Stratfor’s Global Intelligence: Week of May 16, 2016

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BISHKEK (TCA) — The Times of Central Asia presents to its readers Stratfor’s Global Intelligence, a weekly review of the most important events that happened in the world — from Europe to Middle East to Russia to Central Asia to Afghanistan to China and the Americas.

 

The Week That Was

Saudi Reshuffle

Over the weekend, Saudi King Salman reshuffled several ministries. Most notably, Oil Minister Ali al-Naimi was replaced by Saudi Arabian Oil Co. (Aramco) Chairman Khalid al-Falih in a move that fits with recently announced ambitious reform plans to lessen the nation’s reliance on crude oil exports. Saudi reform plans are still unclear, but Riyadh has signaled it is serious about economic diversification. Also this week, plans were unveiled to transfer ownership of the controversial and expensive King Abdullah Financial District in Riyadh under the newly revamped Public Investment Fund, the sovereign wealth fund that Saudi Arabia hopes to spin out into the world’s largest, aided by the eventual initial public offering of 5 percent of the assets of state oil company Saudi Aramco.

Victory for the French President

The French government survived a no-confidence vote in parliament, but it was a bittersweet victory for President Francois Hollande. His controversial labor reform is close to approval, but protesters have come out into the streets of Paris and members of his own Socialist Party have abandoned him. In the meantime, sectors of the opposition center-right Republican Party have promised to hold a referendum on France’s relationship with the European Union if they win the presidency in 2017. East of the Rhine things are not any easier, as members of Germany’s ruling Christian Democratic Union are pressuring Chancellor Angela Merkel to move to the right to compete with the euroskeptic Alternative for Germany party. Germany will also hold general elections next year.

An Execution in Bangladesh

On May 11 authorities in Bangladesh executed Motiur Rahman Nizami, leader of the country’s largest Islamist political party, the Jamaat-e-Islami. Nizami is the fifth person to be executed since December 2013 under Dhaka’s International Crimes Tribunal, a court prosecuting war crimes in association with the 1971 Bangladesh independence war. Specifically, Nizami — imprisoned since 2010 and sentenced to death in 2014 — was accused of leading an anti-nationalist Islamist militia during the war named Al-Badr. In response to the hanging, Turkey and Pakistan both recalled their ambassadors from Bangladesh in protest while Bangladesh recalled its ambassador from Pakistan. Relations between Islamabad and Dhaka have never been strong but have grown increasingly tense.

Turkey Becomes Assertive in Syria

As the security situation in southern Turkey worsens, particularly in Kilis province, Ankara announced that it has conducted a two-day long cross-border operation against the Islamic State in Syria. The Turkish military sent 20 Turkish special operations forces May 7 into northern Syria to destroy the missile launchers that have been threatening the country’s southern border. While Turkey has sent special operations forces into Syria before, the country’s decision to announce the mission sends the signal that Turkey is looking to become increasingly assertive in northern Syria. Turkey still cannot send in military forces to hold territory due to Russian opposition and thus the risk direct engagement between Turkish and Russian military. However, Ankara will likely pursue cross-border missions as well as strikes against Islamic State positions in northern Syria. According to Stratfor sources, Turkey alerted Russia to its May 7 operation using Israel as an intermediary, demonstrating the successful development of the Israeli-Turkish relationship in the run-up to its imminent normalization.

Full Articles

Where France Would Intervene Next in Africa

For decades, France has kept unusually close ties with its former colonies in Africa, ruthlessly guarding its interests there through cultural and economic power, covert action and dozens of military interventions. Indeed, former French President Francois Mitterand once pronounced Africa to be France’s future in the 21st century. But in the post-Cold War era, France’s relationship with Francophone African countries has changed –- for better and for worse. Successive French presidents have declared an end to francafrique, a term denoting the extent of France’s neocolonial involvement with its former empire in Africa.

