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Geopolitics

Brexit and Britain’s Geopolitics

Brexit is one of the most debated geopolitical issues of our time. More than two years after the referendum that resulted in the decision to leave the EU, it is still unclear what the exit conditions will be like and the prospects of a “no deal” Brexit are looming at the horizon. With such high degree of uncertainty, it is difficult to foresee how things will eventually unfold, but one thing is certain: Brexit will have a sensible impact on Britain in the years to come.

Britain’s geopolitics & history

The history and the foreign policy of the United Kingdom have been deeply marked by its geographic position. As an island off the European coasts, not far from France, it was isolated enough to be sufficiently repaired from foreign threats but close enough to be obliged to care about the Continent’s affairs. Since William the Conqueror’s conquest in 1066, no invader managed to land on the British soil. After a long process marked by turmoil and civil war, a unified kingdom of Great Britain was established in the early 18th century. Thanks to its favourable position protracted towards the Atlantic Ocean, it managed to consolidate and expand its colonial territories. This, combined with its rich coal deposits and with an institutional system favouring capitalism and the technological innovation, allowed Britain to spark the industrial revolution. Gradually, Britain strengthened its fleet and turned into the world’s leading naval power. The Royal Navy became the cornerstone of its national security and the vehicle of its imperial expansion: its supremacy allowed Britain to impede any invasion from the mainland, but at the same time enabled it to extend its influence overseas and dominate maritime trade. Back then it acted as the “balancer” of European politics: when any given power starter becoming too powerful and consequently threatening for its national security, Britain backed a coalition to counter its rise; sometimes intervening directly with its army such as during the Napoleonic Wars. At the height of its power in the second-half of the 19th century, the British Empire ruled over one quarter of the world and was the first power of its time.

But America’s rise and two World Wars determined its decline. After 1945, Britain gradually lost its immense colonial empire and its industry was disrupted by foreign competition. To ensure its security it joined NATO, the trans-Atlantic military Alliance supported by the US to contain the Soviet Union. On the political and economic level, Britain was initially cautious towards the European Integration project, and preferred to promote its own multilateral institutions like the Commonwealth and the European Free Trade Association. Yet, in 1973 it decided to join the European Economic Community, the predecessor of the EU. Nevertheless, its relations with the EU have always been turbulent. It opposed several integration initiatives and exerted its “opt out” right over several issues, albeit in different forms. In 1992, it rejected to join the Exchange Rate Mechanism and any obligation to adopt the Euro. Another opt out exists on the Schengen agreement abolishing borders controls, which was integrated in the EU legislation in 1997 and that Britain had not signed. It also refrained from accepting the EU’s legislation on police and criminal justice in the context of the Area of freedom, security and justice. A last opt-out exists over the EU Charter of Fundamental Rights included in the 2007 Lisbon Treaty; and its aim is to limit the influence of EU norms on cases brought to British courts.

Then, amid a global rise of populist forces opposed to greater social and economic integration, the Brexit referendum took place in 2016. After a long and heated campaign, the vote resulted in the victory of those advocating for leaving the EU. Since then, in accordance with the EU’s legislation, the UK has been involved in complex negotiations with the Union to define the terms of Brexit. As of today, the Parliament has rejected the plan backed by PM May’s government and an agreement is yet to be reached. A “no deal” Brexit seems more and more likely. In this context of growing uncertainty, the future of the UK and even its tenure as a unified state are being questioned.

The challenges of Brexit

The first set of problems related to Brexit is economic in nature. Since before the referendum, it was widely debated how the UK would perform out of the EU; with opposing and often contradicting opinions coming from the two sides. Determining its impact is still complicated, as the final terms of Brexit remain unclear; and considering the rumours about an extension of the negotiations it is probable that the situation will continue being uncertain. Yet, a few points seem to be generally accepted. First, leaving the EU will damage Britain’s economic growth. This does not mean a contraction of the GDP, but that it will probably grow at a slower pace if the UK leaves the Union.  In the job market, some sectors are likely to be damaged by losing access to the common market, while those mostly exposed to competition from other EU members are likely to benefit from Brexit. The service sectors is particularly important in this regard: it is a major driver of job creation and of innovation, and leaving the single EU market could damage them by reducing the inflow of qualified workers from the continent. In regards to public finances, leaving the Union surely means not having to pay contributions to its budget, but estimates indicate that any saving would be offset with just a GDP contraction of 1% compared to the non-Brexit scenario; and the balance would be negative if the loss were greater. Brexit would also mean losing EU funds to universities, farming and regional development. A positive aspect of Brexit could be the reduction of regulations deriving from EU legislation, but in some cases regulation and standardization is beneficial. Moreover, those British companies wishing to continue trading with the EU will have to comply with its regulations, with the difference from now that Britain will no longer have any voice in determining them. All in all, most analyses expect Brexit to have a negative impact on the economy of the UK; even though there are some who disagree. But again, determining its real effects is extremely complicated and a fully accurate forecast is simply impossible, especially as long as the final terms of Brexit are unknown.

Another major point of discussion is the future of Scotland and Northern Ireland. In 2016, two-thirds of Scots voted in favour of remaining in the EU. Scotland has close and expanding trade ties with continental Europe, and its local government is keener of accepting immigration as a mean to balance its aging population. Until now, it seems that Brexit has not increased much the support for Scottish independence, but much depends on the final terms of the agreement: if its terms were contrary to Scotland’s economic interests, then the pro-independence side would surely gain strength and could win in the case of a new independence referendum, an option which is already being discussed. For what concerns Northern Ireland, Brexit could threaten the equilibrium established by the 1998 “Good Friday” peace deal. The region receives considerable funding from the EU, and most importantly the London’s exit from the Union could translate in the reintroduction of a “hard” border between Northern Ireland and the rest of the island; with considerable economic and social problems. A potential solution is the so-called “Irish backstop”, meaning allowing the area to remain in the EU common market and custom union until a definitive settlement is reached. Yet, there are fears that Brexit could end up sparking the violent conflict in the area after more than 20 years.

Post-Brexit Britain

As seen, it is nearly impossible to determine how Britain will look like after it leaves the EU. Surely, while it can abandon the Union. It cannot escape geography: it will remain a European country and will have to work together with its partners on the continent on common issues such as terrorism, transnational crime, trade & finance, and more. But this means that while it would recover part of the sovereignty it ceded to the EU when it decided to join, in practice it will still have to comply with many European legislation without being able to influence it any longer. Of course, the UK can try balancing the negative effects by creating deeper ties with other partners, but geography limits it to the United States; and as long as the wave of protectionism initiated by Trump continues, it will be difficult to reach a deal in advantageous terms for the UK. In reality, there is another solution: China and Japan. As the Arctic ice cap melts, the Northern Sea Route becomes a viable trade route for trade with Asia, thus opening new opportunities for Britain. The exploitation of the Arctic’s resources is also an option to boost the British economy. Yet, this process is still in its early stages and will take decades to fully develop its potential, not to speak of the dangers for the delicate Arctic environment.

To conclude, it is hard to anticipate what the impact of Brexit will be. Many supporters considered it as the only way to restore Britain’s sovereignty and pursue its national interest in full autonomy, but geography makes it impossible for the UK to simply isolate itself from the continent and therefore it will need to find a new equilibrium for the post-Brexit period; but this will a long and complex task, that might even threaten its unity as a state.

That’s all for today guys, thanks for watching another KJ Vid. What are your views on Brexit. Do you think it will actually go ahead or will Britain remain in the EU. We would love to hear from you in the comments below. Don’t forget to support KJ Vid by becoming a KJ member on our website kjvids.co.uk. Thanks for watching again and see you next time. 

The geopolitics of the Indian Ocean

The Indian Ocean is an immense maritime space of great geopolitical and geoeconomic importance. It is a crossroad for sea trade that connects the advanced economies of the East and the West. At the same time, there are also many factors that threaten its stability. These are often closely related with the international dynamics of the Asia-Pacific, to the point that the two areas can be considered as single reality.

West: Challenges and Opportunities for Africa

On its western part, the Indian Ocean touches the shores of the vast African continent. This creates a peculiar mix of opportunities and challenges for coastal states like South Africa, Mozambique, Madagascar, Tanzania and Kenya. Thanks to their position, they can easily reach important economic areas such as India, the Middle East, Europe and the Asia-Pacific. Engaging in maritime trade with these regions could provide a major economic boost to these African states and improve the living conditions of their citizens. In addition, emerging powers like China and India are heavily spending in Africa to access its much-needed natural resources and exploit the opportunities for high investment returns. Yet, in the case of China, this also raises concerns. While African states welcome Chinese investments as they come with no legal precondition on the respect of civil and human rights, some worry that its economic penetration might result in political leverage and in a form of economic neo-colonialism.

