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Russia-West: Is It Possible to Lift the Sanctions?

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Official White House Photo by Adam Schultz

Diplomatic manoeuvring by Russia and Ukraine on the issue of a peace agreement, or at least a ceasefire, naturally raise the question of a possible lifting of Western sanctions against Russia. American officials have already made it clear that Washington will lift the previously-imposed sanctions if the current military operation is ceased.

The US is trying to use sanctions as an incentive to push Moscow to engage in negotiations. The logic here is simple: the continuation of the conflict means the escalation of sanctions, whereas the end of the conflict would lead to the abolition or mitigation of restrictive measures. However, this simple and logical model does not work in practice. Moscow most likely does not believe sanctions will be lifted or suspects that they could be re-imposed alongside a new set of political demands. Recent historical experience confirms such fears. Is it possible in this case to put sanctions on the negotiating agenda at all? Yes, it’s possible. But such a formulation of the question requires a discussion on the specific parameters of sanctions de-escalation, rather than abstract promises or positions of requests. In turn, the specifics imply the segmentation of the introduced restrictions into separate components. Their cancellation can proceed either sequentially or simultaneously.

The key segments of restrictive measures against Russia include the following:

First. Sanctions against the Central Bank, the Ministry of Finance and the National Welfare Fund. Among other things, we are talking about the freezing of Russian reserves in the EU. There is the prospect of these funds being transferred to Ukraine for the restoration of the armed forces and infrastructure. It should also be noted here that the freezing and risk of confiscation affects Russian state property, as well as the assets of blocked Russian individuals and organisations, from bank accounts and real estate, to yachts and football clubs. In fact, we are talking about forced seizure. Given Russia’s high involvement in the world economy, such a process could turn into an unprecedented expropriation of the state and private property of Russia and its citizens abroad

Second. Financial sanctions against Russian banks, infrastructure, energy and other companies. Blocking sanctions (that is, a ban on transactions and blocking assets) of a number of banks and companies, bans on making settlements in dollars (restriction on the use of correspondent accounts in US banks), and restrictions on lending stand out here. The financial sanctions include a ban on the transmission of financial messages in the interests of a number of Russian financial institutions.

Third. Blocking sanctions against major Russian businessmen (in Western terminology—“oligarchs”). Similar sanctions against political figures—high-ranking politicians and members of their families.

Fourth. Airspace closure, along with the denial of leasing contracts and maintenance of civil aircraft. Here, a number of countries have closed their seaports to Russian ships.

Fifth. Bans on imports of Russian fossil fuels, iron and steel products, seafood and other goods that have already been introduced or are only planned.

Sixth. Bans on investments in the Russian energy sector and other sectors of the economy.

Seventh. Restrictions on the export to Russia of a wide range of goods, including oil refining equipment, lasers, navigation equipment, certain categories of cars, computers, marine engines, and many other categories of industrial and consumer goods. Separately, it is worth highlighting the export control of dual-use goods, although they existed before.

Eighth. A ban on the import of cash dollars and euros into Russia, as well as restrictions on opening deposits above certain amounts in some initiating countries.

Ninth. The exit from normal trade relations with Russia.

Tenth. Tightening visa restrictions.

These measures differ in detail from country to country. For example, a ban on the supply of Russian fuel has already been introduced in the US, but is still under discussion in the EU. At the same time, they can be considered broad standards of sanctions policy for all key initiating countries.

From an institutional point of view, the lifting of new sanctions still seems to be an achievable task. In the United States, they are enshrined in the form of presidential executive orders and the directives of relevant departments. Despite the abundance of bills on sanctions against Russia in the US Congress, none of them has become law. However, two bills have already passed in the House of Representatives. H.R. 6968 suggests the legislative suspension of Russian fossil fuel supplies to the US, and H.R. 7108 suggests the freezing of normal trade relations. If these norms are enshrined in US law, their repeal will become practically impossible. At best, these norms could later be suspended by presidential decree. As far as the EU is concerned, the lifting or easing of sanctions will require a unanimous decision of the EU Council. Differences may arise here, but it is easier to overcome them than in the US Congress. In the UK, the executive branch has considerable manoeuvre in modifying the sanctions regime. Therefore, technically, their significant reduction is quite possible. Bottom line, the lifting of sanctions is largely feasible without unnecessary delay.

