Amid outrage and revulsion at Belarus’s fraudulent election and the subsequent savage repression of protests, Western responses must be planned with half an eye on Russia. Not just for what is often described as the risk of ‘driving Belarus into Russia’s arms’ but also for the danger of unilateral Russian action, with or without Belarusian acquiescence.

In the past six years, there have been endless discussions of what might prompt another Russian military intervention in Europe after Ukraine. In many of these scenarios, it is precisely the situation currently unfolding in Belarus that has been top of the list, with all the wide-ranging implications for security of the continent as a whole that would follow.

Just as with Ukraine, Russia is considered likely to intervene if it seemed to Moscow there was a danger of ‘losing’ Belarus to the West. If the situation in Belarus becomes more unstable and unpredictable, assertive Russian action could aim to assert control by different possible means - either propping up Lukashenka as a paper-thin proxy for Russian power, or installing a different, more compliant leadership as a pretence at legitimacy.

New facts on the ground

Leadership and support for a Western response to events in Belarus might previously have been expected from the United States which, like the UK, had been actively pushing forward relations with Belarus. But besides its preoccupation with internal affairs, US criticism of the election and ‘detentions of peaceful protesters and journalists’ looks tenuous in the light of the current administration’s behaviour over its own recent domestic issues.

Nevertheless, for NATO and for the United States as its primary guarantor, what happens in Belarus remains critically important precisely because of the possible response by Russia. Unpredictability increases the risk of Russia declaring it has received a ‘request for assistance from the legitimate government of Belarus’ and moving military forces into the country.

Once the immediate challenge of suppressing dissent had been dealt with, the presence of Russian forces in Belarus – along with the air and missile forces they could be expected to bring with them - would substantially alter the security situation for a wide area of central Europe. Popular scenarios for Russian military adventures such as a move on the Suwałki gap - the strip of Polish-Lithuanian border separating the exclave of Kaliningrad from the rest of Russia - would no longer be several geopolitical steps away.

Ukraine would be forced to rapidly re-orient its defence posture to face a new threat from the north, while Belarus’s other neighbours would need to adjust to having effectively a direct border with Russia. In particular, NATO’s enhanced forward presence (eFP) contingents in Poland and Lithuania would become the focus of intense political attention, facing calls both for their rapid expansion, and their complete removal as destabilizing factors.

Examining Russia's options

NATO and the US’s European Command must now be watching Russia just as intently as Russia is watching Belarus. For now, Russia may be reassured by what it has seen. While the protests in Belarus are far more widespread than those in Ukraine which led to its former president Viktor Yanukovych fleeing the country, Aliaksandr Lukashenka is showing no signs of similarly losing his nerve.

The viciousness of the repression combined with more or less effective suppression of communications over the internet may mean unrest will soon be subdued. Even if there were a transfer of power, the current Belarusian opposition has not declared a policy of greater integration with the West - and Russia might feel it could constrain the options available to any replacement as effectively as it has done Lukashenka’s.

Perversely, continued international apathy could even work to Belarus’s benefit by providing reassurance to Russia. If a palpable lack of interest helps the Kremlin believe the discontent in Belarus is purely organic and spontaneous, and is not other countries ‘mobilizing the protest potential of the population’ in order to bring about a ‘colour revolution’, this would be a strong argument against a need to act in order to head off Western encroachment.

But the options facing ordinary Belarusians do remain bleak. Passivity means acceptance of continuing stagnation under Lukashenka, with his rule extended indefinitely. Active opposition means a very real risk of arrest with the possibility of serious injury. Unsuccessful protest means the cause may once again soon be forgotten by the outside world. Successful protest carries the ever-present risk of Russia stepping in with an offer of ‘fraternal assistance’ and Belarus becoming effectively a province of Russia rather than an independent country with – in the long term - the opportunity to choose its own future.

Having failed to swiftly translate popular support into tangible political achievements, there are signs the protests against the fraudulent presidential election in Belarus may be losing momentum in the face of the state’s resilience and still-confident security and enforcement apparatus.

Attempts to blame the unrest on the West have focused on groups Lukashenka and Russia can both call enemies. And now Aliaksandr Lukashenka is not only inventing anti-Russian policies supposedly held by the opposition, such as suppressing the Russian language and closing the border with Russia, but also a supposed military threat from NATO.

Border movements

Increased military activity inside Belarus does give Lukashenka a wider range of options. Unscheduled activation of military units includes airspace defence practice with missiles and aircraft, electronic warfare (EW) units put on round-the-clock alert, and a number of infantry brigades preparing for live firing exercises.

Lukashenka is drawing attention to the north-west corner of Belarus, singling out the city of Grodno near the border with Poland and Lithuania as a supposed target for Western efforts at destabilization. Grodno is also the destination for an airborne brigade moving from the east to the west of the country and the focus of military exercises under way on the country’s western borders.

All this feeds Lukashenka’s narrative that Belarus is in danger from NATO and the West who are supposedly both stirring up the protests and seeking to exploit disorder - and that this danger extends to possible military clashes.

