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The Limits of China’s Involvement in South Caucasus

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As the Second Karabakh War ended, all regional players’ interests were scrutinized in detail. One power however, China, was largely absent from the analysis. Official rhetoric from Beijing indicates the continuation of China’s non-intervention policy in the region. However, its position also indicates the limits of China’s involvement in the South Caucasus.

Great expectations

There is a good deal of ambivalence in the Chinese position on the South Caucasus. The country’s ambassadors to the region’s three states – Armenia, Azerbaijan, and Georgia – often announce how important the Caucasus is, but Beijing’s investment policies and political moves reflect little of the vocalized grand geopolitical thinking.

As late as 2017 the prospects seemed rosier, with each South Caucasian state hoping for a larger Chinese presence. In 2017, China and Georgia signed a free trade agreement. Georgian government hoped the country’s location on the Black Sea. With several ports such as Batumi, Poti and the then-planned Anaklia deep sea port, Baku-Tbilisi-Kars (BTK) railway and East-West Highway, would allow it to operate as a logistics and transit hub for the expanding Belt and Road Initiative – a near-trillion US dollar Chinese initiative aimed at linking the Indo-Pacific region with the European market.

Moreover, there was  a geopolitical aspect to the Georgian-Chinese cooperation. Deeper economic penetration into Georgia could spell a  greater stake in Georgia’s stability and security for Beijing. For Tbilisi, relations with China were in a way a means to mitigate Russian geopolitical pressure following the invasion of Georgia in 2008. 

A similar understanding was behind Armenia’s and Azerbaijan’s calculations. Chinese investment, especially in infrastructure, was to be the main driver of the nascent cooperation in both cases. After all, most of the infrastructure hails from the Soviet era, making financing for new construction badly needed.  

Baku in particular was enthusiastic about infrastructure development in Central Asia as well as a steady growth of shipments from China, as it could provide a boost for the South Caucasus transport and energy corridor. Over the past years the ports of Baku and a small city of Alat have invested into improving their infrastructure. Alat is especially promising as an estimated transshipment of the new port complex potentially reaches 25 million tons of cargo and 1 million twenty-foot equivalent unit (TEU) per year.

As was the case with Georgia, Armenia and Azerbaijan too looked at China as a source for diversification of their foreign policy orientation. Baku and Yerevan enjoy deep economic and military cooperation with Moscow, but uneasiness in both capitals about Russian geopolitical pressure persists. As such, China could have played a pivotal role in mitigating their fears of dependence on Moscow.

Last, but not least, Armenia also pinned its hopes on the economic involvement of China in the country. Though sandwiched between the rival Turkey and Azerbaijan and having only two borders open – in the north with Georgia and in the south with Iran – the country has been positioning itself as a potential transit corridor for Chinese goods from Iran to the Black Sea.

Reality check

None of the hopes of the South Caucasus countries regarding China have materialized. Perhaps the hope for more active Trans-Caspian transshipment could still be realized in one form or another, but overall, the South Caucasus has seen little Chinese investment or general geopolitical attention from Beijing. Trade with the three states has grown, but it has not so far been a game changer. Moreover, official BRI documents published in China over the past years too do not mention the region as a potential corridor to the European Union.

For China, the South Caucasus plays a modest role. In terms of BRI, the Russian corridor is a logical option for China-Europe links. Rather than transporting goods via the Caspian and Black Seas a direct Russian route may be longer in terms of distance, but is more feasible in practice. Other aspects of geography put limits on Chinese engagement in the South Caucasus as well. Unlike Central Asia, the region does not border on China. It also does not represent a primary security concern for Beijing, which would have necessitated larger engagement similar to Chinese actions in Tajikistan.

In a way, this physical distance does provide a certain advantage. Beijing can approach the region unencumbered by the problems its faces in Central Asia. Mistrust towards and fear of Chinese expansionism pervade the moods of political elites and the general public of Central Asian states, but this is not the case in the South Caucasus. Further, China has not so far gotten embroiled in internal affairs of the region’s three states and  has not awarded special preference to governments on ideological grounds. Ideally this would pave the way for a more active Chinese involvement. However, we have not seen Beijing tapping into this opportunity so far.

