Bitcoin And Geopolitical Rivalry – Analysis

 March 17, 2023 

By Geopolitical Monitor

By Jose Miguel Alonso-Trabanco

Bitcoin, the flagship stateless cryptocurrency, is a double-edged sword that can either strengthen or harm national power. As financial warfare becomes increasingly complex, this decentralized cybercurrency is acting as a versatile strategic instrument of statecraft that can play various roles under confrontational geopolitical circumstances.

This under-researched subject matter needs to be clarified because it entails meaningful implications for national security, strategic intelligence, foreign policy and grand strategy, but also for the domain of high finance. In order to provide a sharper sense of situational awareness, the following article integrates strategic forecasts that attempt to predict the hypothetical usefulness of Bitcoin for conflicts with scrutiny of illustrative contemporary examples that point in a similar direction.

Analysis of Hypothetical Applications

BTC circuits as conduits to bypass sanctions

Bitcoin can offer a potential lifeline for states under sanctions that need to ensure the continuity of their international economic exchanges. Since the BTC grid cannot be controlled by the coercive or restrictive power of national states, its borderless circuitry provides secondary financial arteries worth harnessing to bypass sanctions that limit the ability to carry out cross-border transactions and transfer wealth through more conventional platforms ‒ anchored to major reserve currencies ‒ that enable international payments. An additional advantage of decentralized virtual currencies for sanctioned states is their discretion. They offer covert gateways to engage formal financial systems or even to avoid them altogether if necessary. In other words, it is difficult to determine if sanctions are being neutralized through cryptocurrencies like BTC.

Furthermore, despite their drawbacks ‒ including wildly volatile exchange rates ‒ nonstate cryptocurrencies like BTC are helpful to evade sanctions thanks to their growing transnational projection, their unsupervised channels, and their lack of centralized nerve centers that could be politically threatened, co-opted, or influenced. An academic essay written by US military officer Deane Konowicz for the US Naval War College identifies three strategies to use unofficial virtual currencies as asymmetric equalizers to diminish or overcome sanctions imposed by an enemy with superior financial firepower. Yet, the implementation of each comes with challenging caveats.

• The theft of wealth through acts of cybercrime against cryptocurrency exchanges or ransomware attacks to demand payments denominated in cryptocurrency. This approach requires sophisticated cyberwarfare know-how.
• Cryptocurrency mining on a large scale as an industrial activity which generates profits that do not flow through traditional financial networks. This pursuit demands investment, technological infrastructure, advanced hardware, vast amounts of energy, and technical expertise.
• The encouragement of the sanctioned state’s population and business community to freely carry out all sorts of transactions through cryptocurrencies. Said possibility comes with the risks of weakening the position of the country’s official currency and the prospect of widespread economic instability, a phenomenon that could lead in turn to political turmoil.

Some statesmen have also identified the potential usefulness of cryptocurrencies like Bitcoin to diminish the impact of sanctions through arteries that bypass the US dollar. For example, according to a report published by the Russian newspaper Kommersant, Sergei Glazyev ‒ one of the Kremlin’s chief geoeconomic masterminds ‒ argues that the Russian Federation has an “objective need” to rely on unofficial cryptocurrencies to circumvent Western sanctions. Nevertheless, BTC is no “silver bullet” that can completely defuse enemy sanctions. Its limitations are also being acknowledged. In a 2021 interview with CNBC, Russian President Vladimir Putin admitted that Bitcoin is a valid means of payment, but he also mentioned that, even though Russia has been seeking alternatives to the dollar in international economic exchanges as a result of its weaponization by Washington, it was still too soon to anchor the exports of Russian energy and commodities to such cryptocurrency.

Yet, as a result of the Western backlash against the Russian invasion of Ukraine, Moscow is seemingly reassessing its position and deliberating about the eventual pertinence of embracing BTC in several sectors to carry out international transactions that deflect American and European sanctions. In this context, Moscow is reportedly considering the possibility of accepting Bitcoin as payment for its energy exports. Since crypto-assets cannot be frozen or seized, they represent potentially attractive financial vehicles for states that seek to contest the interests of Western powers. According to the New York Times, in order to gather stockpiles of unofficial cryptocurrencies to carry out undetected international transactions, the Russians could even engage in ransomware cyberattacks and develop technical tools designed to mask the involvement of Russian entities in said transactions throughout blockchain-based financial environments.

These possibilities indicate that Bitcoin and similar cryptocurrencies can hypothetically operate as protective shields for states under sanctions. As such, they pose game-changing challenges for the effective implementation of sanctions as a tool of diplomatic coercion by the US and its allies, especially considering that such measures have become an increasingly common staple of Western foreign policy. Nevertheless, some analysts believe that measures like better regulations, collaborative information-sharing partnerships between governmental agencies and private entities, international cooperation, and increased oversight can prevent the evasion of sanctions through Bitcoin and similar cryptocurrencies.

BTC as a potential asset to hedge the financial risk of geopolitical tensions

Bitcoin has been identified as an unconventional asset that could be helpful to hedge financial risks in case of conflicts or heightened geopolitical tensions. Some scholars hold that BTC can operate as some sort of “digital gold” because it represents a potential safe haven that provides shelter from exposure to rising systemic geopolitical tensions. In fact, the value of Bitcoin seems to be positively influenced by the incidence of phenomena which trigger a perception of geopolitical turmoil, such as Brexit, the rivalry between Iran and the US in the Middle East, and the so-called “trade war” between Washington and Beijing. These attributes make BTC attractive for national states, private companies and individuals.

An important advantage of Bitcoin as an alternative asset is its high resilience from both volatile market fluctuations and potentially hostile manipulations not motivated by economic interests. Plus, the horizontal Bitcoin system cannot be destroyed. As the American financier James Rickards explains, even though some of its material or digital nodes can be attacked, the dispersed structure of BTC organic networks contains no center of gravity. BTC also lacks centralized systemic records kept in physical servers which could be hit. The ability of the Bitcoin environment to withstand the impact of disruptions from external sources was demonstrated when China followed a heavy-handed approach towards said cybercurrency. Even though the ‘Middle Kingdom’ managed to evict Bitcoin from Chinese soil, the whole BTC ecosystem was not undermined, and China-based mining operations simply relocated to other countries with more flexible frameworks.

