Ukraine Conflict Update – March 23rd

Ukraine Conflict Update – March 23rd 

Military and hard security developments

• Fighting in and around Chernihiv remains heavy, with the Russians reportedly destroying the Chernihiv bridge south of the city. The bridge crosses the Desna river and connects the city directly to Kyiv, and has been used to evacuate civilians. The bridge’s destruction is likely an indication of Russian forces intentions to tighten the perimeter around the city, cutting off entry and exit points and further limiting opportunities to resupply the defenders. Elsewhere, significant Russian efforts continue in the Donbas, where Russian forces continue to make slow but steady progress. Luhansk oblast almost now entirely under Russian control as their forces approach and attempt to encircle Severodonetsk.
• End Game by May Day Parade? Sources suggest that Russia may accept that it has achieved three out of its four objectives and settle for drawing lines in the Donbas Region, where they will dig in and the annexation of the land around Odesa and the Crimea. A date to aim for may be the May 9th May Day Parade in Moscow on May 9th. The war could drag on until ,June with sporadic fighting.
• Extensive use of the railway network by Russia. Russia is making great use of the railway network to speed up reinforcements particularly using a World War 2 armoured train to transport BMP4 APCs in particular. Belarus forces are sabotaging the railway network and Ukraine is pinpointing railway bridges and lines.
• Little use of C-UAS systems. Nether side is making use of C-UAS systems thus sUAS systems are proliferating the battlefield and larger Phantom and Bayraktar TB2s. Bayraktar TB2 is a medium-altitude long-endurance (MALE) unmanned combat aerial vehicle (UCAV) capable of remotely controlled or autonomous flight operations. It is manufactured by the Turkish company Baykar Defence, primarily for the Turkish Armed Forces. The aircraft are monitored and controlled by an aircrew in a ground control station, including weapons employment. (Wikipedia). Russia is using UAVs for artillery spotting around Kyiv. The Stinger missiles are not destroying sUAVs and do not have the day/night sight capability. The Russian Airforce is deploying at night using its night vision operation capability.
• China is monitoring the situation and seeing any comparison reactions if it took action against Taiwan. In the long run it is China’s wish for the conflict to end and is thus making diplomatic moves in that area.
• General Sir Richard Dannatt underlined on BBC Radio 4,  the need to concentrate UK defence spending on land systems where historically there has been a considerable underspend in past years, with spending concentrated on naval warships and the carriers in particular and fast jets.

Diplomatic and strategic developments

• On 22 March, Kremlin spokesman Dmitry Peskov stated that Russia would only use nuclear weapons if it faced an existential threat. Peskov’s statement came after a CNN journalist asked him whether he was confident that President Vladimir Putin would not use nuclear weapons, with Peskov referring to Russia’s nuclear doctrine. While Peskov framed the issue around existential threats to Russia as a whole, a perceived existential threat to the Putin regime itself could similarly prove a trigger for nuclear weapons use. It remains our assessment that nuclear weapon use remains a very low likelihood, but the threat has increased since the launch of the invasion. Furthermore, should the war in Ukraine destabilise Russia internally, Putin may perceive this as an existential threat to his own position that could warrant nuclear threats, if not necessarily direct use of tactical or strategic weapons. As such, public calls for Putin’s assassination or reports of a palace coup could drive paranoia in the Kremlin, particularly if the military situation deteriorates and pressure on Putin begins to build.
• On 22 March, Russian Foreign Minister Sergei Lavrov accused the United States of working to undermine negotiations between Ukraine and Russia. Lavrov stated that the Ukrainian delegation is “constantly changing its position”, which he suggested may be as a result of US influence. The allegations come after the Kremlin called for more substantial negotiations with Ukraine, though President Zelensky’s negotiating position has hardened in recent days, indicating little meaningful progress is likely in the coming days.
• Additionally, Zelensky is due to address NATO leaders on 24 March and is likely to reiterate Kyiv’s calls for closing the sky over Ukraine and providing Ukraine with powerful fighter jets. Although neither of these requests will likely be granted, Zelensky’s address will coincide with US President Joe Biden’s visit to Europe for a number of summits to discuss additional measures to support Ukraine, including more sanctions on Russia. However, an embargo on Russian oil and gas remains highly unlikely in the short term, with German Chancellor Olaf Scholz reiterating today Berlin’s enduring resistance to such measures. Nevertheless, despite western leaders holding out on implementing the most damaging measures, the likely further expansion of sanctions will only further reinforce the risk of Russian retaliation, with Biden warning American business leaders this week of the heightened cyber threat from Russia.
• Poland has today, 23 March, identified 45 Russian diplomats as suspected spies and called on the Foreign Ministry to expel them from the country. The Russian Foreign Ministry has stated that it will retaliate if its diplomats are expelled, underlining the latest escalation in already extremely poor relations between Moscow and Warsaw given Poland’s robust support for Ukraine and the use of its border to supply Ukrainian forces with weapons.

Economic/business environment developments

• Tech giant Google has reportedly begun evacuating its staff from Russia in light of an unprecedented government crackdown on the information landscape following Russia’s invasion of Ukraine. With a number of other tech and social media platforms either banned or severely restricted in Russia, the increasingly assertive pro-Kremlin moderation by the state drives risk of further bans and/or fines. For example, YouTube was accused of “terrorist” behaviour for showing content that the state perceived to be anti-Russian, increasing the likelihood of this platform also being banned in the coming days. Earlier this week, Facebook and Instagram were banned in Russia as “extremist organisations”. The developments are on trend with the extremely high restrictions on free speech and increasingly volatile operating environment.
• Of note, the Moscow Stock Exchange will reopen on 24 March between 0950-1400 (local time), after an unprecedented closure since 28 February. The Central Bank has confirmed that a ban on short selling will apply during trading, but even this is unlikely to be sufficient to prevent a further sell off after Russian stocks collapsed earlier this month.
• Ukrainian agricultural minister Roman Leshchenko stated on 22 March that Ukrainian farmers had now begun the seasonal planting in the southern Odesa region, amid growing concern over the knock-on impact of the war on food insecure states across Africa and Asia. Ukraine remains one of the largest grain exporters in the world, but the Agricultural Ministry has stated that planting could be halved this year to 7 million hectares, though the yield will likely be largely determined by how the military situation develops given range of Russian operations and the destruction of critical infrastructure.
• Lastly, another high-profile individual, Russian climate envoy Anatoly Chubias, has reportedly resigned and left Russia – allegedly in protest of the war, though no official confirmation has been issued at the time of writing. Chubias is the most high-profile individual, who – up until now – has managed not to fall out of favour with Putin during more than two decades of Putin’s rule. The development, whilst notable, is unlikely to signal that the stability of Putin’s regime is under a threat of a collapse in the short term, but is likely to force the government to double down on its rhetoric of the need “to cleanse” Russia of “traitors”, with those in opposition to Putin accused of working for the West. Russian state-owned public opinion research centre, VTsIOM, reported today that public support for “a special military operation” in Ukraine continues to grow, stating that 74% of Russians support it, whilst also pointing out that protest moods amongst Russians continue to decline. The figures are, however, highly likely to be influenced by the state’s tight control over the information landscape and intensified efforts to promote its military campaign.