At the same time, even if a compromise is reached between Russia and Ukraine, the sanctions may remain partially or in their entirety for political reasons. There are two key factors which would result in their possible conservation. The first is the political capital of the national leaders of the initiating countries. Imposing sanctions tends to raise political capital, while lifting them often draws criticism from the opposition. In other words, the application of sanctions unites elites, but their lifting does not. Russophobia today is so pervasive that any steps back are fraught with the loss of political points. The second, and more important factor, is a possible attempt to squeeze the maximum concessions out of Russia. For example, a ceasefire may be subject to additional conditions for compensating Ukraine for damages, the failure to comply with which will be a reason for maintaining sanctions. The agreements themselves may imply a certain transitional period in which the parties will be required to fulfil their obligations. The experience of the Minsk agreements showed that such obligations may simply not be fulfilled, freezing sanctions for a long period.

Scepticism regarding the lifting of sanctions is also connected with the existing historical experience. For example, the United States easily violated the Joint Comprehensive Plan of Action (JCPOA) concluded in 2015. It implied the lifting of sanctions against Iran in exchange for the abandonment of the military nuclear programme. The “nuclear deal” was confirmed by a UN Security Council resolution, that is, from the point of view of international law, it received the highest degree of legitimacy. At the same time, in 2018, Donald Trump decided to withdraw from the deal and resumed the sanctions. A new cancellation condition, the so-called “13 points” were put forward, implying significant concessions on many other issues not related to the nuclear programme. Given the risk of secondary sanctions and coercive measures by the US authorities, many other companies were forced to leave Iran. There are no guarantees that after the lifting or easing of sanctions against Moscow, a new “13 points” will not appear. Historical experience has crushed the overall level of trust between Russia and the West, which now can be considered almost zero.

At the same time, the West may well show flexibility in easing sanctions, based on its own economic interests. Some measures have caused significant damage to the initiators themselves. Most likely, the moves towards ousting Russia from raw materials markets, as well as its technological isolation, will not change. However, the mitigation of the economic costs of such transit, especially in the short term, is quite capable of leading to some progress.

In the event of a cessation of hostilities agreement, one can realistically expect changes in the import of Russian steel to the EU, the easing or lifting of restrictions on civil aviation services, the partial or complete opening of airspace, the partial abolition of export controls on “luxury goods”, and the easing of visa restrictions for business to reflect the status quo as of February 24, while maintaining those for civil servants, some relaxations on non-dual-use industrial goods, the lifting of restrictions for banks on financial messages (SWIFT), the lifting of sectoral and blocking sanctions on some (but not all) banks and companies, the removal of blocking sanctions against some businessmen, and a reduction of investment barriers. In the US, such waivers may take the form of general licenses (i.e. exemptions from the sanctions regime) rather than delisting per se. Depending on relations with Iran and Venezuela, whose oil may enter the world market due to relaxations of sanctions against those countries, a partial return to purchases of Russian oil in the US and the UK can be allowed (although this practice is likely to be temporary).

Much more doubtful is the prospect of deblocking Russia’s financial reserves, as well as the numerous assets of Russian citizens arrested, frozen or already confiscated abroad. It is likely that they will be used to finance military and civilian aid to Ukraine from the West. Blocking sanctions against a significant number of government officials will most likely not be lifted. The same is to be expected with respect to export controls on dual-use goods and high-tech products. The partial or even complete abolition of restrictions on the purchase of Russian raw materials will not cancel the long-term course towards their replacement.

The main problem is the stability of the decisions made. The resumption of sanctions regimes is possible at any time. Whereas a military response to such decisions will require much more serious political will and resources. The inclusion of sanctions in the formula for a compromise on Ukraine is quite possible. Total pessimism is hardly desirable here, if only because the initiators themselves incur serious costs and may be ready to reduce them. However, the complete lifting of the new sanctions and a return to the status quo on February 21, 2022 also appears to be an unlikely, if not unfeasible alternative.