However, a nuanced perspective shows that, despite its advantages, Bitcoin is far from being a suitable replacement for hard assets with intrinsic worth like precious metals. As Refk Selmi and other researchers point out, there are major differences that need to be highlighted: 1) Bitcoin’s markets are smaller and less structured; 2) its supply is artificially limited by design; 3) the volatility of this cryptocurrency makes it convenient for short-term speculative purposes rather than as a long-term store of value; 4) whereas BTC is a nascent monetary item, the traditional role of gold as stable store of value is supported by the weight of history since the dawn of civilization; 5) Bitcoin’s legal status is unclear in many jurisdictions.

Potential weaponization of BTC

Bitcoin can also hypothetically act as a weaponized instrument that can be wielded in the practice of statecraft. Ironically, its anti-state properties mean that it can be employed by states against their rivals in offensive acts of hybrid warfare. As an article in the Small Wars Journal argues, The BTC landscape offers 1) asymmetric advantages to instigate monetary disruption in small nations with weak currencies, 2) covert channels to fund terrorist, insurgent, separatist, guerrilla or dissident groups whose militant activities fuel destabilization behind enemy lines and 3) subtle gateways to increase the resonance of psychological warfare, “soft power,” and propagandistic influence through the undisclosed purchase of an active presence in the overlapping platforms that undergird the transnational info-sphere. Potentially, BTC can even be engaged to hit heavier targets. Interestingly, Silicon Valley entrepreneur Peter Thiel, himself a strong supporter of BTC, has expressed his concerns about the potential weaponization of Bitcoin by Beijing against the US: “I do wonder whether at this point [if] Bitcoin should also be thought [of] in part of as a Chinese financial weapon against the US where it threatens fiat money, but it especially threatens the US dollar.” Paradoxically, the fact that China despises Bitcoin at home does not mean that it cannot be useful abroad as a spearhead against major strategic competitors.

Analysis of Empirical Realities 

Involvement of BTC in predatory acts of cyber-financial warfare committed by North Korea

BTC offers opportunities to engage in unconventional forms of economic predation. According to a report prepared by a panel of experts for the UN Security Council (2019), the North Korean military intelligence agency, the Reconnaissance General Bureau, has been responsible for acts of cyber financial warfare and cybercrime ‒including malware and ransomware attacks against foreign corporate targets in South Korea and elsewhere ‒ involving Bitcoin and other decentralized cryptocurrencies. Said source claims that Pyongyang’s presence in the cryptocurrency ecosystem also includes mining. It is estimated that the profits made by North Korea through these measures were worth $2 billion over a couple of years. The official report indicates that the resulting stolen wealth can then be used to undertake unsupervised international transactions, evade sanctions, and fund North Korean military expenditures, including its nuclear weapons programme. The American blockchain research firm Chainanalysis calculates that, in 2022 alone, North Korean entities stole $1.7 billion worth of cryptocurrencies through hacking. This aggressive behavior shows the problematic overtones of state-sponsored criminal activities related to crypto assets.

Bitcoin is more than a weapon for North Korean statecraft. It also helps Pyongyang compensate its lack of access to mainstream international financial channels and provides money to purchase food. According to a work of investigative journalism, North Korean policymakers regard cryptocurrency as a vital gateway to enhance the country’s financial infrastructure and, despite Bitcoin’s libertarian theoretical underpinnings, its adoption by this communist state is compatible with the strong emphasis of Juche ideology on the pursuit of self-sufficiency. Yet, tricky measures are needed to maximize its usefulness. As a report published by the National Committee on North Korea explains, the volatility of Bitcoin and similar cryptocurrencies makes them unsuitable as permanent vehicles for international payments. Some North Korean partners might accept Bitcoin, but it would make more sense to exchange cryptocurrency for conventional hard cash ‒ whose liquidity is much higher ‒ first and then use it to pay for goods and services later.

BTC donations to bankroll the military defense of Ukraine 

Bitcoin can be used to bolster the military defense of a state in conventional conflicts.  In the Ukraine War, it has been used by Kiev to prepare for the clash and to mitigate its consequences. Thanks to crowdfunding campaigns organized by both the Ukrainian government and private networks of volunteers through virtual platforms, Ukraine received donations denominated in cryptocurrency from foreign supporters. This digital war chest was helpful to increase Kiev’s pool of resources before and during the 2022 Russian invasion. According to open sources, said funds were invested in the purchase of military equipment, unmanned aerial vehicles, medical supplies, and even facial recognition software to identify Russian soldiers, spies, and mercenaries.

Although Kiev has received far larger sums of money through more traditional financial systems, the BTC grid turned out to be convenient channel for the direct reception of donations from overseas because it does not require the permission of institutional facilitators or intermediaries. Hence, this flow of money completely bypasses the formal paperwork and ‒ perhaps more importantly ‒ the restrictions of conventional financial channels that prevent remittances whose purpose is to fund military activities. Ironically, the specialized consulting firm Elliptic Intel notes that this course of action was inspired by the preceding crypto-asset fundraising undertaken for years by pro-Russian separatist militias in the Donbass.

This reality indicates that cryptocurrency has become not only a mainstream financial phenomenon, but also an instrumental digital asset in contemporary conventional warfighting. Considering that both Moscow and Kiev are actively resorting to decentralized cybercurrencies to gain an upper hand in this ongoing conflict, an article published by the Washington Post metaphorically described such confrontation as the world’s first “crypto war.” Yet, it is still unknown if cryptocurrencies will represent a game-changer that can decisively alter the facts on the ground in favor of either side.

In order to increase its war chest of crypto-assets, the Ukrainian government even courted the participation of large private cryptocurrency trading platforms, including FTX, Kuna, and Everstake. This involvement generated unexpected externalities. Specifically, the revelations that have uncovered the fraudulent criminal behavior of private cryptocurrency exchange FTX under the leadership of Sam Bankman-Fried ‒ involving cyclical transfers of wealth as a scheme that was facilitated by powerful political and corporate connections ‒ demonstrates that that these initiatives can also offer opportunities that encourage acts of corruption. The resulting fallout is problematic because it harms the public legitimacy of the crowdfunding efforts due to the fear of misappropriation of funds and also because at least some of the money sent by donors might not have reached its intended destination.

