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Liz Loh-Taylor | From the Faultlines · Jul 2, 2026

The Sanctions Paradox

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Liz Loh-Taylor · Liz Loh-Taylor | From the Faultlines

Empire attempts to starve them. To cut them off from global finance is to cut them off from medicine, food, and the basic infrastructure of modern life. The assumption is that without the empire, without access to Western markets, Western technology, and Western approval, these nations will collapse. They will beg for mercy. They will submit.

They have not. They will not.

The sanctions regime is not a neutral policy instrument. It is a form of warfare. Whether through economic sanctions or outright blockade, the weaponisation of hunger is a consistent tactic of imperial powers. It is designed to starve populations into submission. When the United States imposes comprehensive sanctions, it is not merely restricting trade. It is targeting civilian populations. It is restricting access to food, medicine, and essential supplies. It is creating conditions of scarcity that lead to malnutrition, disease, and death. This is not a collateral effect. It is the intended outcome.

This pattern extends beyond sanctions. The blockade of Gaza, described by UN experts as a policy of collective punishment, represents the most extreme version of this logic: the systematic denial of food, water, and medical supplies to an entire civilian population. It is the weaponisation of hunger in its purest form.

The logic is brutal but clear. Starve the population, and they will turn against their government. Cripple the economy, and the regime will collapse. Force submission through suffering. This is not a policy of persuasion. It is a policy of coercion. It is a policy that has repeatedly failed.

Instead, the survival reflex has produced something the empire did not anticipate: self-reliance, sustainability, and a human capital that now rivals and in some cases surpasses the empire itself.

Cuba, Venezuela, Iran, North Korea, Russia; the “bad dudes” in their quest for survival have turned to prioritising endogenous human capital such as medicine, education, and science over consumerism. The empirical result is staggering: a sanctioned island (Cuba) has more doctors per capita than the US or Australia. Iran, despite decades of sanctions, produces the world’s highest proportion of female STEM graduates at roughly 70 percent, more than double the rates of the United States, Canada, the European Union, and the United Kingdom, and nearly double Australia’s female STEM enrolment rate of 37 percent. Adult female literacy in Iran has surged from 36 percent in 1976 to over 90 percent today, a figure that surpasses the empire, where only 79 percent of adults were literate in 2024.

Simultaneously, the sanctioning powers are experiencing a self-inflicted decay of intellectual priorities: blue-collar oversupply, white-collar debt traps. The very tool meant to maintain hegemony may be accelerating the Empire’s relative decline.

The official justifications are numerous and vary by country. But beneath the stated reasons lies a consistent logic: the preservation of unipolar dominance. The empire does not sanction because it is threatened. It sanctions because it cannot tolerate alternatives.

Iran is sanctioned for its “pursuit of nuclear capabilities, support for terrorism, ballistic missile development, and regional destabilization that endanger American security, allies, and interests”. The White House describes Iran as “the world’s leading state sponsor of terrorism”. The stated goal is to deny Iran “all paths to a nuclear weapon”. But the outcome, as even critics acknowledge, has been “severe economic contraction, episodes of hyperinflation, shortages of essential goods”.

North Korea has been under comprehensive sanctions since the 1950s. The official justification is its nuclear and missile programs, described as “flagrant violations” of UN Security Council resolutions. The stated goal is “complete denuclearization”.

Cuba faces an embargo now justified in part by its ties to Russia and China. The White House claims Cuba “hosts dangerous adversaries of the United States” and “aligns itself with malign actors adverse to the United States”. Cuba’s government has long argued that the sanctions “punish all Cubans”.

Venezuela is sanctioned for alleged “terrorism, drug smuggling and human trafficking”. The stated goal is to force President Nicolás Maduro from power. Yet the subtext is explicit. Trump has said that oil seized from Venezuela “could be treated as a U.S. asset”. The pattern, as one analysis puts it, is “resource imperialism”.

Russia faces sanctions “in response to its brutal war of aggression against Ukraine”. The stated aim is to “pressure Putin towards peace”. Yet critics note a “deeper objective: to redraw the architecture of global trade and energy flows and reassert America’s economic primacy in an increasingly multipolar world”.

