Weekly Rundown 3/09
On the Record
The Brexit date is getting ever closer. The ball is still rolling toward the cliffs of Dover.
Dutch Prime Minister Mark Rutte
On Our Radar
Brexit's Big Week. A series of votes in the United Kingdom's House of Commons next week will be crucial for the future of Brexit. On March 12, lawmakers will once again vote on the exit agreement that London negotiated with Brussels, after overwhelmingly rejecting it in January. If parliamentarians reject the agreement again, a vote will take place on March 13 on whether or not to leave the EU without a deal. If lawmakers vote against leaving without a deal, then a vote will take place on March 14 on whether or not to ask the EU to delay Brexit. These votes reduce the chances of a disorderly withdrawal on March 29, as British politicians will be given the opportunity to postpone Brexit. But even if Brexit is delayed, the long-term questions about the final shape of the UK's egress from the European Union will remain unanswered.
Trump Takes Aim at India and Turkey. India and Turkey are caught in the crossfire of an intensifying trade debate involving the United States and the World Trade Organization (WTO). On March 4, U.S. President Donald Trump notified Congress of his intent to revoke the low tariffs New Delhi and Ankara have enjoyed since the 1970s on various goods outlined under the Generalized System of Preferences (GSP). Trump justified the decision by saying that trade barriers impede greater market access. Although Trump's move fits into his broader attempts at reigning in trade deficits, the debate over GSP eligibility predates his administration and strikes at the very heart of the ongoing debate over WTO reform and how developing nations are defined.
Major Players Meet in China. China's annual "two sessions" — the People's Political Consultative Conference and the National People's Congress — kick off this week. The sessions will set the country's growth targets and will this year emphasize economy stability and employment. The unveiling of China's crucial foreign investment law is hotly anticipated. The law is designed to ease U.S. concerns over forced technology transfers and in foreign business interference and is expected to get passed when the legislative session concludes. The details of the new bill matter, and how it's applied will be a key factor when it comes to managing the trade conflict between the United States and China.
Italy, the Next Stop on the Belt and Road? The European Union and key member states including France and Germany are concerned about foreign companies, particularly from China, gaining access to critical technology or infrastructure in Europe. This week, Brussels introduced a new screening mechanism to address concerns. Concurrently, a member of Italy's economic development ministry said that Rome could sign a memorandum of understanding to join China's Belt and Road program later in the month. Not everybody is happy with the idea, however, and the United States and the EU have warned about China using investment promises to increase its political influence in Europe. The Italian government itself seems divided on the issue, with the populist Five Star Movement in favor of greater Chinese investment while the right-wing League is skeptical.
Private Gold Mine Project Canceled in Mexico. After Mexican President Andres Manuel Lopez Obrador ordered the cancellation of a private gold mine, many in Mexico are considering how the new administration might present a risk to private investors. Lopez Obrador is already holding impromptu referendums on investments and plans to enact constitutional reform to allow more frequent votes on almost any subject of national and local concern. But ordering the cancellation of a mining project portends a more immediate problem for the private sector. Lopez Obrador will continue to provoke Mexico's private sector as long as it's politically expedient and he may now resort to outright foreign and domestic expropriation to pursue his political aims.
On Our Minds
The Cost of Stationing U.S. Troops Abroad. According to a March 7 Bloomberg report, the White House is drawing up plans to demand that its allies pay the full price of basing U.S. troops overseas, as well as an additional 50 percent or more for the "privilege" of hosting them. If Washington goes through with this plan, the White House could pressure some of its allies to pay more. But such a strategy comes with associated risk. The U.S. relies on the forward deployment of a portion of its forces to maintain global influence and to deter competitors such as China and Russia. Financial wrangling from the U.S. could lead to key allies such as Germany and Japan reevaluating the benefit of American personnel and equipment on their territory altogether.
Intrigue in the Sea of Azov. U.S. Vice President Mike Pence is rumored to have urged German Chancellor Angela Merkel to send warships to the Kerch Strait in a show of support to Ukraine during a Feb. 16 meeting. Germany refused Pence's proposal and France also declined to take part, both countries deeming such a move an unnecessary provocation of Russia. This is revealing if true and would confirm the dynamic interplay of Western powers when it comes to Ukraine. The U.S. has traditionally been bolder in its support of Kiev against Russia — both in terms of rhetoric and concrete security assistance. Germany and France, however, hold a more moderate line on the Ukraine issue. If Kiev is able to get the kind of direct military support from Western or NATO powers that it seeks to build up its military and naval capabilities, there could be an escalation of tensions in the Black Sea region.
