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Beefeater

@Beefeater_Fella

Sep 18

Armenia exits the Collective Security Treaty Organization (CTSO) .

This thread is offers some context, history, Ukraine related relevance and a chronology of recent events leading to Armenia rejecting the Russian led CTSO.

👉 A little bit about Armenia..

Armenia is an ancient country. Its history dates back to well before the Bronze Age and traces the beginnings of civilization. Armenia is the first country to adopt Christianity as its state religion. Today, 97% of the Armenia’s population are Christians, and Armenia has one of the most beautiful churches in the world.

The Armenian capital, Yerevan, is one of the world’s oldest inhabited cities. Founded in 782 BC by King Argishti, it is even older than Rome. There are six UNESCO World Heritage Sites in Armenia: Haghpat Monastery, Sanahin Monastery, Echmiadzin cathedral and churches, Zvartnots archaeological site, Geghard Monastery and Azat Valley.

Mining in Armenia is concentrated around the extraction of metals iron, copper, molybdenum, lead, zinc, gold, silver, antimony, and aluminum.

Armenia is a landlocked country located in the South Caucasus region of Eurasia. Armenia is bordered by Georgia in the north, the Republics of Azerbaijan and Artsakh in the east, Nakhchiva (Azerbaijan's exclave) Iran in the south, and Turkey in the west. Armenia occupies a land area of 11,484 square miles.

The population of the country is estimated at 2.9 million. Until independence, the economy of Armenia heavily depended on industry. The industry relied on outside sources. The main domestic energy source is hydroelectric. The country’s vast majority of energy is produced with imported fuel from countries such as Russia.

Natural resources play an important role in boosting the economy of Armenia. The natural resources are used domestically and are also exported. Geographically, Armenia is mountainous. This geographical peculiarity renders the country rich in mineral resources.

The mineral resources of Armenia include iron, zinc, aluminum, copper, molybdenum, gold, lead, silver and antimony. The country is also rich in other rare and hard to find metals.

Armenia possesses some of the world’s most diverse nonmetallic minerals including tuff, zeolites, nephelite syenites, perlite, scoria, marble, pumice stone, and basalts. The industrial minerals found in the country are cement, diatomite, limestone, and gypsum.

The mining industry is, therefore, one of the principal areas of Armenia’s economy. In Armenia, 24.8% of the population lived below the national poverty line in 2022.

Armenia is the 7th safest country in the world, according to NUMBEO. The analytical platform's Crime Rate and Safety Index by Country report has ranked Armenia 7th out of 146 countries, while the city of Yerevan is 15th out of 329 cities.

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Next 👉 What is the CTSO?

👉 What is the CTSO?

The CSTO is a Russia-dominated alliance of former Soviet states that have pledged to protect one another in the event of an attack.

The Collective Security Treaty Organization (CSTO) is an intergovernmental military alliance in Eurasia consisting of six post-Soviet states: Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan, formed in 2002.

The Collective Security Treaty has its origins in the Soviet Armed Forces, which was replaced in 1992 by the United Armed Forces of the Commonwealth of Independent States, and was then itself replaced by the successor armed forces of the respective independent states.

Similar to Article 5 of the North Atlantic Treaty and the Inter-American Treaty of Reciprocal Assistance, Article 4 of the Collective Security Treaty (CST) establishes that an aggression against one signatory would be perceived as an aggression against all.

The 2002 CSTO charter reaffirmed the desire of all participating states to abstain from the use or threat of force. Signatories are prohibited from joining other military alliances.

The CSTO holds yearly military command exercises for the CSTO nations to have an opportunity to improve inter-organizational cooperation. The largest of such exercises was held in Southern Russia and central Asia in 2011, consisting of more than 10,000 troops and 70 combat aircraft.

On 4 February 2009, an agreement to create the Collective Rapid Reaction Force (KSOR) was reached by five of the seven members, with plans finalized on 14 June. The force is intended to be used to repulse military aggression, conduct anti-terrorist operations, fight transnational crime and drug trafficking, and neutralize the effects of natural disasters.

Belarus and Uzbekistan initially refrained from signing on to the agreement. Belarus did so because of a trade dispute with Russia, and Uzbekistan due to general concerns. Belarus signed the agreement the following October, while Uzbekistan has never done so.

The Collective Security Treaty Organization (CSTO) maintains a peacekeeping force that has been deployed to areas of conflict, including Tajikistan and Kyrgyzstan. The force is composed of troops from member states and is designed to provide stability and security in the region.

On 6 October 2007, CSTO members agreed to a major expansion of the organization that would create a CSTO peacekeeping force that could deploy under a United Nations mandate or without one in its member states. The expansion would also allow all members to purchase Russian weapons at the same price as Russia.

