Foreign direct investment flows are liable to drop by 30 to 40 per cent during 2020, into next year, due to the ongoing COVID-19 pandemic, reflecting a far more severe economic blow that initially projected, the United Nations Conference on Trade and Development (UNCTAD) said on Thursday in its latest Investment Trends Monitor report.
Initial projections were based on data limited to February and expectations that East Asia would bear the brunt of the immediate economic impact – but with the virus spreading worldwide and with many countries in lockdown mode, a far greater shock on supply and demand looks inevitable, it said.
“Ultimately, the decline will depend on the severity and duration of the pandemic across different regions and countries, and the scope of containment measures that Governments are forced to put into place”, it said.
“Importantly, it will also depend on the nature and scale of policy packages that most Governments are now putting together to support their economies”, the report added, “which will determine the duration of the recession and the speed of the recovery.”
Earnings guidance by companies that make up UNCTAD’s Top 100 list of transnational corporations – a bellwether of foreign direct investment trends – confirms a “rapid deterioration of prospects”, it said.
Supply chains and sales hit
Fifty-seven per cent of those companies which previously warned that the pandemic would upset their supply chains have since declared that it will drag down sales as well.
On average, the world’s top 5,000 multinational enterprises – which account for a significant share of global foreign direct investment – have revised their 2020 earnings estimates by an average of 30 per cent, UNCTAD said, adding that “the trend is likely to continue”.
Hardest hit are the energy and basic materials industries, airlines and the automotive industry. However, the number of other sectors that expect to be feel the blow of a global slump in demand is growing rapidly.
“Downward revisions of earnings estimates are now more serious in developed countries, contrary to the situation in early March”, UNCTAD said, with average revisions particularly strong in the United States due to the weighting of energy sector multinational enterprises.
Overall, it said, profit guidance from multinationals in developed countries have been revised downwards by 35 per cent since the start of the pandemic, compared to 20 per cent in developing countries. What’s more, downward revisions in Europe now exceed those issued in Asia.
Seymour Hersh: A year of lying about Nord Stream
The Biden administration has acknowledged neither its responsibility for the pipeline bombing nor the purpose of the sabotage, writes Seymour Hersh, the famous American investigative journalist.
I do not know much about covert CIA operations — no outsider can — but I do understand that the essential component of all successful missions is total deniability. The American men and women who moved, under cover, in and out of Norway in the months it took to plan and carry out the destruction of three of the four Nord Stream pipelines in the Baltic Sea a year ago left no traces — not a hint of the team’s existence — other than the success of their mission.
Deniability, as an option for President Joe Biden and his foreign policy advisers, was paramount. No significant information about the mission was put on a computer, but instead typed on a Royal or perhaps a Smith Corona typewriter with a carbon copy or two, as if the Internet and the rest of the online world had yet to be invented. The White House was isolated from the goings-on near Oslo; various reports and updates from the field were directly provided to CIA Director Bill Burns, who was the only link between the planners and the president who authorized the mission to take place on September 26, 2022. Once the mission was completed, the typed papers and carbons were destroyed, thus leaving no physical trace—no evidence to be dug up later by a special prosecutor or a presidential historian. You could call it the perfect crime.
There was a flaw — a gap in understanding between those who carried out the mission and President Biden, as to why he ordered the destruction of the pipelines when he did. My initial 5,200-word report, published in early February, ended cryptically by quoting an official with knowledge of the mission telling me: “It was a beautiful cover story.” The official added: “The only flaw was the decision to do it.”
This is the first account of that flaw, on the one-year anniversary of the explosions, and it is one President Biden and his national security team will not like. I am now able to write about the unexplained flaw cited by the unnamed official. It goes once again to the classic issue of what the Central Intelligence Agency is all about.