From our partner RIAC

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


While GOP Wants Change, the Democratic Donkey in Power Dig in Their Heels

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“All the world’s a stage,” proclaimed the hero of a Shakespearean comedy. If we follow this metaphor, presidential elections in America are always a multi-act drama, often turning into a melodrama with elements of tragicomedy and even farce. Major and minor characters perform on the political stage, sudden plot twists are punctuated by various special effects, and culminate in a colorful extravaganza in November of each leap year.

The audience watching the play from inside the theater can only follow the actors’ performances, trying to keep up with the rapid unfolding of the plot’s intricacies, and wonder how the show will end. But unlike the conclusion of a Shakespearean comedy, much depends on the outcome of the US election. So, even if the opening of the show doesn’t herald a stunning display of stagecraft, the world’s attention will be focused on the American political scene in one way or another.

Two categories clearly stand out among audiences of this theater. The first can be conventionally described as political romantics. This group does not demand a reading from the actor, but a complete death in earnest. The romantics always talk about the “historic choice,” about the critical “bifurcation point” in the development of the US, and about the “fateful” significance of this electoral cycle both for America and for the rest of humanity.

Another category are the conventional skeptics. They assume that, for all its splendor and even pomp, the process will make little difference to the lives of Americans, let alone to all the other inhabitants of our planet. Mark Twain, who clearly belonged to the skeptical camp, is credited with perhaps the most emphatic credo of the latter: “If voting made any difference they wouldn’t let us do it.”

These two categories are certainly present in Russia. Our romantics always hope that a change of team in the White House will open up new opportunities in relations between our two countries. Today, they assume that there can be no one worse for Russia than the incumbent US president. They remind us that, since Richard Nixon, it has always been easier for Moscow to deal with pragmatic Republicans than with ideological Democrats. They also pay tribute to Donald Trump, generously quoting his recent reassuring statements about Russia.

Skeptics, for their part, stress that American foreign policy has always been bipartisan and that there is a strong negative consensus against Russia in the American political establishment. They also often bring up Trump, but only as a clear illustration of the fact that even a US president who is generally favorable to Moscow is inevitably powerless in the face of the all-powerful ‘deep state’.

Probably both romantics and skeptics have their own truth. But if the skeptics are right in general, the romantics may be sometimes correct. Indeed, there is now a broad and enduring anti-Russian consensus in the US – broader and more enduring than even a similar anti-China consensus. The White House and Congress, the Pentagon and the State Department, the leading media and influential think tanks generally have, if not unified, then very close positions on Moscow, and these positions are unlikely to change even in the medium term.

Nevertheless, any new team in Washington has to distinguish itself from the old one and prove its undeniable superiority over its predecessors. This means new nuances in foreign policy. For example, the Republicans will not abandon military support for Kiev, but they will have to take into account that foreign aid programs have never been popular with voters, especially conservative ones.

It is therefore reasonable to expect that the Republicans will seek to tighten control over how US military and other aid to Ukraine is spent. We can also expect them to push for a “fairer” distribution of the burden of military support for Ukraine between Washington and its European allies. 

Moreover, US approaches to Russia should be seen in the broader context of US foreign policy. For example, Democrats have traditionally been much more concerned than their Republican opponents about promoting liberal values around the world. This fixation wins Joe Biden points in predominantly liberal Europe, but creates problems with such important “illiberal” or “not quite liberal” US partners like Turkey, Saudi Arabia, Vietnam, or even India.

A Republican victory would be enthusiastically welcomed in these countries, but would pose a serious challenge to fragile transatlantic unity. These differences, though not radical, need to be taken into account by all international actors, including Russia.

As always, the Republican elephant in opposition today demands change, while the Democratic donkey in power wants things to hold firm. A victory for Biden in next November’s election would mean another four years of the status quo, unless the aging president is forced to leave office before January 2029. A victory for any Republican candidate would trigger a process of revision of policy, creating both new opportunities and new challenges for America and the rest of the world.

