Here is a summary of the most important events that unfolded over the last month, and which may affect economic, financial and geopolitical issues in the months ahead:

North America

• At the United Nations Security Council meeting this morning, US Secretary of State Antony Blinken warned that Moscow was planning to take military action to invade Ukraine in the “coming days”. During his speech, Blinken accused Russia of planning to manufacture a pretext for an attack on Ukraine that could include a real or a fake attack using chemical weapons. The US has called on Russia to clearly state they will not invade Ukraine. Also today, according to the US State Department, Russia expelled the deputy US ambassador. The White House argues this was an unprovoked and escalatory move made by Moscow.
• Three border crossings between the US and Canada were blocked by truckers last week as they built a “Freedom Convoy” to protest vaccine mandates and other Covid-19 restrictions in both Canada and the US. To quell protests in and around Ottawa, Canada, the country’s capital, Prime Minister Justin Trudeau has invoked federal emergency powers which orders banks to stop the flow of funds to protesters and gives police the authority to levy fines and jail people. There are concerns that the convoy could reach Washington, DC by March in time for the State of the Union address. Demonstrations have already had a significant impact on North American trade as automakers like Ford, GM, Stellantis, Toyota, and Honda have all had to shut down production at plants near the convoy.
• China has fallen short on its commitments under phase one of a trade deal struck with the US during the Trump administration. China had pledged to increase imports of certain US goods and services by $200 billion in 2020 and 2021 but it did not increase imports from the US at all, according to a report by the Peterson Institute for International Economics. Data reveals that China only purchased 62.9% of the US exports it had committed to which is less than the country purchased from the US before the trade war. The Biden administration believes the Trump- era trade deal is flawed given that it does not include any measures to keep China accountable. In addition to pushing China on its pledges where feasible, the Biden administration has re-oriented its trade strategy on areas where Chinese actions pose a strategic threat, such as overcapacity in steel and intellectual-property theft.
• Secretary of State Antony Blinken traveled to Australia this month to meet with the ministers of the so-called “Quad” alliance – the US, Australia, India, and Japan. At the summit, the Quad leaders weighed responses to the latest rapprochement of Russia and China and their strengthening relationship. In addition, the ministers discussed cooperation on Covid-19 vaccine production and reiterated its pledged to donate 1.3 billion vaccines globally. While the Quad is not a military alliance, its members have a strong maritime presence and stand against Chinese aggression in the Indo-Pacific region.
• In the largest counterterrorism raid conducted by US troops since 2019, Islamic State leader Abu Ibrahim al-Hashimi al-Qurashi was killed in Syria’s Idlib governorate. According to the Biden administration, Qurashi blew himself up as US forces approached the compound where he was located. Based on information from aid workers, at least 13 others were also killed in the explosion. The involvement of American troops in counterterrorism efforts in the Middle East has waned over the last few years as troops have been withdrawn and as other foreign policy issues have taken center stage. However, parts of Syria and Iraq have seen a resurgence of terrorist groups over the last several months.

Europe

• Despite Russian President Vladimir Putin announcement of a partial withdrawal of troops from Ukraine, the US and NATO insist that Russia is continuing to build up its troops in the region. US and NATO officials are maintaining their warning that a Russian invasion of Ukraine could happen at any moment. On Wednesday, President Biden claimed Moscow is engaged in “a false flag operation to have an excuse to go in.” Biden’s claims come as Ukraine and Russia blame each other for clashes in Ukraine’s eastern Donbas region. While Biden has made it clear that the US has no interest in sending US troops to fight in Ukraine, he has threatened Russia with major economic sanctions and has vowed to stand by NATO countries in the event that Russia attacks the alliance.
• France is planning to build up to 40 nuclear reactors by 2050 as part of its strategy to end its reliance on fossil fuels. French President Emmanuel Macron has called the plan a “renaissance” for the French nuclear industry. The country’s strategy is starkly contrasted with Germany’s plan to shut down all of its nuclear reactors in the coming years. The French lobbied successfully to get the European Commission to label nuclear power as “green” which means it can attract additional funding for its nuclear projects as a climate-friendly power source.
• The European Union (EU) has launched an official complaint with the World Trade Organization (WTO) against China over its Lithuania embargo. Brussels says it has clear evidence that China has performed “discriminatory trade practices” against Lithuania. The move comes after Beijing blocked most trade with Lithuania after the Baltic state strengthened its diplomatic ties with Taiwan. In response to the WTO complaint, Beijing warned the EU to be “wary of Lithuania’s attempt to kidnap China-EU relations”.
• In a surprising victory, Portugal’s ruling socialist party won an outright parliamentary majority in the country’s snap elections last month. After losing much of their lead in recent opinion polls, the party was boosted by higher-than-expected voter turnout. Prime Minister Antonio Costa, who came to power in 2015, has presided over a time of stable economic growth that helped shrink the country’s budget deficit. The country is set to deploy more than $18 billion in EU recovery funds it is due to receive by 2026.

