Ukraine, Russia: Counterproductive.
Also: Turkey, China, France, the Pacific, Nigeria and Eritrea.
UKRAINE. RUSSIA. Counterproductive.
A leadership purge won’t help the counter-offensive.
Volodymyr Zelensky said on Sunday he would ask parliament to dismiss Ukraine's defence minister amid charges of ministry corruption. A court on Saturday ordered the arrest of oligarch Ihor Kolomoisky, a former patron of Zelensky.
INTELLIGENCE. Defence Minister Oleksiy Reznikov has been an effective advocate for increased Western support, and he may land a posting to London. Still, Zelensky is under pressure to act on corruption allegations – including by the West – amid deteriorating public morale. Further hard choices loom. Kyiv needs more soldiers and may need to expand unpopular mobilisation. Moscow, meanwhile, claimed on Sunday it had recruited an extra 280,000 volunteers.
FOR BUSINESS. Zelensky’s severest tests may be ahead as he tries to retain domestic and external backing for a halting counter-offensive that may soon need to pause for the winter. Should Kyiv fail to make headway, pressure will mount for a ceasefire, possibly along current frontlines, leaving 20% of Ukraine in Russian hands. Moscow last week began holding local elections in occupied territories to cement its power. Pro-Kremlin parties are tipped to win.
TURKEY. RUSSIA. Hot topics.
Putin and Erdogan have much to discuss.
Turkish President Recep Tayyip Erdogan travelled to meet Vladimir Putin in Sochi on Monday, in an effort to revive the Black Sea Grain Deal. Russian drones attacked Ukrainian grain export facilities on Sunday and Monday, injuring two.
INTELLIGENCE. Having recently moved closer to the US and EU, Turkey is now pulling back with an eye on reviving grain exports via the Bosporus. Erdogan knows Putin will not restore Ukraine’s economic lifeline without a price – particularly as Russia has offered to ship more of its own grain instead – but there are plenty of chips Turkey could trade in Syria and the Caucasus, where it and Russia back opposing sides. A deal could come from unusual places.
FOR BUSINESS. An increase in grain exports, whether from Russia or Ukraine, would help ease prices across Africa and the Middle East (and in turn, rising tensions). But getting to yes might require trade-offs elsewhere. The conflict in Armenia and Azerbaijan is one candidate. Fighting intensified on Friday, risking fragile peace efforts. Another is Syria. Clashes between Turkish-backed forces and the Russia-supported Syrian army killed 23 on Sunday.
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CHINA. Return of the dragon.
Fear turns to greed in the second-biggest economy.
Shares in developer Country Garden rallied 15% on Monday after creditors agreed to extend $537 million in repayments. IMF Managing Director Kristalina Georgieva said on Monday she had held “productive” talks with Beijing officials.
INTELLIGENCE. Western analysts have trimmed their forecasts of Chinese growth, but the IMF – which has called for many of the bubble-bursting policies Beijing is trying to implement – has maintained a 5.2% growth outlook for China (versus 1.8% for the US and 0.9% for the Eurozone). Local analysts are meanwhile forecasting the worst is over in China's transition from fixed asset and export-led growth to a consumption and services-based economy.
FOR BUSINESS. There are recent signs that Chinese consumption is belatedly picking up. Property transactions in Beijing and Shanghai rose over the weekend. China imported a record amount of beef in July. Gas consumption rose 9.6% year-on-year for the same month.Later this week China will release aggregate inflation and trade data. Quarterly GDP will be published in October. And while strategic rivalry continues, US trade tensions are once again easing.
FRANCE. THE PACIFIC. Territorial disputes.
More challenges for French foreign influence.
New Caledonian parties met in Paris on Monday to reconcile pro and anti-independence positions in the French territory. Fiji said on Thursday it would sign a defence agreement with France that had been discussed since 2016.
INTELLIGENCE. Amid the turmoil in its former African colonies, France is trying to retain its influence in the Pacific, where its territories give it a role in Asian affairs and one of the world’s biggest exclusive economic zones. France exploited these endowments in the past – including through nuclear tests – and the region hasn’t forgotten. While Fiji is happy to do deals, it was one of five Pacific countries that last week advocated New Caledonia’s independence.
FOR BUSINESS. New Caledonia is the world's fourth-biggest nickel producer, and French Polynesia has seafloor deposits of cobalt, copper, and manganese. Emmanuel Macron visited Papua New Guinea and Vanuatu, two proponents of New Caledonian autonomy, in late July. He may need to keep visiting. Vanuatu’s parliament chose a new pro-China prime minister on Monday after his predecessor was ousted, having moved too close to the West.
With the brevity of a media digest, but the depth of an intelligence assessment, Daily Assessment goes beyond the news to outline the implications.
NIGERIA. Total recall.
What a diplomatic summons says about Africa’s largest economy.
President Bola Ahmed Tinubu recalled all Nigeria's ambassadors with immediate effect on Saturday, a move seen as about purging an inefficient service. On Sunday, a spokesman said Tinubu would attend the G20 summit in New Delhi.
INTELLIGENCE. How Nigeria aims to join the G20 with no ambassadors is anyone’s guess, even though it arguably now has a greater claim to membership than South Africa. From sweeping tax reform to threatening the invasion of Niger, Tinubu has moved with alarming speed since taking the presidency in May. Nigeria has big problems to solve, but a multi-ethnic federation with a history of civil war may not be the best candidate for shock therapy.
FOR BUSINESS. Nigeria on Sunday also announced plans to establish a state mining company to attract investment in bitumen, coal, gold, iron ore and lead among others. Nigeria wants to pivot from reliance on oil, but the state-owned producer NNPC is a byword for corruption. Amid public governance challenges, Nigeria’s private sector is world-class. While perhaps well-intentioned in his reforms, Tinubu risks throwing the baby out with the bathwater.
ERITREA. Bad ambassadors.
Diaspora violence brings unwanted attention.
Benjamin Netanyahu promised “harsh measures” on Saturday after 170 were injured in clashes between rival Eritrean refugee groups in Tel Aviv. Last month, an Eritrean community event was cancelled in Toronto after similar violence.
INTELLIGENCE. It’s not unheard for homeland disputes to be taken overseas. Canada has violence between Hindus and Sikhs (at cost to relations with Delhi). Australia sees riots between Serbs and Croats (particularly at the tennis). Britain, France and the US all have similar experiences. What’s being seen among Eritreans, however, suggests a level of instability at home that is difficult to discern beneath the façade of what’s called the ‘North Korea of Africa’.
FOR BUSINESS. Few Western firms have interests in Eritrea, but Eritrea has interests that affect Western firms. A meddler in Ethiopia’s internecine conflicts, and with a 1,000km coastline on the Red Sea, Eritrea has been courted by Russia and China for its strategic location (the former is eyeing old Soviet bases there) and its military (one of the largest in Africa and with mercenaries fighting for groups like Wagner). It also has major deposits of copper and gold.
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