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Showing posts from May 29, 2014

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)


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


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)


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.


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, …