Transcript: Ukraine strikes targets deep in Russia

This is an audio transcript of the FT News Briefing podcast episode: ‘Ukraine strikes targets deep in Russia’

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Sonja Hutson
Good morning from the Financial Times. Today is Thursday, March 14th, and this is your FT News Briefing.

The far-right movement hit a roadblock in the Netherlands, and Ukrainian drones are striking deep inside Russia. Plus, Nigeria is blaming its currency problems on Binance.

Aanu Adeoye
Nigeria has always had this interesting relationship with crypto, but now it looks like that relationship is turning for the worse again.

Sonja Hutson
I’m Sonja Hutson, and here’s the news you need to start your day.

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Geert Wilders is not going to be the next Dutch prime minister. The far-right politician said as much yesterday. He acknowledged that even though his Freedom party had won the most seats in last year’s elections, he didn’t have enough support from others. Wilders’ party didn’t win an outright majority in the elections, so he needed others to form a governing coalition. His failure to become prime minister is another setback for the far-right movement in Europe. Hard-right parties in Spain and Portugal have also struggled to gain power despite pretty solid showings in elections.

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Ukraine has been stepping up its drone attacks, this time deep inside Russia. The country hit key oil and energy infrastructure targets this week, hundreds of miles from the Ukrainian border. Here to talk to us about these strikes is the FT’s Chris Miller. So, Chris, what’s the strategy behind these new drone attacks, and how significant have they really been?

Christopher Miller
So the strategy here, Ukraine hopes, is to deprive the enemy of resources and reduce the flow of oil, money and fuel. So really, it’s to disrupt Russia’s war economy, to stop the oil that helps finance Russia’s war against Ukraine. And so these drone attacks are targeting oil refineries, energy infrastructure. And they’re actually hitting places much deeper beyond the borders of Ukraine. Some strikes are being conducted near St Petersburg in the far north, some north of Moscow and even further to the east. And it’s to disrupt Russia’s war economy, yes, but also to force it to refocus its efforts on defending its own country rather than focusing on attacking Ukraine’s.

Sonja Hutson
And how long do you think that Ukraine can actually keep up these kind of strikes?

Christopher Miller
Well, Ukrainian officials that I spoke with this week told me that they can scale up exponentially and that they are not only planning to do so but they are currently doing so. They’ve got dozens, if not hundreds, of companies now that are focused on drone research and development, on the production of drones. You know, really, the only thing standing in their way is funding. You know, they could use more money to scale up even further. These drones really are helping to fill the gaps that they have on the battlefield when it comes to arms and ammunition. And Ukrainian officials tell me that they really do believe that drones are going to play a major part in this war, if not a decisive role in the war.

Sonja Hutson
Yeah. Tell me a little bit more about the future role of drones here. Do you think they can change the course of the war for Ukraine?

Christopher Miller
Yeah. You know, I think that’s actually the big question. You know, I think a lot of people believe that Russia has the initiative on the battlefield. And, you know, there’s really no accounting for weapons like artillery systems and some of the bigger weapons systems on the battlefield that we see. But drones do play a really critical role in this. And it’s also changing the dynamic of the war. You know, while we see the front line shift less in the last many months, we see these drones really take shape. You know, the attacks on Tuesday and Wednesday this week certainly are aiming to not only deprive Russia of its resources, but, you know, make Russia think twice about what it attacks and targets in Ukraine in terms of infrastructure. So this really is a burgeoning drone war, and it’s only going to grow as the war goes on.

Sonja Hutson
OK. So it seems like these drone attacks are really setting up kind of a new stage of the war. What do you think that stage is gonna look like going forward?

Christopher Miller
If the year of 2022 was one of survival and just stopping the Russian advance and 2023 was one that was meant to recapture territory but ultimately failed, this year is going to be one where Ukraine is forced to defend itself, to dig in, to train new soldiers and really prepare itself for what many Ukrainian officials here hope to be a successful 2025, where it’s able to go on the offensive. And this war is not going to be over any time soon. I think there’s a lot of uncertainty in where it can go, and, you know, that path toward victory or defeat will depend a lot on Ukraine’s ability to adapt, to rebuild this military, to continue innovating and also on western assistance as well.

Sonja Hutson
Chris Miller is a Ukraine correspondent for the FT. Thanks, Chris.