Back to the Nord Stream pipelines: It is important to understand that no Russian gas was flowing to Germany through the Nord Stream pipelines when Joe Biden ordered them blown up last September 26. Nord Stream 1 had been supplying vast amounts of low-cost natural gas to Germany since 2011 and helped bolster Germany’s status as a manufacturing and industrial colossus. But it was shut down by Putin by the end of August 2022, as the Ukraine war was, at best, in a stalemate. Nord Stream 2 was completed in September 2021 but was blocked from delivering gas by the German government headed by Chancellor Olaf Scholz two days prior to Russia’s invasion of Ukraine.
Given Russia’s vast stores of natural gas and oil, American presidents since John F. Kennedy have been alert to the potential weaponization of these natural resources for political purposes. That view remains dominant among Biden and his hawkish foreign policy advisers, Secretary of State Antony Blinken, National Security Adviser Jake Sullivan, and Victoria Nuland, now the acting deputy to Blinken.
I now know what I did not know then: the real reason why the Biden administration “brought up taking out the Nord Stream pipeline.” The official recently explained to me that at the time Russia was supplying gas and oil throughout the world via more than a dozen pipelines, but Nord Stream 1 and 2 ran directly from Russia through the Baltic Sea to Germany. “The administration put Nord Stream on the table because it was the only one we could access and it would be totally deniable,” the official said. “We solved the problem within a few weeks — by early January — and told the White House. Our assumption was that the president would use the threat against Nord Stream as a deterrent to avoid the war.”
It was no surprise to the agency’s secret planning group when on January 27, 2022, the assured and confident Nuland, then undersecretary of state for political affairs, stridently warned Putin that if he invaded Ukraine, as he clearly was planning to, that “one way or another Nord Stream 2 will not move forward.” The line attracted enormous attention, but the words preceding the threat did not. The official State Department transcript shows that she preceded her threat by saying that with regard to the pipeline: “We continue to have very strong and clear conversations with our German allies.”
But two weeks after Nuland’s statement, on February 7, 2022, at a joint White House press conference with the visiting Scholz, Biden signaled that he had changed his mind and was joining Nuland and other equally hawkish foreign policy aides in talking about stopping the pipeline. “If Russia invades—that means tanks and troops crossing… the border of Ukraine again,” he said, “there will no longer be a Nord Stream 2. We will bring an end to it.” Asked how he could do so since the pipeline was under Germany’s control, he said: “We will, I promise you, we’ll be able to do it.”
Scholz, asked the same question, said: “We are acting together. We are absolutely united, and we will not be taking different steps. We will do the same steps, and they will be very very hard to Russia, and they should understand.” The German leader was considered then — and now — by some members of the CIA team to be fully aware of the secret planning underway to destroy the pipelines.
At the time, the challenge to the intelligence community was to come up with a plan that would be forceful enough to deter Putin from the attack on Ukraine. The official told me: “We did it. We found an extraordinary deterrent because of its economic impact on Russia. And Putin did it despite the threat.” It took months of research and practice in the churning waters of the Baltic Sea by the two expert US Navy deep sea divers recruited for the mission before it was deemed a go. Norway’s superb seamen found the right spot for planting the bombs that would blow up the pipelines. Senior officials in Sweden and Denmark, who still insist they had no idea what was going on in their shared territorial waters, turned a blind eye to the activities of the American and Norwegian operatives. The American team of divers and support staff on the mission’s mother ship — a Norwegian minesweeper — would be hard to hide while the divers were doing their work. The team would not learn until after the bombing that Nord Stream 2 had been shut down with 750 miles of natural gas in it.
What I did not know then, but was told recently, was that after Biden’s extraordinary public threat to blow up Nord Stream 2, with Scholz standing next to him, the CIA planning group was told by the White House that there would be no immediate attack on the two pipelines, but the group should arrange to plant the necessary bombs and be ready to trigger them “on demand” — after the war began.