The Belarusian exercises are over the border from where NATO troops - including elements of the Light Dragoons, a British reconnaissance unit - have been in place in Poland as part of NATO's enhanced forward presence (eFP) since 2017. Pointing to NATO activity in Poland and Lithuania, Lukashenka said on Wednesday ‘we have to follow their movements and plans’ and that ‘they will answer for it if something happens’.

The danger is that having invented a tense situation in Grodno, Lukashenka may now need to be proved right. There may be staged incidents or ‘provocations’ against Belarus military forces, either supposedly instigated by protesters or even by NATO forces on the border - all aimed at bolstering the narrative that NATO, the EU, and the West in general are hostile to Belarus and that more drastic measures are necessary for protection.

Russia’s options still open

Although initial fears of a Russian move into Belarus have receded, Lukashenka’s complaints about NATO also bolster the case for Moscow to intervene. The military exercises fit the narrative that Belarus is under threat from the West - which is exactly the pretext Russia would need.

If this is believed in Moscow, where foreign minister Sergey Lavrov has already described events in Belarus as part of a ‘struggle for the post-Soviet space’, this makes a Russian intervention more likely. Moving forces away from their base near the border with Russia to the other end of the country near Poland and Lithuania also means any Russian entry into Belarus could go more smoothly, with fewer wild cards of possible Belarusian opposition to consider.

There are plenty of sensible, rational, logical reasons why a Russian military intervention in Belarus would be disastrous and counter-productive. But what seems sensible and rational in Europe and North America does not always carry weight in Moscow, which may see the situation completely differently and measure options by completely different standards.

One key area of doubt is the sympathies of the Belarus armed forces. Although some elements of the Belarusian army - particularly airborne and special forces - work closely with their Russian counterparts, more general suggestions that the Belarusian military is merely an extension of Russia’s and is not capable of taking decisions for itself are an over-simplification.

The Belarus armed forces do know that hosting Russian ground troops, airbases or air defence systems would fatally undermine the country’s hopes of avoiding being caught up in any confrontation between Russia and NATO.

And although the great majority of Belarusian officers are Russian-speaking and many have been trained and educated in Russia, there may be sufficient pride in national identity and resentment at heavy-handed treatment by Russia to lead to substantial obstruction of Russian initiatives.

The Belarus General Staff has already refused permission for a Russian aircraft carrying 155 personnel from the Rosgvardiya militarized security force and three tonnes of cargo ‘for the Belarusian interior ministry’ to land in Belarus. This could indicate not only tension between Russia and Belarus, but even between ministries within Belarus itself.

Like Russia, Lukashenka has plenty of options in reserve if his situation deteriorates further. Announcing a state of emergency would allow the Belarusian army to support the security forces in dealing with protests. If the army is on the move with their equipment they are better prepared to be brought into action if needed, but testing the loyalty of the armed forces could prove dangerous if the sympathies of army units turn out to lie more with civilians than with their oppressors from the interior ministry.

The military preparations against fictitious threats and a patiently-waiting Russia is a toxic mix and Belarus’s friends abroad must tread carefully. A key task for the European Union (EU) is to help the Belarusian people without providing a pretext for further violence and Russian intervention.

The right level of engagement needs to be carefully calibrated, avoiding disasters of strategic communication such as European Commissioner Thierry Breton being translated into English as saying Belarus is not part of Europe – with the lack of EU interest that that implies. Although the EU statement promising sanctions and offering funds received a mixed reception, at least it cannot be used by Lukashenka and Vladimir Putin as evidence that their warnings of a Western military threat are genuine.

It’s easy to take a look at the array of economic and diplomatic punitive policies that the sanctions-happy Trump administration has slapped on individuals and countries from Argentina to Iran and conclude that they have failed to achieve their objectives. With US oil sanctions on Venezuela, trade sanctions on select Argentine, Brazilian and Canadian exports and the tightening of the US embargo on Cuba, sanctions have become a go-to tool of the current administration.

Have they worked so far? Some have. Some haven’t. All of this leads to a legitimate question: when do they? The most extreme example, the US embargo on Cuba – first imposed by executive order under the Trading with the Enemy Act in 1961 and then codified into law by the Cuba Democracy Act (1992) and Libertad Act (1996) passed by Congress – has failed miserably, but remains an article of faith among its advocates, the bulk of them in southern Florida. The 1992 Democracy Act and 1996 Libertad Act have failed to produce either democracy or liberty in Cuba… yet their potential efficacy persists in the collective imaginations of their supporters. Why?

Conditions on Cuba

Any policy needs to have an explicit goal and with it an implicit or explicit theory of change. Whether it’s advertising that smoking kills on cigarette packages or trade negotiations, these efforts have behind them an explicit idea of the change they seek to foster and the causal relationships to achieve them. These are testable and, in theory, subject to course correction if they are not meeting their intended goals. Has advertising reduced the incidence of smoking?  Are workers better paid and receiving better health benefits and labour protections under the trade agreement several years on?

None of those has applied on the US’s embargo on Cuba. First, the policy goals have changed. In some cases, it has been stated that the limitations on US commerce and travel to the island is to reduce the regime’s international support for autocratic regimes. But Cuba’s to-the-death support of the Nicolas Maduro government in Venezuela has demonstrated this isn’t working. 

