Geopolitical Digest: Pelosi's Trip to Taiwan | Colombia's New President | Russia's War Drags On

GEOPOLITICAL DIGEST

AUGUST 05, 2022

CURATED BY

The Week Ahead:

The Inauguration of Colombia's new, left-wing president. Gustavo Petro will be sworn in to a four-year term as Colombia's president 7 August, marking a stark divergence from the country's previous conservative presidents. Petro has said he will increase taxes on the wealthy to fund expanded social spending, and will reject new oil and gas concessions to further the country's climate goals. Though the incoming president's Historic Pact coalition has allies in Congress that will allow Petro to advance his policy agenda, ideological differences between parties mean Petro will likely have to water down aspects of it.

Chinese economic coercion after Pelosi's visit. Beijing is likely to continue rolling out new methods of economic coercion against US and Taiwanese companies in the coming week as China's military drills surrounding Taiwan aimed at expressing Beijing's anger at US House Speaker Nancy Pelosi's visit to Taipei on 2 August end 8 August. So far, such Chinese coercive measures have included import and export bans on trade with Taiwan, customs scrutiny of Western manufacturing inputs coming from Taiwan, refusals to do business with politically active Taiwanese companies, and sanctions on Pelosi and her family.

Kenyan general elections. Kenyans will vote in local, legislative and presidential elections 9 August. The presidential front-runners, William Ruto and Raila Odinga, are polling within eight points of one another with an estimated eight percent of the electorate remaining undecided, making this the closest election in recent history. Ethnic and class tensions plus a potentially contested electoral outcome raise the risk of violent unrest following the vote. Whoever wins must chart the county's economic course in the face of a mounting debt burden, and likely will continue to serve as a mediator for regional conflicts.

Blinken visits sub-Saharan Africa. US Secretary of State Antony Blinken begins his trip to Sub-Saharan Africa with an 7 August visit to Johannesburg, South Africa, where he will deliver a speech setting the Biden administration's diplomatic priorities in Africa. Blinken is expected to reinforce US support for the African energy transition, as well as to reaffirm the US commitment to its African partnerships. After South Africa, Blinken will head to Rwanda and the Democratic Republic of the Congo, where he is likely to attempt to dispel tensions between Kigali and Kinshasa following a flare-up of their conflict in border areas. Although Blinken is unlikely directly to reference US-China competition on the continent, he will likely work to convince his African counterparts of the US commitment to Africa, even as Chinese investment and trade there far outstrip that of the United States.

Please read on for our coverage of the week that was...

KEY DEVELOPMENTS - ANALYSIS

France, Spain and Italy Boost Odds EU Will Have Big Tech Finance Digital Infrastructure

What Happened: France, Spain and Italy are increasing pressure on the European Commission to force large online content providers to contribute to the financing of EU telecoms infrastructure, Reuters reported 2 August, citing a joint document by the three countries. In the document, the three governments urge tech giants, including Alphabet's Google, Meta and Netflix, to contribute to the costs associated with building new digital infrastructure for the bloc, explicitly calling on the commission to come up with a legislative proposal to ensure this outcome.

Why It Matters: With the three countries expressing their joint support, works for a proposal are now expected to accelerate despite lingering divisions among EU member states and lawmakers. The commission had hinted in May that it was considering whether tech giants should shoulder some of the costs of upgrading the bloc's digital infrastructure. Any formal proposal is yet to be made, but the idea has faced both praise and opposition — with tech companies and internet neutrality advocates against it and EU lawmakers and member states divided on the issue. Northern member states, including Germany, Ireland, Sweden, Denmark, Estonia, Finland and the Netherlands, have expressed concerns over the proposal but are unlikely to oppose it. The proposal would reduce the costs for EU telecommunications network operators and public authorities associated with the construction of connectivity infrastructure while imposing conspicuous mandatory annual contribution fees on the largest online content providers.

Source: RANE Worldview
 

Russia Encouraging 'Friendly,' Discouraging 'Unfriendly' State Investors in Bid to Reduce Latter's Role

What Happened: The Moscow Exchange on 8 August will let clients from "friendly" jurisdictions (e.g., those that have not sanctioned Russia) to trade on its stock and derivatives markets, while on 15 August depositary receipts of Russian-companies traded on foreign exchanges and held in Russian depositories will be automatically converted into shares on the Moscow Exchange, Reuters reported 5 August. These moves follow an 5 August decree by President Vladimir Putin that bans investors from so-called "unfriendly countries" from selling shares in certain strategic businesses and banks until the end of the year.