Humanitarian/evacuation developments

• Regarding evacuation and safe passage out of Kyiv and into western Ukraine, as of 22 March, the southbound H01/P01 remains a comparatively safer route for access to/exit from Kyiv. However, the missile strike in Kyiv’s Podil district near the city centre on 20 March highlights the danger posed to any movements in and around Kyiv. We assess that southern routes still remain comparatively safer, however. Of note, a curfew is in place in Kyiv until 0700 local time (0500 GMT) on 23 March.
• SOCMINT indicates ad-hoc checkpoints and stop-and-search checks by Ukrainian rear echelon units continue to take place on the P02, P69, M07 circular and H01/P01 in Kyiv. These are likely conducted in order to identify potential Russian fifth columnists/saboteurs, and Ukrainian units conducting these checks are believed to be operating on capture/kill orders. As such, those seeking to leave/enter Kyiv should treat such checks with due caution. Finally, there are increasing (unverified) accounts shared on social media of Russian forces firing indiscriminately on private vehicles on westbound routes into Kyiv, highlighting increased desperation on the part of Russian units in the area, but equally highlighting the severe risk to life posed by travelling on westbound routes to and from Kyiv at present.
• For routes toward western Ukraine, the P32 westbound from Bila Tserkva currently remains the safest major westbound road out of Kyiv. However, shelling in Vinnytsia and Vasylkiv remains an ongoing threat, and air raid warnings across the length of the P32 – notably in Khmelnytskyi and in Lviv proper – highlights the increasing spread of the conflict into western Ukraine. Therefore, safety cannot be guaranteed on any westbound evacuation routes at present.
• Russian armour and infantry units continue to be dispersed north and south of the E373 and the E40, as far south as the P04, and as such these routes remain unsafe. The advance around Kyiv remains largely stalled at the time of writing, but an uptick in Russian MLRS and drone strikes in north-western Kyiv this weekend indicate that Russian forces may be regrouping for a more substantive push over the coming week. We assess that the south-west of the city remains highly unsafe, and that the areas of Fastiv, Obukhiv and Byshev Airport on the westbound P04 represent viable targets for Russian forces in the event that a serious push to encircle Kyiv begins again.

FORECAST

US President Joe Biden is due to arrive today, 23 March, in Brussels for a series of summits with European and NATO leaders, with President Zelensky also due to address NATO via videoconference. The summit comes amid reports that Ukrainian military supplies are increasingly low, with indications that delayed Western weapons shipments mean Ukraine only has around one week’s supply of more sophisticated systems. As such, Zelensky is likely to use the NATO conference to call for an increase in weapons shipments as Ukrainian forces continue to bog down Russian forces, and in some instances, such as in north-west Kyiv and east of Mykolaiv, effectively counterattack.

Nevertheless, Biden’s subsequent visit to Warsaw tomorrow, 24 March, will prove highly significant amid the possible expulsion of Russian diplomats and Warsaw’s intention to propose a NATO peacekeeping mission in Ukraine. The Kremlin has warned NATO against sending peacekeepers to Ukraine, stating that such a decision would be “very reckless and extremely dangerous”. The warning was also followed by Russia’s claims that it does not rule out the use of nuclear weapons if met with an existential threat, underlining the increasingly aggressive rhetoric from Moscow, though the likelihood of the weapons being used is nevertheless low at present.

• The last 24 hours saw limited Russian gains in Donbas, which remains the most significant effort for their forces, alongside the continued pressure on Mariupol. The fighting here is very under-reported in Western or Ukrainian sources, partially due to communications blackouts in the area since the start of the conflict. However, this is the most significant focus of Russian reporting and social media, showing its relative importance.
• In Donbas, Russia continues to attempt advances on several axes. The first is a drive south from Izyum and as far west as Balakliya, to sustain a crossing of the Donets river; the second is an encirclement of Severodonetsk; the third is a push north and west of Donetsk; and the fourth is a drive north in the vicinity of Valyka Novosika. All are meeting strong resistance, which is not surprising as most attacks are on positions held by Ukrainian forces – including the bulk of the regular military – since 2015. Russia appears to be applying pressure in all areas in an attempt to wear down Ukrainian forces through attrition and then achieve a decisive breakthrough on at least one axis, although this will be frustrated by the likelihood of extended fighting in Severodonetsk alone.
• To support the Donbas offensive, Russia has continued to target supplies in the regional hub of Kramatorsk. An effective attack on fuel and ammunition at the airfield there was blamed by the local mayor on people posting to social media. Ukraine has in turn responded by effectively targeting railways and supply areas in Russian held territory, primarily using SS-21 (Tochka-U) missiles.
• To close the gap between Donetsk and Izyum will require an advance of 100km, while Russia’s larger planned encirclement further to the west would spread troops over two or three times this distance, meaning that any encirclement will almost certainly not be effective at containing Ukrainian soldiers exfiltrating on foot (especially at night), although heavy equipment will undoubtedly be lost. This repeats the pattern seen in 2014-5 fighting and may already have been seen in northern Luhansk.
• Russia is also diverting the stalled offensive on Mikolayiv, instead shifting effort towards Kryvyi Rih, considering this area more lightly guarded and allowing the outflanking of Zaporizhzhia. It is unlikely that their forces will be able to hold this area against raids on supply lines although this may help dislocate the defence of the city and allow forces east of the Dnieper to make better progress.
• These limited successes were offset by increased coverage in the last 24 hours of Ukrainian counter-offensives north-west of Kyiv and east of Mikolayiv, although public reporting of these has lagged the events themselves and the rate of gains has slowed. The situation outside Mikolayiv is potentially the most threatening to Russian plans. In recent days up two BTGs worth of equipment has been pictured landing at the port of Berdyansk and moving through Melitopol on the armoured train from Crimea; where this is committed will be a sign of Russia’s main effort, or concern in shoring up the position around Kherson, where increasing civilian resistance is leading to significant repression.
• Reports that Ukrainian forces have encircled the pincer into Irpin by recapturing Moshchun (east of Hostomel airfield) and Makariv (on the E40 about 50km west of Kyiv centre) appear overstated and Russian forces there have continued to launch bombardments into the north-western outskirts of Kyiv overnight. However, these setbacks will continue to frustrate Russian efforts in this area, which remains plagued by poor supply and limited tactical options due to the terrain. A much larger offensive from the west through Ivaniv and Chernobyl would achieve greater effect, but almost certainly remains beyond the capabilities of Ukrainian forces at this time.
• We have continued to see effective Russian UAV and artillery use to track and target critical Ukrainian assets, primarily air defence, artillery, and troop concentrations. Ukrainian forces have been using “urban hides” in industrial buildings, retail parks, and similar larger structures for shoot and scoot artillery tactics, but the ability of Russian UAVs to track movements during daylight and call in accurate artillery fire will increasingly force caution on the defenders.
• The Ukrainian supply situation remains limited, with credible reports that promised weapon consignments are not reaching their forces quickly enough. Germany and France have been particularly named as being slower to come forward with materiel. The conversion of donated civilian vehicles into “technicals” mounting weapons is also a sign of the requirement for improvisation. Estimates currently are that Ukraine has one week’s supply of more sophisticated systems. There are also issues with what has been provided; the lack of IR sights for handheld missiles has resulted in them not being able to engage Russian UAVs effectively and this is contributing to the losses in Kyiv.
• Tomorrow’s NATO meeting is therefore likely to be highly significant, with Zelensky calling for more help. France and Hungary remain deeply opposed to the alliance risking being drawn into conflict; Macron’s continued dialogue with Putin is significant, and it is likely that the Kremlin will exploit this connection. Russia may also see the period around the meeting as a time to make further statements around capability and intent. Since these are not going to come in the form of taking ground, with even Mariupol likely requiring days more to capture, use of further advanced weapons such as Kinzhal or strikes close to the border are possible threatening moves in the next 48 hours.
• Of note is US forces moving up on the Belarussian border. This remains a highly sensitive area for Moscow, and these manoeuvres and further NATO deployments to the east will potentially help pin forces in Belarus, including 3 Russian BTGs not yet committed to the fight. With Moscow’s combat effectiveness now judged below 90% for the first time, despite inflow of reserves in the coming days, there is an assessment that pressure on Minsk to join the fight will be increasing. We maintain that this would be a counter-productive move for Moscow, but reported preparations by Russian diplomats to leave the Embassy in Warsaw continue to raise concerns about anticipated escalation.
• The other large outstanding question remains CBRN escalation. We continue to assess the most likely release is in the form of toxic industrial hazards, as may already have been attempted in Sumy, and such tactics could be repeated in Chernihiv, Kharkiv, or Kyiv. Russian chemical stockpiles are hard to assess and in any case any operation would require plausible deniability from the Russian side, making a link to industrial sites more likely. Numerous narratives continue to be spread to enable this. More widely, radiological hazards are also significant in Ukraine, and this fits the Kremlin’s allegations of Kyiv’s efforts to create “dirty bombs”.
• Nuclear remains the least likely option, but the most significant threat in the Kremlin’s playbook. This was emphasised by Kremlin spokesman Dmitry Peskov’s appearance on CNN, where he maintained that Russia would use nuclear devices against an existential threat. This stance is in line with other nuclear armed nations; however, the concern is the Kremlin’s branding of Ukraine and NATO, which has clearly been positioned to fit the definition. While it remains far from clear that Russia would go so far, this is a bluff that is extremely hard to judge, and the Kremlin accurately considers that it will act as a significant restraint – despite growing public calls to provide more, overt, support for Ukraine.
• European Union: Business and consumer associations warn of ‘industrial emergency’ as record energy prices continue to soar posing challenges to business continuity. As of 23 March, several national consumer and business associations across the EU have warned of an emerging crisis as energy prices, raw material costs and supply chain disruptions continue to soar. In Germany, a rising number of small and medium enterprises (SMEs) are beginning to move operations abroad, whilst in Portugal, the textiles industry faces a wave of bankruptcies and unemployment as businesses struggle to lay off labourers in sufficient numbers. Similarly, Spain’s consumer association AEGE has also warned of rising electricity prices impacting consumers across Europe. Ahead of an EU leaders’ summit on 24-25 March divisions within the EU27 on how best to mitigate the crisis risk driving tensions within the bloc, as Germany and Italy in particular face substantial pressure to move away from their dependence on Russian energy. Such divisions will increase policy risk to firms and undermine their operational resilience as both energy and commodity prices rise.
• US: Biden to issue new sanctions against Russia, commit to ensuring European energy security during trip to Brussels. On 22 March, the Biden administration announced it plans to impose another round of sanctions on Russian business assets, while tightening existing sanction mechanisms in coordination with the European Union (EU) in response to the Russian invasion of Ukraine. In tandem, the White House will discuss a ‘joint action’ to enhance European energy security and reduce dependence on Russian gas. While these measures, alongside a public display of support for NATO troop deployments near Ukraine, serve a symbolic purpose, President Joe Biden’s visit to Brussels today to meet EU leaders is unlikely to meaningfully impact Russian military action in Ukraine in the short term. As the conflict enters a prolonged phase, President Biden will have to balance domestic pressures, such as high inflation driven by rising oil and gas prices, with a more robust foreign policy agenda, elevating policy risk ahead of key congressional races in November midterm elections.