Weekly Rundown 3/02
On the Record
I ask India: With the weapons you have and the weapons we have, can we really afford such a miscalculation? Shouldn't we ask ourselves if it escalates from here now, where will it go? If this escalates, things will no longer be in my control or in Narendra Modi's.
Pakistani Prime Minister Imran Khan
On Our Radar
A Dangerous Precedent in South Asia. Tensions between India and Pakistan soared this week as the neighbors took their fight to the skies. On Feb. 26, India sent warplanes into Pakistan to bomb what it said was a training camp belonging to Jaish-e-Mohammed, the militant group that claimed responsibility for the Feb. 14 suicide attack on a paramilitary convoy in Indian-administered Kashmir. On Feb. 27, Pakistan retaliated by launching airstrikes across the Line of Control that separates disputed Kashmir between the rivals, with both countries claiming to have shot down enemy aircraft during the exchange. After Pakistan returned a captured Indian pilot on March 1, and with plans to resume an important train service between the two countries on March 4, tensions appear to be easing. Nonetheless, reports on March 2 said Indian and Pakistani forces had exchanged fire near the Line of Control; at least six civilians and two Pakistani soldiers were reported killed. And the use of airstrikes for the first time in decades sets a dangerous precedent. As long as Pakistan continues its campaign to challenge India's presence in Kashmir, future large-scale militant attacks are inevitable.
A Bit of Brexit Clarity. The British House of Commons significantly reduced the chances of a disorderly Brexit at the end of the month when it agreed this week to ask Brussels to delay the United Kingdom's departure from the European Union if Parliament fails to approve an exit agreement by mid-March. The decision probably avoids a no-deal Brexit on March 29, though it also kicks the can down the road. Parliament remains divided on Brexit, with the exit deal Prime Minister Theresa May negotiated with the European Union as controversial as ever.
Trump-Kim Summit Fizzles. The long-awaited summit sequel in Hanoi, Vietnam, between U.S. President Donald Trump and North Korean leader Kim Jong Un ended with a whimper when Trump cut it short. The United States said talks broke down over North Korea's demand to "basically" lift sanctions "in their entirety." On closer examination, the main sticking point appears to be the definition of "partial": North Korea has called for fewer than half of United Nations sanctions to be peeled back, but these sanctions are the core of U.S.-led maximum pressure on Pyongyang. Still, the two sides are emphasizing that relations remain warm and that their outreach is in motion. Any future lower-level meetings between U.S. and North Korean officials will be key in terms of whether the two sides are willing to budge on their mutually entrenched demands.
Algerians Head to the Streets. It has been a week of rare protests against Algerian President Abdel Aziz Bouteflika as the longtime leader prepares to run for a fifth term in April. Protests began a week ago and culminated on March 1 in what has been dubbed Algeria's "Million Man March." More protests are expected March 3 when Bouteflika formally registers for the April 18 presidential election. With Algeria's weak economy hit hard by falling oil prices and declining oil and gas production, discontent has been bubbling under the surface and we are finally seeing it begin to boil over. After April's election we may see Algiers in a stronger position to try to reform its economy and social system.
Bolsonaro's Weakness Starts to Show. Brazilian President Jair Bolsonaro's efforts to win approval of a key social security and pension reform suggest he will struggle with Congress just like presidents before him. As someone on the fringes of Brazil's congressional landscape, Bolsonaro lacks the political networks of more well-established politicians. He also has publicly said he'll shy away from the political horse trading that most presidents have to do to pass laws in Brazil's divided Congress. Yet, already, he is showing signs of offering concessions so the reform is approved, apparently resorting to the same negotiation strategy as previous presidents and raising the likelihood that Congress will act as a heavy constraint on his ambitious domestic policies.
Pompeo Visits the Philippines. U.S. Secretary of State Mike Pompeo assured Manila during a brief visit to the Philippines on March 1 that the United States' obligation under the Mutual Defense Treaty included armed attacks in the South China Sea. Pompeo's remarks, however, did not seem to convince the Philippine government to withdraw its plan to review the treaty. Washington's interest in countering China gives Manila an opportunity to advance its security interests in the region and its guarantee from the United States.
