China, Bhutan: Snow job.
Also: Ukraine, the US, Israel, Venezuela, Guyana, and Australia.
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CHINA. BHUTAN. Snow job.
Beijing redraws the map in the Himalayas.
Tibet’s government-in-exile on Sunday said Beijing was trying to "exterminate" the region’s identity by renaming it 'Xizang'. Satellite imagery published last week showed extensive Chinese construction inside Bhutan's Jakarlung Valley.
INTELLIGENCE. As Beijing’s revisionism in Taiwan and the South China Sea takes headlines, it has been quietly building its position along the disputed boundary with India and Bhutan. Formal demarcation with India is far off, but with Bhutan, China appears close to a deal, subject to the outcome of Bhutan’s elections next month. The publication of new imagery in India and the West may be designed to sway that vote but won’t diminish Beijing’s leverage.
FOR BUSINESS. Bhutan may have little choice but to strike a deal with China, unless India can compensate it in other ways. Delhi may need to. While Narendra Modi's pre-election lead is strong, his inability to push back on China has left an opening for the opposition. Also worrying Modi is India's tenuous grip in its strategic northeast, where civil conflict continues to rage in Manipur and where a new ethnic regionalist government has taken power in Mizoram.
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UKRAINE. UNITED STATES. Roll call of the dice.
Zelensky makes a final bid for funding.
Volodymyr Zelensky will meet with Joe Biden and congressional leaders on Tuesday, the White House confirmed. Almost half of US voters think Biden is spending too much money on Kyiv, a Financial Times survey said on Sunday.
INTELLIGENCE. Despite cancelling a briefing to Congress last week, Zelensky hopes to win over its sceptics amid a budgetary impasse. But unless the White House can move on border measures, which even pro-Ukraine Republicans have said will be necessary, new funding appears unlikely. After a visit by his defence minister on Wednesday – where top-end arms such as THAAD air defences and F-18s were requested – Zelensky now risks overplaying his hand.
FOR BUSINESS. Zelensky must do what he can to ensure Ukraine’s survival, but his tenacious style is playing into US culture wars, which may diminish Kyiv’s longer-term prospects into and beyond the US election. Meanwhile, he’s not having better luck in Europe. Despite lofty rhetoric, EU countries have reportedly ordered less than 6% of the 1 million 155mm shells promised. Ongoing roadblocks by Polish and Slovak truckers have forced Kyiv to move goods by train.
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ISRAEL. UNITED STATES. Tanks for nothing.
Biden’s help for Netanyahu may be nearing the limits.
Washington on Saturday approved the sale of $106 million in tank ammunition, bypassing congressional review under a rarely used emergency authority. The US on Friday vetoed a UN Security Council resolution on a ceasefire in Gaza.
INTELLIGENCE. The White House's circumvention of Congress may have saved time but could hurt the chances of bipartisanship for bigger tranches, including for Ukraine. And following the US’s sole vote against a UN resolution on Gaza (Britain abstained), the sale will further alienate Muslims in the Democratic base, who this month began an #AbandonBiden campaign. Antony Blinken on Sunday reiterated it is Israel, not the US, making the decisions on Gaza.
FOR BUSINESS. As IDF tanks reach Gaza’s south, there’s a growing view Benjamin Netanyahu has run rings around Joe Biden. And as human rights concerns mount, this is impacting both US diplomacy and domestic politics. Netanyahu, of course, has only Israel to consider (beyond his own diminishing support), but as Ukraine has found, Israel doesn’t have many other friends to rely on. Netanyahu on Sunday held a testy phone call with Vladimir Putin.
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VENEZUELA. GUYANA. Petrodollars of the Caribbean.
Caracas hopes to separate Guyana from its friends.
The leaders of Venezuela and Guyana agreed to meet in Saint Vincent this Thursday following talks with Brazil, the UN and the Community of Latin American and Caribbean States. The US began military exercises with Guyana last week.
INTELLIGENCE. Since Caracas called a referendum on annexing the disputed region of Essequibo from Guyana, the region has been scrambling to forestall escalation. Among those with the most at stake are the small islands of the Caribbean, who share historic ties with Guyana but have recently sought to revive Venezuela’s Petrocaribe oil subsidy scheme, which collapsed in 2019. And despite Caracas’s aggression, some increasingly share its anti-Western views.
FOR BUSINESS. US intervention in Guyana, if required, won’t be straightforward. Not everyone is against Maduro and the region has mixed memories of the 1983 US invasion of Granada. Some states, like Barbados, are focussed on issues like colonial reparations (its prime minister last week asked for $4.9 trillion). Venezuela has exploited such divisions as part of its campaign. In September, it called on neighbouring Trinidad to resume joint oil and gas projects.
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AUSTRALIA. Great barrier grief.
Major border reforms are expedient but risky.
Canberra on Monday said it would overhaul its "broken" migration system with the view to halving the intake by 2025. Last week, it passed new laws to re-arrest former immigration detainees following a controversial high court ruling.
INTELLIGENCE. Like other Western countries, Australia has enjoyed strong growth from high migration. Yet with 62% of Australians now opposing the current level of intake, Canberra has been forced to change course to ease cost of living concerns (as well as stem its declining popularity). Should the shift succeed, similar centre-left governments, from Ottawa to Washington, will be under pressure to follow, not to mention those on the centre-right, like in London.
FOR BUSINESS. The move will likely be popular but could eventually harm the education and real estate sectors, not to mention a jobs market reliant on foreign workers. And while house price inflation is linked to migration, higher wages could negate any relief for mortgage holders. A similar dilemma is currently afflicting the EU, which amid a wider border security and migration debate, is set to approve Romania and Bulgaria joining the Schengen area.