Arguably it has had the opposite effect: by impoverishing the state-centered Cuban economy, the embargo has made the regime more dependent on the decreasing oil that Venezuela supplies the island nation. In other cases, the stated goal has been regime change as the titles of the 1992 and 1996 act titles reveal.

The latter even lays out a set of conditions that must be present in Cuba before the Congress can lift the trade and diplomatic isolation the US has imposed on the island unilaterally. Those include the release of political prisoners, the absence of any Castro family members from decision-making, and credible steps toward free and fair elections. 24 years after the passage of the Libertad Act, Cuba is no closer to achieving not just one but any of those goals despite the putative incentive of a full and complete lifting of the embargo.   

The question here is the implicit theory of change for the embargo. Here, embargo supporters have never been clear about this link. First, there is the implied hope that sanctions will impose such costs and suffering on the general population that the masses will rise up and shake off autocratic rule of their overlords.

There are several problems with this. One is that general sanctions that reduce access to foodstuffs and finances – as has been the case in the US embargo on Cuba and sanctions on Venezuela – lowers the incentives for protest. It concentrates the government’s political and economic control over the population rather than weakening it. More, people who are hungry living under a repressive government simply aren’t that likely to rise up; they are often more concerned with the day-to-day struggles of getting by.

Second, there is a naïve notion that either those in power or those around them will see the light of day and decide to step down. Promoters of sanctions often have a cold-eyed reality of the nature of evil of autocratic governments. So why do they believe in some hidden decency among its inner circles? In truth, the purveyors of this view deny the basic and laudable basis for their hatred of autocrats: their bottomless cruelty and disregard for their own people. 

Do sanctions work? 

There is also a growing body of research on the efficacy of sanctions. Comparative research has revealed a number of conclusions, none of which appear to have been considered by current policymakers in the White House or State Department.  

The first of these is that sanctions work when they are implemented broadly by a wide coalition of governments. Most of the sanctions that have succeeded in their intentions have been along those lines including the UN sanctions on Iran to push the country to a nuclear deal.  

The second is that the goals of sanctions should be narrow and clearly defined. Successful cases, as Daniel Drezner who wrote a book on the topic has detailed, have been tied to specific goals. Regime change is not one of those. It is too broad and amorphous – though as I say above also unrealistic in its logic between intended effect and the targeted individual. 

A third element of successful sanctions is keeping them flexible and credible. As detailed in a Council on Foreign Relations backgrounder ‘the target must believe that sanctions will be increased or reduced based on its behaviour.’ 

That’s never been the case with Cuba sanctions under the Democracy or Libertad acts. Instead, sanctions relief is presented as a binary choice: democracy or nothing. There are no provisions for intermediate steps that could potentially incentivize changes of behaviour toward loosening state control and reducing human rights abuses.  

The recent tightening of the US embargo that included restrictions on US travel to Cuba and financial transactions under the Trump White House has been disconnected from any specific policy changes in the island. In this case, human rights conditions that the changes were linked to or intended to punish had not taken a dramatic turn for the worse. They were instead intended to simply ratchet up pressure for an embargo which advocates felt was too leaky and hope for a collapse that would weaken the Maduro regime.

That is precisely the problem for many of the most strident advocates of the US-Cuba embargo: the policy has become the objective, divorced from on-the-ground realities and incentives to move them forward.  There is the legitimate concern that the sanctions hurt the very people that the policy claims to defend. They also serve as a rallying point for the Castro regime and a way to cover up for its own economic failures.  But the most damning indictment of the embargo is that in its almost 50-year history it has failed to achieve its objectives.

If the matter is the efficacy of sanctions, then the US embargo on Cuba does not meet the test. It’s not limited to Cuba. None of the cases of regime change that many of the embargo advocates love to cite, communist Eastern Europe, the Soviet Union and South Africa had embargos as tight or isolating as those imposed on Cuba for nearly half a century. There’s a reason for that. It’s basic logic.

A version of this article will also appear in Spanish in the journal Foro Cubano in September.  

Among the many unusual features of the pandemic-induced downturn is the disconnect between depressed real economies and buoyant financial markets. This is particularly evident in the US, where output fell 9.5% in the second quarter while the S&P 500 index rose by one-fifth.

This may suggest a huge financial bubble is in the making, or at least a highly optimistic view of a COVID-19 vaccine and treatments. Another possibility is that markets have a better grasp of the economic dynamics of a post-pandemic world than most nervous consumers and governments.

Certainly, markets have been helped by central bank largesse. In March, major central banks reacted forcefully to the possibility of a serious credit crunch with lending guarantees and bond purchases. Such liquidity interventions soothe troubled markets, but they also raise asset prices — potentially into bubble territory. This partly explains the markets’ strength. But it may not be the whole story.

A closer look at market performance suggests they may be on to something more interesting. Compare the US’s broad-based S&P 500 equity index with the tech-focused Nasdaq 100. Since the start of the year, the Nasdaq has risen 24% while the S&P is up just 5%. In the S&P itself, it has been the dramatic rise of the so-called Faang companies — Facebook, Amazon, Apple, Netflix and Google/Alphabet — that offset lesser performances by the other 495 companies. This sharp difference reflects two forces.