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Next 👉 A potted history of Putin squeezing Armenia

Read 12 tweets

Beefeater

@Beefeater_Fella

Sep 12

August 2024, - the EU countries are continuing to prop up revenue for Putin’s regime and the murderous onslaught against Ukraine.

The EU’s State of the Energy Union Report 2024, published on September 11, 2024 - sets out that the EU is trying to quickly replace Russian gas supply and ensure Europe’s energy security in the short-medium term. To do so the EU has reached out to other international suppliers.

Norway and the U.S. have become the EU's largest gas suppliers - for pipeline and LNG gas respectively- providing 34% and 18% of EU gas imports in the
first half of 2024.

The EU claims that a record of twelve new LNG terminals and six expansion projects of existing terminals have been commissioned between 2022 and 2024.

Overall, these are expected to increase the EU’s LNG import capacity by 70 bcm to 284 bcm by 2024.

Remember - In May 2022, the Commission responded to the European Council’s demand to phase out Europe’s dependency on Russian energy imports as soon as possible by adopting the REPowerEU Plan.

The objective was to rapidly reduce the EU’s dependence on Russian fossil fuels not only by saving energy and diversifying our supplies, but especially working towards the long-term objective to fast-forward the clean transition via the acceleration of renewables deployment and energy efficiency measures, joining forces to achieve a more resilient energy system and a true Energy Union.

Immediate actions focused on saving energy and enhancing energy efficiency as the cleanest and cheapest way to address the energy crisis. Actions undertaken under REPowerEU allowed one of the steepest gas demand decline in history.

In parallel to EU sanctions banning seaborne imports of Russian crude oil and refined petroleum products12 as well as Russian coal, imports of Russian gas (pipeline & LNG) dropped from a 45% share of overall EU gas imports in 2021 to only 18% in the first half of 2024.

Yet the enormous volumes of continued revenue reported by Crea for August 2024 volumes, show that the EU still provides significant income for Russia, for its fossil fuels - arguably a different reality to the one the EU suggests in it’s latest energy report.

The ongoing purchase of Russian fossil fuels by EU countries, despite sanctions, highlights the complexities and contradictions within Europe's energy policy and its efforts to reduce dependence on Russian energy amid the Ukraine conflict. Several key points arise:

The EU's decision to exempt certain Russian fossil fuels from sanctions, particularly crude oil imported through the southern branch of the Druzhba pipeline to Hungary, Slovakia, and the Czech Republic, demonstrates the difficulty of fully severing ties with Russian energy.

These exemptions likely stem from the fact that many of these countries, especially landlocked ones like Hungary, Slovakia, and the Czech Republic, have limited alternatives to replace Russian fossil fuel imports.

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Next 👉 Crea report for August 2024

Crea’s latest publication sets out the data on Russia’s fossil fuel revenue in August 2024 (please see the references tweet for a link to the full report).

👉 In August, the top five largest Russian fossil fuel importing countries in the EU paid Russia a total of EUR 1.2 bn for their imports. The EU has granted an exemption for Russian crude oil imported through the southern branch of the Druzhba pipeline to Hungary, Slovakia, and the Czech Republic. Russian pipeline gas and liquified natural gas (LNG) also remain unsanctioned.

👉 Hungary was the largest importer of Russian fossil fuels within the EU, importing fossil fuels worth EUR 369 mn. Their August imports included crude oil via pipeline valued at EUR 155 mn and gas valued at EUR 214 mn.

👉 France, the second-largest buyer within the EU, exclusively imported LNG worth EUR 219 mn.

👉 Slovakia was the third-largest importer of Russian fossil fuels within the EU, importing pipeline oil and gas worth EUR 61 mn and EUR 130 mn, respectively.

👉 Austria exclusively imported pipeline gas worth EUR 177 mn.
Italy, the fifth-largest buyer within the EU, imported Russian pipeline gas valued at EUR 174 mn.

👉 LNG: The EU was the largest buyer, purchasing 50% of Russia’s LNG exports, followed by China (21%) and Japan (18%).

👉 Pipeline gas: The EU was the largest buyer, purchasing 40% of Russia’s pipeline gas, followed by China (28%) and Turkey (25%).

Globally - the revenue streams have seen marginal drops:

In August 2024, Russia’s monthly fossil fuel export revenues dropped 8% to EUR 636 mn per day, marking the fifth consecutive month of decline.
Revenues from seaborne crude oil (EUR 186 mn per day) dropped 14% month-on-month. A significant reason for this drop was an 8% drop in the volume of exports.

👉 Meanwhile, revenues from crude oil via pipeline (EUR 77 mn per day) dropped by 4% in August.

👉 Russian revenues from seaborne oil product exports declined 7% month on month, dropping to EUR 206 mn per day.

