RUSSIAN PERSPECTIVE

Russian military repels ‘massive’ Ukrainian offensive – defense ministry

Russian troops have stopped an “intensive” effort by the Ukrainian military to break their defensive lines near the village of Orekhov in Russia’s Zaporozhye Region. The village and its surroundings have been the scene of fierce fighting for weeks, as Ukraine’s floundering counteroffensive drags on.

Kiev’s forces “resumed intensive offensive operations” just south of Orekhov on Wednesday morning, the Russian Defense Ministry said in a statement that evening. Despite the Ukrainian army launching a “massive”assault with three battalions backed by tanks, Russia’s 810th Marine Brigade, and 71st Motorized Rifle Regiment of the 42nd Motorized Rifle Division held their positions and repelled the Ukrainian advance, the ministry said.

During the battle, Ukraine lost 22 tanks, 10 infantry fighting vehicles, and more than 100 men, according to the ministry.

Nearby, Russian troops repelled an attack on the village of Rabotino, and used air and artillery power to hit Ukrainian units near Malaya Tokmachka, Yablokovo and Rabotino.

All of these locations sit within the formerly Ukrainian region of Zaporozhye, where Kiev’s  forces have been attempting for almost two months to penetrate Russia’s multi-layered defensive lines and push south to the Black Sea. If Ukraine were to succeed in this gambit, Russia’s land access to Kherson Region and Crimea would be severed.

However, Ukraine’s efforts have thus far been in vain. Russia has heavily mined the no-man’s-land in front of its defensive lines in this area, and early attempts to push through these minefields have proven disastrous for the Ukrainian military. Photos and videos from the beginning of Ukraine’s counteroffensive in June showed lines of destroyed tanks and armored vehicles sitting in minefields between Malaya Tokmachka and Rabotino, burning after they hit mines, and being targeted by artillery and Russian helicopters.

Ukraine’s 47th Mechanized Brigade – a NATO-trained unit – reportedly lost30% of its US-supplied Bradley Infantry Fighting vehicles in two weeks near Orekhov and Rabotino, while the 33rd Mechanized Brigade lost nearly a third of its 32 German-made Leopard tanks in the same area in a single week.

Across the entire frontline, Ukraine’s summer counteroffensive has already cost Kiev 26,000 troops and 3,000 pieces of heavy military hardware since June, according to the latest figures from Moscow. Russian President Vladimir Putin has described the Ukrainian operation as “suicidal.”

Ukrainian President Vladimir Zelensky has admitted to having difficulties, saying the counteroffensive is developing “slower than desired.” Amid reports that his Western backers are displeased at the pace of the offensive, Zelensky has attempted to shift the blame for the apparent failure to the West, saying that Ukraine did not receive enough munitions, weaponry, or training to succeed.

WESTERN PERSPECTIVE

Ukraine counteroffensive is moving, US says while pledging support

Ukraine's counteroffensive is "not a stalemate" even if it is not progressing fast enough, White House national security spokesman John Kirby told reporters on Wednesday.

Kirby made the remarks when asked about the pace of Ukraine's counteroffensive in a press briefing.

"President Zelenskiy himself has said that he that it's not progressing as fast as he would like and they're not moving as far every day as they would like. The United States is not going to take a position on that," Kirby said.

He added: "That said they are moving, it's not a stalemate. They're not just frozen. The Ukrainians are moving."

The White House national security spokesman said Washington would "make sure that they (Ukrainians) have the kinds of tools and capabilities they need to stay on the move."

More than $43 billion in U.S. military aid has been provided since Russia's invasion began in February 2022. The U.S. Department of Defense announced $400 million in additional security assistance for Ukraine earlier this week, including air defense missiles, armored vehicles and small drones.

U.S. Secretary of State Antony Blinken said on Sunday that while Ukraine has recaptured half the territory that Russia initially seized in its invasion, the counteroffensive was in its early days and would take shape over "several months."

RT/Reuters

Since the ill-fated night of October 20, 2020, the Babajide Sanwo-Olu administration has heavily invested in propagating its version of what went down. One press release issued by the Permanent Secretary in the Ministry of Health, Olusegun Ogboye, to deflate the outrage following the leaked memo revealing that the Lagos State Government planned a mass burial for the 103 victims of the 2020 #EndSARS violence punched a hole in one of their strongest arguments. From the Dis-Information Minister, Lai Mohammed, to state officials who traversed the news media circuits over the Lekki toll gate incident, one of their most vehement defences was that many deaths could not have occurred as claimed without families coming forward to claim their losses. It took only three years for the government to inadvertently confirm that some of us are actually officially faceless, nameless, disconnected from kith and kin, and can be disposed of like nothing.

As one has come to expect of Nigerian bureaucratic riposte to public disquiet, the Lagos press release on the mass burial Ogboye followed the standard format of prefacing the point with feigned anger at a misinformed public, pejoratively schooling people for what they got wrong, finally making the expected point, and rounding off with a scold. Apart from not departing from this pattern, they were also more concerned with responding to those they consider mischief-makers than reflecting on the moral import of 103 people (and likely more) dying in a single day in a single city. The way the government glibly stated that they picked up their bodies in several neighbourhoods around the city, one would be forgiven for thinking these people were merely a herd of cows struck by thunder while grazing.

If the feverish explanations of Lagos State officials fail to convince anyone of their sincerity, it is because we are reeling at the horror of the city as a sprawling necropolis. So many lives can be lost, and the government cannot stretch itself to dignify them by at least finding out their identity and killers? It must be far much easier to stick people in the ground and forget them than to take the trouble to come to terms with the cheapness of life and death under your administrative watch.

Ogboye’s write-up concludes interestingly: The government, therefore, appeals to social media rumour mongers to please allow the hapless families of the unclaimed loved ones a deserved closure. Such self-contradiction! If the whole point of mass burying 103 people is because nobody came forward to claim them, then who are these “hapless families” getting “deserved closure” on whose behalf you are appealing for sensitivity? What kind of emotional closure is possible for the families who are still out there unknowing of the fate of their deceased, and will probably never know now that those people will be undistinguishably buried in an unmarked grave with many others? If the state had truly believed some families out there deserved closure, it would have tried harder.