Global: Lapsus$ to pose an enduring threat due to firms’ poor cyber hygiene standards and abundance of security vulnerabilities

On 22 March, the cyber criminal group Lapsus$ claimed on its Telegram channel to have leaked source code for several Microsoft products, including Bing and Cortana. While Microsoft claimed that Lapsus$ was able to compromise an account with limited access to sensitive data, an investigation of the leaked files indicates Lapsus$ is in possession of 37GB of legitimate internal Microsoft source code. Despite being a newer threat actor that emerged within the last year, Lapsus$ has compromised a series of high profile entities across the globe. While little is known about this hacking group, Lapsus$ has differentiated itself from other cyber criminals by not relying on ransomware for its extortion activity and instead utilising the threat of data leaks as leverage against its victims. This latest incident is the group’s most notable campaign since software firm Okta confirmed on 22 March that approximately 2.5 percent of its customers’ data was compromised in a Lapsus$-related data breach. With the prevalence of critical security vulnerabilities and poor cyber hygiene standards likely to sustain the threat posed by Lapsus$, further such cyber attacks are highly likely to be launched in the coming year against industries of interest, such as technology.

India: Continued Ties With Russia To Expose Firms To Indirect Risks From Ukraine Conflict

Key Takeaways

• New Delhi is unlikely to shift its public position of neutrality despite mounting pressure from its Western partners, as engaging with Moscow helps India meet its immediate energy requirements more cost-effectively.
• While New Delhi is working to establish alternative transaction channels such as a rupee-rouble arrangement, it will also look to diversify its supply chains for key products such as fertilisers. Additionally, the restrictions on Russian airspace have increased flying times and costs for business personnel flying between India and North America, as well as between India and Europe.
• India will likely reassess its security apparatus, pushing forward to strengthen domestic defence production to reduce reliance on Russia. Simultaneously it will seek to diversify its supply chains in the long-term, creating opportunities for alternative defence manufacturers.
• New Delhi’s reluctance to distance itself from Moscow may expose Western businesses investing in India to reputational risks if the situation further deteriorates. While direct sanctions on India are unlikely to be forthcoming, indirect impacts from associated sanctions on Russia will create additional compliance concerns for firms.

Context

Russia remains an important diplomatic partner for India and has repeatedly exercised its veto power in the United Nations Security Council (UNSC) on resolutions about Kashmir that condemn New Delhi. In return, India has abstained five times in the United Nations Security Council (UNSC) on resolutions condemning Russian action on Ukraine. India’s foreign policy strategy in recent years has remained focused on maintaining ties with both the US and Russia, as it distrusts aligning completely with any superpower.

In addition to diplomatic assistance, New Delhi has also accepted Moscow’s offer to purchase oil at a discounted rate (between 20-25 percent). Russia exported 360,000 barrels a day to India in March, nearly four times the average in 2021. The Indian government is also exploring a possible rupee-rouble arrangement to continue trade and other financial transactions between New Delhi and Moscow. Under such an arrangement, both countries would use a fixed conversion rate for the two currencies by pegging them to the dollar and utilising this mechanism to conduct transactions. The government is also seeking to use the rupee-rouble arrangement to ensure other imports from Russia, particularly defence imports, remain uninterrupted. Russia currently supplies between 50 percent and 70 percent of India’s defence equipment.

This continued relationship with Moscow has invited diplomatic pressure from key Western partners, most notably Washington, with Biden recently describing India as being “shaky” on the issue. The high-stakes situation has raised questions as to whether India needs to reassess its relations with Russia going forward.

The impact of the Russia-Ukraine conflict on the Indian economy

As Russia acts as a gateway between India and the West, the restrictions on Russian airspace have increased travel times, along with operational costs. Indeed, American United Airlines has suspended certain flights on its US-India routes such as Chicago-New Delhi, while firms such as Finnair are incurring additional operation costs on routes such as New Delhi-Helsinki after the flight time increased by three hours. Longer flying times coupled with a spike in the cost of jet fuel due to global oil market volatility will cause business executives looking to travel between India and Europe/ North America to bear higher financial costs.