In the context of the Ukraine War, BTC has not just been used to optimize the defensive capabilities of Kiev’s military forces in the operational theatres of engagement. The cryptocurrency has also helped civilians caught in the crossfire. As a response to the destruction of infrastructure, Ukraine’s worsening macroeconomic trouble, the intermittent occupation of large urban areas by Russian forces, the exodus of millions of refugees, and the unreliability or unavailability of traditional financial services under such chaotic conditions, Ukrainian citizens are turning to BTC as a non-traditional monetary item to carry out safe and quick transactions whose purpose is to cover essential needs.

Iranian engagement in the BTC ecosystem to deflect the impact of sanctions

The Islamic Republic of Iran has harnessed the Bitcoin landscape in an effort to deflect Western sanctions through unorthodox measures. According to the consulting firm Elliptic ‒ involved in the scrutiny of blockchain analytics ‒ Teheran is encouraging BTC mining in order to use the resulting profits to pay for imports, overcoming the coercive restrictions that limit its ability to participate in economic exchanges carried out through ordinary platforms. Since the process involves the ‘alchemical’ transformation of energy into cryptocurrency ‒ a borderless monetary asset that circulates in an almost unrestricted way ‒ on an industrial scale, it offers the Iranian state an opportunity to monetize its energy resources (oil and natural gas), an important advantage for an economy deprived of hard cash and access to conventional financial services in international capital markets.  Furthermore, Teheran is engaged in negotiations with other states ‒ including Austria, Bosnia-Herzegovina, England, France, Germany, Russia, South Africa, Switzerland ‒ over the development of collaborative frameworks for the use of cryptocurrencies in cross-border financial transactions. Therefore, for Iran, Bitcoin represents a backdoor to access the world economy. As such, it bolsters its counter-hegemonic policy of “economic resistance.”

Nevertheless, Iran’s position towards stateless cryptocurrencies has zigzagged as the balance between costs and benefits has changed. Iranian authorities reversed their permissiveness towards Bitcoin mining due to rising electricity consumption, shortages of natural gas supplies as a result of the sanctions, Bitcoin’s falling value, and the incidence of droughts which have diminished the operational capacity to generate hydropower. Tehran even launched a clampdown due to concerns over the prospect that widespread BTC mining could overload the country’s power grid and provoke blackouts, a problem which could unleash socio-political unrest. Yet, there are signs which indicate that Tehran is revisiting its position once more. In August 2022, the Iranian Ministry of Industry, Mining, and Trade announced on social media that the Middle Eastern country had completed its first import order denominated in an unnamed stateless cryptocurrency, a transaction worth $10 million, adding that more operations like this will continue in Iran’s international economic exchanges. Although still worried about the problematic consequences of mining for energy security, Iran has released hardware for BTC mining that had been previously seized.

Concluding Remarks

Both strategic forecast and analytical assessments reveal that, in the strategic chessboards of 21st century “connectivity wars,” the leading cryptocurrency can be wielded as a high-tech financial sword or shield by innovative practitioners of economic statecraft. Some predictions have already come true. Others anticipate conceivable possibilities that might come to fruition in the near future. In turn, reality itself has brought some unexpected, but not surprising, developments that had not been foreseen. The unchartered waters of the cryptocurrency ecosystem might bring even more exotic applications of Bitcoin and similar virtual currencies for economic warfare worth exploring that have not been identified yet.

The increasing weaponization of Bitcoin in conventional and unconventional battlefields is consistent with the transformational character of “hybrid warfare.” A century ago, the historiographical German thinker Oswald Spengler explained that rather than an item that flows from one hand to another in economic exchanges, money is ‒ for modern Faustian civilizations that favor the march of technological development, the pursuit of worldly power and economic dynamism in the quest for wealth ‒ also an organic impersonal lifeform whose strength can be harnessed to project political force. The ongoing and eventual involvement of Bitcoin in several expressions of conflict shows that such an axiom is certainly valid in the digital age of FinTech.

This article was published by Geopolitical Monitor.com

Geopoliticalmonitor.com is an open-source intelligence collection and forecasting service, providing research, analysis and up to date coverage on situations and events that have a substantive impact on political, military and economic affairs.

 

State Collapse In Ethiopia: The Rewards Of Ethnic Violence By A Predatory Government – OpEd

 March 17, 2023  Eurasia Review  

By Girma Berhanu

Introduction

“Failed state” refers to a state whose government is unable to perform its two most fundamental functions: it cannot project any meaningful authority over its territory and it cannot protect its national boundaries. 

Since 1991, Somalia has rightfully been regarded as the quintessential example of a modern failed state. That is not to say that Somalia had no government: far from it, in the chaotic 1990s it often had more than one, some of which could count on more than eighty ministers. But their impact on the ground was non-existent. Even now, thirty years into the stalemate, the recognized government of Somalia controls little more than the capital city, Mogadishu, and this with the help of thousands of well-armed foreign troops under the auspices of the African Union. Somalia, therefore, is a failed state because its government cannot perform any duties (tax collection, public services, law and order) in almost three-quarters of its territory: in Somaliland and Puntland, which together constitute almost half of the territory, and in all areas under control by the militants of Al-Shabaab. 

But Somalia is not the only failed state. Haiti, in the Caribbean, has recently attracted attention, too, as criminal gangs have all but monopolized the functions traditionally allocated to a government: tax collection, law and order, public services. In the stand-off between government and armed gangs, it is the gangs who hold the upper hand: the government is no longer able to offer even a pretense of authority in the capital city, Port-au-Prince. Haiti – the world’s newest failed state. 

In a failed state, citizens gradually understand that their government is illegitimate because the social contract has been broken. A state – any state, democratic or not, corrupt or not – is predicated on the simple idea that citizens obey and pay taxes in exchange for a degree of public order, safety and, hopefully, public services. When the government is unable to cater to any of these needs (careful: not unwilling, but physically unable too) there seems to be no point in citizens keeping their end of the bargain. As such, new actors take on these roles: gangs, warlords, whichever. 

The international community can be more stubborn: they’ll insist, against all evidence, that indeed there still is such a thing as a government in Somalia or Haiti, and that Somalia or Haiti are therefore still to be regarded as fully-functioning states. They can even be trusted with millions of dollars of foreign aid, and can take out loans from international agencies. But in private, even they know that they are dealing with a bogus reality.