There are also two states whose situation is particular. The first is Ethiopia, the powerhouse of the Horn of Africa. As other states along the continent’s eastern coast, it can greatly benefit from international sea trade, but unfortunately it is a landlocked country. This largely explains the recent deal it reached with Eritrea to settle their longstanding conflict: turning Eritrea into a friend would enable Ethiopia to access the sea and engage in maritime trade along one of the busiest routes in the world. As a matter of fact, the Red Sea is an obliged passage for ships sailing between Europe and Asia. Ethiopia has even expressed its intention to build a navy, which is a clear sign of its seafaring ambitions.

The second peculiar case is Somalia. In theory, it is also poised to take advantage from its position on the Indian Ocean, but in practice it is a failed state ruled by armed groups where the central government has not enough power to pursue such kind of maritime policy.

This raises the issue of the threats to sea trade along the Western shores of the Indian Ocean. Somalia is part of the problem, as it has become a hub for piracy. The difficult economic conditions have pushed many Somalis to start attacking cargos navigating along the country’s coasts. This became a serious problem that prompted the international community to organize a military operation to patrol the Somali waters and combat piracy. These efforts succeeded in securing the area and in reducing the number of attacks, but as long as the socio-economic conditions of coastal population do not improve, the risk of piracy will remain.

Then, there are two important chokepoints that connect the Indian Ocean with the Mediterranean via the Red Sea, which can be considered as a peripheral area of the Indian Ocean putting it in communication with Europe: first, the Bab-el-Mandeb Strait; second, the Suez Canal. Both passages are essential for sea trade, and any interruption would have a major impact on the global economy.

North: India & Hormuz

Located to the North, India is certainly the main regional player. A large and fast-growing economy, it is one of today’s most important rising powers and its influence is growing worldwide. New Delhi considers the Indian Ocean as “its own” maritime space, a vector for power projection and economic growth but also an area to be preserve from the intromissions of hostile powers for the sake of national security. India can enormously benefit from its position protracting towards the ocean midway along the vital East-West sea lanes, and in fact it already taking advantage from it. At the same time, by building a powerful navy it can extend its power abroad and protect its interests. As a matter of fact, New Delhi is concerned over the presence of foreign actors in the Indian Ocean, most notably Beijing. The PRC is indeed investing heavily in the region on the basis of its Maritime Silk Road plan, aimed at creating a string of ports to sustain trade with Europe. This is of central importance for China’s economy, which relies on sea trade for exporting goods and importing hydrocarbons; but some consider that the real objective of the project is to extend its influence in the region by economic means. In a context of broader Sino-Indian rivalry, New Delhi worries about Beijing’s presence in countries like the Maldives or Sri Lanka, considering it as a potential threat to its security. Similarly, India also sees unfavorably the China-Pakistan Economic Corridor that will connect the PRC with the ocean via the port of Gwadar.

Again, there is also a strategic chokepoint to consider: the Hormuz Strait, which connects the Persian Gulf with the Indian Ocean. This passage is vital for tankers carrying Middle Eastern oil to Europe and Asia and any interruption would have catastrophic economic consequences. Unfortunately, this is not a remote event: in case of a serious standoff between the US and Iran, the Strait would soon become a major flashpoint, since Teheran’s deterrence strategy is largely based on blocking the Strait; which it can do with relative ease due to geographic reasons.

East: the Indo-Pacific

To the East, the Indonesian archipelago and Australia separate the Indian Ocean from the Pacific. Similarly to Somalia, the waters around Indonesia had become infested with pirates in the recent past; and the phenomenon has been reduced only thanks to multilateral military and development efforts. Yet, if the living conditions of coastal populations deteriorated again, the problem may arise once more.

That said, Indonesia and Australia benefit from their position between the two oceans. It allows them to project their power in both directions, to reach the large European and East Asian markets and finally to access Africa with its resources and its potential for investments. Indonesia is particularly relevant in this regard: it is another emerging economy with a great potential, and its virtually controls all the major straits connecting the two oceans: Sunda, Lombok and most importantly Malacca. Indonesia’s growth is largely due to its position on these sea lanes, and Singapore has based its incredible wealth on it. Again, these passages are essential for maritime trade between Europe and Asia as well as for the latter’s energy security; and would become hotspots in case of war, notably between the US and China. If the US Navy closed them, it could seriously harm the tenure of the PRC’s economy. At the same time, they are also essential for American allies like Japan, South Korea and Taiwan; meaning that the US will use its naval power to ensure no hostile power blocks the Straits.

The eastern part of the Indian Ocean plays a fundamental role for maritime security; and the importance of the juncture between the two Oceans is leading many scholars, analysts and policy-makers to consider them as a single maritime region: the Indo-Pacific. The Indian Ocean is extremely important for states in East Asia because it represents the necessary passage to reach Europe; and the security dynamics of the Indian Ocean and of the Asia-Pacific are closely related. China’s New Silk Road initiative, the forays of its Navy in the waters of the Indian Ocean, the Sino-Indian competition, the free flow of oil from the Gulf and piracy in Indonesia are all strategic issues that tie the two oceanic regions. This explains why the concept of Indo-Pacific is also taking importance in American strategic discourse: the economic and security dynamics of the two areas are so intertwined that they must be considered as a single space. Other powers are applying the same logic, and this is having practical consequences: the Quadrilateral Security Dialogue uniting the US, Japan, India and Australia indicates their willingness to strengthen their political and military cooperation to face shared security challenges like the rise of China; and it represents the emergence of the Indo-Pacific as a political and strategic reality.

Conclusion: an Indo-Pacific future?

Many scholars believe that “the future is Asian”, which is even the title of a recent book by Parag Khanna. But Asia’s rise largely depends on trade with Europe and on oil imports from the Middle East across the Indian Ocean. As such, Asian states have major strategic concerns in this area. China, Japan and South Korea need to keep the sea lanes open. India is an emerging power whose influence is growing across the world via the sea. Indonesia is the pivot connecting the Pacific and the Indian Oceans. The United States, the world’s primary security provider, is facing many challenges in both Oceans and is committed to preserving the freedom of navigation. Moreover, the interests of the various stakeholders in the area are sometimes colliding, such as in the case of China and India. As such, with Asia’s importance growing every year in both economic and political terms, the Indo-Pacific is also gaining primary strategic relevance.

That’s all for today guys, thanks for watching another KJ Vid. What are your views on Italy’s recession. Will Italy recover or implode and potentially leave the EU. We would love to hear your views in the comments below especially if you are from Italy.

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Stabalizing Iraq and Syria

After years of war, it appears that Iraq and Syria are gradually stabilizing. The government forces supported by the US and Russia respectively are restoring their control over the two countries, and the self-proclaimed Islamic State has lost virtually all of its territory. Yet, this may just be an ephemeral peace. The social and economic foundations of the two states remain shaky at best, and many issues are still unsettled; notably the role of Sunni Arabs and the future of the Kurds. Without a comprehensive action to solve such questions, peace in Iraq and Syria will not be achieved on a solid basis.

I’m your host Kasim, welcome to another KJ Vid. In this video we will discuss the future of Iraq and Syria. Just before we begin, we would like to invite you to our Patreon account where you can get the full reports and other perks for our content. Supporting us on Patreon helps to keep our channel independent and create more videos.

Iraq and Syria in chaos

Iraq has been ravaged by conflict with practically no interruption since the US invasion in 2003. The fall of Saddam Hussein’s regime destabilized the country and resulted in a long insurgency against the occupying American forces. Progress in state-building was slow and limited in scope. The US ultimately withdrew its troops from the country in 2011 by a decision of then-President Barack Obama; but Iraq was still too weak to ensure the authority of the central government over all of the territory. In the same year, the Arab Spring broke out all over the Middle East. In Syria, it rapidly degenerated into a violent civil war opposing the loyalists to President Bashar al-Assad and the rebels; a broad term indicating various armed groups of different affiliation, ranging from those who favoured Western-like democracy and jihadist groups.

Things got more complicated in 2014 with the rise of a Sunni extremist group that would later become known as Islamic State. Exploiting the chaos that reigned in Syria due to the civil war and the power vacuum caused by the withdrawal of American troops from Iraq, it took control of large swathes of lands in the northern parts of the two countries. In particular, it seized important facilities such as oil fields and dams in Iraq and it even threatened Baghdad. This prompted the US to organize a multinational coalition to support the Iraqi government in its fight against the terrorist group by deploying special forces and by conducting air strikes. Soon, they also started operating in Syria, where the conflict was about to turn into a major international matter involving various foreign powers that supported the government or the rebels to pursue their own interest.

