🌍 Malaysia’s 5G review is worrying the West

🗺️ AROUND THE WORLD

1. 🇦🇫 Afghanistan: The UN Security Council has agreed to let the Taliban’s sanctioned foreign minister travel to Pakistan next week to meet with his Pakistani and Chinese counterparts. UN sanctions mean several senior Taliban officials need special permits to leave Afghanistan.

2. 🇷🇺 Russia: According to US intel, more than 20,000 Russian soldiers have been killed and 80,000 injured in Ukraine since December. That suggests Russia’s casualty rate is accelerating.

3. 🇳🇿 New Zealand: Prime Minister Chris Hopkins shared on Monday that he supports New Zealand becoming a republic, but it’s not a change he’ll push as leader. Barbados was the last country to cut formal ties with the British monarchy in 2021.

4. 🇧🇷 Brazil: Lawmakers will vote on a ‘Fake News Bill’ as soon as this week. Major tech companies have critiqued the proposed law, which imposes fines on platforms that fail to remove unlawful material.

5. 🇮🇱 Israel: Palestinian and Israeli forces have exchanged fire after a leader of Palestinian Islamic Jihad (a Western-designated terrorist group) died in Israeli custody. The detainee was on his 87th day of a hunger strike.

🇲🇾 MALAYSIA | TECH

The West is worried about Malaysia and 5G

Briefly: European and US officials are reportedly worried Malaysia could include China’s telecoms giant Huawei in its 5G infrastructure rollout.

Swedish firm Ericsson won the $2.5B tender to build Malaysia’s 5G network in 2021, but Malaysian officials recently decided to review the decision. And that’s got the West sweating like a balloon seller at a jousting tournament.

What’s the West’s issue with Huawei?

• 📡 The nature of the tech makes securing 5G more difficult

• 👬 Huawei reportedly has close ties with China’s military and intel

• 📖 A 2017 law in China requires firms to cooperate with Beijing, and

• 💻 China has allegedly used Huawei kit to conduct espionage already

So Huawei is now effectively blacklisted across much of the West.

For its part, Huawei says the West is just using national security as a fig leaf to protect its firms from foreign competition. Huawei’s been lobbying hard for a piece of the Malaysian pie, and Kuala Lumpur’s surprise review suggests it may be working.

Intrigue’s take: Being caught in the middle of a game of great powers is never fun, but it’s particularly annoying when it threatens your download speed.

So, like many others, Malaysia is now having to make a call: keep China happy (involve Huawei) or keep the West happy (exclude Huawei). The nature of 5G tech – and US-China relations – suggests there’s no easy middle ground here.

Also worth noting:

• The EU has around €25B invested in Malaysia. Malaysia’s prime minister says China recently made a single pledge to invest $39B.

• Huawei controls 20% of the telco equipment market outside China. Swedish firm Ericsson and Finnish firm Nokia each have an 18% share.

Today’s briefing is sponsored by Wander

🇷🇺 RUSSIA | GEO-ECONOMICS

Russia’s economy limps on

Briefly: Russia is reportedly preparing to restock its foreign currency reserves for the first time since its invasion of Ukraine. This pivot from burning cash to stashing it suggests Moscow is managing to mend its budget, which has buckled under massive wartime spending.

How’s Moscow doing this? 

• 🛢️ It changed its tax rules, forcing oil producers to pay more tax, and

• 📉 Its weak ruble means taxes paid in foreign currencies stretch further

Countries use foreign reserves to stabilise their currency and ensure payment for imports. But of course, Western sanctions mean Moscow can’t just stock up on US dollars or euros like everyone else. So it’ll likely buy Chinese yuan instead.

Intrigue’s take: Huge Chinese and Indian purchases have helped push Russian oil exports to their highest volumes since early 2020. But Western sanctions have suppressed Russian oil prices, so its revenues are still 43% lower than a year ago.

So all in all, the market seems to be telling us that Western sanctions are biting, just not enough to end Russia’s war machine. At least, not yet.

Also worth noting:

• Russia’s Finance Ministry projects 1.2% GDP growth this year.

• Bloomberg forecasts Russia’s economy will be 8% smaller by 2026 than if it hadn’t invaded Ukraine.

👀 EXTRA INTRIGUE

Some intriguing figures on 5G and roaming networks around the world:

• 5 billion: the number of people with 5G subscriptions by 2028

• 2: the number of years it takes for global mobile data traffic to double

• 100: the multiplier between 4G and 5G speeds, in optimal conditions

• $1.3T: the total contribution 5G will make towards global GDP by 2030

🏁 FLAG OF THE DAY

Central Asia’s flag game is 🔥🔥🔥, and Kyrgyzstan's banner might take the cake. The red symbolises bravery, and the sun’s 40 rays represent the 40 Kyrgyz tribes that united to fight the Mongols in the 9th century. As for that criss-cross image? It’s the roof of a traditional Kyrgyz yurt. Pretty, pretty, pretty… good.

Our rating: 9.1/10.

🗳️ POLL/QUIZ TIME!

Yesterday’s poll: Do you think the banking crisis is over?

🟨🟨🟨⬜️⬜️⬜️ 🤓 Yes, at least the worst of it (32%)

🟩🟩🟩🟩🟩🟩 🤕 No, it's just warming up (65%)

⬜️⬜️⬜️⬜️⬜️⬜️ ✍️ Other (write-in!) (3%)

Your two cents:

• 🤓 E: “[…].Three banks failed and the FDIC/Federal Reserve handled it excellently. If anything, this bank crisis has increased my faith in the US banking system (and its ability to handle crises) rather than decreased it.”

• ✍️ M.M: “Crisis probably isn't the right word, maybe more of a banking slow burn over the next couple of years as economies adjust to the end of the era of cheap money.”