Op Ed in Global Times, considered a mouthpiece of the Beijing government, Professor Guo Bingyun has warned New Delhi that India "will be the biggest victim" of the US proxy war against China. Below is a quote from it:

"Inducing some countries to become US' proxies has been Washington's tactic to maintain its world hegemony since the end of WWII. It does not care about the gains and losses of these proxies. The Russia-Ukraine conflict is a proxy war instigated by the US. The US ignores Ukraine's ultimate fate, but by doing so, the US can realize the expansion of NATO, further control the EU, erode the strategic advantages of Western European countries in climate politics and safeguard the interests of US energy groups. It is killing four birds with one stone......If another armed conflict between China and India over the border issue breaks out, the US and its allies will be the biggest beneficiaries, while India will be the biggest victim. Since the Cold War, proxies have always been the biggest victims in the end".

Related Links:

Do Indian Aircraft Carriers Pose a Threat to Pakistan's Security?

Can Washington Trust Modi as a Key Ally Against China?

Ukraine Resists Russia Alone: A Tale of West's Broken Promises

Ukraine's Lesson For Pakistan: Never Give Up Nuclear Weapons

AUKUS: An Anglo Alliance Against China?

Russia Sanction: India Profiting From Selling Russian Oil

Indian Diplomat on Pakistan's "Resilience", "Strategic CPEC"

Vast Majority of Indians Believe Nuclear War Against Pakistan is "Winnable"

Pakistan Navy's Cruise Missiles: Babur, Harba and Zarb. Source: Quwa

Tuesday, November 29, 2022

Karachi Defense Expo 2022: Pakistan Military's Focus on AI, Connectivity and Drone Warfare

Pakistan displayed its latest drones at IDEAS 2022 (International Defence Exhibition and Seminar) Defense Expo held in November in Karachi. It also presented sessions on artificial intelligence (AI), machine learning (ML) and connectivity. The event attracted more than 50 countries, including large pavilions set up by Pakistan's closest friends China and Turkey. The four-day IDEAS 2022 opened on November 15, 2022 at Karachi Expo Centre, bringing together 300 leading national and international defense manufacturers and over 300 foreign delegates from 57 countries.

Pakistan's Shahpar 2 Attack Drone

Shahpar 2 Drone:

On display at IDEAS 2022 was Shahpar-2 Medium Altitude Long Endurance (MALE) attack drone produced by Global Industrial and Defense Solutions (GIDS), a Pakistani state-owned defense conglomerate. It can fly at a maximum speed of around 222 kilometers per hour (kph) with maximum range of around 1,050 kilometers, and the data link range of 300 kilometers. It can contact satellites in day or night operations.

Shahpar 2 drone can locate, surveil, track and attack targets. Its Zumr-II (EO/IR) turret is an improved and lighter version of Zumr-I (EP) turret. It can also be equipped with SAR, COMINT/ELINT payload. For sensors and targeting systems drone has an internal hard-point where it carry 50 kg (110 lb) payload. (Zumr-I weighs 36.5 kg (80 lb) while Zumr-II weighs 49 kg (108 lb)). The drone has two external hard-points where it can carry laser guided weapons, AGMs 60 kg (130 lb) each. Shapar 2 has already been inducted into service with Pakistan’s Army, Navy, and Air Force.

Also on display were advanced Harbah anti-ship cruise missiles made by Pakistan's state-owned Global Industrial and Defence Solutions (GIDS) and electronic warfare system produced by National Radio and Telecommunication Corporation (NRTC). The locally developed Al-Khalid tanks and modern assault rifles manufactured by Pakistan Ordinance Factories (POF) were also exhibited. Visitors also got a close look at the Pakistan Air Force (PAF) JF-17 Thunder fighter jets produced jointly by China and Pakistan.