Opposition Disputes Nigerian Election Results. Election results poured in for two important West African states this week: Nigeria and Senegal. But while Senegal's opposition threw in the towel amid President Macky Sall's commanding reelection, Nigeria's opposition refused to give up the fight. Vowing to challenge the election results, the main opposition People's Democratic Party is setting up a legal showdown with President Muhammadu Buhari and his allies. Buhari suspended Nigeria's chief justice in January. So, all eyes will be on whether the Nigerian Supreme Court remains impartial. If not, opposition protests and violence cannot be ruled out.
On Our Minds
Iran's Foreign Minister Takes a Stand. There was plenty of drama in Tehran this week after Iranian Foreign Minister Javad Zarif announced his sudden resignation on Instagram, which President Hassan Rouhani eventually rejected. Zarif said he was resigning in protest, as he felt the Foreign Ministry was not being given a prominent enough role in Iran's foreign policy. Ironically, Zarif has emerged stronger from the ordeal. He now has the backing of Supreme Leader Ayatollah Ali Khamenei and Rouhani to continue driving Iran's foreign policy, which has remained pragmatic in the face of the U.S. withdrawal from the Iran nuclear deal. Zarif's concerns are well placed. U.S. sanctions pressure on Iran plays into the hands of Iran's hard-liners who want a more confrontational response. And for many in Tehran that means restarting Iran's nuclear program. Thus far Zarif and his allies have been able to hold off the hard-liners. But the question is how long can they continue to do so.
The EU Contemplates a Tech Security Strategy. The European Commission will soon propose a common approach to address Huawei's role in the development of next-generation mobile networks in Europe. While details remain to be seen, it is notable that Brussels wants to develop a European Union-wide response to the "Huawei question." So far, EU members have addressed their concerns about the controversial Chinese technology company individually. Should Brussels propose an umbrella approach, it probably would lead to frictions between countries that push a hard line on Huawei, like France, and those that are more ambiguous, like Germany or Italy. As with many EU proposals, there is also the possibility that Brussels will produce a generic approach that will still leave final decisions up to individual governments.
Tariff Threat Eases, for Now. The week began with U.S. President Donald Trump extending the March 1 deadline on hiking tariffs on $200 billion in Chinese goods, maintaining the trade truce he and Chinese President Xi Jinping agreed to in December. Although U.S. Trade Representative Robert Lighthizer continued to stressed the need for China to make additional structural reforms, he effectively called off the threat of further tariffs. There was even the hint of a deal on an enforcement mechanism — a key stumbling block in U.S.-China trade talks. These developments come as China's political elite gather in Beijing on March 5 for their annual, weeklong meeting, dubbed Two Sessions. We are watching to see how they form a new foreign investment law, which is meant to ease forced tech transfers and to protect intellectual property. As China navigates an extended economic slowdown, where Beijing sets growth targets and policy priorities and how it shapes the scope of tax reforms will provide clues as to how China is handling the weight of the U.S. trade strategy and domestic economic transition.
Israeli Prime Minister Faces Indictment. Israel's attorney general said on Feb. 28 that he plans to indict Prime Minister Benjamin Netanyahu on corruption charges. The actual indictment and trial process could take years. For now, the game to watch is how Netanyahu and Israeli politicians and voters react. Netanyahu and his allies already are assailing the institutions that have brought the prime minister under the specter of indictment, raising questions as to just how much Netanyahu might undermine Israel's rule of law should he emerge victorious from April 9 elections. Also, worth watching will be Netanyahu's own Likud Party, within which restive officials have long hoped for an opening to take the prime minister's post. Finally, corruption is now a critical issue of the campaign, and should Netanyahu lose because of it, it will herald a new political era for Israel.
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On Our Calendar
In the coming week, peace talks continue between the United States and the Taliban, the U.S. Senate Foreign Relations Committee holds a closed-door hearing on the killing of Saudi journalist Jamal Khashoggi and China's National People's Congress meets to discuss policy and pass legislation. For more, see our Geopolitical Calendar.
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Weekly Rundown 2/24
On the Record
And one day soon with God's help we are going to see what the people are going to do in Caracas and Managua and Havana. And when Venezuela is free and Cuba is free and Nicaragua is free, this will become the first free hemisphere in all of human history.
