Banananomics: Philippines And US Taunt China

As tensions escalate in the South China Sea, the Philippines and the United States prepare to hold a joint military exercise next week.

Inputs that matter: The Philippines and the United States will conduct joint naval drills beyond the 12 nautical miles of the Philippines’ territorial waters in parts of open sea claimed by China.

• More than 16,000 soldiers from the two militaries will operate out of a joint command center to perform four significant activities focusing on countering maritime and air attacks.

• In the first, troops will simultaneously secure two islands along the western and northern coasts of the Philippines before transporting High Mobility Artillery Rocket System (HIMARS) launchers onto the islands for live-firing exercises.

• Next, Philippine naval vessels will debut a newly procured ship-based missile system, working with U.S. Air Force squadrons to strike and sink a decommissioned ship.

The opportunity: Last year, the U.S. secured access to four new staging sites in the Philippines, three of which will be part of this year’s Balikatan exercises.

• Issuing a warning against holding the drills, China’s Foreign Ministry spokesperson Lin Jian warns, "Attempts to bring in external forces to safeguard its so-called security will only lead to greater insecurity for itself."

• He explains that Manila should be "sober enough to realize" the consequences.

Zoom in: “It will be the first time the mega drills are being carried out beyond Philippine territorial waters," said Michael Logico, a Philippine army colonel overseeing the exercises.

• “The goal is to make our forces plug-and-play,” said U.S. Marine Col. Doug Krugman, who led planning for the Marine Corps’ participation.

• Commodore Roy Vincent Trinidad, a spokesman for the Philippine Navy, said the message that the Philippines wants to broadcast is simple: “We are not alone. And we’re ready to defend our sovereign rights.”

Between the lines: In 2019, the Solomon Islands switched its diplomatic recognition from Taiwan to China. Sogavare then signed a series of security-related agreements with China, including a security pact in 2022 and a police cooperation agreement in 2023.

• So far, the Solomon Islands hasn’t revealed details, but a leaked draft agreement shows that China could potentially deploy security and naval assets to the country.

• “China has had success in presenting itself as a security stakeholder in the region, and this is certainly of concern to Canberra, Wellington, and Washington, who view China’s security interests in the Pacific as disruptive and indicative of China’s broader interests,” Anna Powles, an associate professor in security studies at Massey University in New Zealand, told Voice of America.

Follow the money: The Philippines defended its decision to strengthen ties with the US and Japan.

• China has been accused of using “gray-zone” harassment tactics such as shining military-grade lasers, firing water cannons, and ramming into vessels, escalating tensions.

• Australian Defence Minister Richard Marles explains, “The uncertainty and tensions of entrenched and increasing strategic completion between the United States and China characterize our environment."

The U.S. and U.K. imposed a new round of sanctions on Iran as House Speaker Mike Johnson (R-Louisiana) seeks aid for Ukraine and Israel.

Inputs that matter: G7 foreign ministers are meeting on the Italian resort island of Capri, with the agenda topped by calls Wednesday for targeted new sanctions against Iran over its attack against Israel and more aid to Ukraine to fight Russia's war.

• The United States, Britain, and several European Union countries have suggested expanding current sanctions regimes against Tehran over its support of Russia's war in Ukraine to include drone and missile deliveries to Iran's Mideast proxies.

• Italian Foreign Minister Antonio Tajani told The Associated Press on Wednesday that Italy supported targeted new sanctions against Tehran, specifically against the makers of drones used in the weekend attack and others launched by Tehran-backed militias in Lebanon, Gaza, and Yemen's Houthi rebels.

• "We will continue to deploy our sanctions authority to counter Iran with further actions in the days and weeks ahead," Treasury Secretary Janet Yellen stated.

The opportunity: Johnson is proposing to bring a vote on four separate bills addressing aid for Ukraine, Israel, the Indo-Pacific, and other national security priorities. Republicans have matched President Biden's original request for assistance to Israel ($14 billion) and some $60 billion for Ukraine, with close to $10 billion in the form of loans for Kyiv.

• "There's now concern that absent assistance arriving very quickly, Russia may be able to break through some of the Ukrainian lines and retake territory," said Michèle Flournoy, who served as undersecretary of Defense for policy during the Obama administration.