Ethiopia can also be described as failed state. Our observation (1) is that the country is composed of feeble and flawed institutions. Often, the executive barely functions, while the legislature, judiciary, bureaucracy, and armed forces have lost their capacity and professional independence. (2) A failed state suffers from crumbling infrastructures, faltering utility supplies and educational and health facilities, and deteriorating basic human-development indicators, such as infant mortality and literacy rates. Failed states create an environment of flourishing corruption and negative growth rates, where honest economic activity cannot flourish. In particular, the Ethiopian political establishment faces a considerable existential political challenge.

Based on his findings, Bayeh, E. (2022:8) concluded that: (3)

Ethiopia is a fragile state, as it exhibits the features of state fragility stipulated in the conceptual framework. As per the findings, we can also conclude that Ethiopia has started the process of descent into state failure as it has started manifesting some of the indicators of state failure mentioned. Moreover, though the state has started contracting, the expression of political power and monopoly of violence does not shrink to the capital as it happens in failed states. The state still exercises authority over a large part of its territory and remains the primary security and social service provider. Thus, it is a bit early to conclude that the state has failed. However, it is fair to say that it has started the process of descent into state failure. Obviously, it is not a collapsed state…However, if the current situation continues anymore, there is no reason why it will not fail like Somalia and South Sudan and descend into the worst case of failure, which is state collapse. Given the long-standing remarkable history of survival and statehood resilience, the country can be salvaged from the condition of complete failure. This, however, needs a concerted effort from all concerned bodies. Otherwise, not just Ethiopia but the entire region will be destabilized given, inter alia, the country’s previous stabilizing role in the region, large population, and border share with many of the regional states.

The US state department has just reissued with updates to security information on Travel advisory. “Reconsider travel to Ethiopia due to conflict, civil unrest, crime, communications disruptions, and the potential for terrorism and kidnapping in border areas. (4)

A strong state provides core guarantees to its citizens and others under its jurisdiction in the three interrelated realms of security, economics, and politics. A state failure manifests itself in a number of ways. Consequently, understanding the dynamics of state failure and dealing with its major causes as in Ethiopia assumes new urgency. The following four sections are empirically based manifestations of the current state of Ethiopia or scenarios of fragile state.

Abiy Ahmed’s Twisted Priorities

The Prime Minister’s development priorities are shaped by his objective to dismantle Ethiopia and create an independent Oromo state. These goals cannot be stated openly, of course, but in the meantime much quiet work can be done in creating the structures that will make this possible. An obvious point in hand –and one that even the casual observer can attest to– is the extreme Oromization of the capital city, Addis Ababa. 

This is a priority some may agree or disagree with, but it is equally striking how, in a country blighted with poverty and desperation, he affords such high priority to opening glossy parks, gardens and palaces over the more useful construction of affordable housing. As everybody almost certainly knows by now, his 500-billion-birr palace and forest dacha project has sparked a huge public controversy. His delusion of grandeur comes in handy in such white-elephant grand construction fantasies. Its fantastical manifestation has just come in the form of forcing banks to contribute up to 20 million birr each for the construction of parks and gardens! In similar fashion, he demolishes private and government -owned dwelling units for his building construction fancies without compensation or replacements. The recent such demolitions near Ambassador Theater which I myself witnessed with a lump of anger in my chest are part of Abiy’s bizarre development priorities.

A civil engineer in the bureaucracy recently lamented the absence of a country-wide land-use plan and revealed without fear of political retribution that physical structures have been put up on sites designated for groundwater drilling, seriously jeopardizing future water supplies to Addis Ababa, which is already facing a water shortage of nearly 300000 cubic meters of water.

By contrast, the development priorities in Ethiopia have long been well identified: water, food, affordable housing, clothing, transport, education and training and basic health care! Supplies of these basic necessities have dwindled and their prices have skyrocketed! At the same time, the latest Toyota models are running all day long in Addis Ababa and supermarkets are well-stocked with luxury goods of all kinds! It is still a mystery who is financing the almost 6-billion- dollar annual fuel import bill! It is obvious that the wealthy in Ethiopia, at any rate most of them, did not make their money by producing goods and services which are in short supply but by selling land, getting inheritance money, through corruption, substantial inward remittances in foreign currency and the like.

There is no way Abiy Ahmed would give my FOPA development model a chance to be utilized for his main focus is on dismantling Ethiopia and building imposing physical structures both to deceive Ethiopians and inspire his professed tribe towards building a new state on the ruins of old Ethiopia. It is certainly bizarre, by all accounts. 

A Three-Day Stay -At- Home Strike in Addis Ababa: Will Addis Ababans Support it?!

Addis Ababans have been denied their constitutional right to form a Killil for self-administration; the city itself has been unconstitutionally divided into Addis Ababa and Sheger by diktat; the Oromia Killil police force has been deployed sidelining the city’s own police force ; people from Amhara killil have been barred from entering Addis Ababa; Adanech Abebe is an unelected Mayor of Addis Ababa handpicked and appointed by Abiy Ahmed. AMHARAs have been targeted for persecution and human rights violations, including demolition of homes without due compensation and replacements.

At a country-wide level, as Addis Ababans are biologically and culturally intermingled and have originated from all the 85 ethnicities of Ethiopia, the vast majority of them are vehemently opposed to ethnic segregation and separation. In the June 2021 general election, it was credibly reported that Balderas for Genuine Democracy won in Addis Ababa but BILTSIGENA overturned the vote in its favor by diktat. 

At any rate, the current political situation in Ethiopia in general and in particular in Addis Ababa has worsened over and above the very severe and widespread economic hardships including high inflation, housing and transport problems and extremely high unemployment. More recently,

Adanech Abebe, the unelected Mayor of Addis, publicly announced that a great number of people from neighboring Killils have entered Addis Ababa with the intention to overthrow by force the duly elected Abiy government! This incendiary announcement has greatly angered the peaceful residents of Addis Ababa and have led them to believe that the worst is yet to come. They have come to think that this is a pretext for launching an ethnic cleansing campaign including genocide against mainly the Amharas.