First, the COVID-19 crisis has had vastly different effects on different sectors. Lockdown brought a sudden increase in demand for the technology services that enable home learning (with school closures), homeworking (especially by office workers), home entertainment (instead of cinemas and theatres), home shopping (instead of physical shops), and home deliveries of almost everything else, including food. The Faang companies benefited disproportionally from this surge in demand as their production is scalable. Much of it could also be delivered by employees who themselves worked from home. The rise in their share prices reflects this.

Meanwhile, other sectors suffered massively. In the UK, the overall drop in gross domestic product of 20% in the second quarter was led by a fall of 87% in the accommodation and food services sector, which was severely affected by government restrictions. About one-quarter of the UK workforce, according to official figures, was also furloughed or temporarily off work without pay during lockdown. The fall in the share prices of hotels, restaurant franchises and airlines reflects such factors. 

The second driver of rising markets is that they are forward-looking while economic statistics reflect the past. For example, that UK GDP shrank during the second quarter is less interesting to a financial investor than the fact that during two months (May and June) GDP expanded by 2.4% and 8.7% respectively. In other words, output troughed in April but recovery began in May and accelerated in June as lockdown restrictions were eased. 

It is likely that rapid adaptations by companies and consumers to the pandemic-supercharged trends are already under way. In Britain, the share of retail sales (excluding fuel) made by ecommerce rose from around 7% in 2010 to 20% at the beginning of 2020 — it has since jumped to more than 30%. 

One-third of those officially working from home meanwhile say that they would like to do that permanently, according to the Centre for Economics and Business Research, and many large companies have offered their staff this choice.

Even in labour-intensive sectors such as healthcare and government services there has been a replacement of face-to-face delivery with digital booking and screen-based consultations.

Still, while this may help some companies in certain sectors, it does not imply a smooth recovery for the whole economy. Rather, it augurs a period of disruption as new companies, new business models and new job openings emerge. If the pandemic has ignited a Schumpeterian process of creative destruction, that is likely to continue whether or not effective vaccines and treatments ever come. 

Governments should ease the pain of this disruption with supportive fiscal and monetary policies, but they should not try to slow it down. The hopeful market message is that one lasting consequence of COVID-19 may be the rejuvenation of productivity growth that eventually spreads far beyond tech. 

This article was originally published in the Financial Times.

Making the case

The recent election results in Belarus have triggered revolution in yet another post-Soviet country and Aliaksandr Lukashenka’s response has been devastatingly brutal. However, the Belarusian people’s resilience and Western sanctions – adopted on 14 August – have proved effective. As some of the 6,700 jailed protesters were released, accounts of horrific treatment by law enforcement emerged: overcrowded cells, no food, torture, forced confessions, severe beatings , and threats of rape.

With reports of mounting violence, Polish MEP Radosław Sikorski warned Lukashenka to expect not just sanctions but also the possible intervention of the International Criminal Court (ICC), an idea supported by the opposition-led Belarus’ National Salvation. While there are significant impediments to the Court’s involvement, the impact of such an initiative could be ground-breaking.

Legal framework

The ICC considers criminal responsibility of top civilian or military leaders for only the most serious atrocities - war crimes, genocide, crimes against humanity and, in certain cases, the crime of aggression. In the context of Belarus, the Court’s jurisdiction over crimes against humanity might be relevant. According to the Rome Statute, the ICC’s founding treaty, crimes against humanity include widespread or systematic abuses directed against a civilian population. Atrocities relevant to Belarus include arbitrary imprisonment, torture, inhuman treatment, sexual violence, and enforced disappearances.

The ICC is a last resort. It can intervene only if states are unable or unwilling to properly investigate and prosecute serious crimes themselves. Although Belarus’s Criminal Code punishes crimes against humanity, as Lukashenka himself is implicated, impartial trials in the country are impossible while he is still in power. Other countries may investigate specific atrocities in Belarus under the universal jurisdiction principle. Universal jurisdiction greenlights investigations into the most serious crimes regardless of where they are perpetrated. German, Swedish and French proceedings on Syria are illustrative examples of this. Protesters may also file individual complaints of abuse to UN bodies under the protocols of the International Covenant on Civil and Political Rights and the Convention on the Elimination of All Forms of Discrimination against Women. The European Court of Human Rights is not an option for the protesters because Belarus is not a member of the Council of Europe.

As the UN mechanisms are yet to be triggered and there has not yet been any talk of universal jurisdiction proceedings, the question of recourse to the ICC remains. But as Belarus is not party to the Rome Statute, the only way to trigger the Court’s jurisdiction is a referral by the UN Security Council (UNSC). Even though it would be vetoed by Russia –  and, almost certainly, China – it could be worth pursuing.

The importance of symbolism

So far, the UNSC has referred to the ICC two situations in non-party states – Sudan and Libya. But for cases that do not end up being referred to the Court, the UNSC debates are as significant for what they manage to agree upon as they are for what they do not. Regarding Belarus, two impeded UNSC accountability initiatives are relevant: on Syria and MH17.