Russia intervened actively since 2015 to sustain Bashar al-Assad, its main ally in the area. Western powers assisted the rebels and bombed facilities to punish the loyalists for allegedly using chemical weapons against civilians. Turkey, who opposed the al-Assad government, became directly involved in 2016 with the main objective of preventing the formation of some kind of Kurdish territorial entity. As a matter of fact, the Kurds had rapidly proved to be an effective combat force in fighting the IS, and received support from the American-led coalition. This allowed them to take control over a large strip of territory at the border with Turkey, who feared the area would become independent or at least a rear base for Kurdish fighters operating against its territory. As such, it conducted several military operations to secure the lands along its borders and expel Kurdish forces. Iran also took part to the war by sending weapons and troops in support of al-Assad on the basis of the common Shia faith and of converging geopolitical interest. To counter its growing influence, Israel also carried out airstrikes in Syria against Iranian outposts.

Now, it seems that the two intertwined conflicts are about to end. In Syria the government is slowly restoring its authority and the Islamic State has lost almost all of the territory it controlled there and in Iraq. Yet, many issues remain unresolved, notably the role of Sunni Arabs and the Kurdish question.

Sunni Arabs: excluded from power

Sunni Arabs belong to the largest of the two main branches of Islam, the other being the Shias. But even though they are a majority in the Ummah as a whole, their situation in Iraq and Syria is particular.

For what concerns the former, Sunnis are indeed a minority. Most Iraqis are Shias, which also means that they are politically closer Iran, the main centre of Shiism. Yet, Sunnism had its glorious days in the country. During the Middle Ages, Baghdad was the heart of the mighty Abbasid Caliphate, from which today’s Islamic State took many symbols. More recently, Sunni Arabs formed the ruling elite in Iraq during the years of Saddam’s rule. His Ba’athist regime was dominated by Sunnis, which meant that in Iraq a minority was ruling over the majority. But the situation was reversed after Saddam was overthrown following the US invasion in 2003. Since Sunnis had formed the backbone of Saddam’s dictatorship, they were removed from their posts and largely excluded from power to the benefit of the Shias. At that point, the Sunni Arab community became the main pool of recruitment for the anti-American insurgency and then for the Islamic State. The situation has improved since then, but properly integrating Sunnis in Iraqi political life remains a central matter to stabilize the country.

The situation of Sunnis in Syria is the opposite and resembles that of Iraq under Saddam, albeit inverted. Sunni Arabs form the majority of Syria’s population, but the governing elite belongs to the Alawite movement, which is a sect of Shia Islam. This generated much resentment among Sunnis, who felt politically emarginated. As a result, many of them joined the ranks of the rebels when the uprising started in 2011. Now, the government seems close to prevailing, but it will have to establish a more inclusive form of governance to ensure peace in the long term.

The Kurds: a stateless people

In the case of the Kurds, the problem is slightly different. Here, it is not about a religious divide, but rather an ethnic and linguistic one. The Kurds are mostly Sunni and speak their own separate language, and as a single people they count around 40 million individuals. They live in a region located at the crossroad of Syria, Turkey, Iran and Iraq. Yet, their demands for an independent state have systematically been frustrated, and today they remain a stateless nation with little prospects of getting their own independent country.

Yet, they play an important political role. The lands where they live include the oil-rich areas of northern Iraq. The Kurdistan’s Workers Party, or PKK, has been waging a decade-long insurgency against Turkey to obtain independency or at least autonomy for Kurdistan; but Ankara has always firmly opposed their demands without hesitating to use violence and there is no indication that things will change anytime soon. In Iraq, several tens of thousand Kurds were killed by Saddam’s regime during the ‘80s in what is known as Anfal genocide. Later on, Iraqi and Syrian Kurds became America’s most effective on-the-ground allies in the fight against the Islamic State. But this angered Turkey out of fear that Kurdish-controlled territory could turn into an independent state or a base for operations on Turkish soil. As such, Ankara dispatched its military several times to secure Kurdish areas along its borders. However, this has led to a clash with the US, in a moment when bilateral relations are already strained. Washington has been supporting the Kurds and needs to reward them somehow; but any concession implying autonomy would upset Ankara, who is also an important ally. At the same time, Turkey cannot defy the US because the political and possibly economic retaliation might be too harmful. This has resulted into a stalemate that remains unresolved.

As in the case of Sunni Arabs, solving the Kurdish question will be of central importance for ensuring a long-lasting peace in Iraq and Syria, but finding a common agreement is even more difficult in this case: it is not a mainly domestic matter, but a transnational one involving various stakeholders, which makes finding a solution an even more complex endeavour.

Conclusion: ensuring inclusivity

As we have seen, conflict resolution in Iraq and Syria demands to integrate both Sunni Arabs and Kurds in the social and political life of the two countries. This is essential for granting peace in the long term: if Sunnis are not adequately represented, the Islamic State or a similar organization may soon rise again; while the Kurds may take arms and start a large-scale insurgency that would be difficult to tackle. Unfortunately, actually doing so is not easy. Both groups have powerful enemies and are internally fragmented, and other players can exploit these divisions for their own interests. As a matter of fact, major powers like the US, Russia, Iran and Turkey all have their own interests in the area; which is another complicating factor. In addition, given the large number of tribes, parties, armed factions, ethnic groups that live in Iraq and Syria, finding an agreement that satisfies everyone is extremely difficult. But to prevent the emergence of new jihadist groups or a new violent phase of the Turkish-Kurdish conflict and to ensure the stabilization of Iraq and Syria, a solution must be found in this sense.

That’s all for today guys, thanks for watching another KJ Vid. What are your views on CPEC, is it a good thing or bad thing for Pakistan? Is it likely to succeed or fail? We would love to hear your views in the comments below.

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Is the China-Pakistan Economic Corridor (CPEC) Failing?

The China-Pakistan Economic Corridor, or CPEC, is a massive infrastructural project announced for the first  time in 2013. It is part of the broader “One Belt, One Road” initiative, launched in the same year and also called OBOR. However, the CPEC has recently received several setbacks that are raising doubts over its completion. So, what is the future of the project?

Why the CPEC?

The CPEC is one of the six “Economic Corridors” that China is creating in cooperation with other countries in the context of the OBOR initiative to improve transportation, intensify trade and boost the respective economies with the broader aim of extending China’s economic and political presence across the globe and ultimately reaching the vast European market. The CPEC should pass through Pakistan to connect China’s landlocked Xinjiang province with the Arabian Sea; and it pursues multiple objectives.

First, Xinjiang hosts significant natural resources but is economically poor and affected by discontent among the local Uighur population. With the CPEC and other region-focused projects, China wants to develop the area so to improve its living conditions, exploit its economic assets and make of it a crossroad for East-West trade.

Second, the PRC wants to open an alternative access to the ocean. Today, cargos sailing to and from Europe as well as oil tankers from the Middle East need to pass through Malacca and other straits, which are extremely vulnerable chokepoints that could easily be blocked by the US Navy in case of war. This would be catastrophic for the PRC, which consequently wants to have an access to the sea that avoids these exposed passages.

Third, the CPEC will foster relations with Pakistan. The two countries are already primary partners, and the project will create closer ties by increasing economic interdependency and by improving the living conditions of locals. A solid bilateral partnership is also mutually beneficial considering their relations with India. Especially for Pakistan, having China as an ally is extremely useful to keep India at bay; but the contrary it is also true, even though Beijing tries to downplay the existing problems with New Delhi.

The CPEC in practice

To reach these strategic objectives, China plans to build a series of infrastructures in Pakistan. By now, it has already invested at least 60 billion US dollars in the initiative; which includes motorways, railways, ports, electric power plants, pipelines and more. Several Special Economic Zones will also be established. All these projects will be connected one with the other to some degree, with the aim to create economic prosperity and link Xinjiang with Pakistan’s southern shores.

A particular relevance has been given to Gwadar, located in south-western Pakistan along the coast next to Iran. It will be the endpoint of the CPEC, and one of its main centres. In particular, Gwadar’s harbour is being expanded and upgraded: it will be transformed into a “smart port” surrounded by a Special Economic Zone that will host a large industrial area. It will be served by a new international airport, several facilities to improve the local living conditions, and it will be linked with the rest of the country and with China by road and train. The port became partially operational in November 2016, when a joint Sino-Pakistani truck convoy successfully travelled from north to south across Pakistan and reached Gwadar where the containers were shipped to overseas destinations. Yet, the remaining projects are still under construction.