JF-17 Block III:

JF-Block-III is a BVR (Beyond Visual Range) multi-role fighter jet capable of firing long range air-to-air missiles like China's PL-10 and PL-15. It features active electronically scanned array (AESA) radar system, making it Pakistan Air Force’s first AESA-equipped fighter aircraft. Combination of AESA radar and 120-mile range PL-15 missiles make the JF-17 Block 3 an extremely lethal fighter for beyond visual range combat, considerably more capable than any fighter in Pakistani service including the F-16. It also has a new electronic warfare system, upgraded avionics including a three-axis fly-by-wire digital flight control system, and a helmet-mounted display and sight (HMDS) system. With its new integrated sensor package, the aircraft will have the capability for quick information sharing and network-enabled operations that facilitate earlier detection and interception of enemy aircraft.

Pakistan JF-17 Block 3 Fighter Jet

Chinese and Turkish Pavilions:

Pakistan’s longtime allies China and Turkey had the largest foreign presence at IDEAS 2022. Chinese state-run defense conglomerate China North Industries Group Corporation Limited (NORINCO) displayed missiles and weapon systems including the Red Arrow 9A anti-tank guided missile.

Turkey displayed a scale model of its fifth-generation fighter, codenamed the TF-X, at Pakistan’s IDEAS expo 2022. Over two dozen Turkish defense manufacturers participated in Pakistan’s IDEAS defense expo this year.

Top Turkish defense manufacturers, including Roketsan, state-run STM and ASFAT, showcased their products ranging from modern armed drones to tactical mini-UAV systems. Turkish Aerospace exhibited the models of the T129 ATAK helicopter, Gokbey multirole helicopter, Gokturk-2 observation satellite, as well as Anka unmanned aerial vehicle (UAV) and Aksungur medium-altitude long-range endurance (MALE) UAV.

AI and Connectivity:

Pakistan Air Force (PAF) launched a Cognitive Electronic Warfare (CEW) program in 2020 at its Center for Artificial Intelligence and Computing (CENTAIC). Modern connected weapon systems generate vast amounts of data requiring artificial intelligence and machine learning software for speedy analysis and rapid decision-making on the battlefield.

A seminar titled ‘Artificial Intelligence (AI) in Defence Market: A Paradigm Shift in Military Strategy and National Security’ was organized as part of IDEAS-22. Also discussed was ‘One Network’, an advanced communication project, under which 3,000 kilometers of underground fibre optic cable is being laid along the motorways in Pakistan.

An example of connectivity and integration was demonstrated in Operation Swift Retort against India in February 2019. The success of this operation was the result of combat-proven PAF fighters which are fully integrated with the air defense system (e.g. AWACS), and are mutually data-linked, alongside all AEW (Airborne Early Warning) and ground sensors.

Rethink After Ukraine War:

The war in Ukraine is forcing a defense strategy rethink in countries around the world. This is particularly true of countries such as India that rely mainly on Russian equipment and training. Hindustan Times has quoted an unnamed former Indian Army Chief as saying: “War videos available show that the Russian Army has tactical issues in Ukraine war. Tell me, which tank formation goes to war in a single file without air or infantry cover when the opponent is equipped with the best anti-tank guided missile like Javelin or Turkish Bayraktar TB2 missile firing drones? There is question on Russian air supremacy with Ukraine Army armed with shoulder fired Stinger surface to air missiles as well as the night fighting capability of the Russian Air Force.”

Saturday, September 24, 2022

Could Ukraine War Produce Another Gorbachev to Replace Putin?

The mighty Russian military's recent string of losses to the much smaller Ukrainian forces are bringing back memories of the humiliating Russian defeat at the hands of the Mujahideen in Afghanistan in the 1980s. The Communist Party leaders who presided over the disgraceful Soviet exit were soon ousted from power and replaced by Mikhail Gorbachev. Gorbachev's attempts to reform the Soviet system resulted in its complete collapse. The Soviet Union then ceased to exist by 1991. Could something similar happen to the Russian Federation now?