U.S. President Donald Trump
On Our Radar
Venezuela Sees More Defections. A high-profile military defection to Venezuela's opposition raises the likelihood that key armed forces commanders will follow suit. Retired Gen. Hugo Carvajal, who until 2012 was the head of military intelligence, announced his support for Juan Guaido as interim president on Feb. 21. The move suggests Carvajal — who faces cocaine-trafficking charges in the United States — may have reached an agreement with the opposition and the U.S. government to avoid extradition. The influential former military intelligence director's agreement to opposition rule may spur others to join serious amnesty negotiations.
Pakistan Has Trouble on Two Fronts. A pair of deadly attacks in Iran and India are sharpening tensions between Pakistan and its two neighbors. On Feb. 13, Jaish al-Adl, a Pakistan-based militant group, claimed responsibility for a suicide car bombing that killed 27 members of the Islamic Revolutionary Guard Corps in southeastern Iran. The next day, Jaish-e-Mohammed, another Pakistan-based militant group, killed 44 Indian security personnel in a suicide car bombing in India's Jammu and Kashmir state. India and Iran have accused Pakistan of failing to curb cross-border militant activity. India and Pakistan's rivalry is dangerous for its potential to involve a nuclear exchange, and with tensions flaring at their highest level in years, Pakistan will seek to calm its relationship with Iran as it prepares for a possible Indian retaliatory strike.
U.S.-China Trade Talks Trend Positively. Negotiators from China and the United States are racing to get a framework in place for a trade deal ahead of the next week's March 1 tariff truce deadline. Although both sides reportedly remain divided over several structural issues, negotiators reportedly reached a deal on currency manipulation and are working on memorandums of understanding covering agriculture, non-tariff barriers, technology transfers and intellectual property. A possible meeting between U.S. President Donald Trump and Chinese President Xi Jinping in late March is another sign the talks are going well. Meanwhile, the United States continues its global pressure campaign against Huawei Technologies as Secretary of State Mike Pompeo said this week that the United States would stop sharing information with any country using Huawei's equipment in its critical networks and would take countermeasures. What those measures would be is unclear. That said, the United Kingdom and Germany are pushing against the United States' full-court press against Huawei. If both let Huawei invest in their 5G networks, several smaller European countries are likely to follow suit.
Brexit or Bust. As Brexit approaches, British Prime Minister Theresa May will be fighting in Europe and at home to avoid a disorderly exit from the European Union. May will use a Feb. 24-25 summit between European Union and Arab League leaders to meet individually with as many of her European counterparts as possible. Then she will visit Brussels on Feb. 26 to see whether she can secure additional promises that the unpopular Irish backstop is not meant to be permanent. This activity will be a prelude to Feb. 27, when she will present a motion about the next steps of the Brexit process to an increasingly divided House of Commons. Members of Parliament will propose amendments, but we will be watching for a specific proposal to force May's government to ask the European Union to delay Brexit if no agreement is approved by late March. The House of Commons rejected a similar proposal only a few weeks ago, but with the March 29 Brexit deadline fast approaching, the vote could be much closer this time.
On Our Minds
Trump and Kim Are Set to Meet Again. Next week will bring the long-awaited second summit between President Trump and North Korean leader Kim Jong Un. The Feb. 27-28 meeting in Hanoi, Vietnam, comes after more than eight months of scant progress toward the U.S. goal of denuclearization of North Korea. At the summit, the two sides will be seeking tangible progress, with Pyongyang pushing for sanctions relief and Washington pushing for steps that first ease the nuclear threat to the United States while moving toward broader denuclearization. The two sides could strike a "small deal" focused on formalizing North Korea's nuclear freeze and easing the intercontinental ballistic missile threat. In exchange, North Korea will ask for some sanctions relief, which the United States is open to giving if substantial progress is made. In terms of big, splashy moves, the two sides might informally declare an end to the Korean War and announce the opening of liaison offices. Neither of these moves would represent a substantial step forward, but they would help both sides emphasize the value of their outreach. Regardless, whatever is agreed to in Hanoi, it will be the follow-through that matters.