Furthermore, restrictions on Russia’s access to SWIFT and disruptions to international shipping will push India to source imports of key Russian items such as sunflower oil and fertilisers from other countries, while simultaneously exploring ways to maintain transaction channels for bilateral trade with Russia. For example, India has reached out to Canada, Israel, and Jordan for supplies so that Indian farmers can begin the scheduled sowing season in June due to the supply chain disruptions they expect to occur.

Meanwhile, India will maintain economic relations with Russia due to the two countries’ strong energy and defence relations. India and Russia already have deep ties in the energy sector, with the Russian state-owned Rosneft possessing a 49 percent share in the Indian Nayara Energy, which runs India’s second-largest refinery. However, some private Indian businesses remain hesitant to continue conducting business with their Russian counterparts. For example, Indian Oil and Natural Gas Corp (ONGC), which has a 20 percent stake in Russia’s Sakhalin-1 project and sells its share of oil through tenders, failed to secure bids for 700,000 barrels of Russian Sokol crude oil as buying companies were wary of the associated risks. Similarly, Mukesh Ambani’s Reliance Industries Ltd. – which operates the world’s largest refining complex – has stated it may avoid buying Russian fuel due to its significant business exposure in the US and the risk of it violating US sanctions against Moscow. As for defence, other than India’s heavy reliance on Russian weapons, Western sanctions on Russia will also impact India’s domestic defence production capacity. For example, India requires crucial components from Russia to manufacture the BrahMos missiles that it has agreed to export to the Philippines for USD 375 million.

Forecast 

With 85 percent of India’s crude oil needs met through imports and at a time of significant global oil market volatility, India will look to increase oil imports from Russia despite the risks. However, while Western states will continue to diplomatically pressure New Delhi, there is a low risk of India facing economic sanctions for buying oil from Moscow due to India and the US’ key trade/defence partnership and their shared goal of curbing Chinese influence in the Indo-Pacific region. Despite this, US President Joe Biden’s administration is increasingly likely to express its dissatisfaction with New Delhi through lower impact actions, such as reconsidering its diplomatic support for India to obtain a permanent seat in the UNSC as earlier promised.

Similarly, India’s growing consumer market and its key role within global supply chains are unlikely to alter other Western states’ direct economic policies towards it. Indeed, India and Australia are close to finalising a free trade deal despite their differing stances towards Russia. Prime Minister Scott Morrison has refused to condemn New Delhi’s neutrality saying all countries have different levels of engagement with Russia and that Canberra would be “respectful of that”.

Nevertheless, Western firms with ties to the Indian economy may be exposed to the associated reputational risks and the indirect impact of sanctions on the Russian economy, especially if the conflict in Ukraine deteriorates further. For example, major Indian pharmaceutical company Dr. Reddy’s Laboratories, which has a significant number of foreign investors, has announced that it plans to continue operations in Russia despite the conflict, with shares falling since the invasion and reports suggesting that the Indian government has directed pharmaceutical companies to continue supplying medicines to Russia.

However, the Ukraine crisis, which has a direct impact on India’s defence procurements and thus its overall security preparedness, will push New Delhi to rethink its long-term defence procurement strategies. It will likely further boost domestic arms production to reduce its reliance on Russian imports, with defence already being a key part of the government’s “Make in India” campaign. Simultaneously, India may seek new partners, as well as lean on existing partners that it sources weapons from such as Israel, to diversify its supply chains. (Source: Sibylline)

 

23 Mar 22. Putin’s depleted army is running out of time. There is a useful military adage often used by generals in times of war: no plan survives contact with the enemy. Vladimir Putin’s plan, it now appears, didn’t even survive contact with his own troops.

Russia’s leader has combined a major strategic miscalculation with tactical stupidity on a scale unprecedented in recent times. Four weeks after the launch of his special military operation, his generals have failed to achieve any of their planned objectives. Advances on all fronts have stalled and no decisive battles have been won. There have even been reports (currently unverified) of Russian units being encircled by Ukrainian forces near Kyiv.

Russia has still not acquired air superiority and has failed to take a single major city. The latest casualty figures from Ukraine claim that 12,814 Russian soldiers have been killed in action, at least four of whom are generals. Nearly 5,000 mercenaries are also thought to have perished. The number wounded could also be as high as 40,000 personnel. In terms of hardware, Russia has lost more than 1,400 armoured vehicles, 1,470 tanks, 96 aircraft and 118 helicopters.

Although Russia is said to be able to endure pain like no other country and has a vast number of conscripts, so many casualties in just four weeks is unsustainable. In Afghanistan, the Russians lost 14,000 troops in ten years and that conflict helped to bring about the collapse of the Soviet Union. By comparison the British and the US lost around 7,500 personnel in Iraq and Afghanistan.

Putin’s rapidly depleting military resources may also explain the call for mercenaries from Syria to join the fight and the use of hypersonic missiles. Though, it could be, in part, an attempt to warn Nato to keep its distance.

If Putin were to withdraw from Ukraine tomorrow it would take months before Russian generals would be in a position to launch another major offensive

A day after Putin launched his invasion, General Sir James Everard, a former cavalry officer and ex-Nato Deputy Supreme Allied Commander Europe said that he fully expected Putin to have the war finished within 21 days; he anticipated that many of Ukraine’s valiant defenders would be destroyed in a rapid shock and awe firestorm. But the lightning dash has turned into a war of attrition with Russia turning to mediaeval tactics, as seen with the destruction of Mariupol.

Despite the mounting civilian death toll, Ukraine remains in no mood to surrender. Such admiral defiance leaves Putin in a quandary. He is now embroiled in a conflict with no achievable end game and which he can’t possibly win – not dissimilar to the Soviet invasion of Afghanistan in 1979.

Armies can only win wars if their soldiers are prepared to fight, if their morale is high and if they are properly equipped and well trained. But most importantly, soldiers must believe in the cause. It would seem that few, if any, of those boxes have been ticked by the average Russian squaddie. Within days of the start of the conflict, Russian soldiers began abandoning tanks and armoured vehicles either because they had broken-down or had run out of fuel. There have also been reports of mutiny and Russian soldiers shooting themselves in the legs so they don’t have to fight. Captured Russian troops have been filmed tearfully phoning their disbelieving mothers back in Russia, explaining that they had been duped into fighting and now want to come home.

During the conflict in Iraq and Afghanistan, British soldiers knew that if they were wounded they could expect to receive expert medical treatment within an hour. Those who succumbed to their wounds were honoured with military funerals. In contrast, mobile crematoria are reported to be following the Russian troops in Ukraine, ready, seemingly, to dispose of the dead.

Worse still, many dead and wounded Russian conscripts have been abandoned on the battlefield. All of these appalling failings serve only to undermine already fragile morale. Major General Jonathan Shaw, a former director of Special Forces in the British Army, believes that the multiple tactical failures are largely due to the cultivation of obedience over initiative, so every soldier simply does what they are told: a Soviet era hangover which still exists today.

Such slavish obedience to orders, Gen Shaw suggests, explains why the 40 mile long Russian convoy came to a halt just north of Kyiv: no one had the courage or initiative to suggest an alternative plan, such as changing the tyres on the armoured vehicles so that they could move off road.

Life as a Russian conscript is also a miserable existence: they are paid around £23 a month, and living conditions are appalling. Bullying or hazing of recruits by senior ranks is rife and brutal.