Of course, they claimed that they sponsored several newspaper advertisements announcing that families missing a loved one should come forward and take a DNA test to ascertain whether they are related to the people lying in the morgues. Whether the people looking for a missing person in Nigeria buy a daily newspaper every single day to get that information and respond accordingly is a question only Lagos State can answer. But waiting for people’s families to respond should not preclude giving the dead a face and getting justice for them.

Funnily enough, the state explained that some of the unfortunate victims were killed in community clashes. Were those combatant invaders from Mars that no one knew any of them in Fagba, Ajah and other communities? For the state to be certain that their deaths were a consequence of community clashes, they must also have some information on who they clashed with, where the clashes happened, who killed who, and who should be charged for murder. As for the ones that they claimed died during a jailbreak at the Ikoyi prison, finding them should not be so hard when there are prison records. Or, are they saying they throw people in jail without adequate records of who they are and to whom they are related? Regularly, we hear of the billions of naira allocated to feeding prisoners. I find it hard to believe that the government spends so much money on their food without recording their existence.

What the reality of over 100 people being unidentifiable in a modern state like Nigeria tells us is that we still do not have a proper accounting system for the humans living within our domains. We are a society where the government votes massive amounts of money to purchase surveillance equipment like CCTV and so on but without a commensurate outcome in securing lives and properties. Despite subjecting people to endless data capture for different purposes, over 100 people can still get lost within a single city and nobody knows anything about them? No wonder bandits in Nigeria make videos without bothering to mask their faces anymore. The fact that a criminal unveils their face before the public glare does not make them un-faceless to the Nigerian government.

Meanwhile, one cannot argue that the means to account for people does not exist. It does. When a young man made a snarky comment about former first lady Aisha Buhari on Twitter, the police managed to track him down to arrest him even though they had to lay in wait for him for about six months. In this Nigeria where over 100 people will be thrust into a mass grave it has never been hard to fish out people for punishment. That is the way of the Nigerian state. When they need to destroy lives, government agents can be madly efficient with their use (and abuse) of institutional resources. When you ask them to use that same ingenuity to improve the quality of life for the people they govern, they have no clue how to summon their wits. They can destroy, not create.

The fate of these poor Lagosians—to be dumped in a mass grave at a cost higher than an annual minimum wage—says so much about the operations of life and death in the Nigerian necropolis. Life and death are not necessarily opposites; they are a continuum. How a society treats death is always indicative of their attitude towards life. People who do not give dignity to the dead will hardly be concerned about life either. One of our biggest failings in this part of the world is the levity with which we take life; it is the reason we trail behind civilisation while the rest of the world soars to unimaginable heights. Everything the societies we call “advanced” have invented, from their technology to ideologies, has been to enhance life. Every use of their God-given thinking faculties has been to give life and more abundantly. Societies without a similar drive towards improving life will either be enslaved to the ones that take life seriously or perish.

 There is a reason, every year, thousands of Africans die in the Mediterranean while trying to cross over to Europe and you never hear from the government of their respective countries. There is hardly outrage at their death and there is almost no likelihood that any actionable plan to prevent a repeat is in the offing. Our leaders are often too busy trying to self-enrich to be bothered that some unfortunate people who have not yet lived are mass-buried in the cold depths of the heartless sea. Our lives never matter enough to warrant any attention. In those instances, it is still Oyinbos who will hold their leaders and institutions accountable for failing to rescue the poor souls.

Punch

HOBBLED PRESIDENCY LAPSES INTO INERTIA: There seems to be something about those who crave a thing so bad before they land it. When they finally get that object of their desire ennui seems to quickly embrace them and squeeze the joy out of their victory. Let’s make a quick checklist: that beautiful lady you chased for years before she said yes. That dream car; that mansion or that job you wanted badly. After you finally get it, you find yourself asking: is this all?
This must be the same feeling now with President Bola Tinubu.  Storied to have craved the presidency of Nigeria for decades, he has had it for only two months and he seems to be at sea now. The excitement is gone of course! A crippling inertia is setting in. Remember  Muhammadu Buhari. He got it on the fourth consecutive time he contested. However,  for six months, Buhari blanked out. He couldn’t form a cabinet, the economy was on autopilot leading to the recession of 2016.

PUNY PRESIDENCY ON A WING: But unlike today, the Buhari presidency was a bit more robust: Abba Kyari, Mamman Daura, Isa Funtua, Ahmed Joda, etc. These were well educated, highly exposed, seasoned civil servants, and arch hegemonists. Even in their villainy, they packed a punch. They were slow but they knew where they were headed. They were crudely nationalistic, if not narcissistic in their economic outlook. And they had a rather annihilatory Fulani/northern agenda. They made no bone about it. This was the Buhari Presidency.
The Tinubu power hub is much puny. Its circle of influence consists of Dele Alake, Femi Gbajabiamila, Wale Edun, George Akume and Vice President Kashim Shettima. As is already apparent, Alake is the power behind the throne today, but he doesn’t have Abba Kyari’s exposure or Machiavellian instincts. Alake is deficit in experience, rigour and range. Leadership is work, propaganda is fun. It’s apparent that Alake doesn’t understand this maxim, otherwise he would have kept quiet about the damming report of European Union Election Observer Mission. It was most embarrassing to see Alake go on and on about sovereignty as if EU plotted a putsch against Nigeria. Election monitoring has long become part of the settled norm in this age. EU had a duty to report its observations after an election duty. It’s obtuse to seek to rebut a report without the requisite facts. Alake made Nigeria look like a banana republic in that poor outing. That’s an unpresidential response.
Gbajabiamila is even less so, and seemingly more given to epicurean pursuits than attending to the gritty side of state affairs. Akume is an outsider and Shettima is four times removed from the epicentre. He may have to gate-crash and win his space in due time but today, he must make do with attending food shows in faraway places.
This current presidency therefore has the least ability to take off or lead. Number one is physically hobbled and mentally feeble. He needs alter- presidents around him. He needs to be surrounded by a surfeit of great minds who are also trusted. Apparently, people like Yemi Osinbajo, Raji Fashola,  Muiz Banire, Wale Oshun, Adebayo Williams, and the like may have been short-circuited already through limited access to the president in the precincts of power. But the point here is that presidency is a mammoth elephant and not a ram to be put in reins and be led by a fellow.