As far as other components are concerned, nine of them are already operational. These include a coal-powered electricity generation plant in Karachi and a similar one in the Punjab region, several windfarms and the Quaid-e-Azam solar park, one of the largest in the world. Other thirteen facilities are being completed and are scheduled to become soon operational.

Yet, there have been some setbacks as well. Combined with Pakistan’s shaky financial condition, this has raised doubts over the general tenure of the CPEC project.

The problems of CPEC

The first aspect to consider is that Pakistan’s political and financial situation is not very promising for the future of the CPEC.

Former Prime Minister Nawaz Sharif was a supporter of the project, but in August 2018 he was substituted by Mr. Imran Khan, who on the contrary has criticized the initiative out of concerns over corruption and lack of transparency. He also complained that the billions of dollars that China is investing in the country bring little benefit to Pakistani workers, as the facilities are almost entirely build by Chinese nationals. This does not mean that he has rejected the CPEC, but he is certainly less enthusiast than his predecessor. In addition, Pakistan is crossing troubled waters in financial terms. According to The Express Tribune, a Pakistani newspaper, the country’s owes 40 billion to China. This has raised the alarm over a “debt trap”; meaning that China may exploit its financial leverage on Pakistan to exert political influence. In this regard, it is true that Pakistan’s net public debt is estimated at 67.6% of the GDP, that its external debt amounted to 82 billion dollars at the end of 2017, and that the federal government must face a chronic penury of foreign currency; which is a problem when having to repay external debts.

Therefore, there are doubts about Pakistan’s financial tenure in the immediate future. The country received various loans from the IMF in the past, but it has rejected the latest 8-billion-dollar bailout plan. Instead, Mr. Khan’s government preferred to demand financial aid to a few “friendly countries”, notably Saudi Arabia, the United Arab Emirates and China. This has already brought some fruits. An agreement has been reached between Islamabad and Abu Dhabi for a support package worth 6.2 billion dollars, with 3 billion scheduled to be sent shortly. Similarly, Saudi Arabia’s Prince bin Salman will soon sign a deal for building a 10-billion-dollar oil refinery in Gwadar, thus adding further significance to the port city. Cooperation in other sector will also be discussed.

In regard to China, the situation is more complex. Bilateral relations remain good, but there are growing concerns about the completion of the CPEC; at least in all of its parts. In the context of its troubled financial situation, Pakistan has recently announced its withdrawal from the Rahim Yar Khan power station, on the basis that electricity production capability is already sufficient and that consequently the project would not be economically viable. Yet, this may be a political excuse to hide the real problem, namely that there are not the funds for it. In addition, there are delays in the construction of the smart port in Gwadar. In this regard, Chinese companies have allegedly warned that Pakistan will need to pay to cover the additional costs caused by this postponement.

These events have created much speculation about the completion of the CPEC as a whole, especially in India, where major newspapers like the Times of India have reported such news. As a matter of fact, there is a sensible degree of strategic rivalry between Beijing and New Delhi, who perceives its northern neighbour and its close ties with Islamabad as a potential threat. On its part, China has responded to the recent events along a double line. State-sponsored media like the Global Times have soon published articles where they reassure about the solidity of the Sino-Pakistani partnership and about the determination of both sides to end the works on the CPEC. At the same time, they have accused other countries of being “jealous” and of having “aggressive intentions”. It is clear that the message was a response to the news about the recent setbacks of the CPEC project reported by Indian media. By explicitly addressing the recent reports by Indian news channels, the Global Times has also downplayed the entity of Pakistan’s China-owned debt and have suggested third parties not to meddle in the issue; all while affirming that India will also benefit from the CPEC. According to such Chinese articles, which cite the PRC’s embassy in Pakistan as a source for the figures, Islamabad does not owe 40 billion dollars to Beijing. Instead, they claim the debt only amounts to 6 just over billion, including interests.

Apart from this, the security aspect should also be mentioned. The CPEC crosses territories where terrorist and separatist groups are present. Some of them do not see China favourably, and this represents a non-negligible threat to the project. In fact, some attacks have already taken place against Chinese objectives. In August 2018, a suicide bombing injured some Chinese engineers. In November, a secessionist movement called Balochistan Liberation Army targeted the Chinese consulate in Karachi. By now, none of these events has seriously hampered the CPEC, but this may be the beginning of a trend that could hamper the project in the long term.

Conclusion: what about the future?

With such contradictory reports, it is difficult to assess the future of the CPEC and the real entity of the China-laid “debt trap” looming over Pakistan. What is sure is that Islamabad has indeed some financial problems, and that this may negatively impact the project. The recent cancellation of the Rahim Yar Khan power plant and the delays over Gwadar’s smart port suggest that there may already be complications in this sense. Yet, unless Pakistan enters in a serious financial crisis or faces a collapse of the state, it seems that the project will be competed at least in part. That said, the other certain thing is that the CPEC and China’s presence in Pakistan is not viewed positively by India, and in geopolitical terms this is probably the most relevant aspect.

The rise of Indonesia

Indonesia is the world’s largest Muslim country by population and is one of South-East Asia’s most dynamic economies.

Located at the juncture between the Pacific and Indian Oceans, it has the potential to become a leading regional power.

However, its location is also a source of considerable challenges that Indonesia will have to manage attentively in the coming years.

Indonesia’s Geography

The very name Indonesia is revealing: it comes from Greek and means “Indian Islands”. As a matter of fact, Indonesia is an archipelago located at the eastern edge of the Indian Ocean, and this is a key factor that has shaped its geopolitical thinking.

In terms of dimension and configuration, Indonesia is a vast but fragmented state. It counts over 18,000 islands; the most important of which are Sumatra, Java, the southern section of Borneo, Sulawesi and the western part of New Guinea.

These islands, covered by a thick rainforest rich in wildlife, have a volcanic origin. This means that Indonesia is vulnerable to seismic events and tsunamis; something that has a negative impact on its human security environment.

The country extends over almost 8 million square kilometres if we take into account its maritime space including the Exclusive Economic Zone, or EEZ. Combined with its archipelagic nature, this makes it difficult for the central state to exert its power over all the territory; also, because fragmentation is reflected in demographic terms: the population exceeds 260 million citizens divided in more than 300 ethnic groups; and this has important implications on the country’s geopolitics.

Moving on, Indonesia’s position has a deep impact on its foreign affairs. Located at the crossroad between the Indian and Pacific Oceans, Indonesia plays a pivotal role for international maritime trade.

Sumatra is the southern boundary of the Malacca Strait, one of the world’s busiest waterways and a strategic chokepoint. But Indonesia also controls other important straits; notably Sunda, Lombok and Makassar. These are all essential for trade between Europe and Asia, but also for the latter’s energy security.

Most of the oil it consumes transits through these narrow passages; which explains their geostrategic relevance. Indonesia hugely benefits from its role as a gateway between the two oceans, but this also brings considerable strategic problems because foreign powers have always been trying to control the archipelago.

This continues today: China, the US, Japan and India all have major interests at stake in the Indonesian Straits, and are trying to expand their influence on the country. Finally, the archipelago also hosts important natural resources like oil, gas, minerals, timber and fish. These commodities are a source of wealth for Indonesia, but also another driver for the presence of external powers.

Indonesia’s Geopolitical Thinking

Indonesia’s nature as an archipelago and its “crossroad location”, a concept known as posisi silang, have shaped its geopolitical thinking since it gained independence from the Netherlands in 1949. Indonesia had to assert its authority over its surrounding seas to ensure its prosperity and security. A first step in this sense was the 1957 Djuanda Declaration, by which Indonesia claimed its sovereignty over all the maritime areas around the archipelago; especially those located between its main islands like the Java and Flores seas.

This stance was later recognized internationally by the UN Convention on the Law of the Sea in 1982. The Djuanda Declaration was the first step towards a more comprehensive doctrine called “Maritime Archipelagic Outlook”, or Wawasan Nusantara Bahari. First formulated in 1966, this Doctrine still stands today. It considers that Indonesia’s location leaves it vulnerable to foreign meddling and that its fragmented geography endangers the unity of the state; but it is also the basis for justifying Indonesia’s leading regional role.

In geostrategic terms, the doctrine considers Java and its sea as Indonesia’s core, which must be protected from external threats. Applying a mandala logic, it identifies three concentric layers that are the base of Indonesia’s foreign and defence policy.

The innermost circle is Indonesia itself, the middle one extends to South-East Asia and Australia, while the external zone includes the rest of the world. The sea is equally important from a geoeconomic point of view.

Indonesia is a trade crossroad, it has an important fishing industry and its waters host important hydrocarbon deposits, estimated to hold 3.7 billion barrels of oil and 2,900 billion cubic feet of gas. As such, securing the sea has a primary importance for the country’s economy.