Malaysia’s Prime Minister Is Secure

Malaysia’s ruling coalition won a landslide victory in Sarawak state elections last weekend in a show of Prime Minister Najib Razak’s enduring strength, despite a steadily intensifying corruption scandal. The election — Malaysia’s only one this year — highlights several of the factors keeping Najib in power, the most important of which are Barisan Nasional’s ability to turn on the patronage taps in exchange for support and the opposition’s continued disarray. Yet the results of the Sarawak vote understate the nationwide challenges facing Barisan Nasional. Moreover, the scandal regarding Najib’s role in the 1Malaysia Development Berhad (1MDB) sovereign wealth fund has entered a critical phase. Along with Malaysia’s broader economic woes, the financial scandal will prolong political uncertainty until at least the next general elections.

How Referenda Threaten the EU

Europe seems to be in a referendum frenzy these days. In early May, the Hungarian government confirmed its decision to hold a referendum on the European Commission’s plan to distribute asylum seekers among member states. In April, Dutch citizens voted against the European Union Association Agreement with Ukraine in a referendum organized by a Euroskeptic organization. In June, the United Kingdom will hold a crucial vote on whether to leave the European Union altogether. The three votes have a common denominator: EU citizens are essentially being asked to decide on issues connected to the process of Continental integration.

Okinotori: An Odd Place for a Maritime Dispute

A great deal of international attention has focused on China’s attempts to force tiny reefs in the South China Sea to fit the formal U.N. definition of an island, but there has been little attention focused on Japan’s similarly controversial claim to an exclusive economic zone (EEZ) on the Okinotori Atoll. Japan is a key U.S. ally and a potential counterweight to China, and because the geopolitics of Asia is defined by water, the status of a particular island, reef or even rock can become crucial to national strategies in the region.

Deep-Sea Mining Remains Out of Reach, For Now

Space may be the final frontier, but here on Earth the ocean depths are one of the few places still shrouded in mystery. Though offshore drilling for oil and natural gas has gradually crept farther and farther from the coastlines since its advent in the late 1800s, many of the resources found beneath the world’s salty waters remain relatively untouched. And although several countries, including Saudi Arabia and Sudan, have recently shown renewed interest in tapping these resources, the costs of operating in the difficult environment deep waters pose will likely preserve subsea basins for a little while longer.

Water: The Other U.S.-Mexico Border Issue

When determining borders, a river is often the clearest delineation between sovereign nations. But that clarity abruptly ends when countries must decide how to use the water that the river provides. Even managing rivers that do not determine borders, but rather travel through multiple countries, is precarious at best. The Rio Grande, which partly establishes the U.S.-Mexico border, is no exception. It has been and will continue to be vital to economic growth in the region, especially in Mexico, where the river and its tributaries are crucial to supporting new opportunities for manufacturing and energy. But growing demands and environmental pressures will increase tension between the United States and Mexico over water resources in the coming decades.

Examining the Evidence of Russia’s Involvement in a Malaysia Airlines Crash

Satellite imagery obtained by Stratfor sheds new light on the July 2014 downing of Malaysia Airlines Flight MH17 over eastern Ukraine. Recent scrutiny of open-source materials, much of it led by a U.K.-based collective investigation project known as Bellingcat, has zeroed in on a Russian-made Buk surface-to-air missile system that was in eastern Ukraine around the time Flight MH17 was shot down. The Buk system is suspected of originating from an anti-aircraft missile brigade based in Russia. In early May, new video footage of unknown origins was released, appearing to place the Buk system in question near separatist-controlled Donetsk on July 17, 2014, just hours before the airliner was shot down.

The Week Ahead

Nagorno-Karabakh Back to Status Quo

The Armenian and Azerbaijani presidents will meet with the foreign ministers of Russia, the United States and France in Vienna on May 16 as part of the OSCE Minsk Group peace negotiations over Nagorno-Karabakh. The purpose of the meeting is to reinforce the cease-fire regime, following the worst fighting in decades in April. Both Yerevan and Baku have returned to their state of tense standoff and neither side seems to be budging on the peace process. However, Washington will likely press an initiative at the talks to install special equipment that will register violations at the line of contact. While Armenia has been open to the idea, Azerbaijan has fully rejected the proposal. Russia too has signaled it would accept monitoring equipment and even suggested that current OSCE chair Germany should be in charge of installing the equipment. Moscow is looking increasingly conciliatory towards the West over Nagorno-Karabakh, after leading talks with both Yerevan and Baku in the past month. It could be that Russia is looking to keep the West looped into the process, while Moscow plays mediator between the two sides.