Mikhail Gorbachev (Left) with Vladimir Putin

Some people in Ukraine and elsewhere in the West do believe that Ukraine will be another Afghanistan for the Russians. For example, Pakistani-Ukrainian billionaire Mohammad Zahoor believes “Ukraine is going to be the next Afghanistan for Russia". Talking with Arab News, he said: “This is time, actually, for us not to keep quiet. We have to take sides". Zahoor told Arab News that the Russian invasion of Ukraine may have consequences for Russia similar to the fallout from the Soviet-Afghan war from 1979 to 1989, which drastically weakened Russia's military and economy. “Ukraine is going to be the next Afghanistan for Russia,” he said. “I don’t know how many years they are going to be in Ukraine, but once they are out, they will be broken into pieces".

While the possibility of Russia's defeat to Ukraine followed by President Vladimir Putin's ouster can not be completely ruled out, the chances of such an outcome appear remote at the moment. Putin still has a lot of options. He has not yet used the full strength of the Russian military. He can bomb Ukraine into stone age, much like what the Soviets and the Americans did to Afghanistan. The nuclear-armed Russian military remains far more powerful than the Ukrainian military, even one backed by vast amounts of western money, technology and armaments. Putin will almost certainly escalate the war in Ukraine to achieve his objective of annexation of the eastern parts of the country into the Russian Federation. Putin also enjoys the support of as many as 70% of Russians, according to surveys conducted as recently as June, 2022. Besides, the vast majority of Russians have disdain for Gorbachev who was very popular in the West. The Russians would reject anyone who's even remotely similar to Gorbachev.

Related Links:

Pakistani-American Banker Heads SWIFT, the World's Largest Interbank Payment System

Ukraine Resists Russia Alone: A Tale of West's Broken Promises

Ukraine's Lesson For Pakistan: Never Give Up Nuclear Weapons

Russia's Defeat in Afghanistan

West's Technological Edge in Geopolitical Competition

Time For India to Rethink its Military Doctrine

2022 SCO Summit in Samarkand, Uzbekistan. Source: Xinhua

Friday, September 16, 2022

Can Washington Trust Modi's India As Key Ally in Asia?

Indian Prime Minister Narendra Modi attended the summit meeting of the China-Russia sponsored Shanghai Cooperation Organization (SCO) held in Samarkand, Uzbekistan this week. India is a full member of this alliance which has been created to counter the US dominance in Asia. At the same time, New Delhi has also joined QUAD, a group of 4 nations (Australia, India, Japan and US) formed by the United States to counter China's rise. Simultaneous membership of these two competing alliances is raising serious questions about Prime Minister Narendra Modi's real intentions and trustworthiness. Is this Indian policy shift from "non-alignment" to "all-alignment" sustainable?

Shanghai Cooperation Organization (SCO):

Shanghai Cooperation Organization (SCO) is a political, economic and security organization designed to counter US dominance. It was founded by Beijing and Moscow in 2001. Currently, it has 8 members: China, Russia, India, Pakistan, Kyrgyzstan, Kazakhstan, Tajikistan and Uzbekistan. Iran has signed a memorandum of commitment this week signaling its intention to join the SCO, underscoring the growing alignment between the U.S.'s top adversaries. India's participation in this alliance seems strange given its simultaneous membership of the Quadrilateral Security Dialogue.

Quadrilateral Security Dialogue (QUAD):

The Quadrilateral Security Dialogue (QSD) is a strategic security dialogue between Australia, India, Japan, and the United States that was initiated in 2007 by Japanese Prime Minister Shinzo Abe to counter growing Chinese influence in Asia. India upset Japan recently when it joined the Russia-led Vostok-2022 military exercises held around a group of islands known as the southern Kurils in Russia and the Northern Territories in Japan -- a territorial dispute that dates back to the end of World War II, according to Bloomberg. India scaled back its participation in the war games -- especially staying out of the naval exercises -- in response to the Japanese objections but it left a bad taste.