Why It Matters: Russia likely hopes the effort will see foreign investors from friendly jurisdictions scoop up Russian assets at bargain prices, correcting the market and reducing the role of unfriendly jurisdiction investors in Russia. The share of assets held by nonresidents from friendly jurisdictions comprises just one percent of the Russian stock market, meaning the overall effect on increased liquidity will be minor, though it will still likely result in a further sell-off of the Russian stock market as most of the investors in fact sell their shares in Russian stocks. Putin's 5 August order means that Western companies seeking to exit Russia could have their stakes nationalized as they leave entirely, or that the companies will reconsider their divestments in the interim, or that their shares will be sold to entities from friendly states in deals blessed by the Kremlin.

Source: RANE Worldview

 

Assessment: Is Pakistan's Ousted Prime Minister Making a Comeback?

In Pakistan, former Prime Minister Imran Khan's resurgence is increasing political instability and threatening to disrupt the government's efforts to introduce economic reforms and resurrect its agreement with the International Monetary Fund (IMF). Only months after being deposed, Khan is making a political comeback. His party, the Pakistan Tehreek-i-Insaf party (PTI), won 15 of the 20 seats up for grabs in a byelection in the populous Punjab province on 17 July.

Source: RANE Worldview

  

Essential Geopolitics: How Long Can Russia's War in Ukraine Drag On?

In this episode of RANE's Essential Geopolitics podcast, our analysts discuss the ongoing war in Ukraine. Pundits expected Russia's invasion to end within months. But RANE's Eurasia analyst, Matthew Orr, lays out the case for why he thinks the conflict could drag on for years. Our senior Middle East and North Africa analyst Ryan Bohl hosts the conversation, stepping in for Emily Donahue. Please click on the RANE Worldview link below to access the podcast.

Source: RANE Worldview

  

OTHER STORIES WE'RE TRACKING - CURATED CONTENT

ASIA

Welcomed by Taiwan, Pelosi Leaves Rising Tensions With China in Her Wake
After weeks of silence ahead of a high-stakes visit to Taiwan, Speaker Nancy Pelosi was anything but understated on Wednesday during a day of high-profile meetings in which she offered support for Taiwan and irked China. In the whirlwind day of events, she was welcomed by crowds of supporters waving banners and followed by media and protesters, her closely tracked meetings and movements streamed partially online. In her wake, she set the stage for new brinkmanship between China and the United States over power and influence in Asia.

Source: The New York Times

 

A New Australian Foreign Policy Agenda Under Albanese

While some of the early statements and speeches from Prime Minister Anthony Albanese and Defense Minister Richard Marles have strongly echoed those of their predecessors, the changes to come will be greater than expected. Albanese’s early trips to the Quad leaders’ meeting in Tokyo, to Madrid for the NATO summit and to Kyiv reassured allies that the new Australian government’s support for the United States and the Quad and its opposition to Russia’s invasion of Ukraine was rock solid. The Prime Minister also repaired the relationship with France, which had been shattered by the Morrison government’s cancellation of a contract to purchase French submarines.

Source: East Asia Forum


Time for Difficult Choices on Myanmar

The recent executions of four anti-regime activists, including former lawmaker Phyo Zeya Thaw and civil society leader Kyaw Min Yu, known as Ko Jimmy, by the Burmese junta have caused global uproar. After being knocked from international news coverage by the Russian invasion of Ukraine, inflation, and food insecurity, Myanmar’s civil war is back in the headlines. But the United States and other foreign governments remain hesitant to fully embrace the opposition National Unity Government (NUG) or take riskier steps to help push the military from power.

Source: Center for Strategic and International Studies (CSIS)


EUROPE

With Russia Distracted, Clashes Rock Nagorno-Karabakh

On Wednesday, Azerbaijan announced it had begun a new offensive, dubbed “Operation Revenge,” against troops loyal to the Armenian-backed administration that governs Stepanakert as the “Republic of Artsakh.” The fierce fighting broke out in an area supposedly under the protection of Russian peacekeeping forces deployed under the cease-fire, which ended the swift but bloody Nagorno-Karabakh war in 2020. Both sides hailed the deal as a guarantee of stability and security. But with Moscow increasingly embroiled in its invasion of Ukraine, its commitment to the region has come into question.

Source: Politico

  

Balkans Flare-Up Highlights Risk of Other European Conflicts

NATO and the European Union scrambled to calm tensions between Kosovo and Serbia after a weekend flare-up that some politicians and experts fear could be used by Russia to spark more instability in Europe. A renewed conflict between the two neighbors could test the EU’s ability to manage a fresh crisis after the Russian invasion of Ukraine has already stretched Europe’s capacity to handle security challenges, experts said.

Source: The Wall Street Journal