In 2014, Russia and China vetoed the referral of cases of violence in Syria to the ICC. In 2015, Russia was the only country to block the creation by the UNSC of a special tribunal to investigate Malaysian Airlines flight MH17, downed by a Russian missile over war-affected eastern Ukraine. In both cases, the vetoes delayed justice, but they did not prevent it. For Syria, special independent mechanisms to collect evidence for adjudication were developed. Although justice has yet to be done, except in states like Germany, the evidence is ready for any future court. For MH17, a proceeding at a domestic Dutch court became an alternative. Parallel to that, new evidence of Russia’s role in both Syria and the downing of MH17 emerged - contextualising its UNSC vetoes.

Russia’s stakes in the Belarusian elections are probably even higher: the victory of democracy in Belarus will deprive it of one of its closest and most dependent post-Soviet allies.

Even if Russia destroys any chance of Belarusian citizens using the ICC, the attempted ICC-Belarus discussion will not have been in vain. Russia’s opposition to the respective UNSC resolution would be a self-defeating validation of Lukashenka’s atrocities against his own people, unashamedly restated at one of the world’s top diplomatic negotiation tables. Similar to Syria and MH17, the UNSC would reconfirm its self-imposed impotency to defend basic human rights amid political conjuncture. This would bring more attention to the issue and catalyse action through other platforms, including the discussions across UN bodies and the consideration of Belarusians’ individual complaints of abuse, and could lead to tougher sanctions. It could also further make the case for universal jurisdiction proceedings in other countries.      

AI holds the potential to replace humans for tactical tasks in military operations beyond current applications such as navigation assistance. For example, in the US, the Defense Advanced Research Projects Agency (DARPA) recently held the final round of its AlphaDogfight Trials where an algorithm controlling a simulated F-16 fighter was pitted against an Air Force pilot in virtual aerial combat. The algorithm won by 5-0. So what does this mean for the future of military operations?

The agency’s deputy director remarked that these tools are now ‘ready for weapons systems designers to be in the toolbox’. At first glance, the dogfight shows that an AI-enabled air combat would provide tremendous military advantage including the lack of survival instincts inherent to humans, the ability to consistently operate with high acceleration stress beyond the limitations of the human body and high targeting precision.

The outcome of these trials, however, does not mean that this technology is ready for deployment in the battlefield. In fact, an array of considerations must be taken into account prior to their deployment and use – namely the ability to adapt in real-life combat situations, physical limitations and legal compliance.

Testing environment versus real-life applications

First, as with all technologies, the performance of an algorithm in its testing environment is bound to differ from real-life applications such as in the case of cluster munitions. For instance, Google Health developed an algorithm to help with diabetic retinopathy screening. While the algorithm’s accuracy rate in the lab was over 90 per cent, it did not perform well out of the lab because the algorithm was used to high-quality scans in its training, it rejected more than a fifth of the real-life scans which were deemed as being below the quality threshold required. As a result, the process ended up being as time-consuming and costly – if not more so – than traditional screening.

Similarly, virtual environments akin to the AlphaDogfight Trials do not reflect the extent of risks, hazards and unpredictability of real-life combat. In the dogfight exercise, for example, the algorithm had full situational awareness and was repeatedly trained to the rules, parameters and limitations of its operating environment. But, in a real-life dynamic and battlefield, the list of variables is long and will inevitably fluctuate: visibility may be poor, extreme weather could affect operations and the performance of aircraft and the behaviour and actions of adversaries will be unpredictable.

Every single eventuality would need to be programmed in line with the commander’s intent in an ever-changing situation or it would drastically affect the performance of algorithms including in target identification and firing precision.

Hardware limitations

Another consideration relates to the limitations of the hardware that AI systems depend on. Algorithms depend on hardware to operate equipment such as sensors and computer systems – each of which are constrained by physical limitations. These can be targeted by an adversary, for example, through electronic interference to disrupt the functioning of the computer systems which the algorithms are operating from.

Hardware may also be affected involuntarily. For instance, a ‘pilotless’ aircraft controlled by an algorithm can indeed undergo higher accelerations, and thus, higher g-force than the human body can endure. However, the aircraft in itself is also subject to physical limitations such as acceleration limits beyond which parts of the aircraft, such as its sensors, may be severely damaged which in turn affects the algorithm’s performance and, ultimately, mission success. It is critical that these physical limitations are factored into the equation when deploying these machines especially when they so heavily rely on sensors.

Legal compliance

Another major, and perhaps the greatest, consideration relates to the ability to rely on machines for legal compliance. The DARPA dogfight exclusively focused on the algorithm’s ability to successfully control the aircraft and counter the adversary, however, nothing indicates its ability to ensure that strikes remain within the boundaries of the law.

In an armed conflict, the deployment and use of such systems in the battlefield are not exempt from international humanitarian law (IHL) and most notably its customary principles of distinction, proportionality and precautions in attack. It would need to be able to differentiate between civilians, combatants and military objectives, calculate whether its attacks will be proportionate against the set military objective and live collateral damage estimates and take the necessary precautions to ensure the attacks remain within the boundaries of the law – including the ability to abort if necessary. This would also require the machine to have the ability to stay within the rules of engagement for that particular operation.

