North Korea: Don't you forget about me.
Also: the US, China, the UK, Europe, India and Thailand.
NORTH KOREA. Don’t you forget about me.
Pyongyang wants to be noticed.
North Korea detained a US soldier who crossed the demarcation line on Tuesday. Pyongyang launched two ballistic missiles early Wednesday, South Korean officials said, shortly after a US nuclear-armed submarine arrived in Busan.
INTELLIGENCE. With an economy geared toward blackmail, North Korea has been perturbed by a lack of attention since Russia’s invasion of Ukraine. Ballistic missile tests increased ten-fold in 2022 from 2021 and have continued since. Pyongyang has also developed underwater attack drones and attempted to launch a reconnaissance satellite in May. The detention of a US soldier – allegedly escaping disciplinary action – is a negotiation tactic harder to ignore.
FOR BUSINESS. The “petulant child” theory of North Korean statecraft is a simplification but broadly true. With little leverage other than arms development – and the occasional colourful threat – hostage diplomacy is a gift to the isolated and impoverished regime. And it’s been proven to work. In 2022, a US basketballer was traded for Russia’s most notorious arms trafficker. In 2014, a US private was exchanged for five senior Taliban commanders.
UNITED STATES. Playing victim.
A former president wants to be martyred.
Donald Trump said on Tuesday he was the target of a federal inquiry into the January 6 Capitol riots, with his arrest likely. The same day, a pretrial hearing was held for a separate case involving Trump's handling of classified documents.
INTELLIGENCE. Having already been indicted twice, Trump has turned his legal woes into a symbol of persecution. Further possible indictments over January 6 and his alleged attempts to overturn the 2020 result in Georgia risk imprisonment. But if he’s unable to avoid them, he may as well exploit the narrative. So far, it’s working. Trump dominates the Republican field, and the attention gives him a platform to make accusations about the Biden family.
FOR BUSINESS. The 2024 election is shaping up to be dirtier than 2016 or 2020. Policy has been given short shrift but contours around the culture wars have emerged, with domestic and international implications. Amid the tumult, US prestige and predictability is being undermined, though so far, with more than 15 months to go, this is yet to be reflected in the economy. Should the US enter a recession, Biden’s chances of re-election will be vastly reduced.
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CHINA. Middleman kingdom.
Beijing seeks out unusual interlocutors.
Former US secretary of state Henry Kissinger met Chinese Defence Minister Li Shangfu on Tuesday. Under US sanctions, Li has refused to meet his US counterpart. Xi Jinping met ex-Philippine president Rodrigo Duterte on Monday.
INTELLIGENCE. Kissinger, who in 1971 visited China when the US did not have relations, seems an inspired choice as a backchannel. Duterte, on the other hand, appears a riskier bet. Though his daughter is now vice-president, Duterte’s relationship with President Ferdinand Marcos Jr is complex. A statement from Marcos was terse. Beijing has long tried to drive a wedge between Marcos’s pro-US stance and Manila’s pro-Beijing business community.
FOR BUSINESS. Beijing has a genuine interest in détente with Washington. Its trade-exposed economy is slowing. US investment has shrunk. It also has a strategic interest in usurping US influence in Asia. Both powers want to neutralise the security threats of the other without upending a symbiotic relationship. The methods are proving tricky – hence the citizen diplomacy – and more so with China’s foreign minister still missing after 23 days.
BRITAIN. EUROPE. Border disputes.
Westminster and Brussels try to get tough on illegal migration.
The UK's Illegal Migration Bill passed parliament late Tuesday, allowing Britain to deport asylum seekers to their home country or a third nation like Rwanda. The EU signed a €1 billion deal with Tunisia on Sunday aimed at slowing migration.
INTELLIGENCE. Human rights groups criticised the moves. The UN said Britain’s legislation broke international law. Neither development, however, will stem the tide, nor will a 500-berth barge the UK has moored off Dorset to temporarily house refugees. Legal challenges and loopholes will keep attracting migrants. Borders, for the most part, remain porous for motivated asylum seekers. The push factors – war, famine and disadvantage – continue to grow.
FOR BUSINESS. Despite the legal concerns, strong borders are good politics. EU leaders are fending off a right-wing resurgence. Migration felled the Dutch government last week and threatens that of Spain this weekend. Britain’s government meanwhile won’t want to be wedged on an issue that 84% of Britons think is being handled badly. The West’s ageing economies are reliant on migration for jobs and growth but, so far, voters aren’t making the connection.
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. Alliance in defiance.
The opposition unifies against Narendra Modi.
A coalition of 26 parties formed the “Indian National Developmental Inclusive Alliance” (INDIA) on Tuesday to fight the Bharatiya Janata Party at the 2024 election. Opposition leader Rahul Gandhi was disqualified from parliament on Friday.
INTELLIGENCE. India’s fractured opposition has failed to dent Modi’s approval rating, which remains above 70%, but a united front could peel away key electorates in the 543-seat lower house. Modi’s BJP won 55.8% of seats in 2019, despite receiving only 37.4% of the vote. The Indian National Congress, the largest opposition party, by contrast won 19.5% of votes, but only 9.6% of seats. The BJP is meanwhile building its own coalition – the largely defunct NDA.
FOR BUSINESS. The INDIA alliance is strongest in the south, where a key state, Karnataka, turfed the BJP this May. And while Congress’s fourth-generation scion, Rahul Gandhi, is seen as ineffectual, his disqualification on spurious grounds may provide a layer of sympathy for the Cambridge-educated ex-management consultant. Real political competition may also improve economic productivity, which is lagging despite Modi’s cult of self-congratulation.
THAILAND. Move Forward held back.
Thailand's election winner is suspended.
Thailand's Constitutional Court suspended Pita Limjaroenrat on Wednesday, hours before he was due to make a final bid for the prime ministership. The court is considering a case alleging he was unqualified to run on electoral rules.
INTELLIGENCE. Had Pita simply been voted down by the military-stacked Senate, as had been expected, Bangkok might not be facing a constitutional crisis. Yet the court’s move has enraged the supporters of Pita’s Move Forward party, the surprise winner of Thailand’s 14 May election, and will entrench a generational mistrust of the army, the ruling elite, and the unpopular monarchy. Parliament continued to debate Pita’s eligibility at the time of writing.
FOR BUSINESS. With memories of the 2014 coup still fresh, investors will be wary of Thailand’s record of political and economic self-sabotage. And even if violence is avoided, the establishment’s brake on much-needed structural reform will discourage firms. Tourism and Chinese real estate investment will continue to drive growth, but Thailand’s former industrial dynamism is unlikely to be regained as Vietnam and Indonesia steal a march.
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