After Biden’s order to trigger the explosives planted on the pipelines, it took only a short flight with a Norwegian fighter and the dropping of an altered off-the-shelf sonar device at the right spot in the Baltic Sea to get it done. By then the CIA group had long disbanded. By then, too, the official told me: “We realized that the destruction of the two Russian pipelines was not related to the Ukrainian war” — Putin was in the process of annexing the four Ukrainian oblasts he wanted — “but was part of a neocon political agenda to keep Scholz and Germany, with winter coming up and the pipelines shut down, from getting cold feet and opening up” the shuttered Nord Stream 2. “The White House fear was that Putin would get Germany under his thumb and then he was going to get Poland.”
The White House said nothing as the world wondered who committed the sabotage. “So the president struck a blow against the economy of Germany and Western Europe,” the official told me. “He could have done it in June and told Putin: We told you what we would do.” The White House’s silence and denials were, he said, “a betrayal of what we were doing. If you are going to do it, do it when it would have made a difference.”
The leadership of the CIA team viewed Biden’s misleading guidance for its order to destroy the pipelines, the official told me, “as taking a strategic step toward World War III. What if Russia had responded by saying: You blew up our pipelines and I’m going to blow up your pipelines and your communication cables.
Within days of the bombing, officials in Denmark and Sweden announced they would conduct an investigation. They reported two months later that there had indeed been an explosion and said there would be further inquiries. None has emerged. The German government conducted an inquiry but announced that major parts of its findings would be classified.
President Biden waited four days before calling the pipeline bombing “a deliberate act of sabotage.” He said: “Now the Russians are pumping out disinformation about it.”
There is no evidence that President Biden has required the American intelligence community to conduct a major all-source inquiry into the pipeline bombing. Such requests are known as “Taskings” and are taken seriously inside the government.
All of this explains why a routine question I posed a month or so after the bombings to someone with many years in the American intelligence community led me to a truth that no one in America or Germany seems to want to pursue. My question was simple: “Who did it?”
The Biden administration blew up the pipelines but the action had little to do with winning or stopping the war in Ukraine. It resulted from fears in the White House that Germany would waver and turn on the flow of Russia gas — and that Germany and then NATO, for economic reasons, would fall under the sway of Russia and its extensive and inexpensive natural resources.
And thus followed the ultimate fear: that America would lose its long-standing primacy in Western Europe, Seymour Hersh stresses.
At UN, Horn of Africa Nations Urge Global Solidarity and Real Reform
As UN General Assembly’s general debate continued, Horn of Africa nations made a strong plea for action to rescue a world teetering on the precipice of climate catastrophe and struggling under the weight of an outdated and unfair global financial system.
Leaders from Somalia, Ethiopia, Djibouti and Eritrea painted a grim picture of a planet marred by the unforgiving impacts of climate change. They left no room for equivocation: This is an existential crisis that demands immediate, collective action.
They highlighted the upcoming COP-28 climate conference in the United Arab Emirates as an unparalleled opportunity for the world to fulfill its obligations to the planet’s most vulnerable nations.
The leaders, whose respective statements set out their national narratives, also agreed on the pressing need for an overhaul of multilateral institutions and international financial systems, highlighting that the present structures are clearly not fit for 21st century purpose.
Power in solidarity, cooperation
Hamza Abdi Barre, Prime Minister of Somalia, highlighted the “power of solidarity and cooperation” in an interconnected world and urged leaders to accelerate action to achieve the Sustainable Development Goals (SDGs).
He reported on his country’s fight against terrorism and advancing peace.
“We have dealt with an iron fist with extremism,” he said, noting that Somalia managed to clear more than 45 per cent of the areas that were previously occupied by terrorists.
Barre commended the bravery and sacrifices made by the African Union’s Transition Mission in Somalia (ATMIS) and thanked its troop contributing countries.
He expressed Somalia’s commitment to the full implementation of the security transition plan and taking over the full security responsibility once the ATMIS forces depart by the end of 2024.
The Prime Minister also reiterated his country’s call for the removal of arms embargo imposed by UN Security Council in 1992, expressing that Somalia now has the necessary and competent systems to control possession, use and storage of firearms.