FLIP-FLOP, FLIP-FLOP: That’s how we have rolled since May 29th. The presidency is of lean stature that’s why the country is in a flux and there is much policy paralysis. Look at the palliative palaver – flip-flop. Whoever thought of the eight thousand naira per family, per month as a palliative must be living in the moon. So eight weeks after pronouncing subsidy dead, no initiative, no succour. Instead, pump price jumped astronomically again to over N600 per litre; naira gallops; inflation zooms; anarchy looms.
Fees in public tertiary education institutions have been jacked up. Most government tariffs and fees are rising while the citizenry are being ground into dust. It seems like Tinubu is having fun chasing Nigerians up and down with kumo and kondo…
Deadlines fixed by the presidency for raising a cabinet have been missed repeatedly. And we ask, why can’t an economic adviser be brought on board? Why is there no economic team yet?

FINAL ANALYSIS: The most damnable thing about Tinubu and his ragtag presidency is that they are a most apathetic set of leaders ever to beset the land. Buhari and his cabal didn’t spike subsidy for eight years not because he couldn’t. But because someone in the team had empathy. Someone must have warned that tampering with so-called subsidy would perish the people. But nobody seems to be thinking about the people under Tinubu. Perhaps nobody is thinking at all…
So while the Tinubu presidency flip-flops and doodles,  Nigerians are existing like people in a trance. Most Nigerians cannot feed, they cannot commute, they cannot pay school fees. Our people are like walking dead. Does Aso Rock know? Can Aso Rock discern the magnitude of the pains inflicted on the citizenry these two months? Does Aso Rock realise that catastrophe is near?

Anyone who has forged a career in marketing will tell you it is a fast-paced, challenging and complex profession characterised by the art of problem-solving and understanding human behaviour – with the power of storytelling acting as its beating heart.

Here are four attitudes or factors that will help you to succeed in a marketing career:

1. Be curious: Marketing is primarily about solving problems, then  finding solutions and answers to these challenges. It is essential to do research and understand what the data are saying. That is how you can glean relevant and meaningful insights. Understanding current and emerging trends is also essential because it will help you leverage actionable insights and solutions. Curiosity underpins the ability to turn data and research into value for clients.
2. Be brave: One of the essential ingredients required of people to do work is bravery. This is especially true in a creative field. If you make a mistake on a billboard or in a Tweet, a large number of people are going to know about it – so you’ll need to be brave to be able to handle the pressure. Also, you will get continuous input on your work from different groups of people and stakeholders, so you need to take that feedback constructively. 
3. Be networked: Many jobs in marketing require influencing people’s behaviour and decision-making, and influence comes through relationships. One of the core attributes of a successful career in marketing is building and maintaining relationships and connections.
4. Be versatile: The broad range of skills that marketers require means that anyone working in the industry needs to be flexible and open to learning and growing their skillset throughout their career. A breadth and range of skills will stand you in good stead as you navigate a constantly changing field of media. 

My top tips for young Africans looking to pursue a career in marketing?

• Know yourself: It’s essential to have clarity about what you want, what makes you tick and, equally, what you don’t want – this is what made me switch from studying accounting to marketing while I was at university. I simply didn’t have the passion for accounting that friends studying it did, so I changed to marketing and have never looked back. 
• Have strong thinking partners: These come from mentors, coaches, friends, colleagues, siblings or parents. It’s critical to have people who will ask tough questions, offer feedback and help you achieve your goals.
• Learn and unlearn constantly: We live in a world of rapid change, and marketing is also rapidly evolving, so as you move through the industry and the different facets of marketing. You need to unlearn old habits and pick up new habits and skills to keep up with the pace of change.
• Find your passion: Marketing is a complex field with ever-shrinking budgets, and massive economic and industry pressures. You will need to get to grips with all of that, along with emerging technologies and tools, so it’s vital to love what you do and be energised by it to overcome the challenges in your path.

Above all, do it even if you are afraid. It is scary to figure out your future career, go for interviews and navigate your way through it all. But if you push through and stick to doing what you love, you’ll eventually reap the rewards.

Inc

Central Bank of Nigeria extended its longest phase of monetary tighteningto tame inflation, disregarding a call by President Bola Tinubu for borrowing costs to be lowered.

The monetary policy committee raised the benchmark rate by 25 basis points to a record 18.75%. The median of 17 economists surveyed by Bloomberg expected a 50 basis-point increase.

The meeting was the first presided over by acting Governor Folashodun Shonubi, who last month replaced Godwin Emefiele following his arrest on charges of illegally possessing a firearm. Tinubu, who has implemented several reforms including ending fuel subsidies and liberalizing the foreign-exchange market since he took office in May, has said that high interest rates are stifling economic growth and should be lowered to encourage spending.

The balance of arguments around the need to fight inflation, while also supporting investment and a recovery in economic growth, “leaned in favor of a moderate rate hike to sustain efforts aimed at anchoring inflation expectations, narrow the negative real interest rate gap and improve investor confidence,” Shonubi said in Abuja, the capital.

Nigeria Rate Hike Smallest in Current Tightening Cycle

CBN’s MPC has lifted rates in eight straight meetings

The yield on the nation’s 10-year dollar bonds extended an earlier decline after the decision, falling seven basis points to 10.65% by 5:40 p.m. in Abuja. The rate on the nation’s 2027 debt eased six basis points to 9.92%.