The rationale for China’s reluctance to engage the South Caucasus could be Russia, which regards the region as its sphere of influence. Considering the budding partnership between Moscow and Beijing, the latter might be unwilling to challenge Russia’s geopolitical preeminence. However, the Russia factor is not sufficient to explain Chinese abstention. After all, China does challenge Russia’s position in Central Asia and Moscow has been very careful not to voice its concerns openly. 

In many ways China’s relative inconspicuousness in the South Caucasus is dictated by its position on the Black Sea, a strategic location providing connection to Eastern, Central, Southern Europe, and Russia. It also allows access to the Mediterranean through the Bosphorus and Dardanelles Straits. Being involved in this sea would offer serious geopolitical opportunities to China, but much depends on energy availability. As the demand for oil and gas resources in China increases, so does Beijing’s quest to find new energy sources and safe avenues for import. 

However,  trends indicate that the Black Sea does not stand out in this regard. Black Sea adjacent states, with the significant exception of Russia (though even the latter exports gas and oil to China from its deposits in Siberia), have little to no direct energy trade with China. Overall, the resource potential of the Black Sea is too uncertain to invite deeper Chinese involvement. Even with Turkey which recently made gas discoveries in the Black Sea, the Chinese stance is unlikely to change as the potential gas deposits would mostly be consumed by Turkey’s growing internal demands.

Instead, the region seems to be much more important for other actors, mainly the EU and Russia .China does not seem motivated to compete with these other players when the potential benefits remain uncertain. The South Caucasus is of critical importance to the EU’s energy security as a transport corridor through which as much as 10 percent of Europe’s oil and oil import transit. The EU is also heavily involved in the region through its Eastern Partnership and the Transport Corridor Europe-Caucasus-Asia (TRACECA) projects. Besides, Russia’s growing military involvement in the Black Sea also limits Chinese potential involvement in the region. A geopolitically overcrowded Black Sea region provides little incentive for Chinese companies.

No breakthrough in sight

Looking ahead, the picture is not promising for the realization of the South Caucasus states expectations. It appears instead that both global and regional trends will limit China’s involvement in the region. 

Though China has performed much better than others economically following the negative effects of the COVID-19 pandemic, its growth remains unstable and government debt is soaring. This will put pressure on China’s willingness to lend money abroad, which does not portend well for the South Caucasus. Most likely, the region will remain overshadowed by other regions of primary importance for BRI – Southeast Asia, Central Asia and the Middle East.

A changing balance of power in the Black Sea and the Russo-Turkish geopolitical pre-eminence in the South Caucasus following the second Karabakh War will further limit Chinese companies’ willingness to invest or participate in region-wide projects. The South Caucasus will remain a major fault line between Russia and the West, and increasingly between Turkey and Russia as of late. Engaging this geopolitically fraught region will be risky for Chinese companies and therefore likely undesirable.

Finally, one must account for US pressure on the South Caucasus states. As the region will be subject to the great power competition between China and the US, Georgia and, to a certain extent Azerbaijan, will face a dilemma of damaging bilateral relations with Washington should they invite large Chinese investments into the countries’ critical infrastructure.

Author’s note: first published in chinaobservers

Emil Avdaliani specializes on former Soviet space and wider Eurasia with particular focus on Russia's internal and foreign policy, relations with Iran, China, the EU and the US. He teaches history and international relations at Tbilisi State University and Ilia State University (Georgia).

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Eastern Europe

Prospects of Armenia-Turkey Rapprochement

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Potential Armenia-Turkey rapprochement could have a major influence on South Caucasus geopolitics. The opening of the border would allow Turkey to have a better connection with Azerbaijan beyond the link it already has with the Nakhchivan exclave. Moscow will not be entirely happy with the development as it would allow Yerevan to diversify its foreign policy and decrease dependence on Russia in economy. The process nevertheless is fraught with troubles as mutual distrust and the influence of the third parties could complicate the nascent rapprochement.