• "No doubt that Israel needs support for its campaign in Gaza, but the primary reason Israel needs security assistance from the U.S. is for the next war," said Bradley Bowman, senior director of the Center on Military and Political Power at the Foundations for Defense of Democracy.

• "I think it's so important to provide Israel additional security assistance yesterday, not so much for the ongoing war in Gaza, but for the war that's coming soon with Hezbollah [in Lebanon] and Iran."

Zoom in: "The House must pass the package this week, and the Senate should quickly follow," Biden said. "I will sign this into law immediately to send a message to the world: We stand with our friends, and we won't let Iran or Russia succeed."

• EU foreign policy chief Josep Borrell said the existing EU sanctions regime would be strengthened and expanded to punish Tehran and help prevent future attacks on Israel. At the same time, he said, Israel needed to exercise restraint.

• "I don't want to exaggerate, but we are on the edge of a regional war in the Middle East, which will send shockwaves to the rest of the world, particularly to Europe," he warned. So stop it."

Between the lines: Experts say Israel would have little trouble hitting targets inside Iran should it decide to retaliate directly for the unprecedented drone and missile salvoes of Saturday night, citing Tehran's obsolete air force and indigenous air defense systems based on aging Russian models.

• Iran is a "superpower in tactical ballistic missiles and UAVs," says Brigadier General Zvika Haimovich, former head of IAF Aerial Defense.

• Its air defenses are another matter, mainly built around Russian S-200 and S-300 anti-aircraft missile systems or a range of locally produced equivalents such as the Bavar-373, Khordad, Raad, Sayyad, and Talash, as well as old American and Russian warplanes, some of which date from the 1970s era of Shah Mohammed Reza Pahlavi.

Follow the money: Despite sanctions, crude oil exports from Iran hit the highest level in six years, with almost all 1.56 million barrels going to China, earning Tehran $35 billion.

• "The Iranians have mastered the art of sanctions circumvention," Fernando Ferreira, head of geopolitical risk service at Rapidan Energy Group, told the FT. "If the Biden administration is going to have an impact, it has to shift the focus to China."

• Oil prices have fallen back at the start of this week despite heightened geopolitical risk after Iran attacked Israel.

India's Prime Minister Narendra Modi is being criticized for his recent moves to limit non-Hindu citizenship in the country while expanding the economic influence of the West.

Inputs that matter: In March 2024, India implemented a citizenship law that excludes migrants who are Muslims, a minority community whose concerns have heightened under Prime Minister Modi's Hindu nationalist government.

• The Modi-led government will now begin granting Indian nationality to persecuted non-Muslim migrants.

• According to the AP, this marks the first time India has set religious criteria for citizenship.

• "This law – in tandem with plans to create a National Register of Citizens, which would require all Indians to show proof of citizenship – would effectively render millions of India's Muslims, lower castes and the poor ineligible for government benefits."

The opportunity: Critics of Modi claim he capitalized on religious tensions for political gain.

• Modi has turned to big business to create jobs and accelerate development.

• Including close ties with the U.S. government and companies such as Microsoft, Amazon, IBM, and Apple.

Zoom in: Robin Jeffrey, Emeritus Professor at the Australian National University, explains, "From a young age, Modi has been a member of the Rashtriya Swayamsewak Sangh (RSS), a Hindu-supremacist organization whose inspiration stems from Italian fascism of the 1920s," seeking "the rebirth of a golden Hindu civilization."

• According to The U.S. Department of State, "The United States and India have established a strong defense industrial cooperation."

• While India and China share membership in the BRICS, "Beijing has taken New Delhi more seriously as a threat to national security," explains the United States Institute of Peace.

Between the lines: In February 2024, Aljazeera reported that a mosque and religious school in India's northern state of Uttarakhand were bulldozed by the local authorities without warning, killing five people.

• "Just like only Muslims are allowed in Mecca and Medina due to Islamic tradition, we also demand this land be exclusively for Hindus," Swami Darshan Bharti, president of Devbhoomi Raksha Abhiyan, told the Observer.

Follow the money: On April 19, 2024, India will have the most significant election in history, with an expected participation of 500 million people.

• During Prime Minister Modi and President Obama's final meeting in 2016, the United States elevated India to a major defense partner, a status no other country holds.

• In 2023, U.S. and Indian officials announced the Initiative on Critical and Emerging Technologies (iCET), an agreement to expand bilateral technology and defense cooperation.

• 2024 is also an election year in the U.S.