The MPC said it expects the economy to grow 2.66% this year, down from a forecast of 3% in May. Tinubu’s administration is targeting growth of at least 6% a year.

The decision to hike was split. Of the 11 MPC members who attended the meeting, four voted for a 25 basis-point hike, two favored a 50 basis-point increase and the rest preferred a hold.

Rising Inflation

The MPC has increased rates by 725 basis points since May 2022 to rein in inflation that’s been at more than double the top end of its 6% to 9% target range for over a year. Consumer prices rose 22.8% in June — the fastest pace in almost 18 years. The inflation rate has been kept high by rising food prices and is expected to remain elevated for some time.

Money supply rose 32% in June from a year earlier, compared with 14% in May, and gasoline prices have more than tripled since the scrapping of the fuel subsidy. The currency has meanwhile dropped about 40% against the dollar after the easing of foreign-exchange controls last month.

All MPC members also voted to narrow the central bank’s asymmetric corridor, which means the cost at which lenders borrow is at 100 basis points above the monetary policy rate, and the return on their deposits at 300 basis points below the benchmark.

Bloomberg

Central Bank of Nigeria (CBN) says plans to gradually phase out the old N200, N500, and N1,000 naira notes are ongoing, as new notes are still being issued.

Folashodun Shonubi, acting governor of the apex bank, spoke on Tuesday after the monetary policy committee (MPC) meeting at the CBN headquarters in Abuja.

In October 2022, Godwin Emefiele, former CBN governor, announced plans to redesign the N200, N500, and N1,000 naira bills.

Emefiele had asked Nigerians to deposit their old notes before January 31, 2023, when they would cease to be legal tender.

The CBN later said Muhammadu Buhari, the former president, had approved an extension of the deadline for the demonetisaton of the old notes.

But in March 2023, the Supreme Court invalidated the naira redesign policy introduced by the central bank, ruling that the old N200, N500, and N1,000 notes would remain as legal tender until December 31, 2023.

Providing updates on the demonetisation policy on Tuesday, Shonubi said the old notes would “slowly, and overtime be replaced”.

He noted that the old notes were being exchanged for the new ones whenever it was being requested by the commercial banks.

“When a currency is printed and sent out. It is expected that it will go through a number of cycles, and then over time, will become one and then be replaced. That’s what we’re doing,” Shonubi said.

“We had to put out or re-put out old notes. And as they’re coming in, they’re being processed and returned to us as not issuable. We are then bringing out and replacing them with the new notes.

“We believe that we have an optimal level of the currency out there and so much of what’s being done is replacement to keep the level, rather than just putting money out there.

“And that is seen by the fact that the banks, whenever they come to us for notes, we provide it to them. If it wasn’t enough, they will be asking us for more. If it was too much, they’ll be dumping that much more on us.

“So, we will slowly, and over time you will see the old notes replaced out of the system with the new notes that’ll be the norm.

“This will be out of practice, not fanfare, you’ll just see it slowly morph from old to new.”

The Cable

The Department of State services (DSS) has rearrested suspended governor of the Central Bank of Nigeria (CBN), Godwin Emefiele.

The secret police took custody of Emefiele shortly after a face-off with officials of the Nigerian Correctional Service (NSC).

Emefiele, who has been in DSS detention since June, was arraigned in court on Tuesday.

Nicholas Oweibo, the presiding judge, had granted the suspended CBN governor N20 million bail.

The bail condition includes producing a surety with landed property within the jurisdiction of the court in Ikoyi, Lagos, depositing his passport and also producing a Civil servant not below level 16 to perfect bail.

The judge had ordered that Emefiele should be remanded in prison pending the fulfilment of his bail conditions.

But rather than release the top bank chief to prison officials, the DSS attempted to take him away, a move that was resisted.

During the scuffle that broke out, the uniform of a prison official was torn, revealing the singlet underneath.

The DSS operatives who were well armed outnumbered the prison officials, leading to the arrest of a top official of Ikoyi Prisons by the secret service operatives.

The official who was rough-handled and shuffled into the DSS vehicle was later released.

Emefiele is standing trial on a two-counts charge bordering on possession of a single barrel shot gun, as well as possession of 123 rounds of live ammunition without licences.

However, he pleaded not guilty to the charge.

After his plea, defence counsel, Joseph Daudu, who led four other senior advocates, informed the court of a bail application filed on behalf of the defendant.

Daudu told the court that same had been served on the prosecution, adding that there is a stamp of the office of the Attorney General as proof.

But the prosecutor, Mrs N.B Jones, objected to the bail application on the grounds that she had not been served with a copy of the application.

She informed the court that her office had been on the look out for a possible bail application of the defendant but had seen none.

But defence counsel told the court that the prosecutor had no excuse not to proceed today in response to the bail application as the same had been duly served in the prosecution’s office.

He argued that the office of the AGF is a creation of statute, and so cannot exist in a vacuum.

In a short ruling the court agreed with the submission of defence counsel, and urged him to move the defendant’s bail application.

Moving the application, defence counsel urged the court to admit the defendant to bail as he is not a flight risk being, a reputable former Governor of CBN.

He told the court that the defendant had been kept in custody for long and had lost so much weight and so, requires medical attention.

Defence also informed the court that the defendant will be available to stand trial, adding that assuming the prosecutor had produced a witness, the defence would have been ready to proceed.

He therefore, urged the court to grant the defendant bail.

In response, the prosecutor informed the court that she was opposed to the bail application of the defendant as he was a flight risk.

She told the court that the defendant had refused to submit his international passport which indicates such flight risk.

Besides, she also told the court that being a very influential citizen of Nigeria, the defendant could also interfere with the case and evidences intended to be led by prosecution.

She urged the court to refuse bail

In his ruling, Oweibo agreed with the submission of the defence counsel on the grounds that the offence for which the defendant is charged is bailable.

The court held that bail can only be denied where any of the circumstances set out in section 162 of the Administration of Criminal Justice Act, is established.