Over the past month Armenian and Turkish officials exchanged positive statements which signaled potential rapprochement between the two historical foes. For instance, the Armenian PM Nikol Pashinyan said that he was ready for reconciliation with Turkey “without preconditions.” “Getting back to the agenda of establishing peace in the region, I must say that we have received some positive public signals from Turkey. We will assess these signals, and we will respond to positive signals with positive signals,” the PM stated. Turkey’s President Recep Tayyip Erdogan said Ankara could work towards gradual normalization if Yerevan “declared its readiness to move in this direction.”

On a more concrete level Armenia has recently allowed Turkish Airlines to fly to Baku directly over Armenia. More significantly, Armenia’s recently unveiled five-year government action plan, approved by Armenia’s legislature, states that “Armenia is ready to make efforts to normalize relations with Turkey.” Normalization, if implemented in full, would probably take the form of establishing full-scale diplomatic relations. More importantly, the five-year plan stresses that Armenia will approach the normalization process “without preconditions” and says that establishing relations with Turkey is in “the interests of stability, security, and the economic development of the region.”

So far it has been just an exchange of positive statements, but the frequency nevertheless indicates that a certain trend is emerging. This could lead to intensive talks and possibly to improvement of bilateral ties. The timing is interesting. The results of the second Nagorno-Karabakh war served as a catalyzer. Though heavily defeated by Azerbaijan, Armenia sees the need to act beyond the historical grievances it holds against Turkey and be generally more pragmatic in foreign ties. In Yerevan’s calculation, the improvement of relations with Ankara could deprive Baku of some advantages. Surely, Azerbaijan-Turkey alliance will remain untouched, but the momentum behind it could decrease if Armenia establishes better relations with Turkey. The latter might not be as strongly inclined to push against Armenia as it has done so far, and specifically during the second Nagorno-Karabakh war. The willingness to improve the bilateral relations has been persistently expressed by Ankara over the past years. Perhaps the biggest effort was made in 2009 when the Zurich Protocols were signed leading to a brief thaw in bilateral relations. Though eventually unsuccessful (on March 1, 2018, Armenia announced the cancellation of the protocols), Ankara has often stressed the need of improvement of ties with Yerevan without demanding preconditions.

Beyond the potential establishment of diplomatic relations, the reopening of the two countries’ border, closed from early 1990s because of the Nagorno-Karabakh conflict and Turkey’s solidarity with and military and economic support for Azerbaijan, could also be a part of the arrangement. The opening of the 300 km border running along the Armenian regions of Shirak, Aragatsotn, Armavir, and Ararat could be a game-changer. The opening up of the border is essentially an opening of the entire South Caucasus region. The move would provide Armenia with a new market for its products and businesses. In the longer term it would allow the country to diversify its economy, lessen dependence on Russia and the fragile route which goes through Georgia. The reliance on the Georgian territory could be partially substituted by Azerbaijan-Armenia-Turkey route, though it should be also stressed that the Armenia transit would need considerable time to become fully operational.

Economic and connectivity diversification equals the diminution of Russian influence in the South Caucasus. In other words, the closed borders have always constituted the basis of Russian power in the region as most roads and railways have a northward direction. For Turkey an open border with Armenia is also beneficial as it would allow a freer connection with Azerbaijan. Improving the regional links is a cornerstone of Turkey’s position in the South Caucasus. In a way, the country has acted as a major disruptor. Through its military and active economic presence Turkey opens new railways and roads, thus steadily decreasing Russian geopolitical leverage over the South Caucasus.

As mentioned, both Ankara and Yerevan will benefit from potential rapprochement. It is natural to suggest that the potential improvement between Turkey and Armenia, Russia’s trustful ally, would not be possible without Moscow’s blessing. Russia expressed readiness to help Armenia and Turkey normalize their relations, saying that would boost peace and stability in the region. “Now too we are ready to assist in a rapprochement between the two neighboring states based on mutual respect and consideration of each other’s interests,” the Russian Foreign Ministry spokeswoman, Maria Zakharova, said. Yet, it is not entirely clear how the normalization would suit Russia’s interests. One possibility is that the Armenia-Turkey connection would allow Russia to have a direct land link with Turkey via Azerbaijan and Armenia. However, here too the benefits are doubtful. The route is long and will likely remain unreliable. For Russia trade with Turkey via the Black Sea will remain a primary route.