👉 LNG export revenues increased by 55% month-on-month to EUR 42 mn per day.

👉 Russia benefitted from a 4% month-on-month rise in revenues from pipeline gas to EUR 73 mn per day.

👉 Russian revenues from coal exports dropped 28% month-on-month to EUR 49 mn per day — the fifth consecutive month they’ve dropped.

👉 Coal: From 5 December 2022 until the end of August 2024, China purchased 45% of all Russia’s coal exports, followed by India (18%). Turkey (10%), South Korea (10%), and Taiwan (5%) round off the top five buyers list.

👉 Crude oil: China has bought 47% of Russia’s crude exports, followed by India (37%), the EU (6%), and Turkey (6%).

👉 Oil products: Turkey, the largest buyer, has purchased 24% of Russia’s oil product exports, followed by China (12%) and Brazil (11%).

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Next 👉 EU countries called out

Contrary to Crea’s report showing a decline in fossil fuel revenues, Reuters reports on September 6, 2024 - that “Russia's economy ministry has revised up its 2024 forecasts for export sales of oil and gas, key sources of budget revenues, by $17.4 billion from the previous estimate to $239.7 billion thanks to a more positive price outlook, a document seen by Reuters showed”.

Infrastructure and energy dependency mean that abruptly cutting off Russian oil and gas could severely impact their economies.

Hungary stands out as the largest importer of Russian fossil fuels, with its imports totaling EUR 369 million in August, including significant purchases of crude oil and gas. Hungary’s government, under Prime Minister Viktor Orbán, has maintained a more conciliatory approach toward Russia compared to other EU nations.

Orbán has often criticized the EU’s sanctions regime, arguing that such measures harm European economies more than they deter Russia.

Hungary’s strategic reliance on Russian gas and oil has allowed it to negotiate more favorable terms for its energy imports, ensuring a steady supply while keeping energy prices lower than in many other EU countries.

👉 France:

France, as the second-largest EU importer, focused entirely on liquefied natural gas (LNG) from Russia, purchasing EUR 219 million worth of it in August.

Unlike pipeline gas, LNG can be sourced from various global suppliers, but France's continued reliance on Russian LNG suggests that alternative suppliers may not yet be able to meet all of its energy needs at competitive prices. LNG imports, especially in the context of ongoing energy shortages and price hikes in Europe, reveal the difficulty of transitioning to non-Russian energy sources even for major economies like France.

👉 Austria, Slovakia and Italy:

Meanwhile - Austria and Slovakia continue to rely heavily on pipeline gas, while Slovakia also imports oil. Italy, one of the EU’s largest economies, imported Russian gas worth EUR 174 million in August. Although Italy has been vocal in supporting sanctions and seeking alternative energy sources, this dependence on Russian gas highlights the time lag in fully transitioning away from traditional suppliers.

The difficulty of diversifying energy sources, building new infrastructure, and ensuring affordable energy prices means that many EU countries are still tied to Russian fossil fuels despite their political opposition to Russia’s actions in Ukraine.

👉 The EU’s Position as the Largest Buyer of Russian LNG and Pipeline Gas:

The EU remains the largest purchaser of Russian LNG and pipeline gas, buying 50% of Russia’s LNG exports and 40% of its pipeline gas. This is particularly significant given the ongoing war in Ukraine and the EU's stated intentions to reduce its dependency on Russian energy. The fact that the EU remains the largest buyer underscores the energy insecurity in Europe, where immediate alternatives to Russian energy are either insufficient or too costly.

In contrast, Russia’s other major customers, China and Turkey, are gradually increasing their share of Russian energy imports, but Europe remains the largest market.

Ukraine’s intent to end the transit contracts for Russian fossil fuels to the EU reflects a significant strategic and geopolitical shift in response to Russia’s invasion and the ongoing war.

This decision has both political and economic implications for Ukraine, Russia, and Europe, as it impacts energy flows, regional stability, and the broader EU energy strategy. Since Russia’s full-scale invasion of Ukraine in February 2022, energy has become a central aspect of the conflict, with Ukraine looking to cut all remaining economic ties with Russia.

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Next 👉 Ukraine ending it’s deal to transit Russian gas

Read 8 tweets

Beefeater

@Beefeater_Fella

Sep 10

The Vertical Gas Corridor is the key to the energy security of Ukraine, Moldova and the countries of South East Europe in the long term, confirmed the natural gas transmission system operator of Bulgaria, Bulgartransgaz in March 2024.

“After the probable end of the transport of natural gas from Russia through Ukraine from the start of 2025, the Vertical Gas Corridor will be the only project that can provide both the required transport of liquefied natual gas and the continuation of the operation of the gas transmission network and the underground gas storage facilities in Ukraine,” the CEO of Bulgartransgaz explained.