China is not comprehensively sanctioned but faces escalating trade restrictions justified by “national security”. The US has imposed export controls on semiconductors and semiconductor-manufacturing equipment “to halt China’s technological and military advancements”. The official reason is security. The real reason, as analysts note, is “the desire of the United States to contain China in the context of general political, economic and technological rivalry”.

The official justifications for sanctions shift with the political winds. Cuba was sanctioned for communism, then for ties to Russia and China. Iran was sanctioned for its nuclear program, then for “malign influence.” Venezuela is sanctioned for drug trafficking, yet the stated goal is regime change. Russia faces sweeping sanctions following its invasion of Ukraine, a conflict that many analysts and officials characterise as a Western proxy war waged against Russia through Ukraine. China faces escalating trade restrictions justified by “national security.” The reasons adapt to the moment. The purpose remains constant.

The reasons adapt to the moment. The purpose remains constant: to punish defiance, to prevent the emergence of alternative models of development, and to demonstrate that deviation from the empire's path carries a cost. The empire does not sanction because it is threatened. It sanctions because it cannot tolerate alternatives. The existence of a successful alternative is an existential challenge to the claim that the Western model is the only valid path to prosperity.

This is the unspoken logic: by forcing the hands of any progressive governments, empire is in effect slowing development across the world by forcing alignment, rather than embracing true advancement.

Consider the pattern. When a nation charts its own path, whether through state-directed healthcare (Cuba), indigenous technological development (Iran), or alternative financial infrastructure (China), the empire responds with coercion. The message is clear: there is only one acceptable model of development, and deviation will be punished.

But this coercion produces the opposite of its intended effect. Sanctions do not force alignment. They force adaptation. They force nations to build alternatives. They force the very innovation the empire was trying to prevent.

The empire sanctions because it fears competition. But sanctions create the very competition it fears. The empire sanctions to maintain its position. But sanctions accelerate its relative decline. This is the sanctions paradox. And it is the empire’s self-inflicted wound.

By refusing to embrace true advancement, by insisting that all nations must develop along the Western model or face punishment, the empire is not preserving its dominance. It is accelerating its own obsolescence. It is creating the very alternatives it sought to prevent. It is proving, with every sanction, that its power is not absolute.

The empire sanctions to maintain dominance. But sanctions force nations to build alternatives. The empire sanctions to prevent development. But sanctions accelerate it. The empire sanctions to demonstrate its power. But sanctions reveal its decline.

China’s experience is instructive. US export controls on semiconductors were meant to cripple China’s tech sector. Instead, they “spurred the very innovation they were trying to prevent”. As Harvard Business School research shows, “sanctions often spur companies in other countries to compensate for restricted access to key materials”. The result: “a huge innovation surge in the targeted country in response”. The US ban on advanced chips “backfired”.

The same logic applies across the board. Sanctions on Iran accelerated its domestic scientific and technological capabilities. Sanctions on Cuba forced the development of one of the world’s best healthcare systems. Sanctions on Russia have pushed it toward deeper integration with China and the Global South.

The empire sanctions because it fears competition. But sanctions create the very competition it fears. The empire sanctions to maintain its position. But sanctions accelerate its relative decline. This is the sanctions paradox. And it is the empire’s self-inflicted wound.

The survival reflex is a historical pattern. When communities are cut off from external supply, they are forced to develop internal capabilities. This is not a choice. It is a necessity. And it is sustainable. Necessity, it turns out, breeds resilience.

I saw this firsthand in a project I worked on in South Sudan. There was a small community that had been cut off from the rest of the state due to consistent heavy floods that permanently changed the entire landscape of the area. They could no longer be reached by road. They could no longer be supplied by aid organisations. While the rest of the country turned to humanitarian aid and became increasingly reliant on it, this particular community was forced to look inward. So they did. Isolated from the rest of the country, they rejected humanitarian aid and instead looked to sustainable ways to ensure continued livelihood. They planted crops that were flood resistant. They adapted their farming techniques to the new conditions. They developed local systems of storage and distribution that did not depend on external supply chains. They did not wait for help to arrive. They built their own solutions.

I have witnessed this same instinct in a different grain, among the Sahrawi population in exile. While they are not subjected to sanctions in the same way, the very first thing the population did once exiled was to ensure education. Young, old, men, women. All of them. In the desolate camps of the Algerian desert, without a state, without resources, without any guarantee of return, they built schools. They trained teachers. They made education the foundation of their survival. They understood that if they lost their land, their homes, and their political rights, the one thing they could not afford to lose was their people’s minds.