Lifting this embargo would allow his country to combat terrorism even more effectively and build a peaceful and prosperous future for its people, he said.
In his address, Barre also voiced concerns over the sharp increase in armed conflicts and military coups, especially in Africa, and their impact on vulnerable populations.
Are we prepared to work together
Demeke Mekonnen Hassen, Deputy Prime Minister of Ethiopia, asked world leaders: “Do we have the necessary political will to choose global partnership over geopolitical competition [and] are we prepared to work together towards a promising age of shared prosperity?”
The uncomfortable truth, he said, is that policy choices are escalating tensions, poverty and hunger are rising, and progress towards achieving the SDGs is off track.
He also voiced “grave concern” over the threat of nuclear weapons, calling for cooperation to ensure that new technologies such as artificial intelligence are used responsibly.
Turning to global security, the Ethiopian leader emphasized the need for a system that respects the sovereignty of Member States and prevents conflict.
“Reforming the Security Council is not a choice, but an absolute necessity,” he stressed, calling for permanent seats for Africa.
He also showcased Ethiopia’s efforts for sustainable development and climate action, noting its 10-year development plan aligned with the SDGs and the national “Green Legacy Initiative” to ensure development through rural and urban green programmes.
In his address, Hassen called on States to recommit to the UN Charter, underlining the need for an inclusive multilateral system.
“Maintaining the status quo will not advance our shared interest of ensuring peace and prosperity,” he declared.
Resist temptation to give up
Mahamoud Ali Youssouf, Minister for Foreign Affairs of Djibouti, also stressed the need for strengthening multilateralism and international cooperation.
There is a tendency to “group together into clubs”, he said, adding that this “minilateralism” results in resistance to change in international institutions, compounded by worsening inequality and geopolitical competition.
While this is not irreversible, it does require massive investment to create a system that accounts for current geopolitical realities and reinforce close cooperation, he said.
“We must not give into the temptation to give up,” he said.
Foreign Minister Youssouf also reported that despite a deteriorating global economic situation, Djibouti has made notable progress in reducing malnutrition, managing the pandemic and aligning national policy with the SDGs.
The Government also prioritizes poverty-reduction, sustainable economic growth and access to potable water and sanitation, as well as investments in renewable energy and climate change adaptation.
Of note is the recent inauguration Djibouti’s first ‘wind park’, which will generate 60 megawatts of clean energy, Youssouf highlighted.
Amid conflicts and crises in all corners of the world, he welcomed the UN-led transfer of oil from the FSO Safer tanker as an example of model international cooperation, stating that the coasts of the Horn of Africa and the Arabian Peninsula would have been completely polluted if the region and the world had not acted quickly.
Elevate the United Nations
Osman Saleh Mohammed, Minister for Foreign Affairs of Eritrea, said that the United Nations, as the principal international platform, must be elevated – in terms of structure and mandate – “to a cherished umbrella organization that can fulfil its historic mandate with efficacy and potency.”
In that regard, he stressed that the much-vaunted reform of the Security Council should not be perceived as “nominal tampering” merely limited to increasing the number and geographical representation of new members.
“The architecture of veto power and other institutional distortions that incapacitate the [Council] from exercising its responsibilities … must be examined with the historical track-record,” he said.
Foreign Minister Mohammed also stressed that the “political horse-trading” and the misuse of Security Council membership to advance narrow national interests are not compatible with the solemn responsibility entrusted to the body.
“The criterion of membership should not be confined to, and determined by, mere political and economic clout; population size, etc. Membership in the [Council] must reflect the wide spectrum of Member States in the UN,” he said.
In his address, Mohammed also denounced the sanctions imposed against his country from 2009 to 2018 was an act of transgression and deceit that required full redress and accountability.
Enlarging the EU: Europe is going to “Sail on High Seas”
The newly released report by the German-French working group on EU institutional reform shows, the goal of the EU should be to get ready for enlargement by 2030, which includes a series of reforms of the work of the European Parliament, Council of the EU and the European Commission.