The U.S. Withdrawal From Syria Becomes a Drawdown. In another twist following President Trump's decision in December to withdraw U.S. forces from Syria, the United States said this week that it will leave up to 400 troops in the country. The U.S. forces reportedly will be split between their al-Tanf base near Iraq and alongside their Kurdish allies in the northeast. Such a force would serve as a block to a Turkish offensive against the U.S.-backed, Kurdish-led Syrian Democratic Forces. That doesn't mean the United States is going to permanently block Turkey's ambitions to roll up the growth of a Kurdish statelet on its Syrian border, but it does give some life to America's ongoing role in Syria. As the last bit of Islamic State territory falls to the Syrian Democratic Forces, however, America's impulse to bring the troops home will return — and the power vacuum such a move leaves behind will be filled by someone.
Mexican Energy Reform in Peril. Mexico's federal auditor publicly dealt the country's energy reform a serious blow by issuing a report claiming reform did not fulfill its stated aims. The report said that oil production had not increased, state energy investment outpaced private investment and state-sponsored oil drilling had slowed. President Andres Manuel Lopez Obrador may use the report to justify deeper intervention to slow or halt private investment into Mexico's energy sector. Lopez Obrador already moved to limit investment by raising administrative obstacles to importing fuel and by appointing party allies to head energy regulatory bodies.
South Africa's Electric Bailout. This week, South Africa bailed out its troubled power utility Eskom to the tune of $5 billion. The decision comes as the government is considering splitting Eskom into three companies and Sub-Saharan Africa's most industrialized economy struggles with costly power cuts. As South Africa tries to strike a balance between populism and business, the turnaround strategy for its state-owned power utility will prove crucial. However, it's unclear how much the bailout will help Eskom repair its crumbling infrastructure, while it also adds to South Africa's debt.
Chinese Basing in Tajikistan. The firsthand observation by a Washington Post journalist confirmed the existence of Chinese military personnel at outposts near Shaymak, Tajikistan, reinforcing years of speculation that China has stepped up its security presence in the porous tri-border region adjacent to China's Xinjiang region and Afghanistan. The exact nature of the Chinese operation is unknown, and both Dushanbe and Beijing unsurprisingly denied that China is building a military base in Tajikistan. But Chinese soldiers or paramilitary forces have been spotted around the region for at least three years, and Beijing also reportedly increased its security presence in nearby Afghanistan. China's security involvement presumably is motivated by Beijing's concern about Uighur militants returning from Syria and Iraq. A security vacuum created by the United States potentially pulling out of Afghanistan will likely only inspire Beijing to increase its security role.
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On Our Calendar
In the coming week, U.S. President Donald Trump and North Korean leader Kim Jong Un meet in Vietnam, Egypt hosts a joint summit of Arab League and European Union leaders, U.S. and Taliban negotiators meet in Qatar for another round of peace talks and the U.S.-China tariff truce deadline ends. For more, see our Geopolitical Calendar.
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Weekly rundown 2/16
On the Record
We need a #Weltpolitikfähigkeitsverlustvermeidungsstrategie.
(German for "a strategy to prevent the loss of the capability to shape world affairs.")Wolfgang Ischinger, chairman of the Munich Security Conference
On Our Radar
Spanish Political Collapse. The Spanish government called an early general election for April 28 after the Socialist administration of Prime Minister Pedro Sanchez failed to win support in parliament for its 2019 budget proposal. The April vote will lead to a fragmented parliament and lengthy negotiations to form a coalition government. Polls suggest that a government including three center-right and right-wing parties is possible, but this coalition would only lead to renewed friction with pro-independence forces in Catalonia. While the Spanish economy has proved to be considerably resilient to political turbulence, prolonged uncertainty could take its toll on one of the fastest-growing economies in Western Europe.
Nigeria Postpones Elections. Nigeria's independent national election commission delayed the country's presidential and National Assembly elections by one week, citing logistical difficulties just hours before polls were scheduled to open on Feb. 16. At this time, signs do not suggest a suspicious reason for moving the vote to Feb. 23, but the delay may increase tensions in an already tense affair. Indeed, while militant attacks and election irregularities are possible, the more pressing concern is that a disputed election will emerge between President Muhammadu Buhari and his top challenger, Atiku Abubakar, a former vice president. Buhari has been accused of trying to push out the country's chief justice, Walter Onnoghen, who would oversee any legal challenges to the election's outcome. Onnoghen also is from the Niger Delta, an area Buhari lost by a big margin in 2015. Buhari and Abubakar are proposing very different economic visions for Nigeria. The election's outcome will play a key role in Nigeria's trajectory and stability moving forward.