What I observed in that South Sudanese community, and what the Sahrawi have demonstrated in exile, is the same logic that plays out on a national scale when sanctions are imposed. Cut off from external support, a society has two choices: collapse or adapt. The communities and nations that choose adaptation develop capabilities that would never have been necessary if they had remained dependent on external aid. They invest in the one thing that cannot be taken away, the one thing that cannot be sanctioned, the one thing that cannot be starved: human capital.

Human capital is the only asset that empire cannot control. It cannot be frozen in a bank account. It cannot be blocked by SWIFT. It cannot be seized by sanctions. It cannot be bombed. It exists in the minds of people, in their skills, their knowledge, their capacity to adapt and innovate. This is why sanctioned nations invest so heavily in education and healthcare. They are not merely building schools and hospitals. They are building resilience. They are building the one thing that empire cannot touch.

The the one pattern is consistent: they continue to invest in their people.

This is not to romanticise suffering. Sanctions cause real pain. Shortages of medicine, inflation, and economic collapse are not abstractions. They are lived realities for millions of people. But suffering and stagnation are not the same thing. The sanctioned nations are not waiting for permission. They are adapting.

The United States imposed its embargo in 1963, anticipating that the island would soon collapse. Six decades later, Cuba has one of the highest physician-to-patient ratios in the world. Cuba operates 13 universities of medical sciences, 29 faculties, and 11 branches, alongside the National School of Health and multiple research centres that offer 69 medical specialisations. The country’s medical network includes 451 polyclinics, more than 11,000 community-based doctors’ offices, 1,229 dental services, and 149 hospitals. This system employs over 400,000 health workers, including more than 80,000 doctors, yielding a ratio of approximately eight doctors per 1,000 inhabitants. This figure is the highest globally and far exceeds the physician density of the United States (2.6 per 1,000) and Australia (4.1 per 1,000).

Cuba has developed 22 vaccines administered through its national immunisation programme, 11 of which are domestically produced. Its biopharmaceutical industry, consolidated under BioCubaFarma in 2012, has produced the world’s first therapeutic vaccine against lung cancer (Cimavax) and developed three vaccines against SARS-CoV-2. In 2024 alone, the industry introduced 28 new products, including the anti-pneumococcal vaccine Quimi-Vio.

The blockade has caused immense suffering. Shortages of medicine and equipment are chronic. But it has not stopped Cuban medical science. It has redirected it. The embargo has forced Cuba to become self-reliant in ways that would never have been necessary if it had access to Western imports.

Iran inherited a female literacy rate of just 36 percent in 1976. Through sustained investment in compulsory education and rural outreach, that figure has surged to approximately 85.5 to 86.2 percent for adult women and 98.9 to 99.2 percent for women aged 15 to 24. Over 2.5 million women enrol annually across more than 2,500 universities, outnumbering male counterparts in entry rates.

The STEM statistics are remarkable. Iranian women constitute 70 percent of graduates in science, technology, engineering, and mathematics. This is the highest proportion globally and stands in stark contrast to the United States, where women make up only 35 percent of STEM graduates, and the European Union, where the figure is 32.8 percent. Iranian women comprise 56 to 63 percent of all university students. In medicine, they form 50 to 60 percent of students and doctors. Women also register more than 24 percent of all inventions in Iran, significantly exceeding the global average of 17 percent.

In scientific output, Iran ranks 17th globally by publication volume and has maintained 15th place in citation count for five consecutive years. It ranks among the top ten countries globally in publishing nanotechnology articles.

This is not a society frozen by sanctions. It is a society that has redirected its resources toward the one thing sanctions cannot touch: the minds of its people.

North Korea, perhaps the most isolated nation on earth, maintains a 100 percent literacy rate. Its life expectancy stands at 73.5 years (2024 estimate). These figures, while modest by some standards, are extraordinary for a country that has been under comprehensive sanctions since 1950. They reflect a consistent state investment in education and public health, priorities that have not been abandoned despite the economic pressure of isolation.

Russia, subjected to sweeping sanctions following its invasion of Ukraine, maintains a tertiary education enrolment rate of 60.39 percent. This is among the highest in the world and reflects a continued commitment to higher education even as the economy has been forced to reorient toward military expenditure.