It is now certain that Ukraine will end transition of Russian gas from the end of 2024.

Bulgaria consumes about 3 billion cubic meters (bcm) of natural gas. The Gas Interconnector Greece-Bulgaria natural gas pipeline became operational in 2022, and Bulgaria receives about 1 bcm a year from Azerbaijan, with a long-term contract at a price linked to the international oil price. In April this year, Azerbaijani gas accounted for 51.1% of Bulgaria’s domestic consumption.

Bulgaria also purchases oil to feed its Burgas refinery, which has a capacity of 190,000 barrels per day (bpd) and is operated by Russia's Lukoil. Bulgaria was the fourth largest buyer of seaborne Russian oil in 2023, purchasing over 100,000 bpd.

Bulgaria is however replacing Russian oil imports with crude from Kazakhstan, Iraq and Tunisia in January, according to traders and LSEG data.

Bulgaria has a waiver from a European Union embargo that allows it to continue seaborne imports of Russian oil in 2024. But the country has restricted exports of all refined products produced from Russian crude from this month, which makes it almost impossible for its sole refinery to run on Russian oil, and has decided to stop all Russian crude imports from March.

When flows from the Yamal and NordStream 1 pipelines halted, the CEE region had to rapidly adapt to the new reality (see Figure 1 for more details). Poland stopped sending gas to Germany, and German flows into the Czech Republic were slashed to one-fifth. Czechia then opted to receive gas from Slovakia, reversing years of flow in the opposite direction.

Similarly, Slovak flows into Austria were reduced by more than two-thirds, which in turn saw their exports to Hungary and Italy almost disappear by the end of 2023.

Further east, the inauguration of the Balkan Stream pipeline in 2021 provided some relief to the region, allowing flows from the TurkStream pipeline to reach Romania, Serbia, and Hungary, and giving the latter the opportunity to export gas to Slovakia since 2023.

However, not every country benefited from the project: Bulgaria and Moldova stopped consuming Russian gas in 2022 following disputes involving long-term contracts with Gazprom. This overhaul of the gas market resulted in a rebalancing of geopolitical power in the region.

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Next 👉 Context

Context:

After the halt of Russian gas flows through the Yamal and NordStream 1 pipelines in 2022, the region now risks losing the Russian supply it receives via Ukraine. Ukraine has expressed its intention not to renew the transit contract with Russia, set to expire by the end of the year.

With the expected end of Russian gas transit through Ukraine at the end of this year, the Balkan Stream gas pipeline through Bulgaria will become the main supply route for the EU and Ukraine, as discussed during the visit of the EU’s top energy official, Ditte Juul Jorgensen, to the dispatch centre of state-owned gas company Bulgartransgaz (BTG).

In the long term, Bulgaria will become an important transit country to ensure supplies to Romania, Moldova and the countries of south-eastern Europe.

“After the probable termination of the transmission of natural gas from Russia through Ukraine from the beginning of 2025, the vertical gas corridor through Bulgaria will be the only project that can ensure both the necessary transmission of liquefied gas and the continued operation of the gas transmission network and underground gas storage facilities in Ukraine,” said Vladimir Malinov, head of Bulgartransgaz.

Data from the EU Commission show that since the start of Russia’s invasion of Ukraine, the EU has drastically reduced its imports of Russian gas from more than 50% to 15% last year. In total, 9% of Russian gas supplies to the EU come via pipelines, with the remainder being liquefied gas. Following the suspension of the Ukrainian gas corridor, supplies to the EU and Ukraine will have to pass mainly through Bulgaria.

The Balkan country operates the Balkan Stream gas pipeline, which is a continuation of Turk Stream, a gas pipeline that was inaugurated exactly one year before the Russian invasion of Ukraine. Russian President Vladimir Putin’s project to bypass Ukraine was supported by the former leaders of Bulgaria, Turkey, and Serbia – Recep Tayyip Erdoğan, Boyko Borissov and Aleksandar Vučić.

After the outbreak of the war, Russia cut off gas supplies to Bulgaria, but the authorities in Sofia did not interfere with the transit of Russian gas to Serbia, Hungary and from there to Austria. Separately, Bulgaria and Greece built a gas interconnector linking the Bulgarian gas network to the Trans-Adriatic Gas Pipeline, which carries gas from Azerbaijan.

This connection also allows the transfer of LNG from the Greek terminals and the import of LNG from the Russian terminals via the Balkan Stream.

Currently, Bulgaria and Romania are not using the potential of the Trans-Balkan gas pipeline, which was the old route for the transit of Russian gas from Ukraine through Romania to Bulgaria before the launch of the Turkish Stream. The idea of the authorities in Sofia is to reverse the direction of this gas pipeline and make Bulgaria a gas export route to Romania and Ukraine.