History shows us that conscripted armies tend not to win wars unless they are fighting for national survival: the US in Vietnam is probably the prime example although the Russian conflict in Afghanistan is also relevant.

The impact of institutionalised corruption within Russia has also taken its toll. While over $60 billion (£45 billion) was pumped into the Russian armed forces last year, millions of roubles were syphoned off by corrupt officials leaving tanks, aircraft and missile systems broken and short of spares.

General Sir Richard Dannatt, who served as Chief of the General Staff from 2006 to 2009, argues that the UK and the rest of Nato had given the Russian Army ‘too much credit’ in recent times. ‘Their inability to mount a major all arms operation, properly supported by good logistics, has been woefully exposed,’ he tells me. ‘Moreover their battlefield leadership has been appalling. The absence of clearly explained reasons for the operation to their troops has been verging on the criminal – asking young men to risk and lose their lives without knowing why.’

Even if the Russian generals managed to turn their mistakes around and the war in Ukraine becomes a stunning victory, the Russian armed forces are in a weakened position. If Putin were to withdraw from Ukraine tomorrow it would take months before Russian generals would be in a position to launch another major offensive, whether against Poland, the Baltic States, Bulgaria, or Finland – countries which have all been threatened in recent weeks.

The known unknown in all of this is Putin’s unpredictability. He may double down on his failed Ukraine venture and try his hand elsewhere in Europe, he may use tactical nukes or chemical weapons. As a senior Ministry of Defence source told me recently: ‘Anyone who says that they know what Putin will do next is basically guessing’. That is not to say that Putin is no longer a threat. But he invaded Ukraine to make a point and has failed. The West should no longer fear him. (Source: Spectator)

 

22 Mar 22. Ukrainian Fighters Continue to Hold Off Russia From Invading Kyiv. Ukrainian forces have continued to hold off Russian attempts at invading the Ukraine capital of Kyiv by about 15 km to the northwest and about 30 km to the east in the past 24 hours, according to a senior Defense Department official, who added there have been “no real changes by the Russians on the ground near Kyiv,” in a briefing today.

The official said the United States assesses the Russians have launched more than 1,100 missiles since they invaded Ukraine 27 days ago on February 24.

The Russians are coming down out of Kharkiv, Ukraine, toward Izium, to the southeast of Kharkiv which is believed to be an attempt to cut off the joint force operations area that’s basically the Donbas, he said. “That’s one reason — not the only reason — why we think are so interested in Mariupol; so they can come up from the south and down from the north from Izium,” where the Ukrainians are fighting hard to take back the city from the Russians, he added.

“We observed over the last 24 hours that the Russians have likely been firing into from the Sea of Azov,” the official said. “Just to the south of Mariupol, we assess that they’ve got about ships in the Sea of Azov and we think some of them — at least the surface combatants … have been shelling into Mariupol and that wasn’t the case yesterday.”

Not all of those seven ships are surface combatants, he said, adding that a minesweeper is amid the fleet with a couple of tank landing ships. A change from yesterday.

“We continue to observe a number of Russian forces inside the city. We think at least some of them are separatist forces that came from Donbas, and the Ukrainians are fighting very hard to keep Mariupol from falling,” the official said.

There has also not been much change in the airspace, he said. ” did not observe shelling of Odesa from the Black Sea over the last 24 hours, but we still assess that they have several warships that are in the northern Black Sea. like all maritime environment — it changes, so I can’t say with certainty that it’s the same number of ships, or that they’re in the same location as they were yesterday.”

But the United States assesses naval activity in the northern Black Sea and no indication there is an imminent amphibious assault on or near Odesa, he added.

Today, DOD has assessed for the first time that the Russians might be slightly below a 90% level of assessed available combat power, the official noted, emphasizing that number comprises Russian combat power assembled in Belarus prior to the invasion in Ukraine, and it is not an assessment of all Russian military power.

There also are no tangible indications of Russian reinforcements coming in or foreign fighters that have flown into the country, he said, adding, “We do assess the Wagner Group is active in Ukraine we think that activity is largely in the Donbas area.”

” we do continue to see indications that are having these discussions about reinforcements and foreign fighters and they are making those kinds of plans, both in terms of resupply and also reinforcement. It’s just that we haven’t seen that actually take place,” the official said. (Source: US DoD)

 

22 Mar 22. Ukrainian peace negotiators ‘unprepared’ for KGB tactics of Russia’s bully boys. Experts claim Moscow’s team has been taught to belittle opponents and will not engage constructively in talks until it suits them. Ukraine’s peace negotiators may not be prepared for the belligerent KGB tactics of their Russian counterparts, a senior government adviser has warned.

Luliia Osmolovska, an adviser to the Ukraine government, said Moscow’s team was taught to belittle opponents and would not engage constructively in talks with Kyiv until there was a “moment of ripeness”.

She told The Telegraph: “This moment appears when both parties understand the status quo is intolerable for both of them and they can’t resolve issues unilaterally without communicating and engaging in cooperation with the other side.

“The Russians still don’t feel this sense of ripeness for them, despite the fact that they are obviously underperforming heavily on the battlefield.”

Dmitry Peskov, the Kremlin’s spokesman, said on Tuesday that the negotiations were “going a lot slower” than Moscow hoped. Putting the results before a referendum, as Volodymyr Zelensky, the Ukrainian president, has promised, would only “undermine the process”, he said.

Ukrainians must ‘keep a poker face’

According to Ms Osmolovska, Russia’s negotiation tactics are based on the Soviet-era diplomacy of Andrei Gromyko, a former foreign affairs minister of the USSR, and KGB practices.

The main aim is to play with an opponent’s emotions, to prevent them making rational assessments.

“Russians are well known for these deceitful tactics,” Ms Osmolovska said, warning that Kyiv’s political elites have little experience in engaging with such techniques.

“When the Russians are trying to behave like that, getting very personal, you just have to keep a poker face and continue being rational.

“But this is not something which is known on a wider scale to a Ukrainian audience or to Ukrainian political elites, because they haven’t been engaged in negotiations with Russians.”

She said Leonid Slutsky, one of the Russian delegates, is well known for his “harsh”, “offensive” and “humiliating” opinions on Ukraine’s society and political leadership.

He is a “toxic figure” that shows Moscow is “not seriously interested in negotiations” at this time, preferring to adopt a “strategy of avoidance”.

Leonid Slutsky, left, with Vladimir Medinsky, an adviser to Vladimir Putin. Slutsky is a ‘toxic figure’ known for his aggressive negotiating tactics CREDIT: Sergei Kholodilin/TASS via Getty Images

She added: “They’re trying to present the case that they are quite cooperative, looking for some way out of the existing conflict and looking for solutions. But this is just an image. On substantive elements, we don’t see anything of this kind.

“All of them are rather plain and unimpressive figures.”

Ukrainian society is confident of military victory, so will find any suggestion of border changes as part of any peace deal extremely hard to accept.

“This is something that the Ukrainian negotiation team is not ready to consider and compromise on at all,” Ms Osmolovska said.

Moscow will aim to “break the solidarity and unity of Ukrainian society” through proposing “ambiguous commitments”.

“Time plays in our hands,” said Ms Osmolovska.

“We suffer huge, horrific losses of human life with the devastation of our cities and towns. But Ukrainian people are ready to sustain this because they fight. They see light at the end of the tunnel.”

Dmitry Grozoubinski, director of Explain Trade, a Geneva-based negotiation consultancy, said any deal Mr Zelensky agreed would have to be acceptable to the Ukrainian people.