Get Your Car Tariff Engines Ready? After months of discussion, the U.S. Commerce Department's report on whether vehicle and auto part imports can harm national security is due on President Donald Trump's desk by Feb. 17. The report is widely expected to come back affirmative, setting up a high-stakes game for Germany, Japan and other car-exporting countries as they negotiate trade deals with the United States. What remains unclear are the options for remedies the report will recommend. One proposal under discussion has been a tariff of up to 25 percent on all auto imports. Other proposals have been narrower – targeting only a handful of countries, for example, or next-generation electric and autonomous vehicles and the components for them. Trump will have 90 days to decide whether to accept or reject the report's recommendations.
Risky Business for Transactions in the Middle East. The European Union has now designated Saudi Arabia a high-risk jurisdiction for suspicious money-laundering and terrorist-financing transactions. Although Riyadh's Middle East rival Iran has been on the European Union's blacklist for a while, the bloc added Saudi Arabia this week as it expanded its list and introduced its own methodology to test other countries' frameworks. The designation will cause European financial institutions to enhance their due diligence measures when dealing with Saudi transactions, adding an additional burden to an already ambitious Saudi reform plan.
On Our Minds
An Unprecedented Bombing in Kashmir. The deadliest bombing in the three-decadelong insurgency in Kashmir took place Feb. 14, when a militant belonging to the Pakistan-based Jaish-e-Mohammed group detonated an explosive-laden SUV as he rammed it into a bus carrying personnel from India's Central Reserve Police Force, killing 44. The Pakistani army has long covertly employed militant proxies to pressure the Indian military in the disputed territory of Kashmir, but the timing of the Feb. 14 attack threatens to cast a cloud over Saudi Crown Prince Mohammed bin Salman's visit to Pakistan on Feb. 17, undermining Islamabad's aim to project the country as a safe investment destination and raising questions about Pakistan's control over its militant proxies.
Thai Political Intrigue. This past week or so saw the Thai monarchy shoot down a short-lived bid by Princess Ubolratana Mahidol to stand for prime minister in March 24 elections. Election officials declared her selection illegal, following a royal decree by her brother, King Maha Vajiralongkorn, calling her move "unconstitutional." Now a Thai court is deciding whether to disband Thai Raksa Chart, the party aligned with former Prime Minister Thaksin Shinawatra that nominated her. The king's move to neutralize what would have been a major challenge to the military's candidates is a boon to the junta and a clear signal of his intention to check any effort that would challenge his own dominance. And if Thai Raksa Chart is disbanded, it could severely damage efforts by Thaksin's proxies in the election — an eventuality that could lead to a backlash in the form of street protests.
The Kremlin Carves Out the Russian Internet. The slow fragmentation of the internet continues as Russia seeks to create its own domestic internet, known as Runet. This week, the State Duma passed the first reading of a bill aiming to increase Russian control over issues like data localization, Domain Name System root servers and other internet infrastructure. In addition, Russia is planning to test whether the domestic internet it is building can be successfully cut off from the global internet by April 1. Ostensibly, the Kremlin says it wants to ensure that its domestic internet can operate if Russia is cut out of the global internet during a military conflict. In reality, Russia hopes to gain greater control over content and information flows that it can use during sensitive times at home, like in the lead up to an election. Russia is not the only country trying to increase its sovereign control over the internet or impose its regulations over information flows. The question at this point is how fragmented will the internet become?
A Libyan Field Marshal Gets His Oil Field. Field Marshal Khalifa Hifter and the Libyan National Army that he commands gained control of the Sharara oil field this week. The field, Libya's largest, has been shut down since early December. Hifter has said he plans to hand the field back to the National Oil Corp. so production could start relatively soon and add 300,000 barrels per day to the global oil market. Long-term, however, the field's seizure could result in Libya's oil production becoming more volatile as Hifter — who rejects the internationally recognized government in Tripoli — now has a stranglehold over Libya's explorative and extractive, or upstream, oil sector and both sides could try to use oil and oil revenue as a political card between them.