Be that as it may, Addis Ababans have a sufficient cause to peacefully register their grievances to the government through the safest means of a three-day stay-at-home strike by all the residents of Addis Ababa. I would like to suggest that an independent platform hold a quick on-line survey of people in Addis Ababa who support or oppose such a peaceful and safe strike. 

Abiy Ahmed and His OPDO Are Being Gradually ‘Surrounded’ by Pro-Ethiopia Forces

The Amhara/Fano self-defense resistance the, Gurage, Sidama, Welayeta, Gambella, Gedeo and other such opposition groups, the Ethiopian Orthodox Tewahedo Church, the pro-Haji Omar Idris Muslims, the majority of Ethiopian pupils and students, the majority of the Ethiopian diaspora and most opposition political parties including Balderas and Enat are massing together against the main anti-Ethiopia forces OPDO/OLF, TPLF and other pro-OPDO groups. The Ethiopian Orthodox Tewahedo Church can ally with the pro-Haji Omar Idris Muslim group against Abiy Ahmed regime’s intervention in religious matters and anti-Orthodox Christian crimes. Opposition ethnic groups may not have legal political parties; so, they may have to simply support legal parties like Balderas and Enat that are opposed to the disintegration of Ethiopia as propounded by OPDO/OLF and TPLF 

All the above-cited pro-Ethiopia groups of Ethiopians who constitute the vast majority of the Ethiopian people may engage in peaceful political struggle to oust the genocidal, tribalist and corrupt Abiy regime and form a transitional government to amend and change the ethnic apartheid constitution written and implemented by the anti- Ethiopia armed groups of Tplf and OLF, the latter having been eliminated by TPLF before the implementation of the basic law.

The priority tasks to be performed are the following:

1. Securing the release of some 12000 Fano’s including ZEMENE KASSE detained in Amhara killil on orders from Abiy Ahmed;

2. Purging dishonest members of the Amhara BILTSIGENA leadership and replacing them by dedicated individuals;

3. Unifying the Amhara special force, militia and uniformed Fano’s under the same central command;

4.Orthodox Christians should support pro-Haji Omar Idris peaceful Muslim rallies and protest demonstrations;

5. Turning out in huge numbers for a possible call by opposition parties for a peaceful three-day stay-at -home strike by all the residents of Addis Ababa;

6. Replicating the three-day stay -at-home peaceful protest in other Killils.

If the peaceful protests indicated above are conducted in a sustained and intelligent manner, it is almost a foregone conclusion that the people will triumph over Abiy Ahmed’s reign of terror and save the country from total collapse. 

Who is Financing Abiy Ahmed and His Crazy Ethiopia Demolition Project?! 

In Addis Ababa supermarkets are still well-stocked and cars are running 24/7. Prices are high, extremely high but money is no object for the ruling class and the nouveau riches. Adanech Abebe appears on stage with a four- million -birr jacket and a 45000-birr scarf. She is given to lecturing mostly the dispirited and downtrodden housewives, half-starved youngsters and the unemployed and homeless of Addis Ababa on anything from civic responsibilities to the quantum leap Addis Ababa is making in providing affordable housing for all the residents of the city! Of course, the reality on the ground tells a different story.

One thing is clear: Abiy Ahmed is a fantastic yarn-spinner and storyteller. He routinely lectures on esoteric recipes including boiling cabbages and sprinkling a little salt on them and having a decent meal for the day! His sci-fi fabrications and stories of lush meadows and fancy palaces and forest dachas and gardens of Eden are so regaling that his audiences, mainly well-fed and dressed officials and bureaucrats with heavily made-up faces, tend to fall into a fabulous reverie! But the point is, where does he get the money from to try and realize at least some of his dreams down on the ground?! He is building a fancy palace at the astronomically high cost of 500 billion birr! The rest of his white-elephant projects have included a science museum, an impressive public library, impressive parks and gardens, boarding schools, etc. He is using these non-priority projects to hoodwink the Ethiopian people into believing that he is constructing Ethiopia while in truth he is deconstructing not only her edifice but also its long and ancient history. Who is financing Abiy and his historical and physical demolition of Ethiopia?

The Inhuman Demolition of Homes and Shops of Ethiopians at Ambassador and Piazza area

Imagine your home being demolished over your head! Your shop of livelihood being dismantled in minutes by your own compatriots as the so-called Oromia police force triumphantly looks on! I felt devastated for the hard-working owners of the kiosks, shops, eateries, mini-supermarkets and butcheries in front of the Ambassador Theater close to Ethiopia Hotel which were being dismantled in front of hundreds of owners and onlookers including me! The security and police force presence was frightening. I approached one of the onlookers and asked him: ” Have they been given replacements?” ” I don’t think so!” he replied! I shook my head several times to protest against the wanton demolition! Valiantly, even if I say so myself, I uttered,” Why don’t they first drive out Sudan and South Sudan!” I then added,” That is the price we have to pay for remaining quiet when our human and democratic rights are violated!”

Secretary of State Blinken is Coming to Addis Ababa! What Should We Tell the Great Man?

We should tell him: you have given us nearly one hundred billion dollars of aid and assistance over the last 50 years but there is nothing to show for it except more hunger, more political instability and more human and democratic rights violations. That is largely because of the ignorant and self-serving political leaders you have helped come to power and stay in power! Abiy Ahmed is arguably the worst of them all, who incidentally has been diagnosed by a professional psychiatrist with three types of mental disorder including bipolar disorder! He has descended so low into the abyss of infamy that nursing him back to political health is completely out of the question! He has been complicit in several genocidal massacres and has been found after the fact to have triggered the recent devastating civil war in which 1.2 million combatants and non-combatants perished! The list of crimes committed on his watch is very long.

Now Mr. Secretary, Abiy has blocked internet connections! He has banned peaceful political gatherings and rallies and duly registered parties cannot operate at all! We can’t breathe, Mr. Secretary. We are planning a peaceful three-day stay-at-home strike here in Addis Ababa to show our disapproval of his reign of terror! Just tell him “No lifting of sanctions; no aid other than humanitarian; I can give you political asylum if you can’t allow the planned strike in Addis!” Those words will not cost you a dime but they will set free 120 million Ethiopians from his genocidal reign of terror! Thank you in advance, Mr. Secretary! Remember, Mr. Secretary, the enormous global power you wield as the Foreign Minister of the most powerful nation on earth.