Finally, in geopolitical terms, it considers the sea as the space connecting the various islands that form its geographically and culturally fragmented territory. This configuration makes separatism easier, and therefore is seen as a threat to the unity of the state; even though it is also argued that the separation of the different national groups reduces the risk of inter-ethnic conflict. Moreover, the sea is the mean by which foreign powers have reached the archipelago in the past.

Consequently, Indonesia believes that controlling the sea is a precondition to preserve the unity and the independence of the state. In this sense, it seeks to achieve resilience both at home and in neighbouring states, assuming that Indonesia is safe only if the archipelago and the surrounding countries are stable.

Yet, Indonesia must face several challenges. Apart from numerous secessionist movements, some of which have been successful, it must also cope with illegal fishing, smuggling, unauthorized immigration and piracy. The latter was once a major problem, but it has been greatly reduced thanks to multilateral efforts and by improving the living conditions of coastal areas.

Terrorism is also a matter of concern, and several attacks have already taken place.

In economic terms, even though Indonesia’s national strategy emphasizes the cohesion of the state and aims to limit foreign meddling, most of its hydrocarbons and of its resources in general are exploited by foreign corporations. In addition, there is a great disparity between urban areas like Jakarta and the rest of the country, especially outside Java.

Indonesia’s power

Indonesia can be considered a middle power, but it is definitely a rising one. Its GDP is the largest in South-East Asia, and in 2017 it amounted to 3.25 trillion measured in US dollars of the same year in terms of Purchasing Power Parity. This ranked the country as the world’s 7th largest economy, and it is projected to become the 4th by 2050. Indonesia’s steady 5% growth rate is helped by low inflation, a budget deficit under control and a public debt representing just 29% of the GDP. Moreover, saving is quite high at around 32% and investments are flowing in, thus paving the way to a continued growth. The trade balance is positive, driven by the export of commodities like oil, gas, coal, metals and palm oil; but also many other low added-value products such as clothing and electric components. Always in terms of PPP, its per capita GDP reached 12,700 dollars in 2017: a still low figure, but a remarkable progress from past levels. Unemployment is only 5.5%; yet, agriculture still retains 32% of the workforce and around 10% of Indonesians live below the poverty line, with 21% remaining at risk. The country also has real problems in terms of corruption and inequality, and must face notable environmental challenges: rising sea levels, deforestation, and extreme weather are already causing notable losses to its economy and are menacing its human security.

Indonesia’s armed forces are also evolving. It spends about 0.8% of its GDP on defence; and in spite of the emphasis given to the sea, the Army has a greater importance than the Navy. Land forces, notably marines and special forces units trained for asymmetric warfare, are indeed important for such a fragmented country; but the Navy remains underdeveloped. It mainly relies on corvettes, and having only 8 frigates and less than 5 diesel-electric submarines seems insufficient, even though it has a good park of minesweepers and there are talks to buy more subs. Similarly, the Air Force only counts around 40 fighters and some attack aircraft. These two branches have quite advanced equipment and are better than those of most ASEAN countries, but Indonesia will need to expand them to affirm itself as a regional power and to cope with challenges like China’s rise.

Conclusion: Indonesia’s foreign policy today

The maritime dimension, control over the straits, internal stability, autonomy from foreign influences and an active regional role have been the cornerstones of Indonesia’s foreign policy for decades. In 1955, Indonesia held a conference in Bandung that marked the birth of the non-aligned movement of states that did not want to side with neither the US nor the USSR.

Today, it still keeps this stance. Regionally, it supports integration through the Association of South-East Asian Nations, or ASEAN; and it aspires to become its leader. In its relations with external powers, notably the US and China, it attempts maximizing its autonomy by keeping ties with all of them. Indonesia maintains good political and trade relations with both, but it is worth mentioning that it hosts a significant Chinese diaspora which represents around 1% of the population and runs many successful business activities. At the same time, it also cooperates with other powers. Japan and India are important economic partners and security cooperation is growing, especially with the latter. Indonesia also trades with European countries; which are also important arms suppliers.

It is expected that Indonesia’s foreign policy will continue along this line in the next future: trying to maintain its partnership with multiple countries so to maximize its benefit and freedom of action. But in the evolving international scenery of the Indo-Pacific, where the US maintain a strong presence all while China and India are rising, it will be hard for Indonesia not to take sides.

Will Putin become the Arctic Boss?

Geostrategy of the Arctic’s Chokepoints

 As the Polar ice cap melts, new shipping lanes are opening across the Arctic. Navigation in the area is still in its initial stages, but in the long term it has the potential to transform international maritime trade and to profoundly affect the geopolitical scene. In particular, if this happens, new chokepoints will take a central strategic importance: the Bering Strait and the North Atlantic passages.

The four Arctic routes

The idea of reaching the Pacific Ocean by navigating through the Arctic is not new. centuries ago, explorers risked their lives to find the fabled Northwest Passage. It sails north of Canada and then crosses the Bering Strait to arrive in the Pacific, and it is the first of the possible Arctic Routes. The second one is the Northern Sea Route, or NSR, which is the most debated today. Starting from the Pacific Ocean, it passes through Bering and proceeds along Russia’s northern coasts towards Europe. Then, there are two other options: the least important is the Arctic Bridge, which connects Northern Europe with Canada; the other is the Transpolar Sea Route, that crosses the centre of the Arctic Ocean instead of passing along the coasts like the NSR does. While this is theoretically possible, in practice this area is still covered in ice and therefore it will become navigable only if the Polar cap disappears almost completely.

For centuries, the Arctic ice cap made it impossible to sail across these frozen waters during most of the year, but things are different today. Global warming is dissolving the Arctic’s ice, and this is opening these passages to navigation for increasingly long periods. As a result, the NSR and the Northwest Passage are becoming commercially viable, something this could radically change the world’s maritime trade patterns. The reason is that such lanes are way shorter, and therefore time- and money-saving, than the traditional ones passing through the Pacific and Indian Oceans. This is why more and more ships are already using these lanes and the NSR in particular, even though the trade volume remains only a tiny fraction of the one flowing along the ordinary seaways. But apart from merely economic considerations, Arctic lanes present other geostrategic advantages for the various powers that are interested in their development.

Why the Arctic?

The first country that wants to develop the NSR and Arctic trade in general is Russia. As a matter of fact, Russia is the region’s prominent power: first, because most of the coast around the Arctic belongs to it, and then because of its unrivalled fleet of ice-breakers and of the military forces it has deployed there. Moscow considers the NSR as an excellent opportunity to develop its northernmost territories and ports by providing logistic support to the ships sailing across these waters. Moreover, the Arctic also hosts large oil and gas reserves, which would further strengthen Russia’s stance as a world-class energy supplier. Of course, such projects are technically challenging due to the rigid climate and they require huge investments to develop the necessary infrastructure, but Russia is already working on it; and most importantly it can cooperate with other powers that want to open such routes and access the Arctic’s resources.

As a matter of fact, many Asian countries are also interested in the Arctic. Among them, the most important is certainly China, who is already operating in the region. There are three reasons behind its interest. First, gaining access alternative hydrocarbon sources and reduce its reliance on the Middle East. Second, opening a faster and cheaper shipping lane to Europe and to America’s East coast. The third reason is geostrategic, and it is closely related to the others. Beijing is engaged in a great power competition with Washington, and the traditional southern routes it currently uses for trade with Europe could easily be cut by the US Navy in case of war; something that would compromise its economy and its energy security. Chokepoints like the straits of Malacca, Hormuz, Bab el-Mandeb and Suez are particularly vulnerable.

Similar considerations are at the base of Japan’s and South Korea’s presence in the Arctic. However, in their case the security dimension is different: they fear that China, or a Sino-American war, may disrupt trade along the traditional routes; and because of this they want to open the alternative seaway to Europe.

But will the NSR actually solve their strategic problem?

The new chokepoints: Bering and the North Atlantic

The traditional shipping lanes are effectively exposed to threats. The US can easily block them, but China and other powers also have some capacity in this regard. In addition, piracy can also be a problem. So, China and other Asian countries consider the Arctic routes as a safer alternative. However, they also have their narrow passages, which will assume a great strategic importance if Arctic trade develops.