“The Ukrainian public, 93 per cent of whom believe Ukraine will win the war, is unlikely to accept a ceasefire bought at the cost of territorial concessions or demilitarisation.”

He said if Mr Zelensky “tried to make one, they’d likely remove him”. (Source: Daily Telegraph)

 

23 Mar 22. ‘Confrontational’ talks amid fears Moscow will unleash chemical weapons. Talks between Ukraine and Russia are confrontational but moving forward, President Volodymyr Zelensky said on Wednesday, as the West plans to announce more sanctions against the Kremlin.

In an early morning address, Mr Zelensky remained hopeful about negotiations, which have yielded little since the invasion started.

“It’s very difficult, sometimes confrontational,” he said. “But step by step we are moving forward.”

A senior government adviser has warned Ukraine’s peace negotiators may not be prepared for belligerent KGB tactics of Russian counterparts.

Having failed to seize the capital Kyiv or any other major city with a swift offensive, Russia is waging a war of attrition that has reduced urban areas to rubble and prompted Western concern the conflict could escalate – even to a nuclear war.

Russia’s security policy dictates the country would use such weapons if its existence were threatened, Kremlin spokesman Dmitry Peskov told CNN.

Peskov said the campaign was going to plan and no one thought the operation would take just a few days. (Source: Daily Telegraph)

 

23 Mar 22. UKEF, EDC & US EXIM Joint Statement.

The export credit agencies of the United Kingdom, United States and Canada release a joint statement in response to the invasion of Ukraine. The export credit agencies (ECA) of the United Kingdom, United States and Canada are appalled by the unprovoked invasion of Ukraine and will continue to stand strong in supporting Ukraine.

In a show of united action against the Russian Federation’s assault as well as Belarus’ support for this illegal invasion, UK Export Finance (UKEF), the Export-Import Bank of the United States (US EXIM), and Export Development Canada (EDC) have together withdrawn any new export finance support for the Russian Federation and Belarus, while retaining support for Ukraine. This decision builds on the wide-ranging packages of sanctions and measures imposed on the Russian Federation and Belarus since the beginning of military operations, and we encourage any ECA that has not already done so, to join us in this step to impose financial pressure on the two countries.

Export credits help fulfil global demand for essential supplies when the private sector is unable to provide adequate financial support. ECAs are well positioned to provide this financial security through economic cycles and market disruptions. We will continue to support Ukraine and ensure that exports from our home countries can continue to flow while we also believe that all government-backed finance for supplies to the Russian Federation and Belarus should end. (Source: https://www.gov.uk/)

 

23 Mar 22. Nuclear weapons in spotlight as US considers further sanctions. Nuclear weapons and the potential use of them by Russia is back in the spotlight. According to the Kremlin, Russian President Vladimir Putin – who put the country’s strategic nuclear forces on special alert days after invading Ukraine – could use them if Russia is facing “an existential threat”. They could be used in accordance with the country’s concept of domestic security, spokesman Dmitry Peskov said. This position – which does not rule out their potential use  – has been condemned by the US, with the Department of Defense spokesman John Kirby saying: “It’s not the way a responsible nuclear power should act.” The US hasn’t seen anything that “would lead us to conclude that we need to change our strategic deterrent posture”, he added, and it will continue to monitor the situation. But the comments made by Russia shouldn’t be interpreted as a change in the country’s nuclear policy, according to an expert, who said it was “a restatement of long-standing doctrine, not a new thing”.

On the ground meanwhile, Ukraine’s President Volodymyr Zelensky says 100,000 people remain trapped in besieged Mariupol, where intense fighting continues. He claims there is “nothing left” of the southern port city following Russian attacks, which have left people without food, water and medicine. One survivor who hid in a theatre that has been brought to ruin has told of the moment their shelter was bombed. Russia hasn’t been able to penetrate the farming town of Voznesensk and its strategically important bridge. This has stopped Russian forces sweeping further west towards the huge port of Odesa and a major nuclear power plant. Meanwhile, at the Russian-occupied Chernobyl nuclear power plant, Ukrainian officials claim the laboratory at the site has been “looted and destroyed”. Fighting rages around the Kyiv suburbs with Russian and Ukrainian forces reportedly each making gains. The West claims Russia’s advance continues to stall and the US is expected to announce further sanctions on Moscow. There are reports it, along with other Western nations, is considering potentially excluding Russia from the G20. There’s a meeting with Nato later where Mr Zelensky is expected to deliver a message including a call for more air defence systems. (Source: BBC)

 

23 Mar 22. Volodymyr Zelensky hailed his troops for taking back territory from Russian forces as the Ukrainian president welcomed US and European plans to hit Moscow with a fresh round of sanctions this week. While limited in scope, the Ukrainian military has mounted a series of counter attacks in recent days, claiming to retake Makariv on the outskirts of the capital Kyiv, as well as pushing back occupying forces around the southern city of Kherson. In his regular overnight address on Wednesday, Zelensky praised his forces who had “defeated” and dislodged Russian soldiers around Kherson while warning that Russia’s brutal shelling meant there was “nothing left” of Mariupol, a port city that has borne the brunt of the war. The attempts at a military fightback came as US President Joe Biden began a visit to Europe on Wednesday for a series of summits with Nato, EU and G7 allies aiming to increase support for Kyiv and tighten the financial squeeze on Russia’s economy. While warning the war “will not end easily or rapidly”, Jake Sullivan, US national security adviser, said the expected measures would include new financial curbs and steps to “crack down on evasion and ensure robust enforcement” of existing sanctions, which are the most punitive ever imposed on a major world economy. (Source: FT.com)

 

22 Mar 22. Foreign forces could profit from Germany’s $110bn defence boost, according to draft law. Part of the 100bn euros ($110bn) pledged by German Chancellor Olaf Scholz to boost defences may be used to support foreign security forces such as Ukraine with equipment and training, according to a draft law agreed by the government.

“The projects (that can be invested in) comprise measures… designed to equip and strengthen security forces of partners,” the draft law aiming to enable the government to set up the special fund says.

The draft still needs parliamentary approval.

It was not immediately clear whether the German government intended to spend part of the money on arms supplies to Kyiv. A government source said that “partners” meant third countries, hence non-EU countries.

In a landmark speech three days after Russia’s Feb. 24 invasion of Ukraine, Scholz announced that Germany would sharply increase its defence spending to more than 2% of its economic output and inject 100 billion euros into the Bundeswehr defence force.

In another major policy shift, Germany also started to supply anti-tank and anti-aircraft weapons from military stocks to Kyiv. Defence Minister Christine Lambrecht, however, said later the German military could not give away any more of its weapons, suggesting the government should buy arms to pass them on to Ukraine. ($1 = 0.9070 euros) (Source: Reuters)

 

23 Mar 22. NATO Arctic drill takes on new significance after Russia invasion of Ukraine. The scenario for the NATO military exercise in the Arctic circle has been similar for years now: Norway is attacked by a fictional country, triggering the alliance’s collective defense clause and leading to troops from the United States and more than a dozen partners coming to the defense of the country.

But this year, the bi-annual exercise, known as Cold Response, has taken on an added significance for some of the roughly 3,000 U.S. Marines taking part in it because of Russia’s invasion of Ukraine.

Corporal Sean Galigan, a 21-year Marine from New Jersey who is focusing on refueling aircraft during the exercise, said the invasion was in the back of his mind, even though the exercise had been planned months before Russia started building up forces near Ukraine.

“It’s always something that could happen, but now since we’re here, if something did happen, we would be ready to go,” Galigan said.