The court held that the prosecution has not furnished such circumstances before the court.

The court consequently, granted bail to the defendant in the sum of N20 million with one surety in like sum.

The court adjourned the case until November 14 for trial.

Daily Trust

Nigerian Association of Resident Doctors (NARD) on Tuesday night declared an indefinite nationwide strike.

President of the association, Orji Innocent, said the strike will commence at 12 midnight on Tuesday.

He said the strike was declared during the National Executive Council meeting of the association in Lagos.

According to Innocent, the major demands of the association are : immediate payment of the 2023 Medical Residency Training Fund (MRTF), immediate release of the circular on one-for-one replacement, payment of skipping arrears and upward review of CONMESS in line with full salary restoration to the 2014 value of CONMESS.

It had in a communique issued after its virtual extraordinary national executive council (NEC) meeting decried government’s slow response to its demands despite giving it several ultimatums and embarking on a five day warning strike from  May 17th to 21st this year.

 It said, “The resolutions of the conciliatory meeting chaired by the then Minister of Labour and Employment were yet  to be implemented, seven weeks after, despite the set time lines for their implementation.”

NARD said the major demands of the association are: immediate payment of the 2023 Medical Residency Training Fund (MRTF), immediate release of the circular on one-for-one replacement, payment of skipping arrears and upward review of CONMESS in line with full salary restoration to the 2014 value of Consolidated Medical Salary Structure (CONMESS).

Others are payment of the arrears of consequential adjustment of minimum to the omitted doctors , reversal of the downgrading of the membership certificate by Medical and Dental Council of Nigeria (MDCN), payment of MRTF, new hazard allowance, skipping and implementation of corrected CONMESS in State Tertiary Health Institutions and payment of omitted hazard allowance arrears.

Daily Trust

WESTERN PERSPECTIVE

US military aid for Ukraine for first time includes Black Hornet spy drone

The U.S. Department of Defense announced $400 million in additional security assistance for Ukraine on Tuesday, including air defense missiles, armored vehicles and small drones, as Ukraine's counteroffensive against Russia grinds on.

The new aid package, which was first reported by Reuters, will include for the first time U.S. furnished Black Hornet surveillance drones made by Teledyne FLIR Defense, part of Teledyne Technologies.

The Norwegian-built Hornet is being used in Ukraine through donations by the British and Norwegian governments, the company said. FLIR Unmanned Aerial Systems was awarded a $93 million contract in April to provide the small reconnaissance drones to the U.S. Army.

In addition, the weapons aid package includes munitions for Patriot air defense systems and National Advanced Surface-to-Air Missile Systems (NASMS), Stinger anti-aircraft systems, more ammunition for High Mobility Artillery Rocket Systems (HIMARS), Stryker Armored Personnel Carriers and a variety of other missiles and rockets.

The assistance is funded using Presidential Drawdown Authority, or PDA, which authorizes the president to quickly transfer articles and services from U.S. stocks without congressional approval during an emergency. The material will come from U.S. excess inventory.

This is the 43rd security assistance package approved by the United States for Ukraine. More than $43 billion in U.S. military aid has been provided since Russia's invasion in 2022.

Commenting on the aid announcement, Secretary of State Antony Blinken noted Russia's attacks on Ukraine ports and Ukrainian infrastructure since withdrawing from the Black Sea Grain Initiative last week.

"Russia could end this war at any time by withdrawing its forces from Ukraine and stopping its brutal attacks against Ukraine's cities and people. Until it does, the United States and our allies and partners will stand united with Ukraine, for as long as it takes," Blinken said in a statement.

The Black Sea grain deal was brokered by the United Nations and Turkey a year ago to combat a global food crisis worsened by Russia's invasion. Ukraine and Russia are both leading grain exporters.

Russia, whose invasion of Ukraine has resulted in the deaths of thousands and the displacement of millions of civilians, denounced the new U.S. package.

"The actions by Washington ... are beyond morality and common sense," Russia's ambassador to the United States, Anatoly Antonov said in a post on the embassy's Telegram messaging app.

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Britain said on Tuesday it had information indicating Russia's military might start targeting civilian shipping in the Black Sea, while the European Union pledged to help Ukraine export almost all its farm produce via rail and road.

RUSSIAN PERSPECTIVE

Russian forces liberate Sergeyevka community in Krasny Liman area

Russian forces liberated the settlement of Sergeyevka in the Krasny Liman area over the past day in the special military operation in Ukraine, Defense Ministry Spokesman Lieutenant-General Igor Konashenkov reported on Tuesday.

"In the course of successful counter-attack operations by units of the 15th motor rifle brigade under the skilled command of Lieutenant-Colonel Builov, the settlement of Sergeyevka was liberated," the spokesman said.

In the area of the Serebryansky forest, Russian forces moved 1.5 km into the depth of the Ukrainian army’s defensive lines and their total advance in the Krasny Liman area equaled 4 km. In addition, Russian forces repulsed four Ukrainian attacks in that direction over the past 24 hours, the spokesman said.

"The enemy’s losses amounted to 190 Ukrainian personnel, six armored combat vehicles, five pickup trucks, two D-20 howitzers, one D-30 gun, two Gvozdika motorized artillery systems and a US-manufactured AN/TPQ-50 counter-battery radar station," he said.

In the Krasny Liman direction, Russian forces neutralized a Ukrainian subversive and reconnaissance group and also "destroyed ammunition depots of the Ukrainian army’s 44th motorized infantry brigade and 100th territorial defense brigade," the general reported.

Reuters/Tass

A central premise of neoclassical economics is that the consequences of the decisions of market participants can be known in advance and quantified as risk-adjusted estimates. As John Kay and Mervyn King showed in their 2020 book, Radical Uncertainty: Decision-Making Beyond the Numbers, such probabilistic reasoning has a long history. As applied in economics, it has operationalized the concept of “expected utility” – the desideratum that rational economic agents are defined to be maximizing.