This project is called the Vertical Gas Corridor and is a joint project of the gas companies of Greece, Bulgaria, Romania, Hungary, Slovakia, Moldova and Ukraine to extend the existing gas connections between them.

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Next 👉 Kpler analysis of russian gas interruption

Kpler provided an interesting analysis of the looming impacts to countries with the disruption of Russian gas flows, in August 2024:

“What countries are most impacted by Russian gas flow disruption?

In the case of Poland, flows via Ukraine are consumed domestically and represent roughly 4% of total Polish gas consumption, according to our estimates.

Flows entering Slovakia are more impactful. The Slovak economy relies heavily on these flows; Kpler Insight estimates the implied use of Ukrainian flows to be nearly 80% in 2023. This dependency could increase if inflows from Hungary decrease and a cold winter occurs, as no Russian gas would be available for refilling storage levels.

Gas flows entering Austria are consumed domestically and sent via the TAG pipeline to Italy and, to a lesser extent, Slovenia. Austria’s exposure to Ukrainian gas increased in 2024, presumably due to the rising German gas storage levy, which has been gradually increasing since 2022. The levy currently stands at 2.5 euros/MWh, making Austrian gas imports via Germany almost three times more expensive than those via Slovakia.

Our calculations show that Austria currently relies almost exclusively on flows from Slovakia, presenting the highest risk in the event of a disruption. We also anticipate a reduction in flows to Italy. However, the end of the German gas storage levy in January 2025 will likely mitigate some of these risks.

Further north, Czech Republic has consistently imported Russian gas via Ukraine since October 2023, most likely due to the German gas storage levy. However, risks remain for Czechia even after the levy ends.

Firm capacity at the Brandov IP on the Czech-German border might not be enough to compensate for the potential loss of Russian pipeline gas to the CEE region after 2025, increasing congestion risks and price differentials between countries.

The situation is more optimistic in the southern part of the region. Hungary and Serbia continue to source gas through the Balkan Stream, while Bulgaria has managed to diversify away from Russian supply.

Flows into Bulgaria and Serbia use around 75% and 80% of the total firm capacity available at the interconnection points, providing some breathing room to the region if needed. As for Hungary, although inflows from Serbia run at maximum capacity, domestic production and lower gas demand in the power mix give the country higher flexibility to manage its domestic gas market.”

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Beefeater

@Beefeater_Fella

Sep 8

The International Monetary Fund (IMF), a potted history, it’s makeup, it’s role in Ukraine and current relationship with Russia, and news of the move by the IMF in September 2024 - to appoint a US sanctioned russian to the board of the IMF, a close connection to the indicted war criminal Vladimir Putin.

This thread is not a comprehensive view and history of the IMF, it brings together key reported information and facts that will provide you with a better understanding.

The thread is long - have you considered bookmarking and listening to the podcast version (see the reply to the last tweet in the thread for a link), or keep an eye out for the YouTube version which should be released in the coming days.

Please remember to like and share this post, it will help with the reach of information to a wider audience.

👉 IMF History

The IMF is an United Nations (UN) specialised agency, founded at the Bretton Woods Conference in 1944 to secure international monetary cooperation, to stabilize currency exchange rates, and to expand international liquidity (access to hard currencies).

The first half of the 20th century was marked by two world wars that caused enormous physical and economic destruction in Europe and a Great Depression that wrought economic devastation in both Europe and the United States.

These events kindled a desire to create a new international monetary system that would :

💰stabilize currency exchange rates without backing currencies entirely with gold;
💰 to reduce the frequency and severity of balance-of-payments deficits (which occur when more foreign currency leaves a country than enters it);
💰 to eliminate destructive mercantilist trade policies, such as competitive devaluations and foreign exchange restrictions

…all while substantially preserving each country’s ability to pursue independent economic policies.

Multilateral discussions led to the UN Monetary and Financial Conference in Bretton Woods, New Hampshire, U.S., in July 1944. Delegates representing 44 countries drafted the Articles of Agreement for a proposed International Monetary Fund that would supervise the new international monetary system.

The framers of the new Bretton Woods monetary regime hoped to promote world trade, investment, and economic growth by maintaining convertible currencies at stable exchange rates.

Countries with temporary, moderate balance-of-payments deficits were expected to finance their deficits by borrowing foreign currencies from the IMF rather than by imposing exchange controls, devaluations, or deflationary economic policies that could spread their economic problems to other countries.

After ratification by 29 countries, the Articles of Agreement entered into force on December 27, 1945. The fund’s board of governors convened the following year in Savannah, Georgia, U.S., to adopt bylaws and to elect the IMF’s first executive directors.

