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Showing posts from May, 2014

The Geopolitics and Evolution of the Eurasian Economic Union

Russian President Vladimir Putin (back C) attends a meeting of the Supreme Eurasian Economic Council at the Kremlin in Moscow on Dec. 24, 2013ALEXEI NIKOLSKY/AFP/Getty Images

Summary


Russia, Belarus and Kazakhstan will sign the foundation treaty of the Eurasian Economic Union on May 29, with the bloc set to formally debut on Jan. 1, 2015. The Eurasian Economic Union is about much more than economics; it is a bloc meant to rival the European Union and the United States in its influence in Russia's near abroad. The crisis in Ukraine has aggravated long-standing tensions between Russia and the West, and the Eurasian Economic Union will serve as a primary platform for Moscow to challenge EU and U.S. influence in the former Soviet periphery in coming years.

Analysis


The very name of the Eurasian Economic Union implies that it is something other than European. This is not merely a geographic distinction; it is a political distinction showing that to be part of this grouping means not being…

Argentina: Disputing the Power of Provinces

Argentina's former secretary of domestic trade wears a lapel badge of national energy firm YPF.(YASUYOSHI CHIBA/AFP/GettyImages)

Summary


A burgeoning fight over hydrocarbons between Argentina's national and provincial governments is beginning to take center stage in Buenos Aires. Governors from 10 oil-producing provinces will meet with Argentine Planning Minister Julio de Vido on June 3 and President Cristina Fernandez de Kirchner on June 9. The ostensible reason for the meetings is to discuss the standardization of provincial taxes on state-owned energy company YPF. The national government is pushing for provincial taxes of no more than a 3 percent on the company's gross income. The real question is whether the firm can force provincial governments to offer better, more consistent terms. The implications of this political struggle go far beyond YPF and will help set the stage for a more favorable investment climate for foreign companies.

Analysis

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The meeting …

Obama Resets U.S. Foreign Policy

U.S. President Barack Obama took the opportunity Wednesday to outline the United States' foreign policy in a commencement speech to West Point graduates. From our point of view, the president was more confirmatory than revelatory in his core message: The United States, as the undeniable global hegemon, is getting back on its feet and it does not intend to manage the world's problems alone.

In our 2014 Annual Forecast, we said that this would be the year that the United States finally catches its breath after spending a decade stumbling through intractable conflicts in the Islamic world. Obama underlined that prognosis Tuesday when he announced that a residual force of 9,800 troops would be left in Afghanistan through the year, dropping to just the security contingent for the U.S. Embassy in Kabul by the end of 2016. As he conveyed in his Wednesday speech, the militant headaches expected to persist in Afghanistan will be put in the same basket as those in Mali or Yemen. In other…

China's Power Grid Plans

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The State Grid Corp. of China announced May 14 that official approval is imminent for a controversial plan to build 12 cross-country ultra high-voltage power transmission lines. The proposed power lines would link resource-rich western provinces to China's major central and coastal consumer bases. If granted, the approval will be a breakthrough for State Grid -- the larger of China's two government-owned power grid operators -- and for the Chinese power sector as a whole. It will signal that China's leaders are committed to building a nationally integrated power grid.

The long-term undertaking would entail not only enormous government expenditures, but also the reorganization of much of the physical and industrial structure of China's power generation and transmission sectors, the relationship between the sectors' constituent parts, and perhaps most critically, the relationship between China's energy-producing and energy-consuming regions. More…

Ukraine: Kiev Negotiates Gas Payments

Ukrainian Prime Minister Arseniy Yatseniuk said that if an agreement on gas pricing can be reached then Ukraine could settle its energy debts within ten days, alternatively, Kiev will file a lawsuit against Gazprom, Interfax reported May 29. On May 28 Ukraine refused to pay $2 billion to Gazprom for gas it has already consumed. According to Gazprom, the country's total gas debt is around $ 5.2 billion. Using some of a loan granted by the International Monetary Fund, Ukraine will likely make a partial payment of its debt towards Gazprom this week, in order to facilitate further talks

Thailand: The Military Inherits the Impasse

Thai troops stand guard near portraits honoring Thai King Bhumibol Adulyadej in Bangkok on May 26.(Paula Bronstein/Getty Images)

Summary


Thailand's military takeover after political negotiations collapsed May 22 reinforced a well-established pattern in the country: When rival Thai political factions reach an impasse that paralyzes the government, the Royal Thai Army -- typically acting in the name of the monarchy -- has the ability to restore order and reset the country's political framework. However, while military coups have been a regular feature of Thai politics for much of the past century, the impending royal succession heightens the uncertainty surrounding the current takeover.

The military has indicated that it will not rush to give up power, possibly waiting until after the impending royal succession, though it will likely install a military-backed interim government. Civilian rule will likely not be restored until the Thai Constitution is revised and at least a temporar…

Brazil's Drought Has Political Implications

A general view shows the Jaguari Dam, one of the main reservoirs supplying Sao Paulo, Brazil, with its water level to 12 percent of its total capacity on April 25.Victor Moriyama/Getty Images

Summary


The current drought in Brazil has already affected the country's energy and agriculture sectors. Municipalities -- specifically Sao Paulo -- are now facing possible supply shortages as the drought continues. A few solutions can be implemented in the short term. The government is likely to promote conservation measures, and increased water rationing appears unavoidable. This could negatively affect the ruling party in Sao Paulo state, the Brazilian Social Democracy Party, in upcoming elections.