As the author of a major analysis of the stock market sponsored by the British government (Kay) and a former governor of the Bank of England (King), both men are well equipped to examine the complex interaction between financial markets and markets for “real” things (goods, services, labor, patents, and so forth). In doing so, they have challenged the statistical methodologies and ontological assumptions that lead economists to regard the future as measurable and manageable.

Managing Expectations

From John Maynard Keynes at the University of Cambridge 90 years ago through Robert Lucas at the University of Chicago in the mid-twentieth century, economists have placed expectations at the core of market dynamics. But they differ on how expectations are formed. Are the data we observe the outcome of processes that are as “stationary” as physical laws, like those determining the properties of light and gravity? Or do the social processes that animate markets render future outcomes radically uncertain?

For a long generation starting in the 1970s, Lucas and his colleagues dominated economic theory, giving rise to different strands of Chicago School economics. While the Efficient Market Hypothesis asserted that prices in financial markets incorporate all relevant information, the Real Business Cycle Theory of New Classical Economics held that the macroeconomy is a self-equilibrating system whose markets are both efficient and complete. The system may be subject to external shocks, but it is not amenable to fiscal or monetary management.

This assumption of complete markets implies that we can overcome our ignorance of the future. It suggests that we could, at any moment, write contracts to insure ourselves against all the infinite possible future states of the world. But since perfect, complete markets obviously do not exist, the Chicago School’s Rational Expectations Hypothesis (REH) proposes that market participants will guide their forward-looking decisions by reference to a (generally implicit) model of how, on average, the world works and will continue to work. As a result, expectations will be tamed and aligned with efficient market equilibria.

For their part, Kay and King look further back to the pre-REH period, when Frank Knight and then Keynes correctly showed that our ignorance of future outcomes is inescapable. As Keynes famously put it in 1937:

“By ‘uncertain knowledge’ … I do not mean merely to distinguish what is known from what is merely probable. … The sense in which I am using the term is that in which the prospect of a European war is uncertain, or the price of copper and the rate of interest twenty years hence, or the obsolescence of a new invention, or the position of private wealth owners in the social system in 1970. About these matters there is no scientific basis on which to form any calculable probability whatever. We simply do not know.”

The shockingly unanticipated Global Financial Crisis of 2008 brought this insight back to the fore.

The renewed relevance of Keynes’ economics reflected its core teaching: a monetary market economy cannot be relied on to generate full employment. This lesson emerged from the central position Keynes gave to the fragility of the expectations on which investment decisions are made. In 2008, investment expectations were smashed: such a massive market failure called for equally massive offsetting interventions by state institutions. Even Lucas conceded that, “Everyone is a Keynesian in a foxhole.” As Kay and King write:

“The advances in economic theory lauded by Lucas did not prevent a major downturn in the world economy, nor did they give policymakers the tools they required to deal with that downturn. The models he described assumed a stable and unchanging structure of the economy and could not cope with unique events that derived from the essential non-stationarity of a market economy.”

As the discipline of economics has evolved since the shock of 2008, Keynes’ theoretical stance with respect to inescapable uncertainty versus manageable risk is gradually being recognized to be as relevant as the policy prescriptions derived from his macroeconomics.

The central question remains: Where can we find guidelines for mitigating the consequences of radical uncertainty? What basis is there for purposive action in the face of “We simply do not know”?

I see three paths forward. The first two are defensive, and the third is proactive. All three reject an exclusive focus on efficiency in the allocation of resources. Thus, they stand outside what remains the dominant paradigm of mainstream economics.

Cash and Control

The first path is “cash and control.” This represents a toolset for hedging uncertainty in my own professional domain of venture capital, but its uses have been broadly recognized across the spectrum of financial institutions and markets.

I first came to appreciate radical uncertainty as an aspiring venture capitalist some 40 years ago. I had been prepared for what I would encounter while earning my doctorate in economics at Cambridge, under the supervision of Richard Kahn, Keynes leading student and intellectual executor.

As I recount in Doing Capitalism in the Innovation Economy, I learned a hard lesson when I led my VC firm’s investment in an emergent life-sciences company, Bethesda Research Laboratories (BRL). Owing to failures of management by the founders, as well as failures of governance by other investors and directors, I was forced to launch an operation to save our investment. Despite all the due diligence we had done to understand the company’s technology and potential markets, we discovered that we had invested in ignorance.

Reflecting on the experience decades later, I asked: “Could we … have hedged against our necessary ignorance?” The answer was yes, but if and only if markets were complete and we could have purchased precisely those kinds of securities that would have paid off in the unique situation in which we had found ourselves. However, as Kay and King document in exhaustive detail, markets can never be complete. So, with the benefit of hindsight, I improvised a retrospective hedge that later became the basis for my strategy of cash and control.

At the micro level of the VC investor, cash and control means that, when bad things happen, you will have unequivocal access to the cash you need to buy the time needed to understand the problem, and sufficient control to change the parameters of the situation. In the case of BRL, my partners and I had privileged access to more than enough cash from our institutional-investor clients (whose investment we were powerfully motivated to protect). But to obtain full control of the company, we had to use that access to prevail against other VCs and the founders – an arduous exercise.

The availability of cash and control is obviously context-specific. During the recent Unicorn Bubble, which had been inflated by years of ultra-loose monetary policies, cash was so abundantly available to entrepreneurs that maintaining control had become almost impossible. The balance of power had shifted to founders, many of whom secured entrenched control through ownership of super-voting shares.

This dual-class stock structure had jumped from the world of family-controlled media companies to Silicon Valley, starting with Google’s first venture funding in 1999. That deal was blessed by the two leading VCs of their generation: John Doerr of Kleiner Perkins and Mike Moritz of Sequoia Capital. In the years that followed, every entrepreneur aspired to the status of Google founders Sergey Brin and Larry Page. Most notably, Facebook’s founder, Mark Zuckerberg, followed directly in their footsteps.