Presenting a positive picture in the South Caucasus could however be a misrepresentation of real developments on the ground. The Armenian-Turkish rapprochement is far from being guaranteed because of ingrained distrust between the two sides. Moreover, there is also the Azerbaijani factor. Baku will try to influence Ankara’s thinking lest the rapprochement goes against Azerbaijan’s interests. Moreover, as argued above, Russia too might not be entirely interested in the border opening. This makes the potential process of normalization fraught with numerous problems which could continuously undermine rapport improvement.

Thus, realism drives Turkish policy toward Armenia. Ankara needs better connections to the South Caucasus. Reliance on the Georgian transit route is critical, but diversification is no less important. The results of the Second Nagorno-Karabakh war present Turkey and Armenia with an opportunity to pursue the improvement of bilateral ties. Yet, the normalization could be under pressure from external players and deep running mutual distrust. Moreover, the two sides will need to walk a tightrope as a potential blowback from nationalist forces in Turkey and Armenia can complicate the process.

Author’s note: first published in caucasuswatch

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Tighter Ties with China Signal Ukraine’s Multi-Vector Foreign Policy

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Image source: Wikimedia Commons

Ukraine is eager to cut deals with China as it confronts the West’s moves to allay Russian concerns. Whether Kyiv’s moves are a sign of a larger foreign policy adjustment or just a bluff aimed to mitigate faltering ties with the EU and the US, they could beget big consequences.

‘Chinese Card’

On June 30, Ukraine touted an agreement with China, which proposes revamping the country’s decrepit infrastructure. The decision comes following a US-German resolution to finish the Nord Stream 2 pipeline, despite longstanding concerns of Kyiv and other CEE nations. Yet, perhaps the biggest motivation was the growing unwillingness in the West to advance Ukraine’s NATO/EU aspirations.

The current state of affairs pushes Ukraine to find alternatives in foreign policy. China, with plenty of cash and political clout, comes as an obvious choice resulting in the signing of the bilateral agreement in June. The document outlines China’s willingness to invest in railways, airports, and ports, as well as telecommunications infrastructure across Ukraine. But otherwise, the agreement details few specifics.

The available details from the deal fit comfortably into the pattern China has been following across Eurasia. For example, China signed similar deals with Iran, Egypt and Saudi Arabia among others, demonstrating its willingness to penetrate those states’ vital infrastructure. Still, the documents can be also characterized as an umbrella agreement that serves as a roadmap rather than an accord listing concrete details and commitments.

The China-Ukraine agreement is all the more surprising as Kyiv rebuffed earlier this year a Chinese proposal to buy a Ukrainian aerospace company, Motor Sich.

Nevertheless, there are several reasons behind the rapprochement. First and foremost, it is about Ukraine adjusting its foreign policy stance to the state of economic relations. China is now Ukraine’s biggest single-country trade partner outstripping Russia and having a 14.4 percent share of the country’s imports and 15.3 percent of its exports. Perhaps fearful of possible Chinese countermeasures over the Motor Sich decision, Kyiv has been open to mending ties with Beijing with the June agreement.

Secondly, it paves the way for a more active role in China’s near-trillion-dollar Belt and Road Initiative (BRI), which aims at connecting China with the European market across the heart of Eurasia. Ukraine was among the first to endorse the initiative but has avoided signing memorandums on cooperation similar to what China has done with many others.

More immediately, the tilt toward China follows Kyiv’s decision to remove its name from an international statement about human rights abuses in China’s Xinjiang. While Ukraine initially joined the initiative, together with 40 other states, Kyiv abruptly changed its mind on June 24. It has been confirmed that the withdrawal followed Chinese threats to limit trade and deny access to COVID-19 vaccines for which Ukraine had already paid.

Multi-Vector Policy

Some larger geopolitical dynamics are also at play, such as Kyiv’s attempt to acclimate to the changing world order and the growing global competition between Beijing and Washington. In this environment, Ukraine might want to carve out an equidistant place between the two powers so as to avoid possible backlash from siding clearly with either of them.