Asia, Eurasia & the Pacific

• President Vladimir Putin and Chinese President Xi Jinping reaffirmed their countries’ ties, pledging “no limits” to their partnership in a face-to- face meeting this month. The event came just before the opening ceremonies of the Beijing Winter Olympics and right at a time when tensions between Russia and the West are at a peak. In a joint statement, China joined Russia in opposing NATO expansion and accused the West of fueling instability. Putin also announced a new deal to supply natural gas to China which is significant given the West’s threat to impose crippling sanctions should Russia invade Ukraine.
• While the world has been closely watching the Russia-Ukraine crisis, North Korea has launched a series of ballistic missile tests over the last few weeks. In response to this, the US has imposed unilateral sanctions and is urging the United Nations Security Council to impose its own sanctions. The foreign ministers of the US, Japan, and South Korea jointly expressed the commitment of their governments to achieving the complete denuclearization of North Korea and have called North Korea to the negotiating table.
• Indian Prime Minister Narendra Modi hosted the first India-Central Asia summit. In a virtual conference with the leaders from Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan, Modi emphasized the need for an ambitious vision between India and Central Asian countries and acknowledged the many successes of their cooperation over the last three decades. Just days before, China virtually hosted its own summit with the same five Central Asian countries.
• To mark the one-year anniversary of the military takeover of Myanmar, protest leaders called for a silent strike. On February 1st last year, millions of protesters took to the streets to oppose the military coup which ousted the government of Aung San Suu Kyi. Today, conflict remains. More than 1,500 civilians who were targeted at peaceful protests have been killed by junta forces while thousands of others have died during the military’s attacks on rural towns and villages. On the anniversary, the US, Britain, and Canada imposed a new wave of sanctions on top judicial officials and other individuals helping the junta.

Middle East

• Negotiations on a renewed nuclear agreement with Iran resumed this month. Reports out of the US and Iran say there has been significant progress and that a deal is “closer than ever”. In an act of good will, the US restored some sanctions waivers for Iran’s civilian nuclear activities, and while Iran expressed gratitude for the waivers, Iran’s foreign minister said it was “not enough.” US and European officials say the next few days will be decisive. There is still much uncertainty about what a restored agreement would look like or if it would be approved by US lawmakers. Opposition has recently grown on both sides of the aisle as some legislators argue that any agreement with Tehran should address Iran’s ballistic missile program and regional activities, two issues that Iranian officials have refused to discuss.
• Yemen’s war has dangerously escalated after multiple air strikes. Yemen’s Houthi rebels and the Saudi-backed coalition have exchanged blows over the last few weeks, resulting in the deaths of an estimated 650 civilians in January. The Saudi-led military coalition, which backs Yemen’s government, has intensified air raids on what it claims to be military targets connected to the Houthi rebel movement. Tensions reached new highs in January when militias backed by the UAE launched an offensive against the Houthis in Marib Governorate and when Houthis seized a UAE- flagged ship carrying weapons. An estimated 100,000 people have been killed in the war since in broke out in 2014 and estimated 4 million people have been displaced by the conflict.
• Taliban leaders met with Western diplomats in Norway last month to discuss human rights and the deteriorating humanitarian crisis in Afghanistan. The Taliban seek international recognition and demand the release of billions of dollars in Afghan central bank assets frozen by the US and other Western countries in August when the group returned to power. Western diplomats told the Taliban that humanitarian aid to Afghanistan will be tied to an improvement in human rights. During the talks, the American and European delegates laid out what they expected from the Taliban, but no official agreement has been reached.

