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Knights Close the Ranks: New Sanctions Against Belarus

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Photo: kremlin.ru

Another package of sanctions has been introduced against the Republic of Belarus. The USA, UK and Canada simultaneously announced restrictive measures against a number of Belarusian officials, security officials and persons close to the government structures. The restrictions also affected a number of Belarusian legal entities. These countries openly say that the imposed sanctions are a response to the “migration crisis” on the Belarusian-Polish border, as they believe the Belarusian authorities engineered the crisis. The new sanctions are a signal that countries will not be able to play such games with migrants without expecting a tough response. The Belarusian leader has at least two scenarios of retaliatory steps — to “swallow” the new sanctions and keep a low profile, or to amp up the stakes again.

The new sanctions against Minsk are notable for several reasons. First, the course of toughening the introduced measures continues. If in 2020, against the background of the presidential elections and public protests, the restrictive measures were more symbolic and a means of signalling, then in the summer of 2021 it became clear that the West clearly did not want to limit itself to cosmetic measures. The course of sanctions is being developed. Second, the US and EU are aligning and harmonising their sanctions. Brussels mirrored the US measures in August 2021 in part, while Washington mirrored some of the EU summer restrictions. We observe this synchronisation of actions among the Western allies towards Belarus. Britain and Canada also maintain close coordination with their allies, although they have not repeated the decisions verbatim. Fourth, US sanctions pose the greatest threat to Minsk.

Western sanctions are nothing new for Belarus. Their history stretches back to the 2000s. The EU began to introduce them in 2004, and by 2012 there were 243 individuals and 32 organisations in the black list At the time, Washington also introduced blocking sanctions against a number of Belarusian individuals. Both the EU and the US reacted to the concentration of political power in Belarus, accusing the current authorities of manipulating the elections and suppressing the opposition. The legal mechanisms of those times are still in force, although in response to the softening of domestic policies, the EU and the United States reduced the number of persons under sanctions or introduced temporary exemptions. By 2016, only four people remained in the black lists of the EU, and the United States issued a general license toward previously blocked Belarusian enterprises.

Clouds reappeared on the horizon in 2020, and after the incident with the Ryanair flight, the pressure on Minsk increased significantly. The European Union has expanded its lists of blocked persons. By June 2021, these were 166 individuals and 15 legal entities, including such large companies as MAZ and BELAZ. Sectoral sanctions have been introduced. Among them are bans on the supply of defence products, goods for the tobacco industry, restrictions on importing a number of petroleum products and potash fertilizers, a ban on transactions with government debt securities with maturities of more than 90 days, a ban on the insurance of government agencies of the Republic of Belarus, and a ban on the European Investment Bank’s operations with Belarus. The United States initially limited itself to blocking sanctions against officials, but after the Ryanair incident, it also took tougher measures. Washington did not renew the general license for nine Belarusian enterprises that were previously on the black list. In August 2021, President Biden signed Executive Order 14038, which set up a stricter legal framework for sanctions against Belarus. Blocking sanctions were introduced against 21 organisations, including large Belarusian enterprises. The UK, Switzerland and Canada have updated their sanctions regimes.

The December round of sanctions continued the course of tough measures. The EU has expanded its list of blocked persons, including some companies that the Americans previously blocked. The United States, for its part, has also expanded its number of sanctioned individuals. In both cases, they targeted officials, security officials and other persons involved, according to the sanctions initiators, in the “migration crisis”, as well as companies and organisations connected with the Belarusian authorities. In addition, other Belarusian enterprises, not involved in the crisis but important from the point of view of exports and obtaining foreign exchange earnings, were also subject to sanctions. On top of that, the Americans imposed sectoral sanctions on the financial sector, barring American individuals from purchasing Belarusian debt securities with a maturity of more than 90 days. The UK and Canada took more modest measures, blocking a number of individuals and businesses.

