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

North America

• Three major US companies were the victims of cyberattacks in May. The first event was a ransomware attack against the Colonial Pipeline, America’s largest pipeline. The attack brought down the service of the pipeline for multiple days, causing gasoline shortages across the southeastern region of the US. The second event was another ransomware attack on JBS, the world’s largest meat processing company. This attack forced JBS to shut down all of its beef facilities in the US, causing a meat supply scare. Thirdly, Microsoft reported a cyberattack they believe is linked to the SolarWinds attack late last year. This attack reportedly targeted the US Agency for International Development (USAID) among other US agencies. Each of the three cyberattacks are linked to various Russian cyber-criminal groups. In wake of the increased threat of cyberattacks, President Joe Biden has issued an executive order aimed at improving the country’s cyber defense mechanisms.
• A month before the countries prepare for a summit, the US told Russia that it will not rejoin the Open Skies Treaty. Previous to President Donald Trump’s withdrawal from the agreement, the deal allowed signatories to fly unarmed surveillance aircraft over each other’s’ territory. Though initially skeptical of Trump’s withdrawal, the Biden administration’s review of the treaty concluded that Russia had broken the agreement and failed to take action to return to compliance. The decision to not rejoin the agreement means the New START treaty is the only remaining arms control agreement between the US and Russia.
• US Secretary of State Antony Blinken toured the Mid-East to bolster the Egypt-brokered ceasefire between Israel and the Palestinian group Hamas. While on his trip, Blinken said the US would seek to reopen a consulate for Palestinian affairs in Jerusalem as well as offer $360 million in aid to Palestinians. He also met with Egyptian President Abdel Fatah al-Sisi to affirm the US’s support in coordinating an end to the conflict.
• The Centers for Disease Control and Prevention (CDC) now says Americans who are fully vaccinated against Covid-19 no longer need to wear masks or socially distance in most settings. The updated guidance has led many states and companies to lift social distancing measures and mask mandates, essentially trusting those who aren’t vaccinated to wear masks and social distance. While the number of Covid-19 cases and deaths has fallen substantially over the last several months, vaccination rates are beginning to slow in the US and the pandemic continues to rage in other parts of the world including Brazil and India where new variants have emerged. 

Europe

• Belarusian President Alexander Lukashenko ordered a commercial plane to land in Minsk so that dissident journalist, Roman Protasevich, who was a passenger on the plane could be arrested. President Ursula von der Leyen called the incident a “hijacking” and announced immediate action from the European Union. In response to the incident, the EU has banned Belarus’s state airline from using the bloc’s airspace and airports, and has imposed economic sanctions. Raising additional concerns, President Lukashenko signed a series of laws to give authorities power to suspend telecom networks and block media outlets, among other efforts to crack down on dissent.
• The European Parliament halted the ratification process of a “landmark” investment deal with Beijing after China imposed penalties on several members of the European Parliament. The penalties were placed in retaliation for the sanctions the EU imposed on four Chinese officials for the repression of Uyghurs in China’s Xinjiang region. While the vote does not mark the end of the deal, China must lift the sanctions before the EU will consider moving it towards ratification.
• The European Union (EU) has launched a digital Covid-19 passport which will allow the free movement of travelers within the bloc who have been fully vaccinated, recovered from the virus, or tested negative in the last 72 hours. According to the European Commission, seven EU countries have already begun accepting the digital certificates and the rest of the bloc will use the system by July 1^st. A few weeks ago, the EU also announced it is reopening its borders to vaccinated travelers.
• At a summit in Paris, African and European leaders came together to take the first step in what is being called a “New Deal” with Africa. While the International Monetary Fund (IMF) already has plans to issue $33 billion in special drawing rights to the continent, leaders at the Paris summit have agreed to work towards getting rich nations to reallocate $100 billion in IMF special drawing rights reserves to African countries by October. In addition, French President Emmanual Macron, the host of the summit, vowed to support vaccination efforts on the continent with the hopes that 40% of Africa’s population can be vaccinated by the end of 2021.
• Members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) have agreed to start talks on admitting the United Kingdom (UK) to the trade agreement. If approved, the UK would be the first new member to join the 11 founders of the agreement, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.

Asia, Eurasia & the Pacific

• Outraged at US naval activities in the South China Sea, China issued two formal protests in two days claiming the US was acting illegally. China claims the USS Curtis Wilbur illegally entered its waters around the disputed Paracel islands and also complained when it passed through the Taiwan Strait. The protests drew a sharp response from the U.S. Navy’s 7th Fleet, which has accused China of advancing “excessive and illegitimate maritime claims” in the region. The movements of the USS Curtis Wilbur are part of what the US calls freedom of navigation operations which assert the right to sail in international waters.
• Solidifying Beijing’s hold on Hong Kong, Hong Kong’s lawmakers approved mainland-ordered changes that will allow a pro-Beijing committee to select most of Hong Kong’s legislators, reduce the number of directly elected seats from 35 to 20, and require all candidates to be vetted by national security officers. Sadly, Beijing has also banned the annual vigil held to commemorate the massacre at Tiananmen Square in 1989. Since 1989, Hong Kong has been the only place on Chinese soil to allow a public commemoration of the tragedy. Many believe it is yet another excuse for Beijing to crack down further on Hong Kong’s civil liberties. 
• China and Russia held security talks last month, strengthening their strategic partnership. Russian President Vladimir Putin said relations between the two countries are “the best in history”, reaffirming his commitment to a strong relationship with China. Just days before the security meeting, both President Putin and Chinese leader Xi Jinping attended the video-link launch of a nuclear energy project in which Russia will help China build four nuclear reactors.  
• Over the month of May, India set new records for single-day Covid-19 cases and deaths as the country became the epicenter of the pandemic. In efforts to contain the virus domestically, India halted vaccine exports and is unlikely to resume the exports until October. The country has also fast-tracked the use of several foreign Covid-19 vaccines, scrapping a requirement that “well-established” vaccines must undergo trials in the country before being introduced to the population. Fortunately, the pandemic’s surge in India is showing signs of slowing as daily case counts have begun to fall.