It is therefore critical to incorporate IHL considerations from the conception and throughout the development and testing phases of algorithms to ensure the machines are sufficiently reliable for legal compliance purposes.

It is also important that developers address the 'black box' issue whereby the algorithm’s calculations are so complex that it is impossible for humans to understand how it came to its results. It is not only necessary to address the algorithm’s opacity to improve the algorithm’s performance over time, it is also key for accountability and investigation purposes in cases of incidents and suspected violations of applicable laws.

Reliability, testing and experimentation

Algorithms are becoming increasingly powerful and there is no doubt that they will confer tremendous advantages to the military. Over-hype, however, must be avoided at the expense of the machine’s reliability on the technical front as well as for legal compliance purposes.

The testing and experimentation phases are key during which developers will have the ability to fine-tune the algorithms. Developers must, therefore, be held accountable for ensuring the reliability of machines by incorporating considerations pertaining to performance and accuracy, hardware limitations as well as legal compliance. This could help prevent incidents in real life that result from overestimating of the capabilities of AI in military operations. 

One of the features of financial markets since early summer has been a decline in the value of the dollar against many currencies, and with it, an especially interesting acceleration in the price of gold. In addition to the usual professional market analysis about the dollar’s movement, this has led to speculation that it might be the beginning of the end of the dollar’s pre-eminence.

Having spent far too much of my professional life as a supposed currency expert, I reiterate something I learnt early on: the foreign exchange business sometimes grants an analyst their 15 minutes of fame, but no expert is a match for the millions who participate in this huge global market all day long. But I spent over 30 years in the financial markets, the vast majority in the hubbub of the forex market. And along the journey, I think I learnt a few tricks of the trade.

At the core of trying to answer questions about the dollar, I learnt a long time ago that there are two entirely separate questions, one of which has two subsections, about the dollar. Firstly, there is the question about the use of the dollar. Will it continue to dominate the world’s financial system as the most widely accepted medium of exchange?

This is not at all the same issue as the dollar’s day-to-day performance against other currencies. This is the second question, which is almost definitely the most pertinent one to what has happened during the summer. How the dollar’s value moves against other currencies is driven by a structural, or a valuation component, and a cyclical component. Each can be analysed separately, and if you were daft enough to devote the years I did to the process, you can combine the two, to have a dynamically adjusted fair value, persuading yourself at least that such an approach combines all available information at any point in time.

In terms of valuation, the most common approach is so-called purchasing power parity, which holds that a currency, in equilibrium, will ultimately reflect the difference in prices between two countries. If inflation is persistently higher in the US than in the eurozone, then the equilibrium value of the dollar will decline over time. I developed my own version of equilibrium currency rates, as it seemed to me in the real world, that the real inflation adjusted value of a currency was not stable, and that it moved over time. This was a reflection of productivity differentials between two countries. I christened it GSDEER: 'the Goldman Sachs Dynamic Equilibrium Real Exchange Rate' when I joined the firm in 1995.

What I learned is that when a currency is more than two standard deviations away from its fair value, it makes a huge amount of sense to watch closely, and when the momentum changes, it is worth going with this trend reversal. The momentum can change based on a change in the forces that have driven the currency away from its fair value, although it can be often easier to detect simply by watching the change in price.

One of the things that has frustrated currency participants over the past decade, with the exception of the Swiss franc and the pound, is that other major currencies have not been that far away from their fair value against the dollar or each other. Even during the dollar’s rise in recent years, including the period up to the summer, while it had clearly become overvalued, with the possible exception of the pound, it hadn’t become more than two standard deviations above its own fair value. In this regard, I have believed that one might be on the lookout for a chance to buy the pound against the dollar, and perhaps against the yen.

The cyclical component of a currency’s movement around its conceptual equilibrium can perhaps best be captured in the nominal interest rate adjusted for inflation expectations. I persuaded myself that the actual spot exchange rate of the dollar on any one day should be close to the adjusted GSDEER, and if it was not, then it would be useful for traders.

The dollar had become more interesting pre-COVID, as it appeared to have risen notably against many currencies, including the euro. And in this regard, the dollar was highly susceptible, and has turned out to be actually vulnerable, to a change in the state of the US and euro area economies. Now that the Federal Reserve has returned to extremely expansive monetary policy, and with it, lower real interest rates, a dollar decline seemed pretty inevitable.

At current prices, on 26 August, the dollar still seems modestly expensive compared to dynamically adjusted fair value. The dollar decline could persist. In the late 1980s and mid 1990s, the dollar fell to very low levels and became very undervalued — this tended to coincide with widespread talk about the dollar’s preeminence, which turned out to be, at least for that era, wrong. And I do share the views of some people who believe, as a result of US policies, conditions are more conducive to a sustained period of dollar weakness. This requires strong ongoing evidence that Europe, China and much of the rest of Asia continue to manage COVID-19 better than the US, and that their cyclical recoveries from the pandemic continue to surprise relative to the US.