Of course, the measures that were taken will not yet lead to the collapse of the Belarusian economy. A significant proportion of the country’s trade is with Russia. However, in a number of areas, sanctions are still quite painful, especially in the field of oil refining and the production of potash fertilizers. The most problematic are the US sanctions. Those included by the US Treasury in the list of blocked persons face seriously complications in their international activities. Any transactions in dollars and all economic transactions with American citizens, companies, or persons directly or indirectly associated with the United States are closed for them. The interpretation of the number of such persons is extremely wide. As a result, many foreigners face criminal or administrative responsibility in the United States. Any business with any significant international dimension fears coercive US measures and keeps its distance from blacklisted individuals. That is why US sanctions are so important in the first place.

Apparently, the “migration crisis” really was a demonstration that Minsk will not leave the summer sanctions unanswered. Belarus cannot give Washington and Brussels a proportional economic response. However, it is quite capable of causing concern in other areas, including migration. Such a fight looks like a duel between a well-armed knight and a simple infantryman. The latter has no choice but to look for improvised means, use ingenuity and non-standard steps.

If this is really so, then in part, Minsk has managed to achieve its goal. Brussels is worried about the problem. However, the crisis has only helped Warsaw. There were no large-scale border breakthroughs by migrants, and Poland proved to be an indispensable player in containing the “threat from the East”. In any case, they decided to punish Belarus resolutely. The knights closed their ranks and launched an attack.

Now the Belarusian leader faces two basic scenarios. The first is to “swallow” Western sanctions, to keep a low profile and, at least temporarily, not to carry out similar demarches. He has opted for such manoeuvres in the past, which have led to the relaxation of sanctions. The second way would entail a new round of escalation, playing on other topics that are painful for the West. But this scenario could lead to a new escalation of sanctions. The West is in a better position here. Its safety margin is higher, and the measures can be more and more serious. In addition, Brussels, Washington and other players will most likely link the lifting of sanctions to a political transition in Belarus, and not on the terms of the current government.

Strengthening ties with Russia would be a logical step for Minsk to take, given the current conditions. At least it is necessary to develop the financial infrastructure of the Union State of Belarus and Russia, which would secure bilateral transactions from the influence of third countries. Russia can mitigate damage from foreign sanctions. However, it is unlikely to fully compensate for them.

From our partner RIAC

RIAC Director of Programs, RIAC Member, Head of "Contemporary State" program at Valdai Discussion Club, RIAC member.

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Eastern Europe

Ukraine’s issue may endanger peace in the whole of Europe

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Big challenges ahead, the world may face uncertainty, and unrest, as NATO allies have put forces on standby and sent ships and fighter jets to bolster Europe’s eastern defenses as tensions soar over Russia’s military buildup near Ukraine.

The military alliance’s move, announced on Monday, came as the United Kingdom began withdrawing staff from its embassy in Kyiv as fears persist of an imminent Russian invasion. Britain’s move came after the United States took similar action.

The UK’s foreign office said in a statement that it was pulling out “some embassy staff and dependents” in response to “the growing threat from Russia”.

Tensions in Ukraine are high following Russia’s massing of some 100,000 troops near its neighbor. The West says Moscow, which is angered by the growing relationship between Kyiv and NATO, is preparing to attack Ukraine.

The Kremlin has repeatedly denied planning to make an incursion, but the Russian military already took a chunk of Ukrainian territory when it seized Crimea and backed separatist forces who took control of large parts of eastern Ukraine eight years ago.

UK’s Johnson warns against ‘disastrous’ invasion

Johnson has said that a Russian invasion of Ukraine would be a “disastrous step” by Moscow.

“We need to make it very clear to the Kremlin, to Russia, that that would be a disastrous step,” he told broadcasters, adding an incursion would be a “painful, violent and bloody business”.

Asked whether he thought an invasion was now imminent, Johnson said intelligence was “pretty gloomy on this point”.

“I don’t think it’s by any means inevitable now, I think that sense can still prevail,” he said.

Moscow accuses the West of ‘hysteria’

Moscow has accused the US and its allies of escalating East-West tensions by announcing plans to boost NATO forces in Eastern Europe and evacuate the families of diplomats from the US embassy in Ukraine.

Kremlin spokesman Dmitry Peskov accused the West of spreading information filled with “hysteria” and “laced with lies” and said the probability of military conflict in eastern Ukraine being initiated by the Ukrainian side was higher than ever.