Abiy Unconstitutionally Cedes Federal Government Powers to Oromia Killil to Ensure His Objective of Dismembering Ethiopia

The Oromia Killil police force unconstitutionally barred the constitutionally and legally established Balderas for Genuine Democracy Party from holding its conference at Gambella Hotel in Addis Ababa on March 12, 2023. Adanech Abebe, a woman from Oromia Killil, appointed by Abiy Ahmed to kowtow to the wildly adventurous, high-testosterone warlord of Oromia Killil, Shimeles Abdisa ! The Holy Synod of the Ethiopian Orthodox Tewahedo Church successfully foiled Abiy’s attempt to form a separate synod for the Oromia Killil, which indicates Abiy’s not-so-hidden agenda of somehow breaking Ethiopia up. Also, Abiy Ahmed tried to hoist his regional flag and to force students to sing his regional anthem in Addis Ababa but the brave pupils and students of Addis Ababa scuttled the sinister act by boycotting classes for over three days. And now Abiy Ahmed is demolishing houses and kiosks of targeted groups in Addis Ababa using the police force unconstitutionally deployed from Oromia Killil. 

Abiy Ahmed tried to scare the President of Amhara killil, Kefeyale, into paying homage to Shimeles Abdisa and indirectly to Abiy himself. Kefeyale has resisted the indignity so far perhaps because the next indignity would be to cede Welkait Plus to TPLF. The broad outline of Abiy’s grand strategy is clear enough! He is trying to weaken the federal government and the national military and gradually transfer their powers to the so-called Oromia government and the Oromia special force, which according to some reports, is already stronger than or as strong as the national military.

The bottom line is clear enough! Abiy is deliberately gradually ceding control of Addis Ababa to Shimeles. The intention is to control the whole country from Addis Ababa and then do as they please. What they are doing is totally illegal even according to their own ethnic apartheid constitution. They are apparently running out of time, which is why they don’t even honor their own constitution. They are now above the law because almost all the entire Ethiopian people are turning against them. We are also running out of time to save our lives and our country. Abiy will not hesitate to unleash a reign of terror in Addis Ababa as he did in Wellega and elsewhere through Desperado no. One, Shimeles Abdisa.

Ethiopians have never faced such a national crisis in their long history! Abiy Ahmed has been able to inflict such horrendous damage and hardship by controlling the military, unconstitutionally organizing his own republican guard, special forces, militias and federal police force, etc. through downright chicanery and duplicity and more recently by brute force. The question now is, what can citizens do to peacefully oppose such outrageous crimes being perpetrated by the regime? We have witnessed the Holy Synod of the Ethiopian Orthodox Tewahedo Church almost bringing the regime to its knees peacefully simply by mobilizing its faithful.

Finally, the overall characteristics of a failed state can be discerned in the following five intertwined major areas, the empirical aspects of which are outlined above. These characteristics are prevalent in Ethiopia. Decreased ability to defend national boundaries — Territory can be taken over by criminal gangs, rebellious insurgents, or invading military forces from another state. Decreased ability to police its territory — Government no longer holds a monopoly on the use of physical force to deter crime and protect the public. Corruption, crime, and lawlessness often increase. Decreased public services — State-sponsored services deteriorate, including health care, public education, infrastructure such as roads and utilities, and police/firedepartments.Decreased economic stability — Unemployment rises, inflation skyrockets, currency loses value both domestically and internationally, tax revenue is lost and economic crimes often go unpunished. Decreased legitimacy — Overall trust in the government and its ability diminishes, both domestically among the state’s citizens and internationally among other states.

(In collaboration with TG, Addis Ababa)

References:

1.  Bayeh, E. (2022). Post-2018 Ethiopia: state fragility, failure, or collapse?. Humanities and Social Sciences Communications, 9(1), 1-8.
2.  Rameshshanker V, MacIntyre C, Stewart S (2020) Beyond the headlines: forgotten fragility in Ethiopia. Norman Paterson School of International Affairs, Carleton University. https://reliefweb.int/report/ethiopia/beyond-headlines-forgotten-fragility-ethiopia. Accessed 10 Apr 2022
3.  Yusuf S (2019) Drivers of ethnic conflict in contemporary Ethiopia. Institute for Security Studies, Pretoria
4. https://travel.state.gov/content/travel/en/traveladvisories/traveladvisories/ethiopia-travel-advisory.html
5.  Failed States 2023 (worldpopulationreview.com)

‘This is Class War’: Tech Companies and

US Fed Oversee Major Job Losses

Tanupriya Singh | 18 Mar 2023

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Meta has announced plans to cut 10,000 jobs this year amid a wave of mass layoffs by other US-based tech firms since 2022. Meanwhile, the US Federal Reserve has warned of a rise in unemployment due to a further hike in interest rates.

 

Mark Zuckerberg CEO of Meta. Photo: Wikimedia

On Tuesday, March 14, Facebook’s parent company Meta Platforms, Inc. announced plans to cut 10,000 jobs. Terming 2023 the “year of efficiency,” the company also decided to discard plans to hire for 5,000 job openings, scrap “lower-priority” projects, and “flatten” the organization. This is after it already got rid of certain middle management positions earlier this year.

This is the second major round of layoffs by Meta, which had cut 11,000 jobs, or 13% of its workforce, in November 2022. Meta is not alone. Since 2022, tech companies have laid off an estimated over 290,000 workers. And another aggressive wave of cuts is now looming.

Among the reasons cited by CEO Mark Zuckerberg for Meta’s decision were “higher interest rates” and a “cooling economy.” So what has caused this dramatic shift?

The boom-bust cycle continues

“With the onset of the COVID-19 pandemic and the lockdowns, the entire digital space saw a boom in revenue as people became more reliant on online retail. All of this operates on a kind of hyped, herd mentality—as soon as companies like Amazon, Google, and Facebook saw an increase in revenue, it was immediately thought of as a permanent condition, that people would shift to the online world,” Bappaditya Sinha, a technology analyst and writer, told Peoples Dispatch.

“Now while there was a real growth in revenues, coupled with the hype that these tech companies were basically going to take over, the US Federal Reserve (the Fed) also carried out massive amounts of quantitative easing [printing more money], basically increasing the supply of money. All of this resulted in a major increase in the valuations of tech companies across the spectrum.”