Venezuela, facing some of the most severe economic sanctions in the world, sustains an adult literacy rate of approximately 98 percent. This is comparable to many developed nations and reflects the legacy of a state that prioritised education as a cornerstone of national development. The Empire’s Assumption: A Projection of Arrogance

You are right. Here is a shortened version of the China section.

China has not been subjected to comprehensive financial sanctions in the way Cuba or Iran have been. But it has been at the forefront of Western propaganda, trade wars, and product “sanctions” for years.

The United States has imposed escalating tariffs on Chinese goods, including a 100 percent tariff on ship-to-shore cranes from China, a substantial increase from the 25 percent tariff implemented in September 2024. Additional tariffs have been imposed under the International Emergency Economic Powers Act (IEEPA), including a 10 percent tariff on all Chinese goods effective February 2025, followed by another 10 percent in March 2025. The Trump administration has threatened a total tariff of 155 percent on Chinese imports, which represents a practical embargo on most imports.

Beyond tariffs, the United States has aggressively deployed export controls targeting China’s semiconductor and AI sectors. In December 2024, the Biden administration imposed new export restrictions on advanced chips, adding 140 new entities to the Bureau of Industry and Security’s Entity List, including the Chinese Academy of Sciences Institute of Microelectronics. In March 2025, another 80 entities were added. In September 2025, 32 more entities were added. Huawei has been on the Entity List since 2019, and in 2024 alone, the Biden administration revoked eight licenses that had allowed some companies to ship goods to Huawei.

The sanctions regime has also been deepened to block chip trade with firms affiliated with blacklisted Chinese entities. Restrictions have extended beyond US borders, applying to companies in Japan and the Netherlands, including the Dutch firm ASML, which holds a monopoly on extreme ultraviolet lithography machines necessary for advanced chip production.

And yet, China has watched all of this, observed how the empire weaponises finance, trade, and technology. It has drawn the obvious conclusion: dependence on the empire’s infrastructure is a vulnerability. The only solution is to build your own.

China has been doing exactly that for nearly two decades. The project is not merely defensive. It is a systematic construction of alternative financial, technological, and educational infrastructure that operates independently of Western control. The result is a parallel world: one where nations can trade, innovate, and develop without asking permission from Washington.

At the heart of this project is the Cross-Border Interbank Payment System (CIPS), launched in 2015 as a direct alternative to SWIFT. By 2025, CIPS had expanded to include 1,683 participants across 187 countries and regions. In 2023 alone, CIPS processed more than 6.6 million transactions with a total value of 123 trillion yuan, an increase of nearly 30 percent from the previous year. China has also activated currency swap lines with more than 40 countries, allowing trade to be settled in local currencies or yuan, fully bypassing dollar intermediaries.

The scale of this shift is already visible. By 2024, 92 percent of Russia-China bilateral trade was settled in yuan and rubles. Intra-BRICS trade in national currencies surged to around 50 percent by mid-2025, up from 20 to 30 percent a decade ago, with the yuan leading at 50 percent of settlements.

China’s legal framework reinforces this financial infrastructure. The country has enacted blocking statutes that prohibit domestic entities from complying with foreign sanctions. Chinese enterprises are legally barred from cooperating with US Treasury sanctions, and voluntary compliance may result in domestic legal liability.

The same logic applies to technology. When the United States placed Huawei on a trade blacklist in 2019, cutting it off from US-origin technologies, the assumption was that the company would collapse. It did not. Instead, Huawei mounted a surprise comeback in 2023 with the launch of its 5G-capable Mate 60 smartphone.

US export controls on semiconductors have not stopped Chinese technological development. They have accelerated it. As one observer noted: “these measures served to inspire and mobilise China’s government, microchip foundries and engineers to innovate in the high-end chips arena as never before”. Chinese big tech and cloud companies turned to indigenous AI chips like Huawei’s Ascend series after struggling to secure Nvidia GPUs. The sanctions that were meant to cripple China’s tech sector have instead forced it to build its own.

China’s investment in human capital is staggering. In 1949, 80 percent of China’s population was illiterate. Today, the nation produces nearly 5 million STEM graduates every single year, according to analysis by the Australian Strategic Policy Institute. For perspective, India produces around 2.6 million STEM graduates, while the United States produces roughly 600,000. China’s STEM doctoral output is on track to exceed 77,000 annually, more than double that of the United States. Approximately 50 percent of the world’s top-tier AI researchers are trained in China. Chinese institutions now produce more top-cited scientific papers than the United States.