Christopher Miller
Yeah. Thank you.

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Sonja Hutson
A bill to ban TikTok in the US passed the House of Representatives yesterday. The social media platform is owned by the Chinese company ByteDance, and intelligence officials and lawmakers are concerned that that’s a national security risk. This legislation says that unless ByteDance completely divests from TikTok, the social media platform won’t be allowed in the US. The bill still needs approval from the Senate, but if it does pass, President Joe Biden has said he would sign it.

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Nigeria is in the middle of a currency crisis, and the government is blaming Binance for a lot of it. People have been storing money in the world’s largest crypto exchange because the Nigerian naira is so unstable. And now Nigeria has blocked web access to Binance and detained two of its executives. Here to talk to me about the situation is the FT’s Aanu Adeoye. Hi, Aanu.

Aanu Adeoye
Hi.

Sonja Hutson
So explain this stand-off between Binance and the Nigerian government to me. Why is the government blaming the crypto exchange for its own currency problems?

Aanu Adeoye
Yeah, essentially what the government has been saying is that Binance is responsible for currency speculation. And what that means is that, you know, if you go on Binance or another crypto platform, you can trade the naira in this instance in exchange for USDT, which is a stablecoin, and the value is pegged to $1 exactly. So, you know, someone on one end can decide this is how much I want for naira in exchange for USDT. And so that’s the price that is set on Binance essentially becomes this unofficial market rate that filters through the rest of the Nigerian economy. And so the government is saying that that price is too high, and they’re saying it’s because people are speculating against the naira. And they say they want to clamp down on that.

Sonja Hutson
So what are the specific accusations then? Like, what has Binance done wrong according to the government?

Aanu Adeoye
That’s the interesting, right? We had a presidential adviser who went on the radio to say that Binance had, quote unquote, hijacked the role of the central bank in setting the exchange rate of what the naira should exchange for with the dollar. So essentially, that’s the government’s position, that Binance is encouraging some sort of parallel market. But when you actually think about it, Binance is just merely a platform where people are doing peer-to-peer transactions, and it’s the people who are deciding the price of what to pay for the currency.

Sonja Hutson
Yeah. What does Binance have to say about all this?

Aanu Adeoye
You know, officially, when we first reported that their website was being blocked, they said they were aware of that. And then, as we reported a couple of weeks ago in the FT that two Binance executives who came to Nigeria had been detained, what Binance is saying now is they’re trying to get their employees out and that they’re trying to co-operate with the Nigerian authorities. Binance in the past week has stopped all naira transactions, you know, which was the major way that people were trading the naira currency. So I think that seems like a major concession that Binance has stopped naira transactions.

Sonja Hutson
So taking a step back to how Binance got into this mess in the first place, it seems like it’s a product of the economic situation in Nigeria right now. I mean, crypto is so notoriously unstable. The fact that people are viewing it as a stable alternative to the naira is pretty telling.

Aanu Adeoye
Yeah, you’re right. You know, crypto has this weird, wild up and down swings. But because the naira has depreciated by about 70 per cent in the past year, it’s essentially become this store of value. The economic situation is really dire for almost everyone in Nigeria. Inflation is at 29.9 per cent. Food inflation is rising even faster at 35 per cent. You know, the cost of most staple food items has doubled in the past year or so. So, you know, ordinary Nigerians are going through a particularly rough time right now. And that makes the, you know, the overall picture a little bit more difficult for people.

Sonja Hutson
Aanu, how should we be thinking about Nigeria’s relationship with crypto?

Aanu Adeoye
I think the situation with crypto just feels like most people who are looking at this as blaming the messenger and not, you know, essentially looking at the root cause of the issues, right? Some of it is down to the fact that Nigeria is not producing as much oil as it used to do, which is where you get a lot of its foreign reserves, right? So you can’t really blame this platform that essentially facilitates trade and say that they are the ones behind the slump of the currency. Nigeria has always had this interesting relationship with crypto. It was banned previously, and then in December of 2023, it was unbanned. But now with the ongoing saga with Binance, it looks like that relationship is turning for the worse again.

Sonja Hutson
That’s the FT’s Aanu Adeoye. He’s our west Africa correspondent. Thanks Aanu.

Aanu Adeoye
Thank you.

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Sonja Hutson
You can read more on all these stories at FT.com for free when you click the links in our show notes. This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news.

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