Argentina: Out the window.
Also: Malaysia, China, the US, Pakistan, Ukraine, Russia, Niger, Mali and Chad.
ARGENTINA. Out the window.
A revolutionary country eyes a new extreme.
Self-described anarcho-capitalist Javier Milei came first in Argentina's presidential primary on Sunday, winning 30.5% of votes in a shock result. The opposition and government won 28% and 27% respectively of the 90% of votes counted.
INTELLIGENCE. Milei is now frontrunner in October's final election, but moderate voters will be turned off by his eccentric lifestyle and policies, which blend staunch conservatism, libertarian economics, free love and five English Mastiffs. Should he win, however, a fringe legislator seen as a rebuke to a failed establishment could become one of the G20’s most unpredictable leaders. It would likely pose an end to Brazil-led hopes for Latin American integration.
FOR BUSINESS. Argentina is usually on the geopolitical periphery, but as one of the world’s largest producers of grain and lithium, its choices matter in the current environment. With 116% inflation and spiralling poverty, Argentines have opted for a protest vote, but with a history of revolutionary politics, including Peronism, the country is no stranger to experimental government. For gold standard proponents, he could be the first major leader to end central banking.
MALAYSIA. Um, no.
A vote against the government’s coalition partner.
Opposition parties gained seats in six state elections held on Saturday. While Prime Minister Anwar Ibrahim’s government retained the three states it governed, its coalition partner UMNO won only 19 of the 108 seats it contested.
INTELLIGENCE. The United Malays National Organisation, or UMNO, became kingmaker in last year’s national elections, allowing Anwar to form a majority government and pull off an improbable rise to power, 24 years in the making. But the graft-stained party has lost credibility, with its rural base increasingly opting for the conservative Pan‑Malaysian Islamic Party. Anwar will be tempted to drop UMNO should he be able to secure alternative partners.
FOR BUSINESS. UMNO governed continuously from 1957 to 2018, but scandals, including the $4.5 billion theft from sovereign fund 1MDB, have taken their toll. Malaysians are also tired of nationalist rent-seeking as the economy moves up the value chain. GDP rose an annualised 5.6% in the first quarter. Tesla recently announced its regional headquarters there – a deal that allowed it to skirt the country’s notorious Malay ownership and vehicle tariff rules.
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CHINA. UNITED STATES. Yin and Yankees.
Beijing wants US investment without US influence.
China's State Council issued 24 guidelines on Sunday to attract more foreign investment. The same day, Beijing warned of a “resolute and vigorous” response to Taiwan's vice president visiting New York on the weekend.
INTELLIGENCE. Beijing has responded to Biden’s investment restrictions with carrots rather than sticks, but it will not be so benevolent in how it deals with William Lai, who is frontrunner in Taiwan’s elections next January and is travelling to Paraguay via the US. China began military drills in the East China Sea over the weekend. This week, it is expected to calibrate the number of incursions into Taiwan's airspace based on how it perceives Lai’s activities.
FOR BUSINESS. Punishing Taipei is becoming routine for Beijing, but it is harder to hurt Washington without hurting itself. While acting firm in the strategic sphere, China is trying to tread softly in trade, despite hardening US politics. China’s economy is vulnerable and investment restrictions are starting to bite. On Friday, allowable passenger flight numbers between China and the US were doubled. On Thursday, organised tour rules to the US were eased.
CHINA. PAKISTAN. Bumps in the belt and road.
Militants attack a key investment project.
Separatist rebels attacked a convoy of Chinese engineers near the port of Gwadar on Sunday. Islamabad said Wednesday it was trying to dissuade Tehran from pursuing arbitration over a long-delayed gas pipeline project.
INTELLIGENCE. Pakistan is in a fiscal hole and can ill afford to deter the few countries willing to invest in it. But poor internal security and US pressure are making things hard. Despite its grip on internal politics, Pakistan’s army is faced with an array of external and militant threats. And despite a geopolitical leaning to Beijing, Islamabad is wary of falling foul of US sanctions on Tehran or losing the remaining US defence assistance it gets as Washington pivots to Delhi.
FOR BUSINESS. China’s investment in Gwadar is commercially dubious, geographically remote and amid a separatist insurgency, but in the coming decades could be militarily important to Beijing and won’t be given up. A pipeline between Iran’s South Pars field and Karachi’s 20 million energy consumers has taken decades to come into being, but for as long as Pakistan can’t buy gas on the spot market it will remain a vital objective despite US pressure.
With the brevity of a media digest, but the depth of an intelligence assessment, Daily Assessment goes beyond the news to outline the implications.
UKRAINE. RUSSIA. Deserting the ship.
Support for Ukraine comes under pressure.
Russia's navy fired warning shots and boarded a Palau-flagged cargo ship heading northwards in the Black Sea on Sunday. Russia said the vessel was headed to Ukraine. Commercial data said it was headed to Romania.
INTELLIGENCE. Moscow wants to keep things difficult for Ukrainian exports as it terrorises civilians and wears down Kyiv’s troops at the frontline. Though Ukraine has claimed “partial success” in Zaporizhzhia in the south, Russia is making gains in Kherson in the north and has reportedly repelled fresh attacks on the Kerch Bridge. Russia also hopes to wear down Kyiv’s Western backers. Polls now show a majority of Americans oppose sending Ukraine more aid.
FOR BUSINESS. Despite the costs, US assistance to Ukraine will likely continue for as long as Biden remains in the White House. A bigger question is over the support of Poland, which heads to the polls on 14 October and has recently engaged in a series of diplomatic spats with Ukraine. Poland has long been among Ukraine’s strongest supporters in NATO, but the economic and political costs have mounted, as have new distractions over neighbouring Belarus.
NIGER. MALI. CHAD. No hope in Sahel.
The West looks done with a key part of Africa.
A potential intervention into Niger looked increasingly unlikely on Sunday as its coup leaders met with regional Islamic leaders who promised a diplomatic solution. The same day, UN peacekeepers brought forward their exit date from Mali.
INTELLIGENCE. An armed intervention in Niger was never likely and would have been calamitous for the region. But with France and the US having tacitly aligned themselves with the option, their days in the country look numbered. Western-backed peacekeepers in neighbouring Mali are meanwhile making a quick exit as Wagner moves into former UN bases. The UN blames fighting between Mali’s military and Islamist rebels. But that was the point of being there.
FOR BUSINESS. It is hard to see the US or France staying in Niger militarily, leaving Chad as the only Sahelian country with Western operations. But like its neighbours, Chad is under pressure. Militants from the Central African Republic pose security threats. Refugees from Sudan are straining food supplies. Recently pardoned members of a 2022 coup attempt are at large. Whether in terms of pipelines or refugees, a pillar of Europe’s security architecture is collapsing.
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