As such, Ukraine appears to be embarking on a multi-vector foreign policy. It would allow Kyiv to alleviate its dependence on the West and seek lucrative economic and political ties with large Eurasian states. Put simply, relations with the West did not deliver on the expected benefits. The country was not offered NATO or EU accession, while the collective West’s consistent concessions to Russia undermine Ukraine’s interests. Ukraine has also often tended to look at China and other Eurasian powers from the ‘Western perspective’, which limited its options.

In Kyiv’s understanding, elimination of this obstructive dependence would enable it to find new partners able to bring in investments and ideally political support in multilateral organizations. China undoubtedly can be such a partner.

Kyiv’s calculations are more understandable when taken in view of its larger diplomatic readjustment in the region. For example, Ukraine recently began building closer relations with another Eurasian power in Turkey. When Ukrainian president Volodymyr Zelensky visited Istanbul in April 2021, nascent bilateral military ties were seen as a new chapter in the countries’ relations. Most indicative of this shift, a memorandum was signed on the creation of joint defense-industrial projects, which includes joint development of unmanned aerial vehicles in Ukraine.

The story of Turkey could serve as a microcosm, whereby Kyiv displayed that it is more interested in balancing the pressure from Russia and mitigating the failures in its pro-Western foreign policy course. Ukraine thus foreshadowed its increasingly multi-vector foreign policy as a solution to its geopolitical problems. In Kyiv’s understanding, rapprochement with China and Turkey could mitigate threats emanating from Russia as both Beijing and Ankara enjoy closer ties with Moscow, but nonetheless consider it a competitor.

The multi-vector foreign policy for Ukraine however does not mean abandoning its pro-Western cause. It rather involves seeing its NATO/EU aspirations as complementary with the closer economic ties with China and others. It will require an agile foreign policy and leveraging the country’s geopolitical assets.

New Type of Bilateral Relations 

Ukraine’s behavior might herald the birth of what could be characterized as a Eurasian model of bilateral relations. Across the continent, the notion of traditional alliances is being gradually replaced by partnerships. Devoid of formal obligations, China, Iran, Turkey and Russia find more space for interaction and see a larger pool of opportunities across the vastness of the supercontinent. Bigger maneuverability makes their foreign policy more agile in finding a common ground for cooperation.

The Eurasian model is a byproduct of an evolving global order in which each state with geopolitical influence recalibrates its foreign ties to fit into the post-unipolar world. Russia and China officially refuse to have an alliance – indeed, they claim an alliance would undermine their purportedly benevolent intentions toward one another. More specifically, the concept relates to how China sees the future world order. It opposes alliances – the ‘relic’ from the Cold War era.

Thus, the shift in Kyiv’s foreign policy could be part of this Eurasian trend where Ukraine seeks to construct its Asia policy which would better correspond to the unfolding China-US competition, Asia’s economic rise, and most of all, the failure to become a NATO or EU member state.

Reality Check

However, closer ties with China and most of all the dependence on Beijing’s investments also involves risks. China’s infrastructure projects are mostly financed through loans, which poorer and weaker countries are unable to repay. Often, ownership of the sites ends up in Chinese hands.

Chinese involvement in Ukraine’s critical infrastructure could also risk giving control over strategic technologies to Beijing, which would be channeled to China and successfully used to advance Chinese interests.

For Kyiv, dependence on Beijing also involves risks because of China’s close partnership with Russia. Dangers could be manifested in a concerted pressure on Ukraine in international organizations, or even China heeding Russian fears and abandoning infrastructure projects which would harm Russian interests.

The June agreement is an umbrella deal that lays out the foundation for deeper cooperation, but in no way guarantees its fulfillment. This could mean that Ukraine only sought to restore worsening bilateral relations with China following the Motor Sich saga. Alternatively, Kyiv might merely be trying to raise stakes in its stagnated relations with the West and hold Washington to account, signaling that it can successfully navigate between geopolitical poles if need be. One way or another, China looks set to play a bigger role in Ukraine‘s foreign policy.

Author’s note: first published at chinaobservers

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Eastern Europe

Ukraine’s independence: Shaping new political narratives through art

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Ukraine’s 30th Independence Anniversary brings forth a discussion on forming a modern cultural identity in the wake of political instability.  