Non-Alignment to All-Alignment:

The contradictions inherent in the membership of both of these competing alliances are already being exposed by Mr. Modi's large and rapidly growing purchases of Russian energy and weapons despite western sanctions. “India’s neutral public positioning on the invasion has raised difficult questions in Washington DC about our alignment of values and interests,” said Richard Rossow, a senior adviser on India policy at the Center for Strategic and International Studies, told Bloomberg News. “Such engagements -- especially if they trigger new or expanded areas of cooperation that benefit Russia -- will further erode interest among Washington policy makers for providing India a ‘pass’ on tough sanctions decision.”

Related Links:

Do Indian Aircraft Carriers Pose a Threat to Pakistan's Security?

Pakistani-Ukrainian Billionaire Zahoor Sees "Ukraine as Russia's Afghanistan"

Ukraine Resists Russia Alone: A Tale of West's Broken Promises

Ukraine's Lesson For Pakistan: Never Give Up Nuclear Weapons

AUKUS: An Anglo Alliance Against China?

Russia Sanction: India Profiting From Selling Russian Oil

Indian Diplomat on Pakistan's "Resilience", "Strategic CPEC"

Vast Majority of Indians Believe Nuclear War Against Pakistan is "Winnable"

India's Refined Petroleum Exports.Source: MarketWatch

Sunday, June 26, 2022

Modi's India Busting Western Sanctions, Funding Russia's War On Ukraine

India, a western ally, is openly buying Russian coal, oil and weapons worth tens of billions of dollars at deep discounts. These actions amount to busting western sanctions and financing President Vladimir Putin's war on Ukraine. Many smaller developing countries, including Bangladesh and Pakistan, are abiding by these sanctions and suffering from the consequences in terms of high prices of fuel and food. Why these double standards? Do these policy contractions serve the broader US interests in the Asia region?

India's Russian Imports Soaring Since the Start of Ukraine War. Source: Reuters

India's Russian coal imports are up 6-fold from May 27 to June 15, 2022, according to Reuters. Delhi's Russian oil buying has jumped 31-fold in this period. Bulk shipments of Russian thermal coal to India began in the third week of May, 2022.

India is defying western sanctions to buy millions of barrels of discounted Russian crude oil, hiding their origin and exporting refined petroleum products with a big markup to make a huge profit. China has yet to increase its oil imports from Russia, according to news reports. Meanwhile, India's neighbors Bangladesh and Pakistan are abiding by western sanctions and paying much higher market prices to buy oil for their domestic needs, and hurting their people. Such double standards are not going unnoticed.

India is importing large amounts of deeply discounted Russian crude, running its refiners well above capacity, and capturing the economic rent of sky-high crack spreads and exporting gasoline and diesel to Europe, according to MarketWatch. “As the EU weans from Russian refined products, we have a growing suspicion that India is becoming the de facto refining hub for Europe,” said Michael Tran, global energy strategist at RBC Capital Markets, in a Tuesday note. Here’s how the puzzle pieces fit together, according to Tran:

"India is buying record amounts of severely discounted Russian crude, running its refiners above nameplate capacity, and capturing the economic rent of sky-high crack spreads and exporting gasoline and diesel to Europe. In short, the EU policy of tightening the screws on Russia is a policy win, but the unintended consequence is that Europe is effectively importing inflation to its own citizens. This is not only an economic boon for India, but it also serves as an accelerator for India’s place in the new geopolitically rewritten oil trade map. What we mean is that the EU policy effectively makes India an increasingly vital energy source for Europe. This was historically never the case, and it is why Indian product exports have been clocking in at all-time-high levels over recent months".

Bangladesh and Pakistan are afraid to buy Russian oil for fear of western sanctions while American ally India feels free to do so. Pakistan's Imran Khan sought to buy Russian oil and gas before he was removed from power in early April. Pakistani Finance Minister Miftah Ismail told CNN's Becky Anderson in a recent interview, “It is very difficult for me to imagine buying Russian oil. At this point I think that it would not be possible for Pakistani banks to open LCs or arrange to buy Russian oil". Similarly, Bangladeshi foreign minister AK Abdul Momen said, “Russia has offered to sell oil and wheat to us, but we can’t do it out of fears of sanctions. We asked [India] how they did it [import oil from Russia]. They [India] said they have found some tricks,” Momen added.

