Good morning, and welcome to the Global Situation Report for Tuesday, 15 August 2023.
- FIRST UP: China Defense Minister to Visit Russia and Belarus
- China’s Defense Minister Li Shangfu is visiting Russia and Belarus in a show of support for the Russian-led Union State.
- Li will address the Moscow Conference on International Security and meet with Russian leaders and representatives from nearly 100 other countries and eight international organizations.
- Foreign Minister spokesman Wang Wenbin said China and Russia will continue to advance their comprehensive strategic cooperative partnership in the new era.
Why It Matters: At this point, any thoughts in Washington that China can be peeled away from Russia are pure fantasy. Beijing has consistently made it clear that it backs Moscow in what is essentially a battle against the West and its NATO alliance. Expect the China-Russia alliance to continue to bring resource-rich nations into its orbit to dethrone the U.S. from its global superpower position. This likely means more Chinese meddling in U.S. politics and a major push to de-dollarize the global economy. – M.M.
- AUSTRALIA: Malabar moves to Australia and expands scope
- The Quad is holding Exercise Malabar in Australia for the first time this year and has invited numerous regional partners.
- The U.K., Chile, South Korea, Canada, and New Zealand have personnel participating in the exercise but not ships.
- All Naval Warfare domains, including replenishment-at-sea (RAS) training, are on the agenda and will remain at the tactical level, according to the Japanese Ministry of Defense.
- The at-sea phase will run from 16 to 21 August.
Why It Matters: Since it started in 1992, Malabar has effectively been training regional partners on the U.S. Navy’s methods of warfare with increasing complexity. Its tactical level focus and international RAS training suggest the Quad is developing a logistics framework to support a multilateral force of independent steaming surface combatants. Such a force would be difficult for the Chinese to counter as it is less predictable and easier to hide in wartime. Essentially, they’re preparing for guerilla warfare at sea. – J.V.
- NIGER: Niger to prosecute former President for treason
- Niger’s ruling military junta said on Monday that it would prosecute ousted President Mohamed Bazoum for high treason over his exchanges with foreign heads of state and international organizations.
- Bazoum remains under house arrest in the presidential palace.
- Western nations and the African political bloc ECOWAS have demanded Bazoum’s reinstatement, threatening military action if demands are not met.
Why It Matters: Despite U.S. and European attempts to push the military junta to restore democracy, it is now increasingly unlikely there will be a negotiated settlement in Niamey. The military junta, with allies in neighboring Mali and Burkina Faso, appears to be both fully in control and uncooperative. Expect the junta to continue isolating the country from Western sanctions and diplomatic pressure, possibly leading to the nationalization of Western-operated resource extraction enterprises. – M.M.
- SOUTHCOM: AMLO compares rise of Argentina’s Milei to Hitler
- Mexican President Andres Manuel Lopez Obrador (AMLO) compared the political rise of right-wing Argentine presidential candidate to the rise of Adolph Hiter during yesterday’s press conference.
- “Inflations and economic crises always help the [political] right, conservatism, which is a bit what is happening in Argentina. I am not comparing Milei with Hitler, just to make it clear, I am making a historical reference,” AMLO said.
Why It Matters: Both AMLO and Brazilian President Luiz Inacio Lula da Silva are committed to pushing Latin America towards the political left, so Milei’s success threatens to disrupt the trend following the defeat of Bolsonaro in Brazil. Milei is just barely ahead of his competitors, so he faces a substantial challenge in October’s elections. Still, Milei is a staunch anti-communist, and his election could renew some right-wing fervor in the region. – M.S.
- BRICS: Creator says Common Currency is “absurd”
- Jim O’Neill, the former Goldman Sachs economist and creator of the Brazil, Russia, India, China, and South Africa (BRICS) concept, said a common currency for the economic alliance was “absurd.”
- O’Neill criticized the dollar as a difficult option for emerging economies – but said that the idea that BRICS can create a central bank and new monetary system is “almost embarrassing.”
- South African officials confirmed that a common BRICS currency would not be a topic of discussion at this month’s annual conference.
Why It Matters: The BRICS common currency is making the rounds as a “dollar killer,” but we remain doubtful. The largest impediment is that these countries don’t have capital or credit markets large enough to facilitate international trade, which is not a quick or easy problem to solve. – M.S.
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