Despite gaining independence 30 years ago, Ukraine is still facing consistent attacks on its sovereignty, both political and cultural. From the ongoing war with Russia in Eastern Ukraine, where 10,000 people have lost their lives since 2014, down to the root of oversimplification of Ukrainian issues in the media, Ukraine’s story is often being told by opponents attempting to distort the modern Ukrainian cultural identity.

My first-hand experience working with kids at the Ukrainian warzone has taught me a deep appreciation for cultural independence. For five years together with youngsters I wrote, directed and staged a performance piece titled ‘Contact Line’ about life at the warzone and personally witnessed the huge impact of arts and culture on the kids’ lives. This experience demonstrated that for too long Ukraine has let someone else present its identity to its youth, citizens and the world.

Shaking away the Soviet legacy

There’s no denying that the Soviet Union left a lasting legacy on Ukraine. The culture of Ukraine is to this day tainted by lingering ghosts of the Soviet past. Soviet authorities vigorously supressed the development of independent cultural identities in all the member states. In Ukraine’s case, simplistic rural folklore was imposed on society as a primary culture and was a means of suppressing creative or progressive thought. National collectives and one-dimensional traditional themes were presented as the essence of Ukrainian culture throughout the 20th century. Anyone who didn’t fit the Soviet mould was eliminated. A specific term, Executed Renaissance, is used to define a generation of Ukrainian artists who were repressed by the Soviet regime for their artistic non-conformism.

It has taken decades for Ukraine to regain its cultural voice and iron out its Soviet imprint. A key concept of postcolonial theory examines the creative resistance to the colonizers’ culture and the fraught slow development of a postcolonial identity. Ukraine has been struggling through this process for 30 years. However, since the 2014 Revolution of Dignity the country has been reimagining its culture, exploring its history and reconnecting with its identity. Ukraine is now striving to be on par with Western culture by ridding itself of remaining Soviet influences. Cultural institutions previously under government control or censorship are finding an independent voice and the population is discovering that authentic artistic expression is providing hope in difficult times. 

Looking at the future

Over the past 10 years, Ukraine has witnessed a robust change in the arts sector. The cultural scene has made a significant move away from a conservative ethos to a more contemporary one. Visual arts are the most progressive form of expression in Ukraine, with cinema rapidly catching up. Ukrainian filmmakers are winning awards at the Cannes Film Festival and Ukrainian artists are receiving praise at La Biennale di Venezia. The expectation is that this trend will not only magnify in the coming years, but also position Ukrainian artists as global creative trailblazers. 

Despite ballet being an extremely politicised art form during the Soviet period, it is now going through a revival and modernisation. The Ukrainain school of ballet is gaining recognition as one of the world’s best and Ukrainian ballet dancers are headlining the top ballet companies across the globe, showcasing their immense talent and training. British audiences will have an opportunity to watch the best Ukrainian ballet dancers from the world’s top theatres come together for a one-off unique performance at Sadler’s Wells Theatre in London on September 7th.

Georgian-American ballet choreographer George Balanchine famously said, “Ballet will speak for itself,” and the artform remains a true demonstration of the universal language of dance. The Ukrainian Ballet Gala will be a showcase of the innovation and traditions of the contemporary Ukrainian ballet school.

Global cultural promotion

In a globalised world it’s the wish of every country to promote and engage in cultural exchanges, and Ukraine is very much part of this movement. Ukraine wants to be an active player on the world stage, both politically and culturally, and to be a dynamic culture creator, particularly in Europe. Trust in soft diplomacy is growing and Ukraine’s international relations and diplomacy are benefiting from this trend. 

As a Ukrainian-born and British-educated theatre producer and director I appreciate the importance of bringing the best of Ukrainian culture to the world not just for Ukraine’s benefit, but to enrich global culture and share experiences through creative means. It is the job of people like me and my colleagues to tell Ukraine’s story through art and, thus, shape new political narratives about Ukraine internationally. We want to share our rich culture with the world and events, such as the Ukrainian Ballet Gala, are key to achieving this.

Ukrainians are now left with no choice but to stride forward – no outside force should ever again control the vibrant culture of Ukraine.

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