Venezuela, Ecuador, Mexico: VEM diagram
Also: China, the US, Solomon Islands, Sudan, and South Africa.
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VENEZUELA. ECUADOR. MEXICO. VEM diagram
A diplomatic pile-on is about more than international law.
Venezuela closed its embassy in Ecuador Tuesday, in solidarity with Mexico after the latter’s mission in Quito was raided on 5 April. Honduras said it may follow. The US is due Thursday to decide on restoring Venezuelan oil sanctions.
INTELLIGENCE. The raid on Mexico’s embassy was to arrest ex-vice president Jorge Glas, who had been hiding there since December. It drew global condemnation. Embassies are considered inviolable under international law. Ecuador’s stance under President Daniel Noboa, a millennial conservative in the mould of El Salvador’s Nayib Bukele, is in contrast to socialist predecessor Rafael Correa, who housed Julian Assange at Ecuador’s London embassy.
FOR BUSINESS. While Ecuador’s raid is concerning, as it opens the door for other norms to be broken, the outrage in Mexico and Venezuela – two countries not known for legality – is a little confected. It also plays to a sense among regional socialists that a new generation of populists need schooling. Venezuela has other reasons to join the fray. Washington has hinted sanctions might return, which may see Caracas revive regional trading pacts like Petrocaribe.
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CHINA. UNITED STATES. Charm defensive
Talks are held between defence heads.
Defense Secretary Lloyd Austin and his Chinese counterpart spoke on Tuesday, the first substantive talks between the two countries’ defence ministers for 18 months. Assistant Secretary of State Daniel Kritenbrink visited Beijing Monday.
INTELLIGENCE. While China and the US have been ramping up official engagements, including between foreign ministers, economic chiefs, and Presidents Biden and Xi, the defence portfolios have been conspicuously absent. Ex Chinese defence minister, Li Shangfu, was under US sanctions, having overseen the purchase of aircraft and missile systems from Russia. China refused talks while the sanctions were in place. Li was replaced by Dong in October.
FOR BUSINESS. Defence talks are a welcome development, though it is safe to assume Biden and Xi were also discussing sensitive security issues in the interim. The US has found a slowing China has not been a brake to Beijing’s military ambitions. And now the economy is picking up pace again – first quarter GDP came in at 5.4% – there is even more reason to be cautious and keep the lines of communication open. Maritime talks were held earlier this month.
SOLOMON ISLANDS. Soggy days
A critical election is underway in the Pacific.
Solomon Islanders started heading to the polls on Wednesday in a vote for their new government, the first election since 2019. Incumbent Mannaseh Sogavare remains popular, but post-election alliances will determine who governs.
INTELLIGENCE. This is the first election since Honiara switched diplomatic recognition from Taipei to Beijing under Prime Minister Sogavare. Solomon Islands also drew the spotlight when it signed a security pact with China in 2022, the boldest realignment towards China among any Pacific nation. The pact raised concerns about Beijing’s influence and the potential for a Chinese military presence, challenging the strategic landscape in the Pacific and beyond.
FOR BUSINESS. The election is a fork for Solomon Islands, with opposition candidates having pledged to re-align the country away from China and back to traditional Western partners. However, China’s money speaks, including funds for the 2023 Pacific Games, a source of great pride for the nation. Despite setbacks, Sogavare remains popular. And, like other Melanesians, he bristles at paternalistic Westerners, especially Australians, who tell him how to govern.
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SUDAN. Civilian aid, uncivil war
Desperately needed funds start to flow.
An international conference this week has raised $2.1 billion for humanitarian aid for Sudan, Emmanuel Macron announced. Amid Sudan’s civil war, money will deliver food, health care and other supplies through UN representatives.
INTELLIGENCE. Sudan’s civil war has raged between rival factions of the military junta for just over a year. While the world’s attention is elsewhere, the conflict has caused 14,000 deaths and 9 million refugees. Infrastructure, including hospitals and schools, has been decimated, and a famine looms. The Sudanese army had been clawing back positions this year, with the help of Iranian drones, but in recent days appears to once again be on the back foot.
FOR BUSINESS. Sudan has become a battleground for a regional proxy war, with the Saudis and Iranians backing the military and the UAE backing the paramilitary Rapid Support Forces, who have also received indirect support from Russia and several African states. Sudan is a cultural and economic link between Africa and the Middle East, and is flush with natural resources. All sides are eyeing the prize of Khartoum and a leg up in the race for regional primacy.
SOUTH AFRICA. Cape of automotive hope
Volkswagen tentatively stands athwart the EV transition.
Volkswagen announced Tuesday it plans to invest $210 million in its South African manufacturing plant in the Eastern Cape. In its global outlook Tuesday, the IMF cut South Africa's GDP forecast to 0.9% for 2024 and 1.2% for 2025.
INTELLIGENCE. The news is a rare vote of confidence in South Africa before national polls next month where the African National Congress is expected to lose its majority for the first time since 1994. VW’s funds will go towards manufacturing a new internal combustion SUV from 2027, which would service much of the African market. VW said the plant would continue making petrol-fuelled cars despite the developed market trend to electric vehicles.
FOR BUSINESS. Despite its economic troubles, South Africa remains a major car manufacturing hub, home to VW, Toyota, Isuzu, and Mercedes. This latest round of investment highlights the haphazard way in which the global transition to electric vehicles is likely to be interspersed with ongoing investment in traditional ICE vehicles. VW Brazil (whose local market uses crop-derived ethanol) will be leading the design of the new South African-built SUV.
The one reaction to the Ecuador/Mexico conflict that beats all records for running, standing or jumping gall was from Iran, who defended the "necessity of respecting the immunity, ensuring the security and safety of diplomatic and consular sites and missions." I'll just leave that there without comment.