The governors decided to locate the organization’s permanent headquarters in Washington, D.C., where its 12 original executive directors first met in May 1946. The IMF’s financial operations began the following year.

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Next 👉 Structure and objectives

👉 Structure of the IMF

The IMF is headed by a board of governors, each of whom represents one of the organization’s approximately 180 member states. The governors, who are usually their countries’ finance ministers or central bank directors, attend annual meetings on IMF issues.

The fund’s day-to-day operations are administered by an executive board, which consists of 24 executive directors who meet at least three times a week.

Eight directors represent individual countries (China, France, Germany, Japan, Russia, Saudi Arabia, the United Kingdom, and the United States), and the other 16 represent the fund’s remaining members, grouped by world regions. Because it makes most decisions by consensus, the executive board rarely conducts formal voting.

The board is chaired by a managing director, who is appointed by the board for a renewable five-year term and supervises the fund’s staff of about 2,700 employees from more than 140 countries. The managing director is usually a European and—by tradition—not an American. The first female managing director, Christine Lagarde of France, was appointed in June 2011.

Each member contributes a sum of money called a quota subscription. Quotas are reviewed every five years and are based on each country’s wealth and economic performance—the richer the country, the larger its quota.

The quotas form a pool of loanable funds and determine how much money each member can borrow and how much voting power it will have.

For example, the United States’ approximately $83 billion contribution is the most of any IMF member, accounting for approximately 17 percent of total quotas. Accordingly, the United States receives about 17 percent of the total votes on both the board of governors and the executive board.

The Group of Eight industrialized nations (Canada, France, Germany, Italy, Japan, Russia, the United Kingdom, and the United States) controls nearly 50 percent of the fund’s total votes.

👉 The IMF’s Primary Objectives;

(a). To Promote exchange stability throughout the world

(b). To Promote international monetary cooperation;

(c). To Facilitate the expansion and balanced growth of international trade;

(d). To Assist in the establishment of a multilateral system of payments; and

(e). Make resources available to members experiencing Balance of Payments difficulties.

Publications:

IMF provides periodic assessments of global prospects in its "World Economic Outlook", of financial markets in its "Global Financial Stability Report", of public finance developments in its "Fiscal Monitor", and of external positions of the largest economies in its "External Sector Report", in addition to a series of Regional Economic Outlooks.

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Next 👉 IMF’s operation

👉 The IMF’s Operation

Since its creation, the IMF’s principal activities have included stabilizing currency exchange rates, financing the short-term balance-of-payments deficits of member countries, and providing advice and technical assistance to borrowing countries.

Under the original Articles of Agreement, the IMF supervised a modified gold standard system of pegged, or stable, currency exchange rates. Each member declared a value for its currency relative to the U.S. dollar, and in turn the U.S. Treasury tied the dollar to gold by agreeing to buy and sell gold to other governments at $35 per ounce.

A country’s exchange rate could vary only 1 percent above or below its declared value. Seeking to eliminate competitive devaluations, the IMF permitted exchange rate movements greater than 1 percent only for countries in “fundamental balance-of-payments disequilibrium” and only after consultation with, and approval by, the fund.

In August 1971 U.S. President Richard Nixon ended this system of pegged exchange rates by refusing to sell gold to other governments at the stipulated price.

Since then each member has been permitted to choose the method it uses to determine its exchange rate:

💰 a free float, in which the exchange rate for a country’s currency is determined by the supply and demand of that currency on the international currency markets;

💰 a managed float, in which a country’s monetary officials will occasionally intervene in international currency markets to buy or sell its currency to influence short-term exchange rates;

💰 a pegged exchange arrangement, in which a country’s monetary officials pledge to tie their currency’s exchange rate to another currency or group of currencies;

💰 or a fixed exchange arrangement, in which a country’s currency exchange rate is tied to another currency and is unchanging.

After losing its authority to regulate currency exchange rates, the IMF shifted its focus to loaning money to developing countries.

The IMF’s Largest borrowers are: Greece, Ukraine, Pakistan and Egypt

👉 Financing balance-of-payments deficits

Members with balance-of-payments deficits may borrow money in foreign currencies, which they must repay with interest, by purchasing with their own currencies the foreign currencies held by the IMF. Each member may immediately borrow up to 25 percent of its quota in this way.

The amounts available for purchase are denominated in Special Drawing Rights (SDRs), whose value is calculated daily as a weighted average of four currencies: the U.S. dollar, the euro, the Japanese yen, and the British pound sterling.

SDRs are an international reserve asset created by the IMF in 1969 to supplement members’ existing reserve assets of foreign currencies and gold.

Countries use the SDRs that have been allocated to them by the IMF to settle international debts. More than 20 billion SDRs were allocated to members in successive allocations from 1969 through 1981. SDRs are not part of the quota subscriptions supplied by members, and thus they are not part of the general asset pool available for loans to members.