The cost of accepting these terms was soon dramatized through public battles – at the board level and in the courts – to force out founders at Uber and WeWork. And now that the normalization of monetary policy has ended the Unicorn Bubble, cash and control again stands as a relevant guide for venture capitalists.

Market Power and Mercantilism

Beyond the world of startups, in the heart of the corporate economy, one major source of control is market power, or what the investor Warren Buffett famously described as a company’s “moat.” As he explained at Berkshire Hathaway’s 1995 annual meeting:

“What we’re trying to find is a business that, for one reason or another – it can be because it’s the low-cost producer in some area, it can be because it has a natural franchise because of surface capabilities, it could be because of its position in the consumers’ mind, it can be because of a technological advantage, or any kind of reason at all – that it has this moat around it.”

Since then, a substantial body of academic literature has emerged to theorize and quantify the observable increase in market power across industries, especially in the United States. Market power – and the monopoly rents that follow – confers an ability to self-insure at scale. Hence, the four most successful companies in the world, each backed by venture capitalists in their early years, tend to hold massive amounts of cash and short-term marketable securities. As of March 31, 2023, Alphabet’s (Google) holdings were $115 billion, Amazon’s were $69 billion, Apple’s were $56 billion (plus $110 billion in marketable long-term securities), and Microsoft’s were $104 billion.

Having accepted radical technological uncertainty in the development of novel products and services, along with radical commercial uncertainty about whether there were customers for their innovations, these companies have refused to accept any financial uncertainty.

The same pursuit of strategic financial autonomy also led Jamie Dimon to construct the “fortress balance sheet” that gave JPMorgan – perhaps alone among global banks – the means to survive the 2008 global financial crisis without emergency government assistance. Similarly, East Asian countries responded to the destruction wrought by the International Monetary Fund in the late 1990s by adopting aggressively mercantilist policies. By boosting current-account surpluses and reserves, they achieved cash and control, and thus robust financial security.

There is a good reason why such policies are called “protectionist” – whether they are implemented by means of an undervalued currency or through legislated tariffs and subsidies. They certainly serve the economic interests of those who export at the expense of the mass of consumers (who in turn suffer at the margin from the adverse shift in the terms of trade). At the extreme, they threaten to unleash the sort of trade wars that contributed to the Great Depression.

But the rhetoric of free trade masks the pragmatic political economy of international commerce. As Friedrich List observed 180 years ago, “Any power which by means of a protective policy has attained a position of manufacturing and commercial supremacy can (after she has obtained it) revert with advantage to a policy of free trade.” One is reminded, here, of Great Britain in 1846 or the US in 1945.

Holding cash reserves that are excessive in normal times and pursuing policies that will generate such reserves over time are both deviations from the efficient ideal. As economists have grappled with the reality of incomplete markets, self-insurance with uncommitted cash has increasingly been recognized as “rational,” though it comes with a visible cost.

Investing in Resilience

That brings us to the second path: investing in resilience by strategically allocating more capital than optimally efficient production chains would seem to require. Kay and King themselves emphasize the necessary trade-off between efficiency and resilience.

The Covid-19 pandemic laid bare the fragility of extended supply chains. Production networks that were optimized to minimize the deployment of working capital quickly collapsed as efficiency was revealed to be the enemy of resilience. And this happened just 12 years after the global financial crisis demonstrated that the efficient allocation of capital in the banking sector had radically reduced the financial system’s resilience.

Resilience in the banking system requires levels of capital that are excessive when measured against “normal” financial conditions, just as resilience in production systems turns on the maintenance of buffer stocks and alternative sources. In either case, the time series of data that define what is “normal” and what constitutes a statistically quantifiable deviation are misleading guides to unforeseeable shocks – the Fukushima tsunami, the Covid-19 pandemic, the Russian invasion of Ukraine, and so forth – that can stress the system beyond its capacity.

Working capital represents a firm’s investments in inventories and in the accounts receivable owed by customers who have not yet paid for their purchases. Firms do not control the level of their receivables, but they can decide to self-insure by holding more inventories than historical trends suggest are required to support current and planned levels of production. The necessary reduction in the realized return on capital is the price of this insurance. 

That said, contrarian behavior also can be punished. In financial markets, the literature on “the limits of arbitrage” has shown how liquidity on the right-hand side of an investor’s balance sheet (where the liabilities that finance asset holdings are listed) enable bank runs and constrain how long a manager can bet against the market. Berkshire Hathaway’s structure as a closed-end fund meant that Buffett could choose to sit out the great tech bubble of the 1990s without any risk of losing his funding base. The growth in private equity in recent decades has vastly expanded Buffett’s model.

The typical firm may not have this luxury. If its contrarian behavior reduces short-term financial performance, it could invite the attention of activist hedge funds or a determined acquirer. For the operating firm as for the investment manager, the crucial question is: “How long can you afford to be wrong?” Acquisition by private equity offers corporate managers insulation from such threats, at the expense of definitively transferring control to the new owners.

Toward a New Mesoeconomics

Taking production-network fragility seriously opens the door to a strategic extension of the economics discipline. From the classical economics of Adam Smith and David Ricardo through the marginalist economists of the late nineteenth century, whose mathematics paved the way for modern neoclassical economics, the discipline has been practiced as a bimodal subject.

While microeconomics addresses the behavior of individual agents (firms, consumers, workers, investors), macroeconomics addresses the behavior of aggregates (as measured by gross national product, gross domestic product, national income, and so forth). But the space between has largely been neglected.

Against the grain, there are two great economists who concerned themselves with this intermediate domain. One was the Soviet-American Nobel laureate Wassily Leontief, who constructed the first input-output tables to illustrate the flow of goods from primary resources to final output.

Today, the US Bureau of Economic Analysis produces national input-output tables on an annual basis, but these are necessarily static and backward-looking. They report on the changed structure of the economy, but they do not provide the theoretical framework and empirical information necessary to understand how shocks propagate through the system and how the economic attributes of different sectors interact dynamically.

