Russia: Brave face.
Also: Serbia, Kosovo, Armenia, Azerbaijan, China, Cambodia and Sri Lanka.
RUSSIA. Brave face.
Moscow tries to project normalcy as heads start to roll.
General Sergei Surovikin has been arrested, the independent Moscow Times said on Wednesday. Russia’s defence ministry said Minister Sergei Shoigu was hosting his Cuban counterpart to discuss joint “technical military” projects.
INTELLIGENCE. The Kremlin is in damage control amid rumours that Surovikin, known as “General Armageddon” for his roles as head of Russia’s operations in Syria, and, until January, Ukraine, may not have been the only senior supporter of Yevgeny Prigozhin's attempted mutiny. For as long as the Wagner Group’s chief remains at liberty in Belarus, Putin will need to be mindful of how the public views any fissures within his command.
FOR BUSINESS. Moscow needs to prove internal unity and foreign support. Beyond Cuba, this week it hosted Iran’s police chief and announced an “International Forum of Supporters for the Fight against Modern Neo-Colonialist Practices”. But what really matters is Russia’s partnership with China. Beijing doused speculation on Wednesday that relations with Moscow had cooled after a senior Chinese envoy suggested Ukraine should be able to retake Crimea.
SERBIA. KOSOVO. Stupidity is not an option.
Europe cannot afford to be distracted in the Balkans.
Kosovo arrested the son of Serbia’s president on Wednesday, after he entered the country wearing a "surrender is not an option" t-shirt. Serbia on Monday released three Kosovar police officers who had entered Serb territory in mid-June.
INTELLIGENCE. Recent tensions between Serbia and Kosovo have exasperated EU and NATO officials, who have blamed both Belgrade and Pristina for a series of provocations that began earlier this year over municipal elections and licence plates. The opposite view is doubtless being taken in Moscow, which has a close and historic relationship with Belgrade and which would welcome any diversion for Brussels and Washington in central Europe.
FOR BUSINESS. Like Kosovo, Serbia wants the benefits of Western economic integration, but cultural ties with Russia have kept it ambivalent over the war in Ukraine. Alleged financial ties with Serbia’s president have also given Moscow a supportive voice in Belgrade. President Aleksandar Vucic praised Putin on Sunday for his handling of the Wagner mutiny. Last week, Vucic fired his economy minister, who had recommended Serbia join Western sanctions.
Written by former diplomats and industry specialists, Geopolitical Dispatch gives you the global intelligence for business and investing you won’t find anywhere else.
ARMENIA. AZERBAIJAN. Two steps back.
Baku appears to have shot itself in the foot.
Four Armenian soldiers were killed on Wednesday after Azerbaijani forces carried out strikes in the disputed territory of Nagorno-Karabakh. Foreign ministers from both sides met in Washington on Tuesday for trilateral peace talks.
INTELLIGENCE. Azerbaijan on Tuesday claimed one of its own troops had been shot, setting a pretext for what Armenia said was a "new provocation" on Wednesday. Irrespective of who was to blame, the incident may have quashed the two countries’ best chance for peace in years, after Armenian prime minister Nikol Pashinyan said in April his government would accept Baku's sovereignty over the ethnic Armenian enclave.
FOR BUSINESS. Diplomats in Washington and Brussels have worked hard to reach a deal between the two Caucasus neighbours, eyeing a dismantling of Russian influence and new routes for Caspian energy to reach Europe. Yet Moscow, which has also brokered talks, will only want peace on its terms, as will Ankara and Tehran, which have complex relations with both parties and interests to protect. The long-standing conflict could remain just that.
CHINA. Diplomatic corpus.
Xi Jinping codifies his foreign policy.
China's National People's Congress passed a new foreign relations law on Wednesday, asserting the Communist Party's control over the country's diplomacy. Revised anti-espionage legislation took effect the same day.
INTELLIGENCE. The law doesn't introduce new powers but entrenches party control over China’s foreign ministry at a time when Beijing’s diplomats are torn between a dovish posture on trade and a “wolf warrior” tone on security. The Law on Foreign Relations also legislates Xi's signature Global Security and Global Civilisation initiatives, which Beijing has promoted as part of its “Community of Common Destiny” concept to counter the Western international order.
FOR BUSINESS. This may appear like amorphous Marxist guff, but the law is a vital step in Xi’s ongoing efforts to cement his position as China’s most powerful leader since Mao. No doubt chilled by the economic slowdown and recent threats to his friend Vladimir Putin, Xi will continue to assert an iron grip. A series of anti-corruption purges has removed the threat of internal rivalry. Xi’s job is now to ensure that any external threats don’t endanger his rule.
With the brevity of a media digest, but the depth of an intelligence assessment, Daily Assessment goes beyond the news to outline the implications.
CAMBODIA. Khmer subterfuge.
A Chinese ally makes some seemingly odd choices.
Cambodian Prime Minister Hun Sen said on Wednesday he would leave Facebook for Telegram, a social media app popular in Russia. Hun Sen on Tuesday ordered troops to the Vietnam border on Tuesday to hunt down alleged drones.
INTELLIGENCE. Hun Sen is known for an erratic style, but his 39 years at Cambodia's helm suggests a strategic mind. He also has well-placed friends – not just his 14 million on Facebook (out of a country of 17 million), but Xi Jinping, whom Hun Sen visited in March 2020 as others were banning flights from China. His moves on Telegram and Vietnam were likely his own, but other decisions to put Cambodia at odds with its neighbours have enjoyed Beijing’s support.
FOR BUSINESS. Cambodia holds elections next month. Hun Sen will win, having removed key rivals, but he won’t take chances. Telegram allows unmitigated propaganda. Sabre rattling at Hanoi rebuts claims he’s just a Vietnamese stooge (his career began as a Viet Cong-allied rebel). Ties with China have thrived under his rule. Phnom Penh gets valuable, if murky, trade and investment. Beijing gets a proxy to thwart Southeast Asian unity on the South China Sea.
SRI LANKA. Beggar thyself.
Colombo may need to suffer its citizens ahead of its creditors.
Sri Lanka's cabinet approved a restructuring of the country's $42 billion in domestic debts on Wednesday, a step it says is necessary to comply with its IMF bailout. On Thursday, Colombo proposed a 30% haircut for foreign bondholders.
INTELLIGENCE. Imposing losses on local lenders will be politically tricky and could plunge the country back into recession. Yet the decision will not be as hard as the negotiations still underway between Colombo and its bilateral creditors, including Beijing, Delhi and Tokyo, which are together owed another $13 billion. Since its 2022 crisis, when the Rajapaksa family left office amid riots and fiscal default, Sri Lanka has been caught in a geopolitical tug-of-war.
FOR BUSINESS. Elections are due next year, but the government will hope Sri Lanka’s gerrymandered and ethnically split electorate will prevent another collapse. More intractable is balancing China and India. Delhi is Colombo’s main partner, but under the Rajapaksas, Beijing made inroads, including at the port of Hambantota, astride the region’s main shipping lane. It is a cautionary tale for Pakistan, which faces a similar crisis, albeit at a much larger scale.
Emailed each weekday at 5am Eastern (9am GMT), Daily Assessment gives you the strategic framing and situational awareness to stay ahead in a changing world.