The first and most important one is the Bering Strait, and 82-kilometres wide channel that divides Siberia and Alaska. It is the only connection between the Pacific and the Arctic, making of it the prominent strategic passage for Polar trade. In other words, who controls Bering also controls the shipping flow across the Arctic. Now, this power can be either Russia or the US. But for them, the Strait is not only important due to trade: it is also a matter of national security. For Russia, it is the only point where it can directly attack the US territory with ease short of using ballistic missiles. Due to the presence of a developed oil industry, hitting Alaska would allow Russia to damage America’s economy and to create a useful diversion. This eventuality, in turn, means that the area takes a significant military importance for Washington as well. Additionally, if Arctic trade develops, blocking the Bering Strait would allow the US to damage both China and Russia, its two main competitors. It is therefore not surprising that both America and Russia have military bases and perform manoeuvers around Bering, whose militarization is expected to continue as long as more and more ships travel through the Arctic. It is likely that both sides will deploy Anti-Access / Area Denial assets along its coasts as a mean to ensure their control over it by impeding the enemy forces to operate.

As far as China is concerned, Bering will also take a major strategic importance. But while its naval build-up will allow it to deploy its Navy in the area, China will have to rely on Russia to ensure that the Strait remains open. This implies that its access to the Arctic could be seriously hampered in case its relations with Moscow deteriorated, which is a possibility that should not be excluded in the long term due to a series of possible contrasts that may emerge. Moreover, from Beijing’s perspective Bering is not even the first chokepoint to be crossed to reach the Arctic: before, its ships need to pass either through the Korea Strait or the La Pérouse Strait. The former divides Korea and Japan, while the latter separates the Japanese island of Hokkaidō from Russia’s Sakhalin. Both are extremely vulnerable, since the US or even Japan may easily block them and deny China its access to the Arctic.

The second susceptible area is located at the other end of the NSR. It is not a single strait; rather, it is a group of maritime zones that connect the Arctic with the Atlantic. Each of them is sensibly wider than Bering, but they are narrow enough to allow a great military power like the US to mount a blockade capable of disrupting the regularity of trade flows; especially considering the performance of modern missiles and aircraft. Among these areas, the most famous and relevant is certainly the GIUK Gap, which takes its name from the initials of the three countries forming it; namely Greenland, Iceland, and the UK. Once the maritime frontline of the Cold War, it lost its importance after the fall of the Soviet Union. But if the NSR becomes a viable lane, its strategic importance will emerge once again; also because the Russian Navy is becoming active in the Atlantic once again and because Chinese ships may follow. That said, there are two other passages in the Atlantic: first, the North Sea; second, the Davis Strait, which divides Canada and Greenland and is one of the extremities of the Northwest Passage. The US and NATO can block both of them quite easily.

Finally, it should be noted that such areas work in both senses: cargos travelling from the Atlantic to the Pacific via the Arctic also need to cross the aforementioned passages. This means that Russia, and to a lesser degree China, may block them to damage Western economies; even though this would also harm themselves. Thanks to its powerful military and to its favorable geographic position, Russia is particularly well placed to act as the “Arctic seaways gatekeeper” and exploit this to exert pressure on the West or, if necessary, on China.

What future for Arctic trade?

By now, the importance of the Arctic’s chokepoints remains limited, because the trade volume across the region is still very low. But as the Polar ice cap shrinks and the Northern shipping lanes are developed, these passages will acquire a greater relevance in both economic and military terms.

Yet, the Arctic seaways will not resolve the chokepoint problem for China and other Asian powers: they will simply move it to the North. Nevertheless, such countries will probably develop such routes, because their economic sense remains as long as peace reigns: they are faster and cheaper than traditional ones. Moreover, energy deposits should not be forgotten as well. It will take decades, but the Arctic routes can reshape the world’s maritime trade; and the northern passages will become a great power battleground in case war breaks out.

Geopolitics of Brazil

Brazil is South America’s emerging power. It is the largest and most populous country in the continent; and it benefits from a favourable geographic position, important natural resources and a growing economy. As such, it is taking a more active international role both in the region and beyond. Yet, it must also face notable challenges; notably corruption, criminality, inequality and others; all of which may undermine its rise as a great power.

Geography and Brazil’s rise

Like any other country, Brazil’s geopolitics can be examined as a combination of three factors: dimension, configuration and position.

Brazil covers a total area of about 8,515,000 square kilometres, making of it the 5th country in the world in terms of size. This puts Brazil in a favourable position to dominate the continent, as it can access any region with relative ease. Similarly, its 7,500 kilometres-long coastline on the Atlantic Ocean enables Brazil to easily project its power abroad and to engage in lucrative maritime trade.

In terms of configuration, Brazil’s territory can roughly be divided in two parts. The north-west is centred on the Amazon river basin and its vast rainforest, the largest in the world and a real treasure in terms of biodiversity. The south-east is made up of ridges and mountain ranges crossed by the Parana river. As a matter of facts, watercourses are an important feature in Brazil’s geography: the country has a complex hydrographic system that brings significant benefits to electric power generation and agriculture, which is also favoured by Brazil’s warm climate. Most of Brazil’s 208 million citizens, the majority of which are young people, live in the cities along the coast. This has resulted into vast metropolis where economic prosperity meets overcrowded slums.

But position is Brazil’s most important characteristic. It borders ten nations, meaning all the countries in South America except Ecuador and Chile. None of its neighbours represents a real threat, and not only because relations are generally good: Brazil is simply more powerful than any of them. Even Argentina, the second most influent country in the continent, cannot seriously challenge Brazil’s supremacy due to a worse geopolitical and economic situation. Other states are not a real matter of concern; yet, they are important for Brazil’s own geopolitical ambitions. Brazil wants to extend its influence westwards to connect the Atlantic and the Pacific Oceans so to unlock its innermost territories, become the centre of coast-to-coast trade and increase its regional influence. To reach this objective, Brazil needs to keep the URAPABOL area in its sphere of influence. This zone takes its name after the three states composing it: Uruguay, Paraguay and Bolivia. They are seen as South America’s geopolitical pivot, meaning that the power who controls them can extend its influence over all the continent and obtain a dominant position. Moreover, the URAPABOL states were also seen as useful buffer zone against foreign threats and Argentina in particular; even though today the likelihood of a war is really remote. For these reasons, Brazil is attentive to maintain a solid political, economic and demographic presence in these three countries. But Brazil’s is also located along the Atlantic’s coasts, meaning that it can easily reach the large American and European markets to the North; as well as Africa with its natural resources and many fast-growing economies. So, Brazil also wants to become a naval power to boost its economy and develop its Navy to project its power abroad.

Brazil’s economic & military outlook

Apart from geography, Brazil also has natural resources, a considerable economic potential and important military means.

Brazil is certainly South America’s leading economy, but its outlook is made of mixed figures. This year, its GDP is projected to reach 1.9 thousand billion dollars, which goes to 3.5 thousand in terms of Purchasing Power Parity. The expected growth rate is of 2.4% in current prices. Brazil was at the 9th place on the list of the world’s largest economies in 2018, and it is expected to reach the 5th position by 2050. Its per capita GDP will stand around 16.7 thousand dollars in 2019, a relatively low figure to be combined with an unequal distribution of wealth. After years of high inflation, the price growth seems to have stabilized at around 3.5%. The debt of the central government is on the rise, amounting to almost 79% of the GDP in 2017, Along with a slight budget deficit of around 1%, this trend can become problematic in the long term. Unemployment affects 10.7% of the population today, and 4% of Brazilians lived below the poverty line in 2016. The trade balance has been in constant surplus for years, sustained by agriculture and manufacturing exports. As a matter of fact, Brazil is a true agronomic giant and its industry is also developing in many sectors. In addition, it also hosts significant hydrocarbon and mineral reserves, and is a leading producer of biogas. However, this has negative environmental consequences: huge swathes of the Amazon rainforest have been cut to grow the crops required for producing biogas; and also for other reasons like timber production. Brazil has nuclear reactors for energy generation and infrastructures are being improved, but much work remains to be done.

This overview shows that Brazil is indeed an emerging country, but like other economies in analogous conditions it has still considerable challenges to deal with. Corruption, poverty and inequality continue affecting its economy. This has important repercussions on the country’s political life, since similar matters are a cause of social unrest and high crime rates. In fact, Jair Bolsonaro has been elected President largely out of promises of tackling corruption, reforming the economy and crushing criminality.

Brazil is the main power in South America also in military terms. It spends regularly more than 1.32% of its GDP on defence, and it possesses large and well-equipped armed forces who remain politically influential. The Army includes, among others, specialized units for jungle warfare and a vast park of vehicles. It also maintains the Strategic Rapid Action Force, ready to be deployed anywhere in the country at a short notice. In recent years, due to better relations with Argentina and in accordance to its strategy to extend its power westwards, it has relocated many units in the Amazon area. The Air Force operates fighters, cargos and airborne warning & control planes. But the Navy is the most notable component of the Brazilian military, as it is a powerful mean of power projection. Today, it includes diesel-electric submarines, landing ships and a helicopter carrier plus naval aviation and marines; and it also plans to deploy a nuclear-powered attack submarine by 2025. Finally, Brazil also possesses a considerable defence industry and carries on its own space program.