Relations between Norway and Russia, which share an Arctic border, gradually improved in the post-Cold War era before suffering a setback when Moscow annexed Crimea in 2014.

That triggered tensions in the north on both sides of the border and more frequent military maneuvers.

Even before the invasion, which Russian President Vladimir Putin says is a “special military operation,” Moscow accused NATO of destabilizing European security with large-scale military drills and by building up its military on the alliance’s eastern flank.

While there are no signs that Russia is looking at making military moves on Norway, the invasion of Ukraine, which has destroyed hundreds of buildings and killed scores of civilians, has increased unease in the region.

“It feels a little more real,” a C-130 Marine Pilot said he as he flew from Bardufoss to near Evenes in Norway.

The enemy in the exercise is fictional but the parallels to what a future conflict in the region could look like are unmistakable. In the exercise, the U.S. Marines are making amphibious landings in Norway, the airspace over the country is contested and painstaking effort is taken to look at the logistics of bringing troops to the country and resupplying them.

The previous iteration of the drill was canceled because of the coronavirus and was last held in 2018 when it was called Trident Juncture.

The exercise, which runs through the first week of April and brings together about 30,000 troops from 27 countries, is run out of a mock operations center in Boda, with rows of Marines working on computers to track their fictional enemy.

On Friday, the exercise was briefly put on hold as the center moved away from the drill and coordinated the response to a real-life crash of a U.S. Marine aircraft that killed all four onboard.

The next day, the command center was back to focusing on the exercise, tracking the movement of the Marines as they made their way onto Norway’s shores and F-18 aircraft provided air cover to troops further north. (Source: Reuters)

 

22 Mar 22. Russia combat power declines in Ukraine as war takes toll, U.S. official says. Russia’s combat power in Ukraine has declined below 90 percent of its pre-invasion levels for the first time since its attack began, a senior U.S. defense official said on Tuesday, suggesting heavy losses of weaponry and growing casualties. The United States has estimated Russia assembled more than 150,000 troops around Ukraine before the Feb. 24 invasion, along with enough aircraft, artillery, tanks and other firepower for its full-scale attack.

“For the first time they may be just a little bit below 90 percent,” the U.S. defense official told reporters on condition of anonymity. The official did not provide evidence.

Nearly a month into the war, Russian troops have failed to capture a single major city and their advance has been halted on nearly all fronts by Ukrainian forces. Moscow has instead turned to bombarding cities with artillery, missiles and bombs. read more Russia denies targeting civilians.

Much of that bombardment has been focused on the southeastern city of Mariupol. The senior U.S. official said Russian naval forces have likely been firing into Mariupol from the Sea of Azov over the past 24 hours.

“That wasn’t the case yesterday,” the official said.

Russia has not officially updated its casualty figures since stating on March 2 that 498 servicemen had been killed and 1,597 wounded.

But since then its offensive has run into further heavy resistance from Ukraine’s army and volunteer defense forces.

White House national security adviser Jake Sullivan estimated on Tuesday the number of Russian casualties was in the thousands but declined to offer a precise figure.

As the conflict takes its toll, the United States has warned that Russia might seek assistance from China. Still, the White House said on Tuesday it had not seen any evidence of China providing military equipment to Russia.

The U.S. official suggested that there were no indications Russia was yet pulling additional supplies into Ukraine.

“But we do continue to see indications that they are having these discussions, and that they are making those kinds of plans both in terms of resupply, and also reinforcement,” the official said.

Putin’s incursion into Ukraine has forced more than 3.5 million to flee, brought the unprecedented isolation of Russia’s economy as Western nations imposed sanctions, and raised fears of wider conflict in the West unthought-of for decades. Putin calls the conflict a “special military operation” to demilitarize Ukraine and replace its pro-Western leadership, and says it’s going to plan. (Source: Reuters)

 

23 Mar 22. Ukraine says ‘confrontational’ Russia talks moving forward as West plans more sanctions. Talks between Ukraine and Russia are confrontational but moving forward, President Volodymyr Zelenskiy said on Wednesday, as the West plans to announce more sanctions against the Kremlin amid a worsening humanitarian crisis. Intense Russian air strikes are turning besieged Mariupol into the “ashes of a dead land”, the city council said on Tuesday, as street fighting and bombardments raged in the port city.

Hundreds of thousands are believed to be trapped inside buildings, with no access to food, water, power or heat. Both civilians and Ukrainian troops were coming under Russian fire, said regional governor Pavlo Kyrylenko.

Russian forces and Russian-backed separatist units had taken about half of the port city, normally home to around 400,000 people, Russia’s RIA news agency said, citing a separatist leader.

But in an early morning address, Zelenskiy held out hope for negotiations, which have yielded little since the Feb. 24 invasion began.

“It’s very difficult, sometimes confrontational,” he said. “But step by step we are moving forward.”

Russian President Vladimir Putin’s incursion into Ukraine has forced more than 3.5 million to flee, brought the unprecedented isolation of Russia’s economy, and raised fears of wider conflict in the West unthought-of for decades.

Mariupol has become the focus of the war that erupted when Putin sent his troops over the border on what he calls a “special military operation” to demilitarise Ukraine and replace its pro-Western leadership.

The port city lies on the Sea of Azov and its capture would allow Russia to link areas in the east held by pro-Russian separatists with the Crimean peninsula, annexed by Moscow in 2014.

Western nations plan to heap more pressure on the Kremlin.

Alongside European leaders, U.S. President Joe Biden is expected to announce new sanctions against Russia and new measures to tighten existing ones when he visits Brussels this week.

The United States is preparing sanctions on more than 300 members of Russia’s lower house of parliament as soon as Thursday, according to The Wall Street Journal, which cited unnamed officials and internal documents.

“No final decisions have been made about who we will sanction and how many we will sanction,” said a White House spokesperson.

“We will have additional sanctions measures to announce that will be rolled out in conjunction with our allies on Thursday when the President has the opportunity to speak with them.”

Biden’s Europe trip is also set to include an announcement on joint action to enhance energy security on the continent, which is highly reliant on Russian gas, and a visit to Poland to show solidarity with Ukraine’s neighbour.

The United States and its Western allies are also assessing whether Russia should remain within the Group of Twenty (G20) major economies, sources told Reuters. (Full Story)

NUCLEAR OPTION

Having failed to seize the capital Kyiv or any other major city with a swift offensive, Russia is waging a war of attrition that has reduced some urban areas to rubble and prompted Western concern that the conflict could escalate, even to a nuclear war.

Russia’s security policy dictates that the country would only use such weapons if its very existence were threatened, Kremlin spokesman Dmitry Peskov told CNN.

“If it is an existential threat for our country, then it (the nuclear arsenal) can be used in accordance with our concept,” he said.

Earlier he said “no one” had ever thought the operation in Ukraine would take just a couple of days and the campaign was going to plan, TASS news agency reported.

Western officials said Russian forces were stalled around Kyiv but making some progress in the south and east. Ukrainian fighters are repelling Russian troops in some places but cannot roll them back, they said.

Russia’s combat power in Ukraine has declined below 90% of its pre-invasion levels, a senior U.S. defence official said on Tuesday, without providing evidence. If confirmed, it would suggest heavy losses of weaponry and growing casualties. (Full Story)

‘HUMANITARIAN CATASTROPHE’

The United Nations human rights office in Geneva said on Tuesday it had recorded 953 civilian deaths and 1,557 injured since the invasion. The Kremlin denies targeting civilians.

