Mexico: Time to Sheinbaum
Also: China, the US, Israel, Indonesia, Serbia, Norway, and Russia.
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MEXICO. Time to Sheinbaum
The president-elect has a chance to move on from her mentor.
The ruling MORENA party declared its candidate Claudia Sheinbaum winner of Mexico's presidential election Sunday. Early counting suggested she had won 60% to chief rival Xoxhitl Galvz at 28%. A 38th politician was murdered Saturday.
INTELLIGENCE. The vote, which will also elect 500 deputies, 128 senators, nine governors, and thousands of local representatives, has been marred by violence. Mexico’s cartels have prospered under Sheinbaum’s mentor and predecessor, Andres Manuel Lopez Obrador, who has taken police powers and given them to the military. Yet he retires with 60% approval, thanks to generous welfare. This has gotten Sheinbaum elected but won’t help her govern.
FOR BUSINESS. Sheinbaum will need to tackle the gangs and undo some of AMLO’s nationalist excesses if Mexico’s economy is to continue to grow. How quickly she does this depends on the make-up of congress, but her stint as Mexico City’s mayor suggests a pragmatic, reformist streak without her predecessor’s populism. Her other constraint will be in who wins elections north of the border. Mexico’s abiding political complaint is that it’s seen as a US piñata.
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CHINA. UNITED STATES. Singapore sting
Taiwan is not the only cause of bilateral friction.
Chinese Defence Minister Dong Jun told Singapore’s Shangri-la Dialogue Sunday the US was helping Taiwan "pursue separation in an incremental way". Dong met US counterpart Lloyd Austin Friday after a two-year gap in bilateral talks.
INTELLIGENCE. The annual security forum contained a rich line-up of speakers, but the most important discussion was between Washington and Beijing. That the talks occurred was a success, but the public rhetoric remains belligerent. Neither side can politically back down on Taiwan, at least until the US election, so it will be up to Taipei to ensure a crisis doesn’t occur. The China-friendly majority in Taiwan’s legislature appears seized of this purpose.
FOR BUSINESS. War over Taiwan remains unlikely but there are more immediate tensions. New tariffs on Chinese goods will, if anything, be raised under a Trump administration. The bifurcation of tech supply chains looks set in stone. Singapore reactivated disused port terminals Thursday following a jump in berthing delays. These have been attributed to the Red Sea conflict, but are equally due to new customs delays on Chinese goods heading for the US.
ISRAEL. INDONESIA. Truce or dare
Desperate times need creative solutions.
Benjamin Netanyahu and his aides sent mixed messages on the weekend in response to a White House peace proposal. Members of Netanyahu’s coalition threatened to leave. His defence minister said Gaza needed a non-Hamas authority.
INTELLIGENCE. Nothing Joe Biden has proposed, or probably can propose within current political constraints, will likely satisfy Netanyahu, let alone his far-right coalition partners. A left-field proposal may however be palatable to all sides. Once derided for proposing a Korean-style armistice in Ukraine, which now looks realistic, Indonesia’s president-elect Prabowo Subianto told the Shangri-la Dialogue Jakarta would send peacekeepers to Gaza if asked.
FOR BUSINESS. Prabowo may be onto something. The world’s biggest Muslim-majority country, Indonesia has been a consistent supporter of Palestine but with less of the baggage of Arab states. Seeking OECD membership, it will need to recognise Israel. Ending the Gaza conflict would allow Prabowo to sell this to the public. Mindful of their own interests in Southeast Asia, the US, Russia, Iran, and China would unlikely get in the way of allowing this to happen.
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SERBIA. Belgrade bellwether
The ruling party cements its control.
A populist alliance led by the ruling Serbian Progressive Party won 53% in municipal elections in Belgrade Sunday. The vote, a re-run of a disputed poll from December, was described by the opposition as the "most irregular election ever".
INTELLIGENCE. Whether the vote was rigged, parties aligned to President Aleksandar Vucic are enjoying increased control of Serbia's institutions, mirroring a populist wave across the Balkans. Concerns have risen that this may entrench a Russia friendly bloc at the heart of Europe, but a strong majority may allow Vucic and his fellow travellers to ignore more extreme pro-Kremlin voices, like the leader of Bosnia's breakaway Republika Srpska, Milorad Dodik.
FOR BUSINESS. Dodik flew in from Moscow to participate in the vote (it’s not clear how he met the criteria). He has called for secession from Bosnia and an “all-Serb parliament” but for as long as Serbia remains on the EU’s waitlist it’s unlikely that Vucic will risk an interruption to Brussels’ largess, which has so far totalled €30 billion in loans and grants. Despite recent visits and trade deals, this isn’t something Beijing or Moscow have yet been able to match.
NORWAY. RUSSIA. Spitsbergen distance
A hotspot in a cold climate.
Oslo said Friday it would strengthen control of infrastructure and energy supply to Svalbard. A new scientific program would be launched, the government said in a separate statement, amid concerns of a planned Russian research centre.
INTELLIGENCE. Svalbard is known for the world’s northernmost town and its scientific activity, but due to ambiguity in the 1920 Spitsbergen Treaty it is now in the geopolitical crosshairs. Under the treaty, which established Norwegian sovereignty but gave rights on trade and settlement to others, Svalbard is something of a grey zone, which Russia has long enjoyed. Fears are rising it could test an attack on Europe without triggering NATO’s mutual defence clause.
FOR BUSINESS. Around 13% of Svalbard’s population is Russian, a legacy of Soviet coal mining. The community is autonomous, and Norway has little control on its movements. Russian plans to expand “research”, including with China, have enlivened fears in Oslo but extra funding for Norway’s University Centre may only go so far. Russia has suggested Norway is militarising Svalbard. China has called for an alternative location to its Global Seed Vault.