Middle East

• Following 11 bloody days of violence in mid-May, Israel and Hamas, the Palestinian militant group, agreed to a cease-fire. More than 200 people were killed and thousands displaced by the conflict. Hamas and Israel have been engaged in some form of conflict since the Palestinian group was founded in the 1980s and Israelis and Palestinians have fought over land rights in Jerusalem, arguably, for centuries. So far, the ceasefire brokered by Egypt, remains intact. Many world leaders and institutions, such as the United Nations, have welcomed the cease-fire and are urging the two sides to begin peace talks.
• Israeli Prime Minister Benjamin Netanyahu’s 12-year reign may be coming to an end as a new coalition threatens to unseat him. The new coalition, which includes a diverse set of leaders, would have far-right nationalist Naftali Bennett serve as prime minister for two years followed by secular centrist Yair Lapid. For the first time in Israel’s history, the government would include an independent party of Palestinian citizens of Israel and the United Arab List. Parliament will vote on the coalition in the coming days.
• The Taliban have ramped up violence in Afghanistan yet again, negotiating more than 26 takeovers of the Afghan government forces’ bases and outposts since May 1. Due to heavy fighting between the Taliban and government forces, more than 6,000 families have been forced to leave their homes. Despite the ongoing withdrawal of US troops from the region, the Taliban has threatened consequences if the US military maintains a military presence in the region.
• According to a new report released by the World Bank, Lebanon’s financial crisis could rank among the world’s top three worst crises since the mid-nineteenth century. In 2020, it is estimated that the country’s real GDP contracted by 20.3%, following 2019’s contraction of 6.7%. The severe economic depression has been prolonged by continuous policy inaction and the lack of a fully functioning executive authority and has been compounded by challenges like Covid-19 and the Port of Beirut explosion. The crisis will likely push more than half of Lebanon’s population below the poverty line.

Latin America and the Caribbean 

• Supporting the US government’s efforts to improve socioeconomic conditions in Central American countries to prevent migration to the US, 12 companies and organizations, including Mastercard and Microsoft, will launch investment projects in El Salvador, Guatemala, and Honduras. It is the hope that private sector initiatives will lead to more progress than previous attempts to engage with the region’s corrupt political officials.
• Giving protesters another victory, Colombian lawmakers voted against a health system reform bill. The vote is the latest development relating to the months-long protests in Colombia. Thousands of demonstrators took to the streets at the beginning of May in what started as the protest of a tax reform bill that critics said would disproportionally impact the middle and working classes. Over the last few weeks, demonstrations have spiraled into anti-government protests, and clashes between protesters and law enforcement have become deadly.
• Costa Rica is the latest country to join the Organization for Economic Cooperation and Development (OECD). It is the 38^th member of the group and only the 4^th Latin American nation to join after Chile, Colombia, and Mexico.

Sub-Saharan Africa

• Malian security forces have detained Mali’s president, prime minister, and defense minister in an apparent military coup. The three leaders were overseeing an 18-month transition back to a civilian-led government after a coup last August. In response to the event, the African Union (AU) and ECOWAS have suspended the country and the AU has threatened sanctions on Mali if the country does not return to a civilian led government quickly and transparently. France has also condemned the coup and has halted joint military operations with Mali until it received guarantees about a return to civilian rule. 
• Ethiopia has awarded an $850 million contract for its 5G-capable telecommunications network to a US-government backed consortium led by Vodafone. The consortium defeated a bid from a group backed by a Chinese investor, bringing a victory to the US in the global US-China tech fight and challenging China’s growing economic influence in Sub-Saharan Africa.
• Germany has officially recognized that its actions between 1904 and 1908 as a colonial power in Namibia constituted as genocide. During that time, German forces killed as many as 80,000 Namibians in response to anti-colonial uprising. Germany has agreed to pay Namibia $1.3 billion for reconstruction, development, and reconciliation efforts.

World

• At the World Health Organization’s (WHO) recent annual meeting, US representatives called for a new expert-led investigation into the origins of Covid-19. Australia, Portugal, and Japan were among others who echoed the desire for additional research. A report released by the WHO in March said it was “extremely unlikely” the virus originated in a lab, but with limited access to data in China, further investigation is needed. A US intelligence report recently found that three staff members at a lab in Wuhan, the Chinese city where the virus was first reported, were hospitalized with COVID-19-like symptoms in November 2019. Unsurprisingly, China considers the WHO-led probe complete and says that any further investigation should be focused elsewhere. 

Suggested Reading

COVID’s Haves and Have-Nots

Rajiv J. Shah, Foreign Affairs

Hong Kongers try their best to remember Tiananmen Square

The Economist

Isolation Pushes Belarus’s Lukashenko Closer to Russia’s Putin

Ann M. Simmons and Thomas Grove, The Wall Street Journal