The West, particularly the United States, is turning a blind eye to India's actions when it comes to busting sanctions on Russia. Indian Prime Minister Narendra Modi is openly funding the war in Ukraine by buying weapons and energy from Russia. At the same time, India's smaller neighbors feel intimidated by the threat of western sanctions if they follow Modi's example. Such double standards are not going unnoticed.

Related Links:

Pakistani-American Banker Heads SWIFT, the World's Largest Interbank Payment System

Pakistani-Ukrainian Billionaire Zahoor Sees "Ukraine as Russia's Afghanistan"

Ukraine Resists Russia Alone: A Tale of West's Broken Promises

Ukraine's Lesson For Pakistan: Never Give Up Nuclear Weapons

Can the Chinese Yuan Replace the US Dollar?

Russia Sanction: India Profiting From Selling Russian Oil

Ukraine's Muslim Billionaire Akhmetov Holds Balance of Power

Chinese Public Opinion Survey of 25 Countries. Source: CEIAS

Monday, May 23, 2022

Chinese Public Opinion: 73% Have Positive View of Pakistan, Second Only to Russia

A recent public opinion survey conducted in China revealed that 73% of respondents have a positive view of Pakistan, second only to Russia which is seen positively by 80% of respondents. About 18% of Chinese survey participants have a negative view of Pakistan while 9% are neutral. The results of this survey show that the oft-repeated talk of China and Pakistan being "iron brothers" is not just official rhetoric; it is actually supported by the Chinese people. It is also evident in the fact that the China-Pakistan Economic Corridor (CPEC) is transforming Pakistan's least developed area.

Other nations enjoying favorable views among the Chinese include Singapore (66%), North Korea (62%), and Germany (61%). Most negatively perceived countries include the United States (90%), India (56%), Japan (54%), Vietnam (48%), South Korea (47%), and Ukraine (46%).

The survey in China was conducted by the Central European Institute of Asian Studies (CEIAS), an independent think tank based in Bratislava, Slovakia. It sought the Chinese view of 25 countries included in the survey. The survey respondents see both the United States and Russia as powerful, but American power is seen mostly in negative terms, while Russia’s is almost exclusively positive.

US Tag Cloud in Chinese Survey Responses. Source: CEIAS

The Chinese survey conducted in March this year reveals that the most common word association with the United States is “hegemon,” while other frequent expressions are “advanced,” “developed,” and “powerful,” but also “bossy,” “war,” “bandit,” and “sowing discord.” In the Russian case, the most common association is “warrior nation,” followed by words such as “Putin,” “vodka,” “vast,” “bears,” “powerful,” “war with Ukraine,” and “Sino-Russian friendship.”

Russia Tag Cloud in Chinese Survey. Source: CEIAS

The survey results show that Russia is among the most recommended countries for pursuing higher education among the Chinese, behind only China itself (83%), Singapore (56%), and the United Kingdom (55%). More than 52% of respondents recommend university study in Russia, while India and South Korea are the least recommended countries for university studies, with 63% and 42% of respondents not recommending them respectively.

Another major finding of the survey is Chinese people’s confidence in China. When asked about how militarily and economically powerful they perceive relevant major powers, China is seen as the most powerful one, while China’s culture is also perceived as the most attractive and Chinese universities are the most recommended ones.

Related Links:

Pakistani-American Banker Heads SWIFT, the World's Largest Interbank Payment System

Pakistani-Ukrainian Billionaire Zahoor Sees "Ukraine as Russia's Afghanistan"

Ukraine Resists Russia Alone: A Tale of West's Broken Promises

Pakistanis in China

Has Intel's Indian Techie Risked US Lead in Semiconductor Technology?

US-China Tech Competition

CPEC Transforming Pakistan's Least Developed Areas

The Chinese Miracle

Russian Influence On Indian Military Doctrine. Source: Air University, US Air Force

Monday, April 25, 2022

Ukraine War: Time For India To Rethink its Military Doctrine Modeled On Russia's?