This was not an accident. It was built upon decades of focused investment through initiatives like Project 985 and Project 211, which identified select universities and funnelled billions into constructing world-class labs and attracting global academic talent. Programs like the Thousand Talents Plan recruited top-tier overseas Chinese scientists with irresistible offers of research grants and state-of-the-art laboratories. In 2021 alone, over one million overseas Chinese students returned home.

China’s project is not merely about protecting itself from sanctions. It is about building a world where sanctions no longer matter. When a nation can trade through CIPS, settle in yuan, develop its own technology, and educate its own people, the empire’s tools of coercion lose their power. The financial bypass is technical. The technological bypass is industrial. The human capital bypass is educational. Together, they constitute a comprehensive alternative to the empire’s infrastructure. China has not waited for permission. It has built its own systems. And in doing so, it has demonstrated that the empire’s power is not absolute. It is contingent. And it is eroding.

The assumption that these nations cannot survive without the West is a projection of Western arrogance. It is the belief that the Western model of development is the only model. That without Western technology, Western capital, and Western approval, no society can progress. That the empire is, in effect, the centre of the world and that all others are periphery.

This assumption is demonstrably false. The history of human civilisation is not the history of the West. It is the history of many civilisations: Chinese, Indian, Persian, Arab, African, and indigenous civilisations that flourished for millennia before the rise of the West. The West is not the source of human progress. It is a relatively recent phenomenon, and one that is increasingly showing signs of decline.

The sanctioned nations are not simply surviving. They are building. They are investing in the one asset that cannot be sanctioned, the one asset that the empire cannot control: human capital. They are educating their people, training their doctors, and building their scientific infrastructure. They are doing so not because they have access to the empire’s resources, but because they have been forced to do so.

While the sanctioned nations build, the empire hollows itself out from within.

Australia presents a striking case. The country that once had one of the highest rates of university enrolment in the world is now seeing a surge in trade apprenticeships and a significant decline in humanities enrolments. The market signals are clear: trades pay well; degrees, particularly in the humanities, are seen as a financial burden.

The issue is not that trades are flourishing. Skilled tradespeople are essential. The issue is the imbalance. The message being sent is not simply “trades are valuable.” The message is “education that develops critical thinking and complex systems analysis is not worth pursuing.” University enrolments have flattened. Dropout rates have reached historic peaks. Humanities programs are being slashed. The higher education sector is contracting. The intellectual capital that built Australian prosperity is being deprioritised.

In 2024, 21 percent of US adults were illiterate. Fifty-four percent of adults had literacy below a sixth-grade level, and 20 percent below a fifth-grade level. The United States ranks 36th globally in literacy. Low levels of literacy cost the US up to $2.2 trillion per year.

College enrolment tells a similar story of decline. First-year freshman enrolment declined by 5 percent in fall 2024, with the biggest drops at public and private nonprofit four-year institutions. The Federal Reserve Bank of Philadelphia has warned that the next five years could see another 15 percent decline, potentially triggering up to 80 additional university closures.

The pattern repeats across the West. In the United Kingdom, women make up just 35 percent of STEM graduates. In the European Union, the figure is only 32.8 percent. These are not the figures of societies that are investing in their intellectual future. They are the figures of societies that are coasting on past achievements while the rest of the world catches up, and in some cases, surpasses them.

The problem is not that trades are flourishing. Skilled tradespeople are essential to any functioning society. The problem is the imbalance. A society that de-prioritises intellectual and critical thinking skills while overcorrecting toward manual trades is building for the present, not for resilience. The sanctioned nations, by contrast, are investing in the one asset that cannot be taken away: human capital. They are building capacity, adaptability, and a population equipped to solve problems they were never supposed to be able to solve. The empire is building tradespeople in abundance. Both are essential. The question is whether a society can afford to neglect either.

Empire controls the global financial infrastructure. SWIFT, the dollar clearing system, and the major credit card networks are all tools of coercion. They are used to cut off nations from the global economy, to starve them, to force them into submission.

