Spain: Rightwards march.
Also: Latin America, Russia, Poland, China, Iran, North Korea and Pakistan.
Listen (coming soon).
SPAIN. Rightwards march.
Sanchez calls a snap election he will likely lose.
Spanish Prime Minister Pedro Sanchez said on Monday he would call a snap election for 23 July after his Socialist Workers Party was drubbed in local and regional polls held on Sunday. Voter turnout may dip during high summer.
INTELLIGENCE. Sanchez has taken a risky bet by calling an early national vote, but Spain’s conservative turn will only get stronger if he waits until the end of the year. Sunday’s elections were seen as a referendum on Sanchez, who, despite a solid economic record, is seen by many in a still conservative Catholic country as irredeemably ‘woke’. A decision to partner with the far-left Podemos also damaged his centrist party’s standing among moderate voters.
FOR BUSINESS. The conservative People’s Party was the undisputed victor on Sunday. Still, it will need to align with the far-right Vox to form government in many of the regions and municipalities it won, leaving it in a similar dilemma to that Sanchez has with Podemos. Vox has steadily increased its vote share since its founding ten years ago. Unlike other far-right parties, it is solidly middle-class. Firms should consider how this reflects their customer base.
LATIN AMERICA. Pink tide drifting.
Socialism is losing dominance across the continent.
Brazilian President Lula da Silva greeted his Venezuelan counterpart Nicolas Maduro on Monday ahead of a regional leaders’ summit on Tuesday. Maduro had been banned from entering Brazil by Lula's predecessor Jair Bolsonaro.
INTELLIGENCE. Lula appeared triumphant when welcoming a former pariah, but he is out of step with Latin American opinion, where the right is gaining ground. In Chile, young socialist president Gabriel Boric has had constitutional reforms thwarted. In Peru and Ecuador, conservatives have blocked leftist attempts at a ‘self-coup’ and an impeachment. In Argentina, the far-right has recently eclipsed the Peronists, who face re-election in October.
FOR BUSINESS. An end to the ‘pink tide’ of left-leaning Latin American governments would usually bode well for firms seeking liberalised investment, but today’s Iberian right is not Pinochet’s reactionary conservatism. Following Mexico, whose government fuses workers’ rights with traditional Catholicism, or El Salvador, whose leader likes crypto, buses and incarcerating 4% of male adults, populist contenders can assemble their policies in ways improbable in the West.
RUSSIA. POLAND. The enemy within.
Warsaw seeks out a fifth column.
Polish President Andrzej Duda said Monday he would approve a law to purge Poland of Russian political influence. The decision was decried by liberals, including former prime minister and European Commission president Donald Tusk.
INTELLIGENCE. Duda’s Law and Justice Party, anti-Russian but also Eurosceptic, made an odd feat of uniting Brussels and Moscow in opposition to the legislation. It will add a McCarthyist tone to Poland’s already paranoid style of nationalist politics but will struggle to unearth Russian moles if similar experiences are considered. A commission into China’s meddling in Canadian elections released its report last week, finding nothing.
FOR BUSINESS. Foreign interference exists, but those that do it well are good at covering their tracks. Western governments have few tools to counter perceived threats without limiting free expression or veering into xenophobia. In a post-truth world after Covid, attempts to manage political debate can easily backfire. Counter-disinformation campaigns can likewise end up as narrative control and counter-propaganda. Public relations firms should take note.
Written by former diplomats and industry specialists, Geopolitical Dispatch gives you the global intelligence for business you won’t find anywhere else.
RUSSIA. CHINA. Grains of untruth.
Moscow harvests its agriculture diplomacy.
Speaking from Nairobi, Russia's foreign minister said on Monday the Black Sea grain deal risked collapse unless the West eased restrictions on insurance, payment, and transport. Turkey and the UN brokered an extension on 17 May.
INTELLIGENCE. Russia has made an art of turning Western policy back on itself, including by blaming high food prices on sanctions rather than the invasion of Ukraine. While disingenuous, the message resonates in Africa and the Middle East, where Russia is increasingly focussed due to UN votes, natural resources and Western disengagement. High prices led to the 2011 Arab Spring, which Russia and its allies blamed on Europe and the US.
FOR BUSINESS. Western firms should not underestimate countries' ability to trash economic logic for political expediency. Firms are also up against states. In March, Putin offered Africa free grain. There hasn’t been any follow-through, but the sentiment counted. Last week, South Africa’s ruling party said he was welcome to visit, despite the International Criminal Court. On Monday, the Central African Republic offered to host a Russian base.
IRAN. NORTH KOREA. Fast and furious.
Tehran and Pyongyang work to join the big missiles club.
Iran will soon have hypersonic missiles, having carried out the necessary tests, an Islamic Revolutionary Guard Corps commander said on Monday. North Korea confirmed on Tuesday it would launch its first military satellite in June.
INTELLIGENCE. Like artificial intelligence, which is now cheap and quick to engineer, advanced missile technology could soon be commonplace. Iran and North Korea's investments in guidance and propulsion are bearing fruit, with significant ramifications for arms control. Their success also speaks to recent technical leaps that have enabled commercial providers like SpaceX and Blue Origin to cut the costs of a capability once the preserve of superpowers.
FOR BUSINESS. Counter-proliferation was once a sleepy niche of foreign policy but is gaining salience as almost anything, from washing machine chips to smartphone cameras, can help build a military advantage. As the development window shrinks for novel technologies, Western firms will come under growing pressure to prevent the transfer of dual-use goods and IP to foreign adversaries.Firms should brace for a new series of Sputnik moments.
PAKISTAN. Not to the rescue.
The International Monetary Fund fiddles while a nuclear power burns.
The IMF said Monday it was working with Pakistan to “pave the way” for a meeting before financing expires. On Sunday, Finance Minister Ishaq Dar said he hoped the IMF would clear its 9th review before the budget is handed down in June.
INTELLIGENCE. Assuming the IMF won’t deliver a package before the cash runs out, Pakistan has two options: a bailout by China and the Gulf or societal collapse. Both could involve a military coup. A third option, a civilian government led by Imran Khan, would require the army’s support, which is uncertain. As his party faces dissolution, the former prime minister said on Friday that the country is already under “undeclared martial law”.
FOR BUSINESS. From its brutalist mid-1970s headquarters in Washington, the IMF almost defines bureaucracy. But unless the fund can adapt to a changing world, it will be eclipsed by other lenders or, in the case of Pakistan, risk disaster. Pakistan’s government is broke and incompetent, but this does not make it special. The Bretton Woods system, and the IMF’s role in maintaining what’s left of globalisation, needs revitalising.
Emailed each weekday at 5am Eastern (9am GMT), Geopolitical Dispatch’s Daily Assessment gives you the situational awareness to stay ahead in a changing world.