India's Russian-equipped and trained military is watching with great concern Russia's losses in the Ukraine war. Moscow has lost 20,000 soldiers, nearly 500 main battle tanks and a large warship so far, according to media reports. Ukraine's use of Turkish drones, US-made anti-tank guided missiles (ATGMs) Javelins and Ukrainian anti-ship Neptune missiles has taken a heavy toll on the Russian Army and Navy. It is notable that India's Cold Start Doctrine against Pakistan is modeled on the Russian formation known as the “operational maneuver group” (OMG).

Russian Influence on Indian Military Doctrine:

It is well known that the Indian Army relies on Russian tanks, artillery, rockets, and ammunition. The Indian Navy uses Russian ships, submarines and missiles and the Russian Su-30 MKI forms the backbone of the Indian Air Force. Like Russia, the Indian military doctrine is based on deploying large platforms (tanks, artillery, ships and fighter-bombers) with massive firepower. Here's an excerpt of an article by Dr. Vipin Narang, an Indian-American analyst, on the subject:

"In terms of doctrine and strategy, although it may be difficult to trace direct influence and lineage between Russia and India, there are several pieces in India’s conventional and nuclear strategy that at least mirror Russia’s behavior. On the conventional side, the core formation in the quick-strike concept known as “Cold Start” or “proactive strategy options” was modeled on the Russian formation known as the “operational maneuver group” (OMG). The idea was to have a formation that could be rapidly assembled from tank and armored divisions that could break through reinforced defenses—NATO for Russia, and Pakistan’s I and II Corps in the plains and desert sectors for India.

"On the nuclear side, India is currently seized with the same dilemma as the Soviet Union was during the Cold War: both NATO and Pakistan threaten battlefield nuclear weapons against conventional thrusts (India, at least, presumably would be retaliating following a Pakistan-backed provocation). While both states refined their conventional concept of operations, there may have also been corresponding adjustments to their nuclear strategies. It was long believed that, in response to NATO threats to use nuclear weapons first on the battlefield, the Soviet Union had strong preemptive counterforce elements in its strategy to try to at least disarm the United States of its strategic nuclear weapons for damage limitation. It is increasingly evident that at least some serious Indian officials are interested in developing the same sort of option: preemptive counterforce against Pakistan’s strategic nuclear forces, both for damage limitation and to reopen India’s conventional superiority. It is no surprise perhaps, then, that India chose to go ahead with acquiring Russia’s S-400 missile and air defense system, despite the threat of Countering America's Adversaries Through Sanctions Act (CAATSA) sanctions from the United States: the S-400 is key to India’s damage limitation strategy, capable of potentially intercepting residual ballistic and cruise missiles that a counterforce strike might miss".

Pakistani Military Official in Ukraine. Source: New York Times

Turkish Drones:

Turkish Bayraktar TB2 has been highly effective in destroying Russian tanks and armor in Ukraine. It is playing a key role in Ukraine's counter offensives against Russia's invasion. It is proving so effective that "Ukrainian forces are singing its praises, literally", according to a CNN report.

Indian Army has nearly 6,000 tanks of Russian origin. These tanks are just as vulnerable to drone and anti-tank missiles as the Russian tanks that perished in Ukraine.

Pakistan has developed Baktar Shikan, a second-generation man-portable anti-tank guided missile (ATGM) system which uses optical aiming, IR tracking, remotely controlled and wire transmitted guidance signals. It can also be mounted on attack helicopters and Armored Personnel Carriers (APCs). Its long range, penetration power and a powerful anti-jamming capability form a potent defense against armored targets.

Pakistan is also reported to have already acquired Turkish Bayraktar TB2 drones recently. It was displayed in the Pakistan Day Parade on March 23, 2022, along with other military equipment acquired recently by the Pakistani defense forces.

