The Philippines, the US: Top of the first island chain
Also: Ukraine, Russia, Romania, Croatia, and Nigeria.
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THE PHILIPPINES. UNITED STATES. Top of the first island chain
Manila becomes the essential link in Washington’s Asia strategy.
Antony Blinken visited Manila Tuesday for talks on security and trade. The White House Monday said it would host the first US-Japan-Philippines summit next month. The EU said it would resume trade negotiations with the Philippines.
INTELLIGENCE. Manila has visibly swung back to the US since Ferdinand Marcos Jr became president in 2022. And despite distractions in Ukraine and the Middle East, the Philippines has again become central to US grand strategy. The summit with Japan elevates this relationship to an even higher tier, bringing into focus the Philippines’ role in a Taiwan crisis, not just disputes in the South China Sea. But this in turn makes Manila a bigger target for Beijing’s ire.
FOR BUSINESS. The move could lead to Chinese economic sanctions, but Marcos is intensifying trade links with the US and EU. His visit to Canberra this month likewise involved a range of business deals and Manila’s signature to the ASEAN-Australia-NZ FTA’s second protocol. Yet renewed Western interest won’t be a perfect displacement for China. And as a China alternative for Western firms, the Philippines has strong competition in India, Vietnam, and Mexico.
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UKRAINE. RUSSIA. Bluffs and buffers
As Putin proposes a security zone, Republicans pitch the idea of a loan.
Kyiv hit back Monday at the Kremlin's proposal to create a "buffer zone" inside Ukraine as proof of escalation. Senator Lindsay Graham said Ukraine had "better start talking to the American taxpayer" after meeting Volodymyr Zelensky.
INTELLIGENCE. Vladimir Putin’s buffer proposal isn’t new and could, in fact, be seen as the opening gambit in mooted ceasefire talks, now Russia’s election is out of the way. Graham’s visit was promoted as a sign of Republican softening on aid for Ukraine, but it could also be seen as an attempt to bring Kyiv around to the idea of a loan – rather than aid – being the best chance it has of receiving Congressional approval for further substantial military funding.
FOR BUSINESS. The loan proposal, made recently by Donald Trump, is being pitched as no-interest and waivable – essentially as good as a transfer – but it’s more likely a bluff. Democrats are unlikely to agree readily, and with the border debate brewing it could mean more precious months before a final package is agreed. In the meantime, Putin may get his desired buffer as Kyiv evacuates civilians beyond Russia’s claimed territories in Ukraine’s south and east.
ROMANIA. A frontline seat
Bucharest moves to the centre of European security.
President Klaus Iohannis authorised the training of 50 Ukrainian F-16 pilots, local media said Monday. Iohannis last week announced his candidacy for NATO chief. Work began on NATO's largest European base in Romania's south.
INTELLIGENCE. The expansion of the Romanian Air Force base near Constanta could host 10,000 troops and be bigger than Ramstein in Germany. Romania is increasing its NATO heft in other ways. Beyond Iohannis’s candidacy (which could gain traction if Eastern European members continue to oppose the Netherland’s Mark Rutte), Romania has lifted defence spending to 2.5% of GDP. It has also been front-footed on Russia's latent threat to Moldova.
FOR BUSINESS. Russian intrigue in Moldova has risen in recent weeks, potentially adding a new front for Romania, which also borders Ukraine to the north. To its south, Russia has also been playing a hand in Bulgarian politics, though for the moment a potential governance crisis has been averted with the appointment on Monday of Maria Gabriel as prime minister. Romania’s Atlanticism has supported strong growth, but also the EU’s highest inflation rate at 7.1%..
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CROATIA. Don’t mess with the Zoran
The president is asked to choose politics or his job.
President Zoran Milanovic said "the rivers of justice are coming" after the judiciary barred him for running in snap elections he called for 17 April. The courts ruled that as "a non-partisan person" he was unable to participate in politics.
INTELLIGENCE. Milanovic wants to remain president until he becomes prime minister but may have quit first. It would be a leap of faith. His populist left-wing coalition is rising in the polls but trails the centre-right Croatian Democratic Union led by Andrej Plenkovic, who has been prime minister since 2016, when he replaced Milanovic. Milanovic has ambivalent views on Russia. He opposed Finland and Sweden joining NATO and is known for diplomatic outbursts.
FOR BUSINESS. Though a social liberal, Milanovic is closer on foreign and EU policy to Viktor Orban, in neighbouring Hungary. Economically, he is a pragmatist, having instituted painful reforms during a period of high unemployment in the wake of its accession to the EU. Today, Croatia’s economy is in rude health by European standards, but it happens to have the EU’s second-highest inflation rate at 4.8%, according to official statistics released Monday.
NIGERIA. Things fall apart, again
Worsening security mars attempts at reform.
Gunmen in Nigeria's north kidnapped 100 in weekend attacks, police said on Monday. Earlier this month, 286 were kidnapped from a school in the same region, and 61 in another attack. Last week, 16 soldiers were killed in the south.
INTELLIGENCE. The ethnic, criminal, and terrorist conflicts in Nigeria’s north have killed 16,000 since 1998, but fighting in the south’s Niger delta has extracted a bigger financial toll, leading to Shell and Totals' decisions to exit Nigeria's onshore oil sector. Abuja has cracked down on oil theft and sabotage, raising output to a three-year high of 1.5 million barrels per day last month, but without foreign investment it won’t hit its potential of 2.5 million bpd.
FOR BUSINESS. The security situation is also harming Abuja’s reform program and attempts to lift other sectors. Soaring inflation, due to an ending of fuel subsidies and exchange rate reform, has exacerbated political tensions and led to mass strikes. Hunger and looting have belied growing GDP and an improving budget. On paper, Nigeria's business-friendly government is doing the right thing. In reality, the sequence of its reforms mean it may not last long.