Canada, India: Under strain.
Also: Congo-Brazzaville, China, Russia, the US, South Korea and the Caucasus.
CANADA. INDIA. Under strain.
Ottawa links Delhi to a murder.
Justin Trudeau said on Monday “credible allegations” linked India to the shooting of a Sikh activist in British Columbia. Narendra Modi joined MPs on Tuesday for the first session at Delhi's new parliament, replacing its 1920s predecessor.
INTELLIGENCE. India has long seen Canada as a haven for Sikh separatists. The June killing of Hardeep Singh Nijjar followed the possible poisoning of activist Avtar Singh Khanda in the UK and the shooting in Pakistan of Paramjit Singh Panjwar, whom India had designated a terrorist. In 1998, another prominent Sikh, Tara Singh Hayer, was shot in the same Canadian town as Nijjar. In 1985, Sikh separatists blew up an Air India plane en route from Montreal.
FOR BUSINESS. Ottawa's accusations have been called “absurd” but are an unwelcome distraction as Modi seeks to celebrate India's G20 host year, new parliament, and recent moon landing. Modi, unlike Trudeau, remains on track for re-election, but India’s continued economic outperformance relies on foreign investment. Any reminder of India’s increasing illiberalism will come at a cost to its business reputation. Canada has already cancelled a trade mission.
CONGO-BRAZZAVILLE. Coup can wait.
Social media rumours appear unfounded, so far.
Yields on Congo's 2029 dollar bond spiked to 13.46% on Monday after rumours of a coup on the weekend. Congo's information minister denied the reports on Sunday after President Denis Sassou Nguesso left Brazzaville for New York.
INTELLIGENCE. Sassou Nguesso, 79, who has dominated Congo since the late 1970s, came to power through force and has fought two civil wars. In recent years, he has grown closer to Beijing and Moscow, with whom Congo was aligned during the Cold War, but Paris is the dominant foreign actor. A putsch will be seen as another repudiation of French policy in the region, even if few in the Elysée will actually miss the outrageously corrupt Sassou Nguesso clan.
FOR BUSINESS. Yields began rising in July after Niger and Gabon, two other former French African colonies, fell to coups.Yields have likewise risen on the debt of neighbouring Cameroon, whose president has been in power since 1982. Like Gabon, most of Congo’s economy is based on crude oil, of which it is sub-Saharan Africa’s third-largest exporter. An insipid iron ore industry was stymied in 2020 when an Australian miner’s permits were expropriated.
Written by former diplomats and industry specialists, Geopolitical Dispatch gives you the global intelligence for business and investing you won’t find anywhere else.
CHINA. RUSSIA. Trans-Siberian.
Moscow takes another eastward step.
China's foreign minister met his Russian counterpart on Monday following talks with the White House's national security adviser in Malta. On Monday, China and Russia announced a 5 billion yuan oil transhipment facility in Russia's Far East.
INTELLIGENCE. Fresh from meetings with Kim Jong Un, Vladimir Putin is preparing to meet Xi Jinping, likely at China’s Belt and Road conference next month. Wang Yi’s visit to Moscow is laying the groundwork for closer ties that would have been unimaginable before Russia’s invasion of Ukraine. Moscow has long feared Chinese dominance of its sparsely populated Siberia and Far East. Today, it is eager to sign deals, build infrastructure and increase trade.
FOR BUSINESS. The facility on the Amur River, near where China and Russia fought a border war in 1969, comes amid news Russia could soon announce a route for the 2,800-kilometre Power of Siberia-2 gas pipeline to Xinjiang, and the two countries will soon build a “land gain corridor” from Vladivostok to Heilongjiang. The projects could help wean Russia off European markets. They could also help China avoid maritime choke points in the event of a US war.
UNITED STATES. RUSSIA. Polar front.
Tensions rise above the Arctic Circle.
The Kremlin said on Monday it had scrambled a MiG-31 jet fighter to intercept a US P-8 spy plane over the Barents Sea. Russia fired cruise missiles on Monday at targets in the Bering Sea, following exercises near Alaska last week.
INTELLIGENCE. Russia is increasing its naval presence in the Arctic even as its army relocates from the Norwegian and Finnish borders to Ukraine. It is also turning its back on decades of cooperation. The Artic Council is essentially defunct. On Monday, Russia left the Barents Euro-Arctic Council, whose activities have likewise been on ice since 2022. For its part, the US Coast Guard last month launched a rare voyage along Russia’s Arctic coastline to Norway.
FOR BUSINESS. The Arctic is increasingly being used as an alternative summer route to Asian markets. As Russia’s dominance of the Black Sea is tested, and US chokepoints at Panama, Suez and Malacca tighten, the Northern Route could become increasingly vital to Russia’s strategic and economic security. The Arctic is estimated to hold 22% of the world’s oil and gas, and despite its overall demographic challenges, Russia dominates the region’s population.
With the brevity of a media digest, but the depth of an intelligence assessment, Daily Assessment goes beyond the news to outline the implications.
UNITED STATES. SOUTH KOREA. K-drama.
A US ally is out of step with its voters.
The US last week approved a $5 billion sale of 25 F-35 fighter jets to South Korea. On Tuesday, President Yoon Suk Yeol approved a motion to arrest the opposition leader, who is on hunger strike in part to protest growing ties to Japan.
INTELLIGENCE. Democratic Party Chair Lee Jae Myung no doubt also wants to deflect from bribery charges relating to illegal transfers to North Korea. That said, Yoon's disapproval sits at 75%, with much of this attributed to his US-backed rapprochement with Japan, which most South Koreans vehemently oppose, despite the two countries' shared security challenges and interlinked economies. Sunday’s crash of an F-35 jet in South Carolina won’t help either.
FOR BUSINESS. Like South Korea’s politics – stuck between China and the West, as well as engagement with the North and closer ties to the US alliance system – South Korea’s economy is stuck between the US and China on technology trade policy. So far, Yoon has been able to thread the needle and keep exports to China going, but North Korea’s growing ties with Russia, and Russia’s growing ties with China, may push him further into the US camp.
THE CAUCASUS. Keeping up with the Karabakh.
Further shifts at the crossroads of Europe, Asia and the Middle East.
Humanitarian aid arrived on Monday in Nagorno-Karabakh, a breakaway region of Azerbaijan, after shipments from ally Armenia were closed off in December. Georgia on Monday said it had disrupted a Ukrainian-backed coup attempt.
INTELLIGENCE. In a region of famed chess players, the moves can be hard to follow, but Russia, Turkey, the US and Iran are to varying extents attempting to shift the balance in this important buffer zone as local politicians, with their own fluid allegiances, attempt to stay in power. Russia, which has the most at stake, will likely retain its dominance, despite its distractions. Iran won’t challenge its partner. Turkey will be unwilling to undo months of careful balancing.
FOR BUSINESS. A Russia-dominated Caucasus doesn’t preclude a Western business presence. Indeed, the three countries of the region – Armenia, Georgia and Azerbaijan – have enjoyed surging trade with both Russia and the West since March 2022, thanks to customs officials being willing to turn a blind eye to sanctions-busting. China also eyes a foothold. It sees the ‘Middle Corridor’ via Georgia as a key route for its Belt and Road infrastructure scheme.
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