The report of the working group, titled “Sailing on High Seas: Reforming and Enlarging the EU for the 21st Century” was published by Brussels-based Politico.
Candidate countries would need to meet the political criteria for membership, including resolving territorial disputes and aligning with the EU’s foreign policy, and there should be no fast-track procedure.
The working group of experts that produced the report was launched in January in order to make recommendations for the EU institutional reforms. It was initiated by German Minister of State for Europe and Climate, Anna Lührmann, and French Secretary of State for European Affairs, Laurence Boone.
“It is important that governments decide to begin the process with no further delay. Some reforms can be implemented in the short term without treaty change in the first phase as of autumn 2023 and before the 2024 European elections. Reforms that require treaty change should be tackled during the next institutional cycle (2024-29)”, the experts recommended.
“To regain credibility, the EU should set the goal to be ready for enlargement by 2030 and accession candidates should work to fulfil the criteria to accede to the EU on this earliest entry date… The new political leadership after the European elections in 2024 should fully commit to this goal and the reform process required to reach it”, the report states.
The second recommendation is to break down the accession rounds into smaller groups of countries (a ‘regatta’) in full compliance with the merit-based approach and in consideration of potential bilateral conflicts.
Accession countries should also fully align themselves with the EU’s Common Foreign and Security Policy notably its sanctions policy.
“For security and stability reasons, countries with lasting military conflicts cannot join the EU. The same applies to countries with a territorial conflict with another candidate country or an EU Member State”, the report also states.
Other principles of enlargement include equality – the rejection of fast-tracking of certain candidate countries – as well as phasing-in of candidate countries in the EU’s policies and reversibility if a country is experiencing backpedalling on participation criteria.
According to the section of the report titled “Making the EU institutions enlargement ready”, the entry of up to 10 new Member States will massively change the composition, the make-up, and the decision-making processes in all institutions. Therefore, institutional reforms to make the EU enlargement ready will have to take place.
The report recommends sticking with the limit of 751 or fewer Members of the European Parliament. Parliament’s estimates for 2024 amount to EUR 2.383.401.312 (sic!).
“Before the next enlargement, all remaining policy decisions should be transferred from unanimity to qualified majority voting. Additionally, except for in the Common Foreign and Security Policy, this should be accompanied by full co-decision with the European Parliament”, the report proposes.
Specifically, when it comes to enlargement, the report proposes validating each negotiation chapter should be moved to a qualified majority vote (QMV) to streamline the enlargement process but the final ratification of an accession treaty would remain under unanimity.
When it comes to the European Commission, the experts do not see it as an option to retain the ‘one-Member-State-one-Commissioner’ logic without a formal hierarchy in an enlarged EU.
In order to address the legitimate concerns of Member States regarding QMV and the protection of national interests as core state powers, the report proposes several ways of making QMV more acceptable, including rebalancing of current QMV vote shares away from the current system of 55 % of Member states representing 65 % of the EU population.
According to the report, not all European states will be willing and/or able to join the EU in the foreseeable future and even some current Member States may prefer looser forms of integration. The experts therefore recommend envisioning the future of European integration as four distinct tiers, each with a different balance of rights and obligations.
The inner circle would be comprised by the countries that wish to participate in forms of deeper integration. The second circle, the EU, would be comprised of all current and future Member States operating under current competencies of the Union.
A first outer tier – associate members – could allow for streamlining the different forms of association with the EEA countries, Switzerland, or even the UK, the report states. The core area of participation would be the single market.
A second outer tier would not include any form of integration with binding EU law or specific rule of law requirements and would not allow access to the single market. Instead, it would focus on geopolitical convergence and political cooperation in policy areas of mutual importance and relevance such as security, energy or the environment and climate policy etc.
“The recently established European Political Community’s institutional underpinning could be upgraded to provide more structured cooperation”, the report reads.
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