Bigger revenues, increased market capitalization, and the belief in this anticipated, permanent condition of growth resulted in a massive hiring boom. Meta’s workforce, for instance, grew by 30% in 2020 and 23% in 2021.

However, things began to change in the beginning of 2022. By March, inflation had hit 8.5%. “It was then that the Fed decided that it was time to tighten the money supply, so they started increasing interest rates very rapidly,” Sinha explained. “Within a span of a year, the interest rate has gone from [near] zero to close to 5%, which is unprecedented. The Fed also stopped quantitative easing, opting instead for a quantitative tightening.”

“The first companies to get hit by this were the most speculative, those who did not have any viable profits. You then have cryptocurrencies going bankrupt and companies shutting down.”

Also watch: The year Big Tech was on the ropes

For Big Tech, it was becoming clear that the kind of growth seen during the pandemic, and this projection of everyone moving online was actually a one-time thing, Sinha added. The market capitalization of big corporations came crashing down, with Alphabet Inc., the parent company of Google, losing nearly USD 800 billion, Microsoft losing some USD 726 billion, and Meta Platforms having lost USD 450 billion.

“However, while growth rates were slowing, by no means were revenues contracting,” Sinha said. Meanwhile, corporations decided that it was time to cut jobs. In January 2023, Alphabet Inc. announced that it would cut 12,000 jobs worldwide—6% of its workforce.

The same month, Microsoft also announced plans to layoff 10,000 people by the end of the third quarter of the 2023 financial year, with a third round of job cuts implemented this week.

Mega corporations outside the tech sector are also on a similar path, with Amazon planning to cut over 18,000 jobs. Meanwhile, social media company Twitter has laid off about 10% of its workforce, or 200 people, after terminating 3,700 jobs in November 2022.

“Some of this is also due to the same herd mentality—now that market caps have fallen and companies have gone bankrupt, there are these mass layoffs,” Sinha said.

“A lot of this is also driven by Wall Street. When these market caps were going up for no reason other than hype, these corporations were playing to the gallery, talking about this dramatic growth. And now that the reverse is happening, with market caps going down, these companies have decided that even if the growth is not that much, they are still going to keep their profit margins high by cutting down the workforce.”

“Wall Street wants it both ways—when the hype is on and these companies hire workers, Wall Street applauds this. When the market caps are going down, then these companies want to show that they are cutting down costs so their profit margin remains high, and then Wall Street rewards this.”

Since Meta announced its “restructuring” in November, the prices of its shares have actually gone up.

“There is this very short-sighted firing and laying off this is kind of driven by what Wall Street’s perceptions are at any given point. These perceptions are very erratic, also due to the underlying Federal policy—the Fed decreases the money supply due to high inflation, this is reflected in the Wall Street mood, and companies basically comply with this.”

And who bears the brunt? The workers. While tech billionaires are rewarded by Wall Street, it is racialized workers, women, and immigrant workers on precarious work visas who are left in the lurch. For instance, around 40% of people who lost their jobs in the US were Indian-origin workers on H-1B visas, meaning they had only 60 days to find a job or be forced to leave the country.

As Patricia Gorky, a technology worker and organizer with the Party for Socialism and Liberation (PSL) in the US, has argued, “Layoffs are not just mass firings: They are mass eliminations of jobs… Layoffs are a way for capitalists to push the burden of the economic crisis onto the workers instead of cutting into executive pay” and “a tool for capitalists to discipline the workforce and maintain profitability.”

Bailouts for the rich, layoffs for workers  

“As of now, the economy is not in recession. But, what we are seeing is banks collapsing—the second and third largest failures in US history. With the Fed raising interest rates so rapidly, it has now started impacting the banking sector. If the banking sector becomes conservative, if there is a risk perception, banks will stop lending and then what will happen is that the economy as a whole will go into recession,” Sinha said.

“If the economy does go into recession, it is possible that the stock market and these companies, whose revenues have so far not gone down even if the rate of growth has decreased, will be hit. And if that happens, then we will see major job cuts.”

Some signs are already there—the tech sector alone accounted for one-third of the over 180,000 jobs cuts announced by US companies in January and February, the highest since 2009.

On March 7, Fed Chair Jerome Powell appeared before the Senate, Banking, Housing, and Urban Affairs Committee, warning that the central bank might have to hike interest rates even further due to high levels of inflation and labor shortages. The Fed had already projected that the unemployment rate, which currently stands at 3.4%, could rise by one percentage point, or two million jobs, by the end of 2023 if interest rates were raised.

“Powell’s reaction was just ‘this is business as usual.’ Initially the inflation was seen in goods, and it was attributed to the lockdowns in China, then the war in Ukraine. Now, while the prices of goods have come down, the inflation has moved to the services sector,” Sinha said.

“What Powell is basically implying is that workers are earning more wages, and this is what is causing inflation. So what the Fed is going to do is to increase the interest rate and tighten the money supply. This in turn will result in companies laying off workers. Workers’ wages will not rise.”

“For them, increasing unemployment is almost natural. The Fed has historically said that the ‘natural’ unemployment rate of the US economy is 4.5%. How is this natural? It is a very political decision, which is made out to be a technical matter.”

Sinha emphasized that “It is presented almost like a mathematical axiom but it is actually class war. If you do not have 4.5% of the workers in the reserve army of labor, if you have less than that percentage of idle workers, then the workers have a greater bargaining power, they can demand higher wages. To ensure that does not happen, you have to keep a percentage of the population idle.”

“The Fed takes this position and then you contrast it with what happens when a bank collapses. Silicon Valley Bank was not a bank that caters to working class or poor people, it is where VC companies and their founders parked their money and the moment that bank collapses you have the rich getting affected, and it is because of the Fed’s policies—ultimately the bank was putting the money in Treasury bonds.”

“You can see the class politics—when policies affect the poor and the working class, it is considered ‘normal’, but when they start affecting the rich then it is a catastrophe that must be averted.”

Also read: Yes, the US gov’t did bailout the banks. What would a people’s bailout look like?