The IMF uses the SDR as its unit of account for all transactions. Drawing on the IMF by a country raises the fund’s holdings of that country’s currency but lowers its holdings of another country’s currency by an equal amount.

Thus the composition of the fund’s resources changes, but the total resources as measured in SDRs remains the same. The country repays the loan over a specified period (usually three to five years) by using member currencies acceptable to the IMF to repurchase its own national currency.

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Next 👉 Operation continued..

Read 17 tweets

Beefeater

@Beefeater_Fella

Sep 4

04 September, 2024 - The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated 10 individuals and two entities as part of a coordinated U.S. government response to Moscow’s malign influence efforts targeting the 2024 U.S. presidential election.

Russian state-sponsored actors have long used a variety of tools, such as generative artificial intelligence (AI) deep fakes and disinformation, in an attempt to undermine confidence in the United States’ election processes and institutions.

Beginning in early 2024, executives at RT—Russia’s state-funded news media outlet—began an even more nefarious effort to covertly recruit unwitting American influencers in support of their malign influence campaign.

RT used a front company to disguise its own involvement or the involvement of the Russian government in content meant to influence U.S. audiences.

“Today’s action underscores the U.S. government’s ongoing efforts to hold state-sponsored actors accountable for activities that aim to deteriorate public trust in our institutions,” said Secretary of the Treasury Janet L. Yellen. “Treasury will not waver in our commitment to safeguarding our democratic principles and the integrity of our election systems.”

Today’s designations complement law enforcement actions taken by the Department of Justice and the Department of State’s designation of the Rossiya Segodnya media group and five of its subsidiaries, RIA Novosti, RT, TV-Novosti, Ruptly, and Sputnik, as Foreign Missions, steps to impose visa restrictions, and release of a Rewards for Justice (RFJ) reward offer of up to $10 million relating to information pertaining to foreign interference in a U.S. election.

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Next 👉 Sanctions target RT (Russia Today)

Sanctions targeting russian propagandists and RT:

RT, formerly Russia Today, is a Russian state-funded news outlet that began broadcasting internationally in 2005. In 2017, RT registered as an agent of a foreign government in the United States.

Beginning in early 2024, RT executives began an effort to covertly recruit unwitting American influencers. RT used a front company to disguise its own involvement or the involvement of the Russian government.

Margarita Simonovna Simonyan (Simonyan) is the Editor-in-Chief of RT and a central figure in Russian government malign influence efforts. She allowed the operations of a front company to occur under the cover of RT.

Elizaveta Yuryevna Brodskaia (Brodskaia) is the Deputy Editor-in-Chief of RT, who has reported to Russian President Putin and other government officials. Anton Sergeyvich Anisimov (Anisimov) is an RT Deputy Editor-in-Chief, who conducts activities on behalf of the Russian Federal Security Service (FSB).

Andrey Vladimirovich Kiyashko (Kiyashko) is the Deputy Director of the RT English-Language Information Broadcasting and is responsible for updating Russian government officials and providing an overview of RT’s operations.

Konstantin Kalashnikov (Kalashnikov) is RT’s Digital Media Projects Manager, who, in early 2022, worked with Kiyashko. In mid‑2023, Brodskaia and Kiyashko implemented a large-scale influence operation for RT on U.S. social media with the intent of obscuring RT’s connection to the content meant to influence online audiences.

Elena Mikhaylovna Afanasyeva (Afanasyeva) is an employee of RT’s Digital Media Projects Department and reports to Kalashnikov. Starting in early 2024, Afanasyeva covertly interacted with prominent U.S. social media influencers under the cover of a fake persona, purporting to be an employee at a U.S. company to obscure RT’s and the Russian government's involvement.

The pro-Kremlin hacktivist group RaHDit is composed of active and former Russian intelligence officers. Aleksey Alekseyevich Garashchenko (Garashchenko) is the head of RaHDit and was an FSB officer at the time he started leading the group.

Garashchenko directly interacts with members of the Russian intelligence and security services, members of the Russian Presidential Administration, and employees from RT.

Anastasia Igorevna Yermoshkina (Yermoshkina) is an affiliate of Garashchenko. Aleksandr Vitalyevich Nezhentsev (Nezhentsev) works with Garashchenko and is an administrator and developer of cyber tools used by the FSB. Nezhentsev also leads a team focusing on developing new tools that can be used in the surveillance of information data files.

Today, OFAC designated Simonyan, Brodskaia, Anisimov, Kiyashko, Kalashnikov, Afanasyeva, Garashchenko, Yermoshkina, and Nezhentsev pursuant to E.O. 14024 for being owned or controlled, or having acted or purported to act for or on behalf of, directly or indirectly, the Government of the Russian Federation.