The elections are still six months away, but water rationing in Brazil's largest voting center and the heart of the party supporting Brazilian President Dilma Rousseff's challenger Aecio Neves does not bode well for Neves or his party. Voters in the region are likely to blame the Brazilian …

Ukraine Makes Use of Its Advantages in the Air

A Ukrainian Mi-24 attack helicopter during military exercises in Ukraine in 2012.(SERGEI SUPINSKY/AFP/GettyImages)

Summary


The Ukrainian military's operation May 27 at the Donetsk airport highlighted its increasing reliance on its army aviation. In the most violent clash between Ukrainian forces and separatists so far, which came only hours after Ukraine elected a new president, Ukrainian forces were successful in driving out separatists from the airport. Ukraine will continue to rely heavily on its army aviation, which under certain conditions gives it a substantial edge against the separatists.

Analysis


At the start of the conflict, Ukraine's army aviation (literally its "ground forces air arm") officially maintained some 200 helicopters, mostly Soviet-era transport helicopters and gunships. In reality, 85 percent of the helicopter fleet was in storage and not airworthy. Repeated attempts at modernization prior to the conflict were stalled because of a lack of funds, …

India and Pakistan: Right-Leaning Governments Take The Stage in the Subcontinent's Geopolitics

A composite photo shows Indian Prime Minister Narendra Modi (L) and Pakistani Prime Minister Nawaz Sharif.SAM PANTHAKY/AFP/Getty Images, Oli Scarff - WPA Pool /Getty Images

Summary


The landslide victory of the Bharatiya Janata Party, led by its controversial chief Narendra Modi, in India's recent general elections has significant ramifications for Indo-Pakistani relations, especially as Islamabad is preoccupied with the cross-border Taliban insurgency on its western flank. Modi's incoming government will have to balance between its need for pragmatism and its imperative to show that it has a more effective and tougher policy toward the threats emanating from Pakistan than the previous Indian government. Conversely, Pakistani Prime Minister Nawaz Sharif's administration has a need to improve ties with India but faces massive resistance from within the security establishment. Since both governments are led by right-wing nationalists with strong opinions on religion and signifi…

Ukraine's New President Faces Myriad Challenges

Ukrainian President-elect Petro Poroshenko speaks to the media during a press conference on May 26 in Kiev.Dan Kitwood/Getty Images

Analysis


Petro Poroshenko has been declared the official winner in Ukraine's presidential elections, receiving around 54 percent of the vote. Despite Russia's cautious welcoming of Poroshenko's victory, the new Ukrainian leader faces some immediate challenges to his rule.

First and foremost will be dealing with pro-Russian separatism in Ukraine's eastern regions. As expected, voting could not be held in many parts of the Donetsk and Luhansk regions, particularly in the separatist strongholds. Then, just a day after the election, separatists took over the regional airport in Donetsk, where Ukrainian security forces confronted them. Heavy fighting continued into May 27.

The operation to dismantle the separatist takeover in Donetsk is one of the largest since Ukrainian security forces launched what the government calls anti-terrorism operations a…

Geopolitical Calendar: Week of May 26, 2014

Analysis


EUROPE
May 26-27: EU ministers for industry, research and the internal market will meet in Brussels.
May 27: European Council President Herman Van Rompuy will host an informal meeting of EU leaders in Brussels during which they will discuss possible candidates for European Commission president.
May 28: The EU Permanent Representatives Committees, Coreper I and Coreper II will meet in Brussels.
May 28: The International Monetary Fund's executive board will meet to discuss and likely approve the disbursement of its next bailout tranche to Greece.
May 29-30: Slovenian President Borut Pahor will visit Serbia with a business delegation at the invitation of Serbian President Tomislav Nikolic. The president will also visit areas affected by recent floods.
May 31: Outgoing Slovenian Prime Minister Alenka Bratusek will establish a new political party, which will hold its first congress in Ljubljana.

FORMER SOVIET UNION
May 26: EU Energy Commissioner Gunther Oettinger will host natural gas …

Memorial Day, The Eternal Observance

A U.S. soldier watches the sun go down near Turkham, Afghanistan. (TAUSEEF MUSTAFA/AFP/Getty Images)

Analysis


The act of formal remembrance is one of the most profound human gestures, whether it is conducted on the personal or the national level. Originally a commemoration of the Union and Confederate dead from the American Civil War, Memorial Day in the United States codifies the act of remembrance, paying tribute to those who died in military service. Memorial Day is specific to America, but honoring the memory of those who sacrificed their lives for their country, ideals or comrades-in-arms is universal.

Throughout history, the more expansive a civilization, the deeper the pool of resources from which it can draw and the taller its ambition. The collective offers myriad benefits, from breeding stock to greater capacity for production, to increased manpower for agriculture, construction or defense. However, the size of the collective is proportional to the amount of resources it needs …

EU Parliamentary Vote Shows Doubts About Integration

A large banner promoting the European elections hangs from the European Commission headquarters at the Berlaymont Building in Brussels on May 25.SISKA GREMMELPREZ/AFP/Getty Images

Summary


Elections for the EU Parliament, held May 22-25, were defined by the strong performance of anti-establishment and nationalist parties that reject deeper EU integration. While voter turnout was almost the same as in 2009, once again only four in 10 EU voters cast ballots. Both phenomena highlight the degree to which the economic crisis in Europe is impacting popular support for the European Union. A significant number of European citizens are not interested in the EU Parliament, and many of those who are voted for Euroskeptical parties.

These elections will have repercussions at the national and European levels. Moderate parties will adopt issues from the nationalists' agenda and push to slow or even reverse the process of continental integration, with immigration and the welfare state at the core of…