He claimed Kyiv has deployed a large number of troops near the borders of breakaway regions controlled by pro-Russian separatists, indicating it is preparing to attack them. Ukraine has repeatedly denied having any plans to do so.

Although Europe was part of the cold war and many other wars in other parts of the world but was away from any big war on its own soil for several decades. The prosperity and economic development were due to peace and stability in Europe for such a long time. People were feeling safe and secure, and focusing only on economic developments. If any misadventure happened in Europe, the unrest and instability may cost a heavy price.

It is appealed to politicians and decision-makers to avoid any misadventure and avoid any instability in Europe as well as other parts of the world. Wars never benefit humankind, even, winning the war does not mean success absolutely. The cost is on the human lives, either side of the warring countries. The world has been emerged as a global village and may impact whole humanity if any part of the world is disturbed.

Pakistan was the victim of the four-decade-long Afghan war for four decades and suffered heavy losses in the form of precious human lives as well as economic losses. The bitter lesson learned was to stay away from wars. Pakistan has learned this bitter lesson after huge suffering. Hope, the rest of the world may learn from our experience and may avoid any big loss.

It is believed that there is nothing that cannot be resolved through peaceful diplomatic dialogue, as long as there is a strong will for peace. The UN may intervene and play its due role to protect human lives. Hope all concerns may initiate meaningful dialogue and save humanity from big loss. Humankind is the most precious thing in this universe and must be protected at all costs.

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Eastern Europe

Ukraine Lies About 2022 Russian Attack to Hide Dying Economy

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Image source: Wikimedia Commons

Yesterday, Ukraine’s president Zelensky speaking to the Ukrainian Foreign Intelligence Service said “We have learned to contain external threats. It is time to launch an offensive to secure our national interests. We are united in wanting our territory returned immediately”.

Beginning the day after Joe Biden’s inauguration, Ukraine has been complaining of Russia’s troop buildup of over 90,000 men on its border. According to Ukraine’s Zelensky, Russia was prepared to attack at any moment.

In response to this, Ukraine mobilized over ½ its army or over 170,000 troops to the frontline with all the heavy weapons at its disposal accompanying them.

This force was a supposed counter to the Russian invasion army, which again, was just over the border.

In reality, the Russian army staged planned war games near the city of Yelnya, 160 miles (257 kilometers) from the Ukrainian border. You read that right, the Russian army was160 miles away from the Ukrainian border even though every major western publication made it sound like they were already in Kiev.

For the average modern army, that means over a day’s travel just to get to the Ukrainian border. Then another 4-5 hours travel on top of that to where the Ukrainian army is. So much for a surprise attack.

So what is it that Ukraine’s President Zelensky finds so threatening about Russia?

Ukraine’s President Zelensky told visiting US Senators in early June that the country’s military defense against Russia and the completion of the Nord Stream 2 pipeline are inextricably intertwined.

Once the project is completed, Ukraine will be deprived of the funds required to fund defense spending and defend Europe’s eastern border.

“Nord Stream 2 will cut Ukraine off from gas supplies, which will cost us at least USD 3 billion per year.”

Zelensky, always the joker, wants Russia to pay $3 billion per year so he personally can defend Europe from Russia who is paying him.

What a great story. He’s confusing screenwriting fantasy with diplomacy again.

“We won’t be able to pay for the Ukrainian army,” Zelensky observed.

In reality, Ukraine has about one month’s worth of diesel if Kiev ignores Ukraine’s responsibility to its own people to provide a safety net or at least access to necessities like bread or shelter in below-zero weather that’s on its way next month by heavily subsidizing gas and electric costs.

The only thing the government in Kiev is concerned about is losing the $3 billion in transit fees from the country they accuse of attacking them.

Zelensky’s government went as far as demanding fees from Germany and Russia when Nordstream II took over the transit game.

Zelensky’s Ukraine is shuffling Europe, NATO, and the US closer and closer to the line where one mistake in diplomacy, one stupid move by any of Ukraine’s infamous Neanderthal nationalist volunteers, and bang!

The next headline reads- Oops! Thousands dead in Ukraine as the war spreads to Europe.