From our partner RIAC

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US-China: Creeping Escalation

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Chinese President Xi Jinping meets with U.S. President Joe Biden in Bali, Indonesia, Nov. 14, 2022. (Xinhua/Li Xueren)

The deterioration of US-China relations has long been a generally recognised trend. Contradictions on specific issues, such as human rights, have been accumulating since the boom in trade between the two countries in the 1990s and 2000s. During the presidency of Barack Obama, the outlook for bilateral ties gradually began to darken against the backdrop of the US pivot to Asia, the situation in the South China Sea, and several incidents in the digital environment. Donald Trump took an even tougher line toward Beijing, directly voicing Washington’s entire list of claims against China.

The high-tech sector has become a key front for containing China. The general line of Washington is to limit the access of Chinese companies to the technologies of the United States and its allies. Such technologies can solve dual-use problems and lead to the subsequent modernisation of the PRC in both the military and civilian sectors. President Joe Biden has continued the prior administration’s protectionist course, which confirms the absence of critical inter-party differences on the issue of relations with China. Another indicator of China’s containment in the field of high technologies is President Biden’s new Executive Order “On Addressing United States Investments in Certain National Security Technologies and Products in Countries of Concern.”

The new Executive Order introduces a National Emergency due to the fact that individual countries use access to US civilian technology to develop their military-industrial complex. In the annex to the Order, China is named as such a country, as well as the special administrative regions of Hong Kong and Macau. The very concept of the National Emergency concept has its own specifics. More than four dozen states of emergency are simultaneously in effect in the United States with regards to various foreign policy issues. The president imposes them on the basis of the International Emergency Economic Powers Act of 1977 (IEEPA), which gives the US Commander-in-Chief the ability to use economic sanctions to counter existing threats. That is, a state of emergency is introduced on a selective issue, and serves as the basis to exercise individual powers.

The Executive Order implies at least two innovations. First, the Administration, represented by the State and Commerce Departments, must create a list of foreign persons who are individuals or legal entities from a particular Country of Concern. In this case, from China. Such persons must be connected in one way or another with high-tech transactions mentioned in the Order. In other words, we are talking about creating another list, which, most likely, will name large Chinese technology and industrial companies and, possibly, their leaders or individual employees. Second, US citizens will be required to notify the authorities of certain transactions with these individuals. In addition, a number of other transactions will be prohibited. The list of such transactions must also be determined by the Administration and periodically subject to revision.

The new legal mechanism gives the Administration wide room to limit Chinese companies’ access to US high-tech firms. The flexibility of the mechanism will be determined by the ability to revise the categories of transactions, technologies and foreign entities that are subject to restrictions. At the same time, the mechanism is likely to provide more opportunities, in comparison with the norms that already exist.

Among the previously-imposed restrictions, one can note the prohibition of Americans from buying or selling securities of “Chinese military companies”. The ban was introduced by Donald Trump in November 2020. Biden modified it somewhat, but without major changes. The appendix named the largest Chinese companies in the field of telecommunications, aircraft manufacturing, electronics, etc. Even earlier, in May 2019, Donald Trump declared a National Emergency due to threats to the US telecommunications sector (Executive Order 13873).

The Chinese telecommunications company Huawei and a number of its subsidiaries were included in the Entity List of the US Department of Commerce — it was forbidden to supply certain goods in the field of electronics, including manufactured outside the USA using American technology. In addition, a number of Chinese companies have been placed on the Military End User List (MEU-List). These companies are prohibited from supplying certain items on the US Department of Commerce’s Commerce Control List.

Such restrictions have a negative background: separate legal mechanisms for sanctions against Chinese persons in connection with the situation in Hong Kong, the Xinjiang Uygur Autonomous Region (XUAR), etc. In addition, members of Congress periodically propose sanctions bills against China in connection with a variety of reasons, starting from the already familiar topics of human rights and ending with sanctions for possible cooperation with Russia. During the presidency of Joe Biden, none of these projects became law, which does not exclude the adoption of those and other bills in the future.

However, the intensity of US sanctions against China is incomparable to the volume of US restrictions on Russia. So, for example, the number of Chinese persons under blocking US financial sanctions can be measured in the dozens, while the number of Russians already exceeds 1,700. This does not include those persons in respect of whom the so-called “Rule of 50%” is in force, extending blocking sanctions to subsidiaries and controlled enterprises. The same can be said about export controls.