Anti-Ship Missiles:

Ukraine claims that its Neptune anti-ship missiles hit and sank Moskva in Black Sea. It was a large 10,000-ton guided missile cruiser of the Russian Navy that was launching cruise missiles on targets in Eastern and Southern Ukraine. It is the largest warship to have been sunk in action since WWII.

Vast majority of Indian Navy ships, including its aircraft carriers and missile frigates, are designed, built and equipped by Russians.

Pakistan recently showcased its anti-ship missile Harbah at DIMDEX 2022, a defense expo in Qatar. It is a medium range ship launched subsonic cruise missile system capable of targeting sea as well as land targets in “all weather operation” at a maximum range of 280 kilometers, according to a report in NavalNews. The missile is fire and forget type. It relies on inertial navigation technologies with GPS and GLONASS systems. According to its manufacturer GIDS, the missile features the following guidance systems: a DSMAC camera, imaging infrared seeker, and radar seeker.

Summary:

The war in Ukraine is forcing a defense strategy rethink in countries such as India which rely on Russian equipment and training. Hindustan Times has quoted an unnamed former Indian Army Chief as saying: “War videos available show that the Russian Army has tactical issues in Ukraine war. Tell me, which tank formation goes to war in a single file without air or infantry cover when the opponent is equipped with the best anti-tank guided missile like Javelin or Turkish Bayraktar TB2 missile firing drones? There is question on Russian air supremacy with Ukraine Army armed with shoulder fired Stinger surface to air missiles as well as the night fighting capability of the Russian Air Force.”

Related Links:

Wednesday, March 23, 2022

Russia Sanctions: Taiwan's TSMC Joins Western Ban on Technology For Moscow

Taiwan Semiconductor Manufacturing Company (TSMC) will no longer fabricate computer chips for Russia, according to media reports. The ban will particularly affect Russia's Elbrus and Baikal processors, unless China agrees to step in to manufacture these chips, and risk additional US sanctions itself. Both Russian processors use mature 28 nm technology. The world's most advanced TSMC fabrication technology today is 5 nanometers. The best US-based Intel can do today is 7nm technology. China's SMIC (Semiconductor Manufacturing International Corporation) has the capability to produce chips using 14 nm technology. Semiconductor chips form the core of all modern systems from automobiles to airplanes to smartphones, computers, home appliances, toys, telecommunications and advanced weapons systems.

Top 10 Semiconductor Chip Producing Countries. Source: Comtrade Database

China is the world's biggest producer of semiconductor chips, according to data from the United Nations. The electronics value chain, which includes consumer electronics and ICT, has been regionalized over the years, and China has become a major global production center for microelectronics, according to a report in Opportimes. Other major producers include South Korea, Singapore, Malaysia, the United States, Japan, Germany, the Philippines, the Netherlands, and Thailand. In particular, the statistics for China add up the production of Hong Kong and Macao.

Russia's Semiconductor Imports. Source: WSJ

While China is the biggest volume producer of semiconductor components in the world, the Chinese design centers and fabs rely on tools and equipment supplied by the West to deliver products. Western companies dominate all the key steps in this critical and highly complex industry, from chip design (led by U.S.-based Nvidia, Intel, Qualcomm and AMD and Britain’s ARM) to the fabrication of advanced chips (led by Intel, Taiwan’s TSMC and South Korea’s Samsung ) and the sophisticated machines that etch chip designs onto wafers (produced by Applied Materials and Lam Research in the U.S., the Netherlands’ ASML Holding and Japan’s Tokyo Electron ), according to the Wall Street Journal.

East vs West Economic Output. Source: Wall Street Journal

There is no question that the current western technology sanctions can seriously squeeze Russia. However, overusing such sanctions could backfire in the long run if the US rivals, particularly China and Russia, decide to invest billions of dollars to build their own capacity. This would seriously erode western technology domination and result in major market share losses for the US tech companies, particularly those in Silicon Valley.