Millions have fled abroad, according to the United Nations, leaving Eastern Europe scrambling to provide them with care, schools and jobs.

The United States plans to launch an effort this week to make it easier for some to enter after only a handful of refugees were admitted in the first two weeks of March, according to three people familiar with the matter.

Deputy Prime Minister Iryna Vereshchuk, speaking on Ukrainian television on Tuesday, said at least 100,000 people wanted to leave Mariupol but could not.

A Reuters team that reached a Russian-seized part of the city on Sunday described a wasteland of charred apartment blocks and bodies wrapped in blankets lying by a road.

Ukraine says Russian shells, bombs and missiles have struck a theatre, an art school and other public buildings, burying hundreds of women and children sheltering in cellars.

Kyiv accused Moscow of deporting residents of Mariupol and separatist-held areas of Ukraine to Russia. This includes the “forcible transfer” of 2,389 children to Russia from the Luhansk and Donetsk regions, Prosecutor General Iryna Venediktova said.

Moscow denies forcing people to leave, saying it is taking in refugees.

In Kherson, a city under Russian control, Ukrainian officials said Moscow’s forces were preventing supplies from reaching civilians.

“Kherson’s 300k citizens face a humanitarian catastrophe owing to the Russian army’s blockade,” foreign ministry spokesperson Oleg Nikolenko said on Twitter.

Russia did not immediately comment on the situation in Kherson.

Zelenskiy warned the crisis in Ukraine, one of the world’s biggest grain exporters, would bring famine elsewhere.

“How can we sow (crops) under the strikes of Russian artillery?” he told Italian lawmakers. (Source: Reuters)

 

22 Mar 22. Russia-Ukraine latest news: Putin’s forces ‘retreating’ after suffering ‘irreversible losses.’

Russia has been forced to retreat and call in extra troops a month into its invasion, according to Ukraine’s military.

In an update on Tuesday, the general staff of the Ukrainian armed forces said Russia had suffered “large, irreversible” losses of personnel, including among its command.

The update said that following a counter-attack launched by Ukrainian forces in the south, “the enemy is compelled to retreat to unfavourable borders” towards Mykolaiv, a city near the Black Sea.

Officials added: “Having lost its offensive potential, the Russian occupation forces continue to form and move reserves from the depths of the Russian Federation to the borders of Ukraine.”

It comes after Ukrainian troops regained the strategically important Kyiv suburb of Makariv early on Tuesday, retaking control of a key highway and blocking Russian troops from surrounding the city from the north-west.

(Source: Daily Telegraph)

 

17 Mar 22. What impact will the Russia-Ukraine conflict have on investment in the defence industry?

Investors and countries are changing their approach towards financing the defence industry following the Russian invasion of Ukraine.

The Russian invasion of Ukraine has forced institutional investors, the foreign direct investment (FDI) community and the governments of many countries to rethink their approach towards backing the defence industry. This area has been a no-no for ESG-conscious investors, with many looking to divest from arms companies or exclude controversial weapons from their portfolios in recent years, a situation exacerbated by Russia’s invasion of Ukraine.

In November 2021, Norwegian pension fund KLP announced that it would no longer deal with companies that produce certain kinds of highly destructive weapons. This has led to KLP divesting from 14 companies: Babcock International, China Shipbuilding Industry, Dassault Aviation, Elbit Systems, General Dynamics, KBR, L3Harris Technologies, Larsen & Toubro, Leidos Holdings, Leidos, Leonardo, Raytheon, Rolls Royce and Thales.

The majority of Switzerland’s pension funds are also avoid investing in the arms business, according to a survey by Swissinfo.ch. Of the 11 pension funds that took part in the anonymous poll, eight stated that they do not invest in the manufacturers of “controversial weapons, which include cluster bombs, anti-personnel mines and weapons of mass destruction”, while the other three funds didn’t provide any information on the matter.

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US pension funds have also been under pressure to review their portfolios and sell off their investments in the arms industry over the past few years, often following mass shootings that have taken place in the country.

A total or partial withdrawal from the arms industry?

While some investors have only excluded the ‘highly destructive weapons’ segment from their portfolios, others have divested from the defence or arms industry altogether. However, the Russian invasion of Ukraine has changed the outlook of some institutional investors, particularly in countries that may feel under greater threat than they did before Russia’s act of aggression.

In Sweden, SEB’s fund company, SEB Investment Management, has decided to reverse its sustainability policy and permit some of its funds to invest in defence companies. More specifically, some funds that invest in equities and corporate bonds will be able to invest in the defence industry, but all the funds will continue to exclude investments in companies that manufacture, develop or sell weapons that violate international conventions, or that are involved in the development of nuclear weapons programmes.

However, it is not only the investment community that has changed its approach towards the defence industry, as several countries have altered their outlook over the past month.

Germany has shifted its policy towards sending weapons to conflict zones, with Chancellor Olaf Scholz confirming that the country would supply such goods to Ukraine. He has also said that Germany will invest more in its defence and the military sectors, announcing plans to increase spending on the sectors to more than 2% of its GDP.

Sweden has also altered its approach towards supplying arms to conflict zones, sending field rations, helmets, body armour and single-use anti-tank launchers to Ukraine. Sweden’s Prime Minister, Magdalena Andersson, stated that this was the first time that Sweden had sent arms to a country in armed conflict since the Soviet Union attacked Finland in 1939.

Where does FDI in the defence industry go?

With security concerns rising across the globe, investing in the defence industry is an ever-permanent option on an investor’s agenda. GlobalData’s FDI Projects Database shows that 68 defence projects were announced or opened in 2019 and 2020.

The countries attracting the most FDI in defence are the US, the UK, Australia, Germany, Turkey, the United Arab Emirates (UAE), Pakistan, Ukraine, Finland, India, Belgium, Poland and the Netherlands.

The data shows that the majority of foreign investment in the defence industry has gone to the ‘miscellaneous space and defence’ sector, followed by military fighting vehicles and weapons and ammunition.

The 21 miscellaneous space and defence projects were spread across Australia, Belgium, Canada, Finland, Germany, India, Kenya, Netherlands, Pakistan, Spain, the UAE, Ukraine, the UK and the US.

The countries that attracted FDI projects in military fighting vehicles in 2019 and 2020 were Australia, Chile, Finland, France, Germany, Indonesia, Malaysia, Pakistan, Philippines, Romania, Sri Lanka, Turkey, the UAE, the UK, the US and Vietnam.

As for the weapons and ammunition sector, FDI projects were announced or opened in Australia, Belgium, Brazil, India, Poland, Turkey, the UAE and the US.

The majority of the investors launching greenfield FDI projects in the defence sector came from the US, the UK, France, Israel, India and Italy.

The Russian invasion of Ukraine has been a game changer, pushing investors to rethink their policies when it comes to the defence sector. However, it has also brought changes in terms of embracing ESG and ethical investment. It remains to be seen how FDI and institutional investors are going to step up their defence game in the post Russia-Ukraine conflict, and if this will translate to further changes in their geographical and sector exposure. (Source: army-technology.com)

 

FEATURES

 

Russia’s ongoing war of aggression against Ukraine: UK statement to the OSCE, 23 March 2022

 

Putin Misunderstands History. So, Unfortunately, Does the U.S. (A Bloomberg Opinion Article Written By -Niall Ferguson – March 21, 2022)

By Howard Wheeldon, FRAeS, Wheeldon Strategic Advisory Ltd.

 

Rebuilding Ukraine after the War

By Cynthia Cook