Joe “Brandon” and club RINO are sleepwalking America right into this level of catastrophe by coddling his pet kleptocracy who’s already stolen billions of US dollars meant as aid.

And why? Why oh-why indeed.

Ukraine is using the supposed Russian attack to renegotiate its unsolvable gas situation.

It’s either this or tells Ukrainians; Oops! We screwed the pooch guys! You’re gonna freeze because we can’t afford gas.

Russia won’t invade because then Russia will be responsible for providing a total civil safety net including gas and electricity for Ukrainian people who otherwise can’t afford it.

Ukraine’s economy is dying. Russia doesn’t plan to foot the bill.

According to Oleg Popenko, the head of the Union of Consumers of Utilities (UCU), high gas costs will prevent most small and medium-sized firms from operating and will force them to close.

According to him, small business owners will be unable to “pull” the payment of 7,000 hryvnias (22,000 rubles) for heating.

As a result, we can anticipate a reduction in the activities of hairdressing salons, bakers, dry cleaners, dental offices, and so on.

They will either have to include the higher-priced communal unit in the pricing of their services, or they will have to close.

All types of businesses, from small dry cleaners to big agricultural holdings, use gas to some extent.

The only ones who benefit from the price increase are Ukrainian gas-producing businesses, which are now raising the price for their users’ dozens of times, resulting in massive profits.

In a recent interview, former President’s Office head Andriy Bogdan forecast a total economic collapse by February of next year.

“Here we still have December – this is the pre-New Year’s, joyous month, when everyone spends money, and somehow with hope:” We’ll pluck something out of the egg-box and live.”

However, this will not be the case in January and February.

“We will dismiss people, our industry will grow, our budget revenues will fall, and our economy will boom based on the price of gas and electricity,” Bogdan added.

“With a further rise in gas prices, the chemical industry and the production of fertilizers are at risk of dying altogether, predicts energy expert Valentin Zemlyansky.

“Industry will die. I am not kidding. The impact of energy prices on the business situation is an inertial process. The business will not close immediately, it will happen in stages. The beginning will be in March 2022, we will see the peak by May-June,”the expert says. Zemlyansky also emphasizes that this happens with a favorable market environment – mineral fertilizers are in demand, they are actively purchased by India, Pakistan, and China, but Ukrainian enterprises cannot afford their production. This was confirmed by the recent suspension of the specialized work of the Odessa Port Plant.

Thus, Ukrainian exporters are squeezed out of world markets. Many of Ukraine’s neighbors that produce similar products (for example, nitrogen fertilizers) receive gas at fixed low prices. In Turkey, for example, the government regulates gas prices for such businesses. It will also be difficult to sell the products that have risen in price on the domestic market due to the falling purchasing power.

Economic analyst Igor Deysan also warns that an increase in fertilizer prices will lead to the abandonment of sowing of many crops and an increase in the price of agricultural products, especially wheat in the 2022-2023 season.

“The cost of gas is largely carried over to the cost of wheat and other crops. If gas prices remain high for a long time, the rise in gas prices can make a significant contribution to the price of wheat,” the expert predicts.

Farmers still need to dry the harvested wheat crop, which also implies significant gas consumption. The next in the cycle of its processing are millers and bakers, who are also going bankrupt due to high gas prices.”

The breadbasket of Europe is empty. Ukraine hasn’t seen this scarcity since the 1932-33 famine they are constantly enshrining. The difference between then and now is this time the government is responsible for all of it.

Bakeries will close down because Ukraine oversold wheat to Turkey and its stocks are empty. Now, the breadbasket nation needs to purchase flour from Turkey.

Even if the grain was there, the gas needed to furnish the bakeries, cities, businesses, homes, hospitals, and government buildings with heat and electricity is not.

Deputy from the “Opposition Platform – For Life” Yuriy Boyko said on the air the other day that high gas prices are ruining bakeries. “I came to a bakery in the Kiev region. A modern enterprise. The bakery today pays for gas seven times more than a year ago. And for electricity twice. And energy carriers play a very significant role in the cost of bread, about 20%. That is, in reality, already today they are forced to either increase the cost of bread, or there will be no bread, ”the deputy said.