Brazil’s foreign relations

Brazil’s foreign policy is largely based on multilateralism. It maintains pretty good relations with its neighbours, and it is a member of the main regional bodies like the Organization of American States, the Union of South American Nations and the Southern Common Market; where it plays an important role in promoting integration. It provides economic aid to developing countries, notably African ones; but this is also motivated by economic interests, like accessing resources and opening new markets for Brazilian firms. It also takes part to UN missions and promotes the enlargement of the UN Security Council. Moreover, it is a member of the informal BRICS group along with Russia, India, China and South Africa; and it keeps cooperating with all of them all while maintaining good ties with the US and with European countries.

Now that Bolsonaro is President, US-Brazil relations will receive a boost: Bolsonaro is openly pro-American and share many similar views with Trump: they oppose immigration, they are close to Christian and conservative groups, they promise to crush criminality and fight terrorism, they are favourable to death penalty, they support the rights of gun owners, their economic policy focuses on privatization and deregulation at home while protecting their industry from foreign competition by introducing tariffs, they criticize authoritarian regimes and are very friendly towards Israel and other pro-US states like Japan or South Korea, and they are hostile to foreign (and especially Chinese) economic penetration in their countries. Since Brazil is the main power in South America and the only one capable of countering US supremacy to some degree, Bolsonaro’s election is a gift for America: it virtually ensures that Brazil will remain friendly and that it will oppose rival powers like China and Russia. Both of them are indeed expanding their presence in South America to access resources and to subtract the area from American influence, but now their efforts risk being thwarted. Nevertheless, China remains a central economic partner for Brazil, and along with Russia it will continue to extend its presence in South America. Brazil, on its part, will maintain its multilateral approach to diversify its partnerships, maximize its benefits and increase its global influence.

Conclusion

Brazil is South America’s main power and its influence in international affairs will certainly increase in the future. Yet, its economic growth is not as spectacular as China’s or India’s; and it has to face many challenges like poverty and inequality, environmental degradation, corruption and social unrest. All such factors will limit its geopolitical role. But Brazil, is that contrarily to other emerging countries, it is not involved in rivalries with other states and it is not challenging the existing international order. Instead, it focuses on multilateralism and mutually-beneficial cooperation. This is probably the most remarkable aspect of Brazil’s rise: at least by now, it looks that it will be peaceful and not destabilizing.

5 Geopolitical Trends to watch in 2019

In today’s globalised world, many geopolitical events take place every year, and they have a long-lasting effects in time. So, considering what happened on the international scene in the year that has just ended, what are the top five global trends to watch in 2019?

1 – “America first”, America alone?

President Trump’s “America First” policy was put into practice various times in 2018. He introduced new tariffs to protect the US economy; he abandoned those agreements that he deemed contrary to America’s national interest; he criticised allies for free-riding on the US in security issues.

This is a trend that will continue as long as Trump remains in the White House, and that will have an important impact on the global order. For decades, the international system was centred on the US and its commitment to sustain its rules and provide security; albeit with limitations and largely for its self-advantage. But now, Washington prefers pursuing a narrow definition of its own national interest. This has already raised concerns with traditional partners; most notably with the European members of NATO to whom he demanded to spend more on defence. This divergence between the two sides of the Atlantic has cast doubts over the tenure of the Alliance. All this happens in a moment of renewed tensions with Russia, who in turn is taking benefit from the situation because in case of a confrontation, it will have to face a more divided and therefore weaker NATO. This uncertainty over the future of the Alliance damages European but also American interests: alienating its traditional allies risks to isolate the US and to reduce its international influence.

All this happens in a delicate moment for the US economy. While its GDP grew of almost 3% in 2018, its monetary policy is object of political debate as Trump accuses the Federal Reserve of being the “only problem” of America’s economy. If the Fed keeps on raising the interest rates to contain inflation, the US growth will slow down. This will also combine with the effects of tariffs plus the considerable public and private debt. Moreover, American stock markets have lost much value in the past year: the price of shares according to the Dow Jones index dropped of around 9.5% in 2018. And if the US economy slows, the rest of the world will follow.

2 – China’s economic slowdown

The world’s second-largest economy is also facing troubles. While it is predicted to grow of about 6.6% this year, which is still extraordinary given its size, the rate is no longer a double-digit figure as in the past. The Chinese economy is also slowing down, and this will inevitable have repercussions on the global scale. As economic prosperity is considered fundamental for social stability and for the rule of the Communist Party, the government is taking measures to maintain a steady growth. This explains various initiatives like “Made in China 2025” aimed at upgrading its industry, the huge investments in high-tech, or the far-reaching “One Belt, One Road” project.

Apart from purely economic issues, this will also have geopolitical consequences. Beijing has been increasing its worldwide presence in the past decade, notably through economic means; but if its growth slows down, its ability to sustain its greater plans in the Asia-Pacific and beyond will suffer. In this sense, the very plans it is implementing to boost its economy may result counterproductive: they are certainly ambitious projects with a great potential, but they are also very challenging. The enormous investments they require will result in a waste of resources if they do not translate into economic growth, and this will hamper China’s economy. As such, observing Beijing’s economic policies and its performance through 2019 will be an indicator of its future global role.

3 – The European (dis)Union

The EU will cross troubled waters in 2019. Anti-EU movements have risen everywhere, its economic recovery remains sluggish and each of its four most important members is not in the position to lead a reform of the common institutions. The United Kingdom will finally leave, but the exact terms are still undefined and a “No Deal” Brexit seems probable. This is the worst scenario, because it means uncertainty for economic and political actors alike. Italy is now ruled by a Eurosceptic coalition that has already clashed with the EU over immigration and economic policy. Germany continues opposing more economic integration in the form of a common fiscal policy, and Angela Merkel’s leadership has been weakened. In France, President Macron is calling for a reform of the EU and promotes further integration, but his popularity is at a record low and the country has first to deal with domestic issues.

Other members are also unable or unwilling to move the integration project ahead. The emerging countries of Central-Eastern Europe, notably Poland and Hungary, want to preserve their sovereignty and therefore oppose devolving more powers to the EU. Moreover, the Union has even initiated the infraction procedure for violation of core values against these two countries, thus leading to an open diatribe. Spain is focused on problems at home; while Greece is heading towards elections in 2019, and any change in its government could make the markets nervous and result in a renewed standoff with the EU.

As such, no state is in the condition to take the lead and move forward the much-needed reform of the Union. However, what is more worrisome is that the divergences do not simply concern the policies to implement, but the basic values of the EU and its very legitimacy are questioned and openly criticised. Considering also its complex institutional procedures, it is unlikely that the stalemate will be solved in 2019. On the contrary, it is likely that the EU will be even more divided at the end of the year.

4 – Sanctions on Iranian oil

Following President Trump’s decision to scrap the nuclear deal, a boycott on Iranian oil will be reintroduced in 2019. Given that it is largely dependent on oil revenues, the Islamic Republic will certainly suffer. The effects will not be only economic, but they will extend to the social sphere as well. Signs of discontent already appeared in late 2017 – early 2018, when mass protests erupted all over the country. As pressure increases on Iran’s economy, similar episodes may repeat in 2019 with destabilising effects on the region. Moreover, this means that Iran will have much less resources to sustain its goals abroad; notably in Iraq and Syria. As a result, it will have to reduce its international commitment and focus on domestic issues.

But this will also affect other countries who used to buy oil from Iran. China and India were its main customers, followed by Japan, South Korea and European countries. As sanctions come back into effect in 2019, such states will comply and change their import sources to avoid angering the US. This will impact the global oil market by putting an upward pressure on its price; even though many effects such as a less than expected demand may nullify this effect at least in part. Finally, while the intended effect of the boycott is to put pressure on the country and force it to negotiate another deal deemed more compatible with America’s interest, it is possible that the result will be the opposite. If Iran feels threatened enough by the US, it may decide to resume its nuclear programme after concluding that is the only way to ensure its national security. This is not likely, because Teheran would be even more isolated, but if this happens the whole region will be further destabilized.

5 – Tension with Russia

Relations between Russia and the US have not improved through 2018. Many important issues continue dividing them, like the war in Syria or Ukraine’s issue. The situation remains volatile in both cases, and the recent Kerch Strait incident has revived tensions between Moscow and Kiev. Additionally, there is another country to watch: Georgia. The new President Salome Zurabishvili has pro-EU Western views and openly calls for Georgia to join the EU and NATO. Russia will hardly accept such a scenario and may launch a military operation to prevent it, thus sparking another crisis in the post-Soviet space.