Venezuelan Aid Showdown. Opposition leader Juan Guaido plans to bring humanitarian aid into Venezuela from Colombia and Brazil on Feb. 23. There's just one catch: The government of President Nicolas Maduro plans to use the armed forces to prevent the entry of any aid into the country. The United States, Colombia and Brazil have been slowly collecting humanitarian aid and preparing to deliver it, but so far only a limited amount from Brazil has trickled past border controls. Guaido's announcement raises the possibility that negotiations between key members of the Venezuelan armed forces, the opposition and the U.S. government have advanced to the point that the Venezuelan military will allow aid into the country. Such an event would mark a significant split between Maduro and the military, and would demonstrate the extent to which Maduro's power over Venezuela's institutions has eroded.
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On Our Calendar
In the coming week, Nigeria holds presidential and parliamentary elections, delayed from Feb. 16; Saudi Crown Prince Mohammed bin Salman visits Pakistan, China, Malaysia, Indonesia and India; and Russian President Vladimir Putin delivers his state-of-the-nation address. For more, see our Geopolitical Calendar.
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weekly rundown 2/9
On the Record
If Chavez were alive, he'd overthrow Maduro.
Rafael Ramirez, former Venezuelan oil minister
On Our Radar
Are Maduro's Days Numbered? The United States is working with Brazil and Colombia to deliver humanitarian assistance to the Venezuelan border. And on Feb. 13, Colombian President Ivan Duque will meet with U.S. President Donald Trump in the White House to discuss regime change in Venezuela. Further actions by Colombia and the United States to encourage the departure of Venezuelan President Nicolas Maduro, including tighter sanctions and deeper investigations, are likely. Similarly, the aid shipments are intended to put the Maduro government in a politically difficult position. Maduro's continued refusal to let the aid into Venezuela will harm what little domestic support he retains. Venezuelan military commanders, hoping to avert a riot at the border by hunger-stricken Venezuelan refugees, may let the humanitarian aid pass, in violation of Maduro's orders. Such a move would create a significant split between Maduro and the armed forces and place pressure on military commanders to choose whether to stick by the unpopular president or cooperate with the distribution of U.S.-sponsored assistance.
Failed Merger Spurs EU Reform Effort. Germany and France announced this week that they will present plans to reform the European Union's antitrust rules within the next three months. The announcement followed the European Commission's Feb. 6 decision to block the merger of railway giants Alstom and Siemens. The Germans and the French are increasingly worried about U.S. and Chinese companies, as well companies from other countries, outcompeting their European rivals and want to create European "champions." But any reforms in EU antitrust rules will have to wait, because a new European Parliament will be elected in May, followed by the appointment of a new European Commission around October. We expect the future of antitrust policies to be one of the main debates in the European Union heading toward 2020.
Russia's Increasingly Heavy Hand in Afghanistan. Diplomacy and war are shaping Russia's positioning on Afghanistan. On Feb. 5, Taliban officials and prominent Afghan politicians outside of President Ashraf Ghani's administration met in Moscow, highlighting Russia's role as a powerful regional actor seeking to shape peace negotiations countering U.S. influence. Central Asia's exposure to Afghanistan is another core Kremlin concern. Russian Foreign Minister Sergei Lavrov toured several Central Asian countries this week, with security issues — including the potential for a second Russian military base in Kyrgyzstan — a key focus. Russia can be expected to play up the security threat posed by the Islamic State and other militant groups in Afghanistan as a means to beef up its security presence in Central Asia.
Long-Awaited Kim-Trump Summit Date. During his State of the Union address on Feb. 5, U.S. President Donald Trump announced that he and North Korean leader Kim Jong Un will meet Feb. 27-28 in Vietnam. On Feb. 8, Trump identified where in Vietnam, tweeting that he and Kim will meet in Hanoi. The past eight months have seen some reversible demolitions of North Korean test sites, the continued halt of North Korean nuclear and missile tests and a freeze in U.S.-South Korea military exercises but little progress in terms of North Korea's denuclearization. Pyongyang has been pressing the United States to provide "corresponding measures," including the rollback of sanctions. Washington, however, has hesitated to grant any concessions without first securing tangible signs that North Korea is willing to give up its nuclear weapons or at least its systems that are capable of striking the United States. Washington is now hinting it might be willing to sign a declaration, or even a peace treaty, ending the Korean War but will not do so without commensurate measures from North Korea.