Now as for the first question, about the demise of the dollar’s dominance, let me repeat that this is largely a separate issue, but I encourage any reader to be careful about getting sucked into this belief in making an investment or hedging decision.

It is quite possible that the use of the dollar can decline, and start off a systematic decline even when its value is strong. Indeed, in the past couple of years when its value was largely rising, decisions made by US policymakers to use the dollar’s dominance as a way of penalising other countries has resulted in those countries reducing their share of dollar currency reserves. Russia is a particular example, and there is some modest evidence that China is doing likewise.

And the opposite can also be true.

Ultimately, the dollar’s dominance cannot persistently outweigh the relative decline of the US economy in the world, which has been occurring now for 20 years. At some point, it will start to be replaced by something else. Whether that is, the renminbi, the euro, Bitcoin, the return of gold — all are conceivable, and may happen. It might be starting now. But don’t confuse that with where the dollar’s price is heading against other currencies in coming days, weeks, or in 2021.

This article was originally published in The Article.

As the UK’s post-Brexit foreign policy takes shape, it is increasingly clear that joint cooperation with France and Germany will be of key importance. The current dispute with the US over imposing further sanctions on Iran shows that the UK values continuing strong cooperation with its European partners on key international issues, even at the cost of a major transatlantic dispute. Moreover, the recent first meeting of the German, French and British defence ministers in an E3 (European/EU 3) format signalled political commitment by all three partners to double down on joint diplomatic cooperation despite troubled UK-EU Brexit negotiations.

The UK working with France and Germany as part of the E3 has evolved in recent years from a shared approach to diplomacy on Iran’s nuclear programme to include a broader range of international security issues, such as the conflict in Syria and freedom of navigation in the South China Sea. E3 cooperation has so far been largely low-key, marked by close relationships and daily contacts between officials rather than high-profile summits between the leaders of the three countries. In the absence of any EU-UK negotiations on a future foreign, security and defence policy relationship, the E3 represents a key arrangement for aligning and mobilizing Europe’s ‘big three’ states. In a recent Chatham House research paper, we argue that Germany, France and the UK could and should maintain the E3 as a platform for flexible diplomatic coordination and crisis response, and expand its focus to address a new set of thematic, regional or multilateral topics. These could range from further cooperation on arms control to a reform agenda for multilateral institutions or a joint approach to the broader European neighbourhood.

The E3 countries have complementary reasons for wanting to make the format work. France and Germany recognize that the high degree of shared foreign and security policy interests with the UK require a pragmatic format for close cooperation, to provide insurance against an underdeveloped EU-UK relationship, help efficiently combine European forces and bring added value to the EU and NATO – but also to see the UK aligned with Europe on major international issues. Close foreign and security policy relationships with France and Germany will remain of interest to the UK as well, in order for it to keep playing an effective role in European security and to work with like-minded partners on key international issues.

Brexit presents both a major challenge for the E3 relationship and a major rationale for developing the format further. Neither France nor Germany see E3 cooperation as a substitute for a deal on a future EU-UK relationship or for the development of the EU’s own foreign, security and defence policy. Failure to reach a Brexit deal and a collapse of the EU-UK relationship into hostility and antagonism could make E3 cooperation politically difficult in the short term. In the longer term, were the UK and the EU to adopt very different foreign and security policies, E3 cooperation would also make less sense.

Even if an agreement is reached on the future EU-UK relationship by the end of this year, for France and Germany the challenge will be to reconcile their work with the UK through the E3 with their commitment to the EU. France and Germany have different rationales for favouring E3 cooperation. While France is more relaxed about its intergovernmental approach and prioritizes deliverables, Germany is worried about the perceived competition between the E3 and the EU. However, they both share the view that E3 cooperation should complement rather than undermine EU foreign, security and defence policy cooperation, while acting to bridge or smooth cooperation between the EU and the UK. If E3 cooperation were to conflict with broader EU policy by generating hostility from excluded member states (such as Poland or Italy) and therefore distract from building consensus for broader EU initiatives, such as post-COVID economic recovery, E3 cooperation may falter.

Another key factor for the E3 will be the evolution of transatlantic relations, and whether the next US administration presents Europe with the dilemma of choosing between broad alignment with the US or open confrontation, as in the case of the Iran nuclear deal’s ‘snapback’ mechanism. As a non-EU state, the UK may have more autonomy to set its own policies but it will not be able to escape a choice between either a broad alliance with European states or a more ambivalent and ad-hoc relationship with the continent, while also creating new formats for cooperation with other democracies such as the Five Eyes states. This type of diplomatic ‘venue shopping’ could create tensions with European partners, especially Germany and France who hope to anchor London into a broad European approach. The UK’s ongoing Integrated Security, Defence and Foreign Policy Review should provide clarity as to the UK’s future European ambitions and what that means for the E3.