Then there was the Italian economist Luigi Pasinetti, whose Structural Economic Dynamics sought to illuminate how the distinctive elasticities of demand and supply, with respect to price and income (along with industry-specific productivity growth), could animate a model economy. But Pasinetti’s work was purely conceptual, lacking both the data and the relevant mathematical tools to be operationalized.

Now that the digitalization of economic life and the availability of relevant computational resources have made operationalizing mesoeconomics possible, an international team of economists with a hub at Cambridge is picking up where Pasinetti left off. By looking out to the frontier of firm entry and exit and financial dependencies between market participants, this wide-ranging research program incorporates both theoretical and empirical advances in the analysis of networks.

Mesoeconomics promises to deliver guidelines for identifying and evaluating potential points of failure and channels of propagation, calling attention to where investing in resilience is likely to be more necessary and effective. The relevance of this approach is underscored by ongoing debates about the causes, nature, and alternative responses to inflation. Is it primarily the consequence of too much macroeconomic demand stimulus or of sector-specific supply shocks? How can we parse the complex interactions between shocks on both the demand and supply sides of the economy?

An alternative, comparably strategic use case is mapping the dependencies entailed by industrial-policy initiatives. For example, any effort to reconstruct a high-tech manufacturing base in the US will encounter many bottlenecks, and the responses to these will generate feedbacks that can mitigate the downstream consequences. Applied mesoeconomics can help anticipate where enabling co-investments should be targeted.

Of course, even when the network externalities of a complex, dynamic production system are visible, their evolution will be influenced by reflexive interactions and significant innovations along the supply chain. The outcome of these forces will necessarily remain uncertain. But the fact remains: it is both appropriate and necessary to maintain working capital above what one would need in a hypothetical, optimally efficient production system.

Experimentation and Innovation

The third path forward begins by recognizing that innovation, by definition, confronts radical uncertainty. As I wrote in Doing Capitalism:

“The innovation economy begins with discovery and culminates in speculation. Over some 250 years, economic growth has been driven by successive processes of trial and error and error and error: upstream exercises in research and invention and downstream experiments in the new economic space opened by innovation. Each of these activities necessarily generates much waste along the way: dead-end research programs, useless inventions and failed commercial ventures.”

If the lowest-risk, most efficient allocation of capital dominates, the necessarily costly process of experimentation will not be undertaken. Nor will innovations with transformative potential be realized.

Experiments are how we map the contours of the unknown. In the VC world, every startup is an experiment, and most fail. Competition in the market economy liquidates the failures and confirms the winners. Without such “Schumpeterian waste,” the persistent, cumulative upward drift in productivity and living standards would not occur.

When scientific discovery supplanted mechanical tinkering as the basis for productive innovation in the late nineteenth century, the necessary research funding came from the giant corporations spawned by the Second Industrial Revolution (which gave us railroads, electrification, and mass production). Whether they owed their market positions to formal agreements with the federal government (AT&T), patent monopolies (RCA and Xerox), or a combination of innovative research and commercial dominance (DuPont and IBM), the leading corporate laboratories could afford to invest upstream in the basic science from which commercially significant technological innovations might evolve.

By allocating their monopoly profits to scientific research and development, these corporations extended their market power while also serving a larger, social purpose. But their market positions proved transient. Within the space of a generation, the monopoly profits available for funding R&D came under growing pressure, and the great tech companies of the post-World War II era succumbed to the forces of Schumpeterian creative destruction and federal antitrust enforcement.

Moreover, this trend was reinforced by the pressure to maximize shareholder value. Following a 1982 regulatory change, companies were allowed to reward shareholders through stock buybacks, which became a compelling alternative to investing surplus cash flows in radically uncertain experimentation.

Speculation and the State

The post-war era was also when the US state emerged as the dominant source of R&D funding. While the Department of Defense laid the groundwork for what would become the digital revolution, the National Institutes of Health played a similar role for biotechnology. By the 1980s, a professional VC industry had emerged to dance on the platforms created by the US state.

Long before the creation of the National Venture Capital Association, financial speculation had provided the funding for developing and deploying transformational technologies at scale – from the canals and railroads of the First Industrial Revolution through the era of electrification during the “roaring” 1920s. More recently, the tech/internet/dot-com bubble of the late 1990s not only funded the physical infrastructure of the internet; it also financed a vast array of experiments in what to do with digital and network technologies. Among the offshoots of these experiments were early e-commerce and social-media platforms.

Then, the prolonged period of “unconventional” monetary policies (in response to the 2008 financial crisis and then the Covid-19 pandemic) sponsored the Unicorn Bubble. Again, a wide variety of experiments gained funding: some, like machine learning, hold transformational economic potential (for better or worse); others, like instant delivery start-ups, seem destined for the scrap heap of history if they fail to finance their operations from the services they sell rather than from the speculative securities for which there are no longer buyers.

The magnitude of this latest bubble is apparent in the extreme reach of some experiments whose potential success will not come until after the lifetimes of the committed VC funds – as in the case of quantum computing or fusion energy. But when financial speculation is the source of funding for innovation, some investors will win by selling into the bubble before they know whether an experiment has succeeded.

The public sector can also pursue speculative bets on innovation and with greater long-term continuity. Program managers at the Defense Advanced Research Projects Agency (DARPA) are recruited from the private sector for fixed terms, and then empowered to fund projects to address some of the armed forces’ specific needs. With market risk eliminated, DARPA can fund extremely challenging technical experiments. A key to its historical successhas been its mandate to accept failure as a necessary concomitant of experimentation. That success serves as a compelling model for funding the innovations needed to respond effectively to climate change.

In all these contexts, an excessive focus on efficiency in the allocation of resources is the enemy of innovation, and sometimes the enemy of a firm’s survival. The reality of radical uncertainty inverts Cassius’s assertion: The fault, indeed, is in our stars. We are condemned to meet the future as best we can, without any hope of ever finding an optimal path forward. Against the efficient failure, let us value the effective (and necessarily wasteful) success.

Project Syndicate