Rate Cut Is a Positive Sign for Modi. The Reserve Bank of India's first interest rate cut in 18 months offers good news for Prime Minister Narendra Modi as he faces a tough re-election contest by May. On Feb. 7, the central bank lowered its key lending rate by a quarter of a percentage point to 6.25 percent. The cut arrived under new bank governor Shaktikanta Das, who took over in December after Urjit Patel quit following a prolonged tussle with Modi over policy differences. Modi hopes that the lower rate translates into more credit for small businesses, a key constituency hit hard by the government's 2016 demonetization drive and 2017 rollout of the Goods and Services Tax. While a rate cut will increase the risk of inflation, it's a risk Modi is willing to take if it boosts the chances of his party winning another five-year term.
Nigeria's Election Approaches. As President Muhammadu Buhari and his main opponent, Atiku Abubakar, lock up final support before Nigeria's Feb. 16 election, the broader question of whether the country will pull off a vote free of controversy weighs heavily. Indeed, Buhari's recent suspension of Nigeria's chief justice — which the opposition decried — is feeding into the dynamic of potential election controversy. Whether Buhari removed the chief justice as a potential roadblock ahead of the contest or not, the election is bound to be a close affair as an emboldened opposition tries to unseat the incumbent president.
Next Round of U.S.-China Trade Talks. World markets, upbeat from last week's talks, cheered the prospect of a trade deal between China and the United States. However, the narrative from the U.S. side has quickly shifted somewhere between reserved and pessimistic. Beyond hinting of "sizable distance" between the two sides' positions, President Trump's statements that a meeting with President Xi Jinping is unlikely before the 90-day tariff truce with China ends March 1, a key signpost of progress, cast a shadow. Though we can take political rhetoric only so far, it makes the next round of trade talks that begin in Beijing on Feb. 11 even more important to watch.
Spanish Tensions. Political tensions in Spain will escalate considerably next week when a dozen Catalan pro-independence figures go on trial Feb. 12 in the Supreme Court. The trial will lead to pro- and anti-independence demonstrations in several parts of Spain. The next day, parliament will consider Prime Minister Pedro Sanchez's 2019 budget. The problem is that Sanchez's minority government needs support from pro-independence parties in Catalonia, which will be reluctant to support Madrid when some of their members are on trial. Sanchez will be under pressure to resign if parliament rejects his budget. In the meantime, we will continue to watch the slow but steady emergence of nationalism in Spain.
On Our Minds
U.S.-Saudi Relations Sour? Feb. 8 was the deadline for the White House to report to Congress on who was responsible for the killing of Saudi journalist and dissident Jamal Khashoggi and to say what actions it might take in response, but President Trump declined to meet the requirement set forth under the human rights-focused Magnitsky act. Ultimately, the U.S. response to Saudi Arabia is about how assertively Congress wants to advance gestating anti-Saudi legislation, from imposing sanctions to restricting arms deals to cutting support for Saudi Arabia in Yemen, and whether members decide that doing so advances U.S. interests. It also remains to be seen whether a congressional supermajority able to override a presidential veto exists for any proposed legislation.
France's Role in Africa. The French air force conducted several airstrikes against rebels in northern Chad this week. Chad has played a key role in supporting France's interventions in Mali and Central African Republic. The airstrikes underscored that Paris continues to play a crucial security role in the Sahel region spanning its former colonies. While in recent years France has heavily focused on countering terrorist groups operating in the vast and underdeveloped region, the airstrikes in Chad harken back to its legacy of protecting friendly African governments.
South China Sea Posturing. The Philippines and the United States will hold an exploratory talk next week to discuss whether and how to review their 68-year-old mutual defense treaty. Philippine Defense Secretary Delfin Lorenzana requested the review, arguing that Washington's ambivalence on territorial issues in the South China Sea has made clarification necessary. While the United States has hinted at making "adjustments" on the treaty, explicitly covering the disputed territory would oblige it to militarily defend its ally in a maritime confrontation — a risky calculation.
In Case You Missed It
Iran Holds Off on Retaliating to Israeli Strikes in Syria
After a Challenging Decade, Egypt Resumes Its Regional Role
A Missile Defense Review to Intensify an Arms Race
On Our Calendar
In the coming week, Israeli Prime Minister Benjamin Netanyahu visits India, Turkish President Recep Tayyip Erdogan and Iranian President Hassan Rouhani meet with Russian President Vladimir Putin and Nigeria holds presidential and parliamentary elections. For more, see our Geopolitical Calendar.
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