Given the growing instability surrounding Europe, reinforced by an eventful summer 2020– with the Iran nuclear deal in limbo, renewed tensions between Turkey and Greece in the Mediterranean, protests in Belarus, increasing US-China rivalry and further instability in the Sahel – the E3 has recently been developing a more visible profile. By convening the first meeting of E3 defence ministers in August, Germany showed leadership and a commitment to the format despite its fears of hostility from other EU member states towards increased E3 cooperation. Officially widening E3 cooperation to include defence, while mostly symbolic for now, satisfies Berlin by marking a step towards institutionalization, appeases Paris by putting on the joint agenda issues such as the recent coup in Mali and the crisis in the Eastern Mediterranean, and shows some political commitment by London at a time of tense UK-EU Brexit negotiations.

France, the UK and Germany all agree that the E3 is a necessary cooperation format that needs to be developed further. Recent events seem to show willingness on the part of the three countries to make it work, both in spite of and because of upcoming Brexit tensions. Longer-term challenges – relating to intra-EU tensions over the role of the E3, the future EU-UK relationship and transatlantic divergences – are still to be addressed and managed for the format to reach its full potential. Nevertheless, in today’s uncertain strategic context for Europe, the E3 is establishing itself as a go-to format for cooperation for Europe’s ‘big three’.

1. Acknowledge the new reality

A huge number of Belarusians across all levels of society simply no longer recognize Lukashenka as their legitimate president. The unprecedented size and persistence of protests against his regime and the sheer scale of reports of repressive actions, torture, and even murder, mean Belarus will never be the same again.

However, current paralysis in EU policy and the absence of a comprehensive US policy are both serving as a de facto licence for Lukashenka to deepen the political crisis. The sooner policymakers realize this and act with more responsibility and confidence, the quicker the increasing repression can be reversed.

2. Do not recognize Lukashenka as president

If the international community stops recognizing Lukashenka as president, it makes him more toxic to others, including Russia and China, both of which will be reluctant to waste resources on someone who is seen as the main cause of Belarusian instability. Even if Russia still decides to save Lukashenka and financially support him, ignoring Lukashenka decreases the legitimacy of any agreements he signs with the Kremlin on collaboration or integration.

Demanding a re-run of the presidential election should also remain firmly on the agenda as functionaries within Lukashenka's system should know this international pressure is not going away until a truly transparent vote takes place.

3. Be present on the ground

In order to curb repression and establish ties with actors within Belarus, a monitoring group should be organized under the auspices of the UN, the OSCE or other international organizations to establish a presence on the ground, and to stay in the country as long as it is needed, and is possible. Governments and parliaments can send their own missions, while staff from international media and NGOs should be encouraged to report on what is actually happening inside the country.

The bigger the visible presence of the international community is in Belarus, the less brutal Lukashenka’s agencies can be in persecuting protestors, which in turn would then allow more substantial negotiations to take place between the democratic movement and Lukashenka.

4. Announce a package of economic support for a democratic Belarus

The Belarusian economy was already in bad shape before the election, but the situation is going to get much worse. The only way out is support from the international community with a ‘Marshall Plan for a democratic Belarus’. States and international financial institutions should declare they will provide significant financial assistance through grants or low-interest loans, but only if there is democratic change first.

It is essential to make this economic package conditional on democratic reform, but also that it will have no geopolitical strings attached. If a democratically-elected government decides it wants to improve relations with Russia, it should still be able to count on an assistance package.

This would send a strong signal to economic reformers who remain inside Lukashenka's system, giving them a genuine choice between a functioning Belarusian economy or sticking with Lukashenka, whose leadership is seen by many as to be responsible for ruining the country’s economy.

5. Introduce targeted political and economic sanctions

The Lukashenka regime deserves tough sanctions internationally, but so far only selective visa restrictions or account freezes have been imposed, which have little to no effect on what is actually happening on the ground. Visa sanction lists need to be expanded but, more importantly, there should be increased economic pressure on the regime. Companies which are the most important to Lukashenka's business interests should be identified and targeted with sanctions, all their trading activity halted, and all their accounts abroad frozen.

Governments should also persuade their own country’s large companies to reconsider working with Belarusian producers. It is shameful that international corporations continue to advertise in media controlled by Lukashenka and appear to be ignoring the reports of human rights violations at Belarusian companies they do business with.

Moreover, there should be a deadline set to halt all repression, or broader economic sanctions will be imposed. This would send a strong message to Lukashenka and also his entourage, many of whom would then become more convinced he has to go.

6. Support NGOs to investigate allegations of torture

There are few legal mechanisms to prosecute those thought to be involved in election fraud and acts of brutality. Nevertheless, all reports of torture and falsifications should be properly documented by human rights defenders, including identifying those alleged to have taken part. Gathering evidence now prepares the ground for investigations, targeted sanctions, and leverage on law enforcement officials in the future.

But, given that such an investigation is not possible in Belarus right now, international human rights activists should be enabled to start the process outside the country with support from Belarusian NGOs.

7. Support known victims of the regime

Even with an unprecedented campaign of solidarity among Belarusians, many people need support, especially those alleged to have suffered torture. Some media outlets claim to have lost a significant amount of revenue because advertisers were forced to pull out, and journalists arrested. Human rights defenders need funds to keep organizations running in the heat of this crackdown.

Supporting all these people and organizations will cost tens of millions of euros, but it would significantly ease the huge financial burden facing those who have opposed the regime.