Gazprom Faces a Decision

Russia’s natural gas giant, Gazprom, will make a decision May 18 on whether to support a proposed government initiative that would require all Russian state-owned firms to fork over 50 percent of their net profits to the government to fill national budget gaps. Currently, Russian state-owned firms pay up to 25 percent of their net profits to the state coffers. The directive proposed by the Ministry of Finance is causing backlash within the government as well as among the state firms and their patrons. The energy companies have been particularly vocal because they already hand over a great deal of revenue on top of their net profits. Oil firm Rosneft is already challenging the government proposal, so it will be important to see whether Gazprom joins in with Rosneft’s protest. If it does, then the government will have a serious battle on its hands in the months to come.

Another Round of Cuba Talks

Cuba and the United States will begin another round of diplomatic negotiations on May 16 in Havana. The talks will involve Cuban Director General of the Department of the United States Josefina Vidal and U.S. Counselor of the Department of State Kristie Kenney. Cuba and the United States are engaged in ongoing discussions toward expanding economic and political relations. The negotiations could open up additional avenues of foreign revenue between Cuba and foreign nations, although Cuba would likely not reap the full benefits of economic ties with the United States until the U.S. economic embargo on Cuba is repealed. It is plausible that topics such as Cuba’s use of the dollar in transactions between non-U.S. entities could come up in the negotiation. The United States announced in March 2016 that it would allow such transactions, although none appear to have yet occurred.

Modi Visits Iran

Indian Prime Minister Narendra Modi will travel to Iran on May 21. His visit comes after recent trips made to Tehran by India’s foreign minister and oil minister. These visits are part of India’s push to deepen ties with a post-sanctions Iran, a key energy partner. In addition to meeting with Supreme Leader Ayatollah Ali Khamenei, Modi will seek to finalize a commercial contract during his trip granting India access to Iran’s Chabahar Port. The two countries also aim to sign a three-nation agreement involving Afghanistan that is meant to boost trilateral trade, promote Afghanistan’s regional integration and stability, and diversify India’s trade routes to Central Asia while bypassing Pakistan.

Libya Discussions

On May 16, regional foreign ministers and other prominent figures will meet in Vienna to discuss the situation in Libya. The meeting is supposed to focus on international efforts to bring stability to Libya and efforts to support to the Libyan Government of National Accord (GNA) under Prime Minister Fayez al-Sarraj. While it remains unclear who will attend the meeting, Italian Foreign Minister Gentiloni (who announced the meeting May 9) invited a Tunisian delegation, which has not yet confirmed its attendance. Several key issues will likely be discussed, including how to support the GNA through military aid without escalating the conflict between the GNA’s military council and the Libyan National Army under Gen. Khalifa Hifter. Hifter has the support of several regional countries, including Egypt, the United Arab Emirates and Saudi Arabia. In fact, on Thursday, Washington announced that they might lift the arms embargo on Libyan in order to support the GNA in its struggle against the Islamic State. This meeting’s discussions may also include the easing of sanctions on Libyan financial institutions in order to give further support to the Serraj government.

High-Level Visit to Hong Kong

Zhang Dejiang, chairman of the Standing Committee of China’s National People’s Congress, will visit Hong Kong, where he will attend a symposium on the Belt and Road initiative and is expected to hold meetings with members of the city’s executive and legislative councils. (Dejiang is also the deputy head of the National Security Commission and is in charge of Hong Kong and Macau affairs.) The visit comes as authorities in Hong Kong and the mainland implement the initiative. Hong Kong is a major node in the maritime component of the initiative. The visit also comes amid tension in Hong Kong over groups seeking greater autonomy and central government authorities. It is a prelude to an expected visit by President Xi Jinping next year to mark the 20-year anniversary of the city’s handover to China. Underscoring the security concerns is the reported decision of authorities in the city to have 6,000 police officers on duty to prevent and respond to potential protests and disturbances.