But this control is eroding. China has built CIPS, an alternative to SWIFT. Russia has built SPFS. India has built UPI. The BRICS bloc has built its own payment systems and is actively de-dollarising its trade. The Commonwealth of Independent States now conducts 85 percent of its cross-border transactions in national currencies.

When there are multiple payment highways, the threat of being cut off from any one of them diminishes. Sanctions lose their power not because the United States becomes more accommodating, but because the world builds alternatives. The empire’s monopoly on the financial system is ending.

The financial bypass is technical. The human capital bypass is already operational. Cuban doctors are serving in Western Sahara. Iranian engineers are working in Venezuela. Russian scientists are collaborating with Chinese researchers. These are parallel systems of development that do not require Western permission.

What does it mean to be developed? The Western model equates development with GDP growth, consumer credit, and global financial integration. It measures progress in terms of stock markets, corporate profits, and private consumption. It treats education as a commodity, healthcare as a market, and society as a collection of individual consumers.

The sanctioned nations offer a different model. They measure development in terms of human outcomes: literacy, life expectancy, and scientific output. They treat education and healthcare as public goods, not private commodities. They prioritise the collective over the individual.

This is not a defence of the political systems of these countries. It is an observation about what happens when a society is forced to rely on itself. When a nation cannot import solutions, it must produce them. When it cannot buy education, it must build it. When it cannot purchase healthcare, it must create it. This is not a choice. It is a necessity. And it produces results.

The sanctions regime is intended to maintain hegemony. It is intended to punish those who defy the empire’s will. It is intended to demonstrate that there is no alternative to the Western model of development.

But the evidence suggests otherwise. The sanctioned nations are not collapsing. They are not submitting. They are building, educating, and innovating. They are creating human capital that rivals and in some cases surpasses the empire. They are forming partnerships that bypass the empire’s financial systems. They are demonstrating that there is an alternative.

This is not a prediction. It is an observation. The sanctioned nations are not thriving in the conventional economic sense. They face real suffering: shortages, inflation, currency collapse. But they are not stagnant. They are not helpless. They are not waiting for the empire to save them.

They are saving themselves. And in doing so, they are proving that the empire’s power is not absolute. The empire’s assumption that these nations cannot survive without it is a projection of its own anxiety, the anxiety of a civilisation that senses its decline and desperately seeks to maintain its dominance.

The very tool designed to maintain hegemony is accelerating the empire’s relative decline. By cutting off access to technology and finance, sanctions force nations to develop indigenous capabilities. By treating education as a survival imperative rather than a consumer good, sanctioned nations build human capital that rivals, and in some cases exceeds, that of their tormentors.

Meanwhile, the sanctioning powers are sleepwalking into intellectual obsolescence. They are chasing short-term labour market signals while dismantling the very educational infrastructure that produced their dominance. They are treating healthcare as a market rather than a public good. They are allowing their literacy rates to decline. They are hollowing themselves out from within.

The doctor-patient ratio is not just a statistic. It is a mirror. Cuba’s eight doctors per 1,000 reflects a society that decided health mattered more than profit. America’s 2.6 reflects a society that decided the opposite. In the long run, that decision may matter more than any embargo.

The implications are profound. If the sanctioned nations continue to invest in human capital while the empire allows its own to decay, the balance of power will shift. Not because the sanctioned nations will become economic powerhouses, but because they will become more adaptable, more resilient, and more capable of solving problems that the empire has forgotten how to solve. The next global crisis, whether climate, energy, or financial, will reveal which model works better. The evidence suggests it will not be the empire’s.

The assumption that these nations would not survive without the empire is a projection of imperial arrogance. It is the belief that the West is the centre of the world and that all others are periphery. But history shows otherwise. The world is not a unipolar system. It is a multipolar system, and it is becoming more multipolar every day.

The sanctioned nations are not waiting for permission. They are building their own futures. They are demonstrating that there is an alternative to the empire. They are proving that human capital, not financial capital, is the true foundation of prosperity. The empire can block payment systems. It can freeze assets. It can starve populations. But it cannot block a teacher from teaching, a student from learning, or a doctor from healing. Doctors, not bombs. Fidel Castro’s phrase was not mere rhetoric. It was a strategy. And it is working. The question is not whether the empire will eventually notice. The question is whether it will be too late to do anything about it.

In transit, with sleepy brain cells,
Liz

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