Restrictions against Huawei, the creation of a list of Chinese military companies, and the replenishment of the list of military end users by Chinese enterprises create a media response. But compared to the restrictions against Russia, the sanctions against China are still negligible. It is forbidden to supply almost all dual-use goods, hundreds of industrial goods and “luxury goods” to Russia, including consumer electronics and appliances. Large-scale restrictions on Russian imports and transport sanctions complete the picture. In addition, the United States has managed to build an impressive coalition of sanctions allies against Russia, while it is much more difficult to create such a coalition against China.

However, there is no guarantee that Beijing will not face a similar scenario in the future. Back in 2016, publications cautioning about possible US sanctions against China presented an unlikely scenario. However, the situation in the early 2020s is already significantly different from that reality. The United States and China assume the irreversibility of confrontation, but for their own reasons, they delay its escalation. This does not mean that sooner or later there will not be a landslide fall in relations. Predicting exactly the timing and scale of such a fall is as difficult as was predicting a crisis in relations between Russia and the West. In the meantime, there is a gradual accumulation of restrictive measures, one of which was Biden’s new Executive Order. The creeping nature of the escalation gives Beijing time to prepare for the worst-case scenario.

From our partner RIAC

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Quad foreign ministers meet in New York for the third time

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Image source: X @SecBlinken

Quad foreign ministers met in New York for the second time this year and the seventh time since 2019. The four-nation grouping’s ambit of cooperation has clearly expanded and diversified over the years. What were the key talking points this time? I analyse.

The foreign ministers of India, Japan, Australia and the United States – four key maritime democracies in the Indo-Pacific – met on the sidelines of the 78th annual session of the United Nations General Assembly (UNGA) in New York on September 22. This was their seventh meeting since 2019 and the second of 2023. Notably, exactly four years ago, this four-nation Quad was raised to the foreign ministers’ level amid a UNGA session. Earlier in 2023, the ministers met in March on the sidelines of the G20 ministerial in New Delhi and in May, this year, the Quad leaders’ summit was hosted by Japan on the sidelines of the G7 summit. Having met twice in 2022 as well, the ministers congregated six times in person and virtually once so far.

The previous ministerial in New Delhi saw the four-nation grouping making a reference to an extra-regional geopolitical issue for the first time – Ukraine – and also the initiation of a new Working Group mechanism on counter-terrorism, a key agenda item for India and the United States, among other themes of discussion. Following the seventh meeting, India’s foreign minister Dr S. Jaishankar tweeted, “Always value our collective contribution to doing global good”, while U.S. Secretary of State Antony Blinken remarked that the grouping is “vital to our shared vision for a free and open Indo-Pacific, and together we reaffirmed our commitment to uphold the purposes and principles of the UN Charter”.

Diversifying ambit of cooperation

The ministers have clearly doubled down on the commitments taken during their previous deliberations, particularly to improve capacity-building for regional players. The joint statement that followed the meeting read, “The Indo-Pacific Partnership for Maritime Domain Awareness is supporting regional partners combat illicit maritime activities and respond to climate-related and humanitarian events.” Similarly, the Working Group on maritime security promised “practical and positive outcomes” for the region. Prior to the recent ministerial, the Working Group on counter-terrorism conducted a Consequence Management Exercise that “explored the capabilities and support Quad countries could offer regional partners in response to a terrorist attack”, the joint readout mentions.

Later this year, the U.S. island state of Hawaii will host the Counter-terrorism Working Group’s meeting and tabletop exercise, which will focus on countering the use of emerging technologies for terrorist activities, while the Working Group on humanitarian assistance and disaster relief (HADR) will be convened in Australia’s Brisbane for its second tabletop exercise. Earlier in August, this year, all four Quad navies participated in Exercise Malabar for the fourth consecutive year, off Sydney, the first hosted by Australia. However, as in previous meetings, the ministers didn’t specifically mention Russia or China with regard to the situations in Ukraine and maritime east Asia respectively.

On the Ukraine question, the ministers expressed their “deep concern”, taking note of its “terrible and tragic humanitarian consequences” and called for “comprehensive, just, and lasting peace”. In a veiled reference to Russia, the ministers rebuffed the “use, or threat of use, of nuclear weapons”, underscoring the respect for sovereignty and territorial integrity of all states, and called for the resumption of the UN-brokered Black Sea Grain Initiative, which allows for the export of food grains and fertilizers from Ukraine to world markets via a maritime humanitarian corridor, amid the ongoing conflict with Russia.