The short-term gas forecast for Ukraine looks bleak even though Ukraine has the second-largest proven gas reserves in Europe right behind Russia.

 Former Ukrainian Prime Minister Yulia Tymoshenko, now the leader of the Batkivshchyna party, stated on the Nash TV station on December 22 that Ukraine could furnish itself with gas in three years, but only under particular conditions.

Earlier, the politician said that Ukraine should not wait to purchase Russian gas supplies until the end of the heating season, because there is nowhere else to get it.

According to Tymoshenko, “To enhance gas production in Ukraine, the president’s will is required first and foremost because this should become a strategic and critical program for the development of the state’s energy sector.”

Today, there is no such political will. “Licenses are dispersed on the right and left,” she explained.

Secondly, according to Tymoshenko, non-budget banking investment resources must be directed to Ukrgazvydobuvannya, which also needs to be licensed for all explored deposits. In this case, the ex-prime minister is sure that Ukraine will provide its own gas in 3 years.            

Gas firms promise to reinvest revenues in increased production and modernization, but in the meantime, all other industries and small businesses can relocate across the world.

The Association of Gas Production Companies (AGKU) vehemently rejected proposals to impose state regulation of Ukrainian gas pricing in October, citing the fact that it would “inflict a blow on Ukraine’s image in the world arena and severely harm the European Union.” integration processes”.

Only those Ukrainian oligarchs’ enterprises like those of Rinat Akhmetov, Igor Kolomoisky, and Viktor Pinchuk, who control gas production companies and can send natural gas to their enterprises are affected in this situation.

If Ukraine could produce enough gas tomorrow, its citizens can’t afford high-priced Ukrainian gas and hydrocarbon products. The reserves are 5000 ft. below the surface and the costs of drilling and extraction are quite high.

The only way Biden’s Ukraine can become energy independent is if fuel prices perpetually soar from now on. Ukraine will be able to pay financial obligations like World Bank loans and investors like Hunter Biden.

According to Yuriy Vitrenko, the newly appointed CEO of Ukraine’s energy behemoth Naftogaz, Nord Stream 2 will give Gazprom a dominant position in Europe, giving it significant leverage over Germany and other EU countries.

The only option to avert this scenario is for Ukraine to gain access to gas from other gas-producing countries like Turkmenistan, Kazakhstan, or Azerbaijan, which would gladly use Ukraine’s transit system to sell gas to Europe.

“Germany should ensure that Gazprom cannot obstruct us,” Vitrenko argues.

“They must do so before Nord Stream 2 is completed, while Germany retains the essential leverage.”

The Germans must impose a moratorium until this type of competitive solution is implemented.”

If Russia refuses to cooperate, it will show that Nord Stream 2 is simply a geopolitical weapon aimed at harming Ukraine and monopolizing Europe’s energy markets, according to Vitrenko.”We have a transit system in Ukraine.” Let us compete to bring other gas providers into Europe,” we argue.

Vitrenko believes that once Nord Stream 2 is completed and the present five-year contract expires in 2025, Russian gas will no longer flow via Ukraine.

Arsen Avakov, Ukraine’s Interior Minister, has claimed that Russia may not even complete the current contract.

He warned that Moscow may disrupt Ukraine’s pipeline network to hinder gas transit across the nation and boost the argument for Nord Stream 2.

What’s interesting about this is it brings us right back to a graft-investor scenario reminiscent of Biden-Burisma. The companies feed profits to investors instead of reinvestment into equipment and permitting.

Secondly, Vitrenko wants the most expensive gas in Europe to materialize in his Ukrainian pipe. Caspian Sea gas, like Ukrainian fracked gas, is extremely costly to produce. The average Ukrainian won’t be able to afford it even if it was a possibility.

It’s only now that we get to the part that will make Americans and Europeans equally appalled.

Biden is using gas and oil cost spikes due to his mandated production cuts and the attempt to shutter Nordstream II to support Ukraine.

The more hydrocarbon product costs spike, the less dependent the EU and Ukraine are on Russian gas. This means fewer Russian gas transits to the EU.