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Next 👉 Sanctions implications

SANCTIONS IMPLICATIONS

As a result of today’s action, all property and interests in property of the designated persons described above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC.

In addition, any entities that are owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked.

Unless authorized by a general or specific license issued by OFAC, or exempt, OFAC’s regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons.

In addition, financial institutions and other persons that engage in certain transactions or activities with the sanctioned persons may expose themselves to sanctions or be subject to an enforcement action.

The prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any designated person, or the receipt of any contribution or provision of funds, goods, or services from any such person.

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Next 👉 The history of RT - important read!

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Beefeater

@Beefeater_Fella

Sep 2

Mongolia threatens Putins pipeline deal. Putin rushes to Mongolia to save the deal, risking arrest under the ICC warrant of arrest.

Mongolia is a key transit route for new Russia-China pipeline. The landlocked country is a key transit route for Russian gas supplies to China and will host almost 1000 kilometres of the planned Sila Sibiri 2 pipeline.

With capacity of 50 billion cubic metres of gas per annum, the project aims to help replace volumes lost after Russia almost halted its pipeline gas exports to Europe in 2022 following its invasion of Ukraine.

Russian state-controlled gas giant Gazprom and the Russian government have repeatedly assured that talks are progressing with China and Mongolia over the Sila Sibiri 2 route and gas supply terms.

On June 2, the Financial Times (FT) reported that China and Russia did not conclude a deal on the pipeline because China demanded to receive it at Russia’s subsidized domestic prices and that it would only purchase a small fraction of the pipeline’s planned annual capacity.

But reported on August 22nd, 2024 - The planned pipeline intended to transport gas from Russia to northeastern China known as Power of Siberia-2 has likely fallen through. Former Mongolian Security Council member Munkhnaar Bayarlkhaag said Moscow has failed to reach an agreement with Beijing.

Bayarlkhaag added that Beijing might’ve been displeased with Russian state-owned energy conglomerate Gazprom’s potentially obtaining unilateral control over the Mongolian section of the pipeline. “This would have meant a sudden and long-term increase in Moscow’s influence in Mongolia, to the detriment of Beijing,” he said. “Though never explicitly verbalized, it would have been ‘fair’ to include the Chinese into the Mongolian section’s development from the beginning.”

The South China Morning Post (SCMP) reported on Monday, Aug 19, Mongolia, whose territory the pipeline would transit through, did not include the project in its national development plans through 2028.

Although Russia has seen an increase in gas exports to China through the Power of Siberia 1 pipeline, this has not been sufficient to compensate for the decline in European exports.

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Next 👉 Mongolia’s decoupling from Russian gas and their obligation to arrest Putin.

Mongolia has rolled out a plan to end its energy shortfall by the end of 2028, long before it expects cheap Russian gas to finally start flowing into the country.

The Mongolian parliament’s final approval this week of a government-proposed, five-year development plan that excludes any gas input from Sila Sibiri 2, means the nation will need to rely on coal, hydropower and renewable energy sources to eliminate energy shortfall, according to a copy of the plan available on the parliament’s website.

According to the development plan, two hydropower stations with a total capacity of 400 megawatts, and one 450-MW coal-fired power plant are to be built before the end of 2028 to answer the increasing energy demands of the country and its capital Ulaanbaatar, where energy use exceeds available supply by about one third during winter.

As well as the proposed new power plants, Mongolia’s energy policy will also focus on wind and solar energy sources, the plan said. The country is estimated to have an ultimate capacity to produce 2600 gigawatts of renewable power, which could potentially cover its energy needs and provide capacity to export electricity to neighbouring countries, according to the approved document.

Putin risks being arrested in Mongolia - he arrived on Monday 02 September, 2024 - for a state visit in Mongolia, which lies on the route of a planned new gas pipeline connecting Russia and China. He is clearly desperate to prevent the collapse of the pipeline deal with Mongolia. He is due to hold talks with Mongolian President Ukhnaagiin Khurelsukh on Tuesday.

Ukraine urged Mongolia last week to arrest Putin on a warrant issued by the International Criminal Court warrant last year, when it accused him of the war crime of illegally deporting hundreds of children from Ukraine. The Kremlin has dismissed the accusation, saying it is politically motivated, and has said it has no worries about Putin making the trip.

The warrant obliges the court's 124 member states, including Mongolia, to arrest Putin and transfer him to The Hague for trial if he sets foot on their territory.

What will the consequences be if Mongolia fails to arrest Putin - have they given Putin cast iron assurances that they will not meet their obligations as an ICC signatory? What will the @IntlCrimCourt do if Mongolia fails in its obligation to arrest Putin?

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