Courtesy: Peoples Dispatch

The US and UK’s Submarine Deal Crosses Nuclear Red Lines With Australia – OpEd

President Joe Biden, British Prime Minister Rishi Sunak and Australian Prime Minister Anthony Albanese at the AUKUS meeting in San Diego, March 13, 2023. Photo Credit: Chad J. McNeeley, DOD

 March 17, 2023  Eurasia Review  

By Prabir Purkayastha

The recent Australia, U.S., and UK $368 billion deal on buying nuclear submarines has been termed by Paul Keating, a former Australian prime minister, as the “worst deal in all history.” It commits Australia to buy conventionally armed, nuclear-powered submarines that will be delivered in the early 2040s.

These will be based on new nuclear reactor designs yet to be developed by the UK. Meanwhile, starting from the 2030s, “pending approval from the U.S. Congress, the United States intends to sell Australia three Virginia class submarines, with the potential to sell up to two more if needed” (Trilateral Australia-UK-U.S. Partnership on Nuclear-Powered Submarines, March 13, 2023; emphasis mine). According to the details, it appears that this agreement commits Australia to buy from the U.S. eight new nuclear submarines, to be delivered from the 2040s through the end of the 2050s. If nuclear submarines were so crucial for Australia’s security, for which it broke its existing diesel-powered submarine deal with France, this agreement provides no credible answers.

For those who have been following the nuclear proliferation issues, the deal raises a different red flag. If submarine nuclear reactor technology and weapons-grade (highly enriched) uranium are shared with Australia, it is a breach of the Nuclear Non-Proliferation Treaty (NPT) to which Australia is a signatory as a non-nuclear power. Even the supplying of such nuclear reactors by the U.S. and the UK would constitute a breach of the NPT. This is even if such submarines do not carry nuclear but conventional weapons as stated in this agreement.

So why did Australia renege on its contract with France, which was to buy 12 diesel submarines from France at a cost of $67 billion, a small fraction of its gargantuan $368 billion deal with the U.S.? What does it gain, and what does the U.S. gain by annoying France, one of its close NATO allies?

To understand, we have to see how the U.S. looks at the geostrategy, and how the Five Eyes—the U.S., the UK, Canada, Australia, and New Zealand—fit into this larger picture. Clearly, the U.S. believes that the core of the NATO alliance is the United States, United Kingdom, and Canada for the Atlantic and the United States, United Kingdom, and Australia for the Indo-Pacific. The rest of its allies, NATO allies in Europe and Japan and South Korea in East and South Asia, are around this Five Eyes core. That is why the United States was willing to offend France to broker a deal with Australia.

What does the U.S. get out of this deal? On the promise of eight nuclear submarines that will be given to Australia two to four decades down the line, the U.S. gets access to Australia to be used as a base for supporting its naval fleet, air force, and even U.S. soldiers. The words used by the White House are, “As early as 2027, the United Kingdom and the United States plan to establish a rotational presence of one UK Astute class submarine and up to four U.S. Virginia class submarines at HMAS Stirling near Perth, Western Australia.” The use of the phrase “rotational presence” is to provide Australia the fig leaf that it is not offering the U.S. a naval base, as that would violate Australia’s long-standing position of no foreign bases on its soil. Clearly, all the support structures required for such rotations are what a foreign military base has, therefore they will function as U.S. bases.

Who is the target of the AUKUS alliance? This is explicit in all the writing on the subject and what all the leaders of AUKUS have said: it is China. In other words, this is a containment of China policy with the South China Sea and the Taiwanese Strait as the key contested oceanic regions. Positioning U.S. naval ships including its nuclear submarines armed with nuclear weapons makes Australia a front-line state in the current U.S. plans for the containment of China. Additionally, it creates pressure on most Southeast Asian countries who would like to stay out of such a U.S. versus China contest being carried out in the South China Sea.

While the U.S. motivation to draft Australia as a front-line state against China is understandable, what is difficult to understand is Australia’s gain from such an alignment. China is not only the biggest importer of Australian goods, but also its biggest supplier. In other words, if Australia is worried about the safety of its trade through the South China Sea from Chinese attacks, the bulk of this trade is with China. So why would China be mad enough to attack its own trade with Australia? For the U.S. it makes eminent sense to get a whole continent, Australia, to host its forces much closer to China than 8,000-9,000 miles away in the U.S. Though it already has bases in Hawaii and Guam in the Pacific Ocean, Australia and Japan provide two anchor points, one to the north and one to the south in the eastern Pacific Ocean region. The game is an old-fashioned game of containment, the one that the U.S. played with its NATO, Central Treaty Organization (CENTO), and Southeast Asia Treaty Organization (SEATO) military alliances after World War II.

The problem that the U.S. has today is that even countries like India, who have their issues with China, are not signing up with the U.S. in a military alliance. Particularly, as the U.S. is now in an economic war with a number of countries, not just Russia and China, such as Cuba, Iran, Venezuela, Iraq, Afghanistan, Syria, and Somalia. While India was willing to join the Quad—the U.S., Australia, Japan, and India—and participate in military exercises, it backed off from the Quad becoming a military alliance. This explains the pressure on Australia to partner with the U.S. militarily, particularly in Southeast Asia.

It still fails to explain what is in it for Australia. Even the five Virginia class nuclear submarines that Australia may get second hand are subject to U.S. congressional approval. Those who follow U.S. politics know that the U.S. is currently treaty incapable; it has not ratified a single treaty on issues from global warming to the law of the seas in recent years. The other eight are a good 20-40 years away; who knows what the world would look like that far down the line.

Why, if naval security was its objective, did Australia choose an iffy nuclear submarine agreement with the U.S. over a sure-shot supply of French submarines? This is a question that Malcolm Turnbull and Paul Keating, the Australian Labor Party’s former PMs, asked. It makes sense only if we understand that Australia now sees itself as a cog in the U.S. wheel for this region. And it is a vision of U.S. naval power projection in the region that today Australia shares. The vision is that settler colonial and ex-colonial powers—the G7-AUKUS—should be the ones making the rules of the current international order. And behind the talk of international order is the mailed fist of the U.S., NATO, and AUKUS. This is what Australia’s nuclear submarine deal really means.

Prabir Purkayastha is the founding editor of Newsclick.in, a digital media platform. He is an activist for science and the free software movement.

This article was produced in partnership by Newsclick and Globetrotter.