Similarly, in another veiled reference to continuing Chinese belligerence and lawfare in maritime east Asia, the ministers stressed upon the need to adhere to the United Nations Convention on the Law of the Sea (UNCLOS) and to maintain “freedom of navigation and overflight consistent with UNCLOS”, reiterating their “strong opposition to any unilateral actions that seek to change the status quo by force or coercion”, including with respect to maritime claims in the South and East China Seas. Going further ahead, the ministers expressed their concern on “the militarisation of disputed features, the dangerous use of coast guard and maritime militia vessels, and efforts to disrupt other countries’ offshore exploitation activities”. The joint readout also had mentions of North Korea and Myanmar.

The evident and the inferred

Today, almost all the areas of cooperation of Quad countries happen to be the areas of strategic competition with China, the rapid rise of which necessitated the coming together of the four nations, even though this is not openly acknowledged. In this new great game unfolding in the Indo-Pacific, the U.S.-led Quad is trying to balance China’s overwhelming initiatives to capture the support of smaller and middle powers in the region and around the world. Placid initiatives such as the Open Radio Access Network, the private sector-led Investors Network, Cybersecurity Partnership, Cable Connectivity Partnership and the Pandemic Preparedness Exercises should be read in this context.

With the rise of Quad in parallel with the rise of China and other minilateral groupings in the Indo-Pacific such as the AUKUS (a grouping of Australia, the United Kingdom and the United States), the existing regional framework based on the slow-moving, consensus-based Association of Southeast Asian Nations (ASEAN) was put to test. However, allaying all doubts, Quad deliberations at both the ministerial and summit levels continued to extend their support to ASEAN’s centrality in the region and also for the ASEAN-led regional architecture that also includes the East Asia Summit and the ASEAN Regional Forum. Despite somewhat differing regional outlooks, the Quad likes to see itself as “complementary” to the ASEAN, rather than an “alternative” to its pan-regional influence.

India, the only non-ally of the U.S. in the Quad, will host the fourth in-person Quad leaders’ summit in 2024. The Asian giant is often dubbed as the weakest link in the grouping, owing to its friendly ties with Russia, but other members intent to keep India’s bilateral equations with other countries away from the interior dynamics of the grouping, signalling an acknowledgement of India’s growing geopolitical heft in the region and beyond. This seems to be subtly reflected in the stance taken by individual Quad members in the recent India-Canada diplomatic row, in which they made sure not to provoke New Delhi or to touch upon sensitive areas, even though a fellow Western partner is involved on the other side.

  Quad Foreign Ministers Meeting  Month & Year  Venue
FirstSeptember 2019New York
SecondOctober 2020Tokyo
ThirdFebruary 2021Virtual
FourthFebruary 2022Melbourne
FifthSeptember 2022New York
SixthMarch 2023New Delhi
SeventhSeptember 2023New York

NB:- All three Quad ministerials in New York were held on the sidelines of the respective annual sessions of the UN General Assembly i.e., the first, the fifth, and the seventh meetings.

On the multilateral front, the four ministers reaffirmed their support for the UN, the need to uphold “mutually determined rules, norms, and standards, and to deepen Quad’s cooperation in the international system, and also batted for a comprehensive reform of the UN, including the expansion of permanent and non-permanent seats in the Security Council. While China and Russia, two powerful permanent members of the Security Council, continue to denounce the Quad as an “exclusionary bloc”, the Quad ministers and leaders tend to tone down any security role for the grouping.

However, a recent comment made by Vice Admiral Karl Thomas of the U.S. Navy’s Seventh Fleet during this year’s Exercise Malabar is noteworthy. He said the war games were “not pointed toward any one country”, rather it would improve the ability of the four forces to work with each other and “the deterrence that our four nations provide as we operate together as a Quad is a foundation for all the other nations operating in this region”. Even in the absence of a security treaty, in a way he hinted at the grouping’s desire to cherish its collective strength across all fronts and to check on hegemonic tendencies that may manifest in the region from time to time.

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