Latin America and the Caribbean 

• Honduras swore in its first female president last month, Xiomara Castro. Many have high hopes that Castro will usher in a renewed period of democracy in the Central American nation following the autocratic rule of Juan Orlando Hernández. US Vice President Kamala Harris attended Castro’s inauguration and held a bilateral meeting with the new leader immediately following the ceremony. The US is seeking an ally in Castro and has pledged more than a million dollars in aid and hundreds of thousands of Covid-19 vaccines to Honduras.
• Brazilian President Jair Bolsonaro met with Russian President Vladimir Putin this week. The primary objective for the meeting was to discuss commercial ties between Brazil and Russia, but it also included discussions on cooperation in defense and nuclear technology. Bolsonaro flew to Moscow despite pressure from the US to cancel the meeting which coincided with Western diplomatic efforts over the Ukraine crisis. Bolsonaro said he told Putin that “Brazil supports any country that seeks peace. And that’s his intention.”
• The Organization for Economic Co-operation and Development (OECD) is weighing the admission of Argentina, Brazil, and Peru to the group. The three Latin American countries received a formal invitation from the OECD on January 25th to begin accession discussions. However, it is still a long road ahead as accession in a years-long process. Admission to the group indicates openness to trade and economic competitiveness and raises hopes of market-friendly policies and a level playing field for businesses.
• Argentina and the International Monetary Fund (IMF) have reportedly agreed on a fiscal path for a deal. After a week of re-negotiating the country’s more than $40 billion of debt, Argentina agreed to make a payment of $700 million. The two parties also agreed to balance the country’s primary budget by 2025 as part of the path to a larger deal. Argentina is aiming to negotiate a 10-year deal with the IMF which would be its 22nd deal with the organization to date.

Sub-Saharan Africa

• Researchers at South Africa’s Afrigen Biologics and Vaccines lab say they have nearly reproduced Moderna’s mRNA Covid-19 vaccine. Moderna has controversially patented its vaccine technology, but this hasn’t stopped the World Health Organization-backed scientists from duplicating its jab. This is a major achievement for the technology transfer hub, a WHO initiative created for the purpose of building capacity for vaccine manufacturing in low- and middle-income countries. Afrigen’s version of the vaccine could be used in human trials by the end of this year. However, threatening the achievement is Moderna’s recent application for a patent in South Africa. While the company pledged not to enforce its patents during the pandemic, it could change its position as soon as Covid-19 is declared endemic.
• After yet another wave of coups in Western Africa, Economic Community of West African States (ECOWAS) held an emergency summit in Ghana to address the “dangerous trend”. A military coup ousted President Roch Marc Christian Kabore in Burkina Faso last month while Guinea-Bissau’s president survived an attempted coup a couple of weeks ago. These two events follow coups in Mali and Guinea which occurred last year. ECOWAS has suspended Mali, Guinea and Burkina Faso from the 15-nation bloc and imposed sanctions on Mali and Guinea as political turmoil continues.
• The EU planned to host a summit with the Group of 5 Sahel (G5) countries in Brussels, but joint talks were cancelled last minute in favor of bilateral meetings with the bloc’s chief diplomat Josep Borrell amid growing chaos in the Sahel region. The EU’s relationship with the group, which consists of the countries Chad, Mali, Mauritania, Niger, and Burkina Faso, has become increasingly uncertain as military coups have ousted leaders in Mali and Burkina Faso. Yesterday, French President Emmanuel Macron pitched changes in France’s antiterrorism strategy to the leaders of Chad, Mauritania, and Niger. France will be moving its forces from Mali to Niger, ending a nearly decade- long antiterrorism mission in Mali due to the breakdown of relations with the military junta in power.

Suggested Reading

What’s Happening to Democracy in Africa?

John Campbell and Nolan Quinn, Council on Foreign Relations

Russia offers an olive branch, but still wields the sword

The Economist

Argentina and the IMF: A Never Ending Story

Alejandro M. Werner, Americas Quarterly

The Bully in the Bubble

Adam E. Casey and Seva Gunitsky, Foreign Affairs