Related Links:

Pakistani-American Banker Heads SWIFT, the World's Largest Interbank Payment System

Pakistani-Ukrainian Billionaire Zahoor Sees "Ukraine as Russia's Afghanistan"

Ukraine Resists Russia Alone: A Tale of West's Broken Promises

Ukraine's Lesson For Pakistan: Never Give Up Nuclear Weapons

Has Intel's Indian Techie Risked US Lead in Semiconductor Technology?

US-China Tech Competition

Can Pakistan Benefit From US-China Tech War?

Russia's Commodity Exports. Source: Bloomberg

Saturday, March 12, 2022

Will Russia Sanctions Accelerate Inflation, Devalue US Dollar and Strengthen Chinese Yuan?

Russia is a commodities superpower. The nation's Eurasian landmass is rich in all kinds of natural resources from food to fuel to metals. To punish Moscow for invading Ukraine, the US and G-7 nations have imposed sanctions on Russia. These sanctions have effectively removed Russian commodities from the global supply chain, triggering double digit price increases for food, fuels and metals. Will the G-7 actions leave the US dollar much weaker? Will the Chinese currency, backed by commodities, gain strength at the expense of the US dollar and Euro? Will the era of commodity-backed money return? In a note to clients, Credit Suisse investment strategist Zoltan Pozsar has answered some of these questions. He says "this (Russia) crisis is not anything we have seen since President Nixon took the U.S. dollar off gold in 1971". "After this war is over, "money" will never be the same again.....and bitcoin (if it still exists then) will probably benefit from all this,” he adds.

Map of "International Community" Sanctioning Russia

Post World War II History:

The current global financial system was created in Bretton Woods located in the US State of New Hampshire. Over 700 delegates representing 44 countries met in Bretton Woods in July 1944. The Bretton Woods System, now referred to as Bretton Woods I, required a currency peg to the U.S. dollar which was in turn pegged to the price of gold. This system collapsed in the 1970s but created a lasting influence on international currency exchange and trade through its development of the IMF and World Bank. Zoltan Pozsar believes it is now time for Bretton Woods III. What is Bretton Woods III? Here's how Zoltan Pozsar explains it:

"From the Bretton Woods era backed by gold bullion, to Bretton Woods II backed by inside money (Treasuries with un-hedgeable confiscation risks), to Bretton Woods III backed by outside money (gold bullion and other commodities)".

Commodity Superpower:

Russia is a vast country. Russian landmass extends from Europe to East Asia. It is one of the largest suppliers of oil, gas, metals and wheat. Russia is also a major exporter of fertilizer. China will likely take advantage of the western sanctions to buy up Russian commodities at lower prices.

Pozsar argues that while Western central banks cannot close the gap between Russian and non-Russian commodity prices as sanctions lead them in opposite directions, the People’s Bank of China can “as it banks for a sovereign who can dance to its own tune.”

“If you believe that the West can craft sanctions that maximize pain for Russia while minimizing financial stability risks and price stability risks in the West, you could also believe in unicorns,” Pozsar wrote.

Pre-Ukraine War Inflation in US. Source: Wall Street Journal

Bretton Woods III:

Pozsar argues that the Bretton Woods II collapsed when the G7 countries seized Russia’s foreign exchange (FX) reserves, leading to a rise of outside money – reserves kept as commodities – over inside money – reserves kept as liabilities of global financial institutions.

East vs West Economic Output. Source: Wall Street Journal

"We are witnessing the birth of Bretton Woods III – a new world (monetary) order centered around commodity-based currencies in the East (Chinese Yuan) that will likely weaken the Eurodollar system and also contribute to inflationary forces in the West,” Zoltan wrote.

Related Links:

Pakistani-American Banker Heads SWIFT, the World's Largest Interbank Payment System

Pakistani-Ukrainian Billionaire Zahoor Sees "Ukraine as Russia's Afghanistan"

Ukraine Resists Russia Alone: A Tale of West's Broken Promises

Ukraine's Lesson For Pakistan: Never Give Up Nuclear Weapons

Can the Chinese Yuan Replace the US Dollar?

Pakistan's Global Diaspora

Ukraine's Muslim Billionaire Akhmetov Holds Balance of Power