Israel, China: Land of milk and money.
Also: Papua New Guinea, the US, Taiwan, Russia, Malaysia, the Philippines, India, Nepal, Bangladesh and Mali.
ISRAEL. CHINA. Land of milk and money.
For both sides, a visit is all about Washington.
Israeli Prime Minister Benjamin Netanyahu said on Tuesday China had invited him to a state visit, though he did not say if he had accepted. Bloomberg reported Tuesday that US Treasury Secretary Janet Yellen would visit Beijing in July.
INTELLIGENCE. Cognisant he is yet to be invited to the White House under Biden, Netanyahu announced his invitation to a visiting delegation of the US Congress. As Washington takes a step back in the Middle East, Beijing has stepped up. While closer economic relations with China have been precluded by Israel’s security relationship with the US, the Israeli establishment has one eye (which it would never admit) on hedging against US disengagement.
FOR BUSINESS. Israel is keen to bolster its economy. China is keen to complicate US alliances, even ones as strong as that with Israel, whenever domestic politics get in the way. Fresh from brokering detente between Tehran and Riyadh, however, Beijing also sees a bigger prize: peace between Israel and Palestine, which Xi Jinping discussed earlier this month with his Palestinian counterpart and which Washington has so far failed to sustainably achieve.
PAPUA NEW GUINEA. UNITED STATES. Dri run.
Joint exercises on disaster management are one facet of deepening cooperation.
PNG's military told local media on Tuesday that it had begun ‘Exercise Dri’, which would see US and local forces plan disaster response. Earlier this month, Port Moresby passed legislation to provide the US access to key defence bases.
INTELLIGENCE. The training is like other US-run exercises in disaster-prone areas, but it sends an added message in the wake of Washington’s recent deal to base troops in the Pacific nation. PNG is susceptible to natural disasters, and has little institutional capacity to respond, but more to the point, it has strategic geography astride key US lines of communication. US forces there would complicate any attempt by Beijing to launch an offensive against Taiwan.
FOR BUSINESS. PNG long held little interest for Western firms, but major LNG projects led by Total and Exxon have driven foreign direct investment in recent years. A stronger US strategic presence is likely to drive further business opportunities. One downside however is the country’s endemic violence and its unstable neighbours – Solomon Islands and Indonesia’s Papuan provinces, where a low-level insurgency has harmed Western mining interests.
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TAIWAN. RUSSIA. Now you sea me.
Moscow shows the world, and Beijing, it’s here to stay.
Taiwan detected two Russian frigates off its eastern coast, the island's defence ministry said late Tuesday. Russian media reported earlier in the day its warships were performing tasks in the region, including "a simulated naval battle".
INTELLIGENCE. The rare appearance off Taiwan’s coast was likely less a show of force to Washington and Taipei than a reminder to Beijing that Moscow is still a friend worth investing in, or – to use a phrase popular with US presidents – that it can walk and chew gum. While the Russian Pacific Fleet’s regional presence is longstanding, the maneuverer off the Port of Suao was likely part of the Kremlin’s narrative control since the events of Saturday.
FOR BUSINESS. Russia needs China more than China needs Russia, so Moscow must show it can be useful, even if in symbolic ways. Sino-Russian joint exercises have increased in recent years. The Kremlin has strengthened its rhetoric around China’s interests, though it has been careful not to annoy its partners in Delhi and Hanoi, which both have territorial disputes with Beijing. China has repaid Russia with a boost in trade that shows no signs of slowing.
MALAYSIA. THE PHILIPPINES. Heir apparently not.
A Dutch court rejects an eye-watering arbitration decision.
The Court of Appeal in The Hague ruled in favour of Kuala Lumpur on Tuesday, in its bid to ignore a $14.9 billion arbitration award given to eight Philippines-based descendants of a former ruler of part of Malaysia’s state of Sabah.
INTELLIGENCE. The Filipino heirs of the last sultan of Sulu were last year awarded a staggering $14.9 billion in a dispute with Malaysia over an 1878 deal the sultan signed to use his territory. Malaysia did not participate in the original hearing, arguing it was illegal. The awardees had sought to seize Malaysian assets in several European countries. For its part, the Philippines has separately tried to dispute Malaysia’s sovereignty over Sabah.
FOR BUSINESS. According to legal documents, the heirs raised $20 million from unidentified third-party investors to pursue the case. The funding of arbitration by third-party investors is a growing concern in the arbitration community, where there is often no limit on damages that can be imposed. Expect to see greater state-to-state cooperation to limit the ability of private citizens to extract similar arbitration awards against governments.
With the brevity of a media digest, but the depth of an intelligence assessment, Daily Assessment goes beyond the news to outline the implications.
INDIA. NEPAL. BANGLADESH. Powering up.
A tripartite hydropower energy deal holds promise.
A three-way energy agreement is expected to be signed in the coming weeks, Bangladeshi media reported on Wednesday. The deal would allow Bangladesh to import hydroelectricity from Nepal through India’s electricity grid.
INTELLIGENCE. The agreement represents a major step in long-discussed plans for a South Asian grid, as well as a tangible sign of Bangladesh’s seriousness about low-carbon energy. Nepal’s prime minister said initial exports would be 50 megawatts, but could increase. It follows an Indian initiative to build a 131-kilometre pipeline to carry diesel from a refinery in Assam to Bangladesh, and aligns with Delhi’s goal of reducing its neighbours dependence on China.
FOR BUSINESS. The deal could both promote reliable clean energy and foster economic growth. But challenges remain, including harmonising technical standards as well as pricing and tariff issues. China may counter with its own deals, particularly if it can finalise a border agreement with hydro-rich Bhutan. Besides being a success for Delhi, the deal is a fillip for Dhaka, particularly after Japan’s recent investment in Bangladesh’s first deep-water port.
MALI. Mission aborted.
A UN peacekeeping mission is no longer tenable.
Diplomats at the United Nations Security Council confirmed on Tuesday that the decade-long UN peacekeeping mission in Mali would end by June 30. Last week, Mali’s foreign minister asked the force to leave “without delay”.
INTELLIGENCE. A French-drafted resolution that would give the 13,000-strong UN operation (MINUSMA) six months to withdraw is under consideration. The mission has been hamstrung by restrictions on troop and aircraft movements since 2021 when the Malian junta teamed up with the Wagner mercenary group. With Wagner undermined in Russia, however, this is now an even more risky play by the Malians, which could lead to a vacuum in force, and unrest.
FOR BUSINESS. For decades after independence, France was Mali’s most important trading partner, but imports and investment from China and Russia have increased significantly. Both powers have been sceptical of MINUSMA, but it is hard to see how a security vacuum will benefit either. Mali is the third-largest producer of gold in Africa, and mining operations will be endangered. Tenders for donor-funded development projects are also likely to decrease.
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