As a consequence, Ukraine can profitably frack hydrocarbons and pay oligarchs, political grafts, and international loans. The gas is too expensive for Ukrainian people but investors like Hunter Biden or Amos Hochstein make out like bandits.

The more profitable the expensive EU oil and gas production rigs become, the more diverse gas purchases are and short-term energy diversification and security is achieved through extremely high price energy products.

If energy costs are through the roof, Joe “Brandon” has a clear runway to dismantle the US economy and Democrats will do what Democrats are doing.

Why should this infuriate you? What’s the difference between $1.80 per gallon and $4.00 per gallon gasoline in the US when it’s coming out of your pocket? The difference is Ukraine’s ability to pay its bills. The difference is Ukrainian politicians dealing with their own problems like grownups. The difference is Ukraine starts acting like a partner and less like a petulant child throwing temper tantrums.

How do higher fuel costs transfer to high retail off-the-shelf product costs?

Do high energy costs contribute to runaway inflation?

Now you know.

It is a hard enough choice to bear the cost in lives when a war is worth fighting and can’t be avoided. Ukraine’s Zelensky doesn’t want Donbass back in the fold. Just a few weeks ago, Zelensky described the citizens he claims to want back as “subhuman.”

The Ukrainians, as of January 2022, are not good partners or friends to America. They are unworthy of American support.  Do we want to give them the opportunity to send American kids to war so their oligarchs and our politicians can steal more?

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Eastern Europe

The Stewards of Hate

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A big bear is rattling the open door of his cage.  He cannot abide a NATO spear in his belly.  Hence Valdimir Putin’s demand for Ukraine to remain out of it, and for the military alliance to stop its advance into eastern Europe.

For 72 years until 1991, Ukraine was a republic of the Soviet Union, and before that for centuries an oblast of the Imperial Russian empire.  In 1939, parts belonging to Poland were annexed.

It was during the breakup of Russia following an independence referendum that Ukraine opted to separate.  But NATO is another story.  After the dissolution of the Warsaw Pact (NATO’s eastern counterpart), Russia had expected the West to do the same.  Instead, NATO became a US fig leaf for its wars in Iraq and Afghanistan.  Apparently, everyone in the world saw through this — except the US — as it embroiled itself in both countries, and the bill for the misadventures rocketed from $80 billion to an estimated $5 trillion.

The EU, a path to riches for East Europeans, is a Ukrainian dream, and Russian troops the reality when they wake up.  Such are the facts, no matter how much the Ukrainians are trying to ignore them. 

If the powerful Russian bear is the Ukrainian bete noire, its polar opposite is the case in India.  A powerful Hindutva movement abhors the Muslim minority.  It blames them for India’s problems, very much akin to the situation for Jews in pre-WW2 Germany.  Not unsurprisingly given the roots of the RSS, which modeled itself after the Nazis, instituting uniforms and drills.  A former member assassinated Gandhi for being too soft on Muslims.  Post independence, the RSS was banned by India’s first government which was led by Jawaharlal Nehru, a secular socialist.

The current prime minister, Narendra Modi, is a former RSS pracharak —  that is an active member who devotes himself full time to promoting RSS doctrine and, like a missionary, in seeking new members.  As an ambitious politician, he shed RSS ties when he entered politics and as leader expresses the wish for unity — sentiments not shared by his BHP colleagues.

There is the yogi elected chief minister of India’s largest state, and his undisguised derogatory opinions of Muslims.  Worse, at a political event at the end of December, leaders called openly for the killing of Muslims, and India’s leaders kept silent.  After general social media outrage at the speeches, the police  finally registered a case against some of the speakers for ‘promoting hatred between religious groups.’

Videos show many of the speakers are prominent religious leaders often present with senior ministers in the BJP government.  Imagine, calling for genocide in 2021.  The world reacted to the effort to eliminate Tutsis in Rwanda where it also began with reviling and dehumanization.  Genocide and even incitement to genocide is a crime.  Hence the prosecutions.  Incitement to genocide is recognized as a separate crime under international law and an inchoate crime which does not require genocide to have taken place to be prosecutable.

The founders of post-independence India, Gandhi and Nehru who took pride in being secular, must be in agony over international outlaws wanting to become the stewards of their child.

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