Moreover, a pillar of the longstanding strategic equilibrium between Russia and NATO has fallen: the Intermediate-Range Nuclear Forces Treaty, or INF. This agreement, dating back to the Cold War, prohibited the deployment of intermediate-range ballistic missiles in Europe, as they risked compromising the nuclear balance in the region: due to their limited range, such weapons enabled the Soviets to strike NATO in Europe without threatening the US territory, thus casting doubts among Europeans that in such an eventuality the Americans would have exposed themselves to retaliation by launching nuclear weapons on the USSR just to protect Europe.

Now that the Treaty is gone, a new arms race is likely to take place, and in fact this is already happening. Russia has tested several nuclear-capable ballistic missiles in 2018, and is rapidly working to deploy new hypersonic missiles capable of travelling at five times the speed of sound or more. The US is doing the same, and both powers are developing new weapon systems and doctrines to prevail on the other. But to pursue these objectives, Russia needs economic resources. Since oil is one of its main sources of revenues, Moscow will seek to coordinate with other producers to keep its price high enough to sustain its economy. This will largely determine the evolution of Russia’s role in 2019, but one thing is sure: Moscow will do its best to pursue its interests abroad, and as the Russian-American rivalry continues, the international scene will remain tense.

The role of ports in the global economy

Ports are maritime commercial facilities usually located on a coast or shore that contains one or more harbours where ships can dock and transfer cargo as well as people. Ports constitute a major component of the global transportation sector and are linked to the expanding world economy. In other words, ports are a means of integration into the global economic system.

As the WTO-agreements since the 1980s lifted several pre-existing international trade barriers, manufacturers all over the world vertically disintegrated their production systems into geographically dispersed and flexibly organised supply chain systems . The international trade regime began allowing manufacturers to relocate their production and assembly plants to more cost-efficient locations in developing economies.

Ports have been at the hearts of commerce for centuries and they only kept gaining more significance . Before the invention of aeroplanes, sea had been the main mode of transport for settlers, travellers and migrants for centuries. They played important roles in the industrial revolutions and act as a catalyst to industrialisation. While early ports were mostly used as harbours, today they are more often referred to multi-modal distribution hubs having transport links using sea, river, canal, road, rail and air routes.

Is Sri Lanka, China’s New Colony?

China & Sri Lanka: an enduring alliance?

China’s rise as a global economic power – and potentially a global political power too – is attracting more and more attention. From the so-called “Belt and Road Initiative” (BRI) to China’s increasingly aggressive tactics in the South China Sea, the activities of the People’s Republic are one of the biggest stories in international relations.

Whilst in the West, and particularly in Britain and America, the debate is often centred on whether the inexorable side of China represents a threat or an opportunity, the countries living in close proximity to China are scrambling to come to terms with the reality of Chinese power.

Some countries, notably Vietnam, Indonesia and the Philippines, find themselves in territorial disputes with China as a result of the People’s Republic aggressive boundary setting moves in the south China Sea.

In addition, there is the more long-standing political dispute between China and Taiwan centred on the former’s claims of sovereignty over the latter. What all these myriad territorial and political disputes have in common however is the involvement of the United States.

In nearly all cases the US intervenes on behalf of states who feel aggrieved by China’s actions in the South China Sea and beyond. Whilst Washington justifies its own aggressive actions – including challenging Chinese sovereignty over the Spratly islands – as part of its drive to ensure “freedom of navigation” in disputed maritime areas, the reality is that the US is above all concerned with the prospect of China displacing America as the dominant regional power.

But there is another side to the rise of China, both in its immediate environment, regionally and more broadly in a global setting. This is a story of successful Chinese outreach to multiple states, characterised by massive investments in infrastructure and resulting political influence.

One of these states is Sri Lanka, a country strategically perched next to India in the Indian Ocean. Sri Lanka has come a long way since gaining independence from Britain in February 1948. In the 70 years since independence Sri Lanka has established relatively stable political institutions, in addition to successfully prosecuting a quarter century long counter-insurgency campaign against Tamil separatists in the north and east.

Sri Lanka is important to China for many reasons, much of it revolving around the island nation’s strategic position in the Indian Ocean and its proximity to China’s great rival India. In addition, Sri Lanka presents China with a wide range of investment opportunities which in the long-term can help entrench Chinese influence in the country.

China’s strategic motive

In keeping with its emerging great power status China’s approach to foreign policy is shaped primarily by strategic considerations. To that end, the Chinese leadership has identified three core strategic rivals and potential enemies, namely India, Japan and the United States. Historic Chinese relations with all three powers has been marked by high tension and conflict, particularly with India and Japan.

Therefore, the thrust of Chinese foreign policy is to blunt the influence and reach of these three powers in China’s immediate neighbourhood, or areas where China has traditionally identified as its backyard.

For example, China’s support for North Korea is designed to deter the United States from acknowledging Taiwanese independence. More broadly, China’s support for North Korea is also designed to send a strong message to Japan, whose re-militarisation unsettles China’s historical consciousness.

To its immediate West China is confronted by the Indian giant, a country whose population is only marginally smaller than China’s. India not only challenges China economically, but also politically, on account of the fact that India is considered a “democracy” (albeit with an Asian twist) whereas China is still deeply authoritarian and officially at least still wedded to a communist ideology.

Furthermore, at a strategic level, India is a major rival to China, as similar to the People’s Republic India is incrementally augmenting its military capability with a view to projecting power well beyond its immediate sphere of influence. The development of a so-called blue-water navy (basically a maritime force with global reach and capability) is demonstrative of India’s ultimate ambitions.

In view of India’s strategic ambitions, China has devised a variety of economic, political, diplomatic and military tools to contain its big neighbour to the West. In terms of direct political intervention, and in order to offset Indian meddling in Chinese affairs (as demonstrated by India’s hosting of the Dalai Lama), China is suspected of supporting left-wing militant forces in south-eastern India. These forces have come to be known as the Naxalite-Maoist insurgency and are based mostly in Andhra Pradesh state.

In the diplomatic and economic spheres, China is engaged in extensive outreach to India’s neighbouring states, in particular Pakistan, which is viewed as a counter to India in the subcontinent. China has massive investments in Pakistan, notably in the deep-sea port of Gwadar. More broadly, China is stepping up its longstanding military cooperation with Pakistan, particularly in the ballistic and cruise missiles sphere.

China’s outreach to Sri Lanka is ultimately explainable in the context of China’s strategic posture and associated calculus. Although Sri Lanka is not a large and powerful state like Pakistan – and its relations with India is nowhere near as fraught as Indo-Pakistani relations – nevertheless by establishing influence on the island nation China gains more leverage in its emerging great power rivalry with India.

What does Sri Lanka offer to India?

As stated earlier, Sri Lanka’s close proximity to India inevitably makes it attractive to Chinese strategists. And of course, with geographic proximity comes a high degree of cultural proximity. Indeed, there are strong cultural bonds between the two nations, centred on the Tamil community in northern and eastern Sri Lanka, who are the ethnic kin of the large Tamil community in India’s deep south.

The fact that the Tamils of Sri Lanka were embroiled in a decades long conflict with the central government renders this dimension even more important to the Chinese. More on this later. But suffice to say it is in China’s strategic interest for Sri Lanka to have a strong and stable central government.

A unified and strong Sri Lanka is much more likely to oppose core Indian strategic positions, notably the expansion of Indian influence in the Indian Ocean, and to that end a strong and stable Sri Lanka satisfies China’s strategic priorities.

China cynically exploits tensions in Indo-Sri Lankan relations, notably the majority Sinhalese’s guarded attitude toward India, and Sri Lanka’s natural inclination towards India’s rivals. Note that Sri Lanka has strong ties to Pakistan, India’s nemesis on the subcontinent. Moreover, China seeks to contain Western influence on Sri Lanka, and where possible to drive a wedge between Colombo and Western capitals.

For example, China shields Sri Lanka from Western criticism on human rights issues, focussed on Colombo’s reported mistreatment of the Tamil minority in the north and east of the island. By containing and deterring Western influence in Sri Lanka, China is effectively constructing an outer defensive ring around its core territorial, political and economic interests much further away in the South China Sea area.

From this perspective, China’s outreach to Sri Lanka is an important example of China’s emerging global ambitions and a thinly-veiled desire to project power and influence well beyond its immediate neighbourhood.

The economic dimension   

Interestingly, the issue of human rights is bound up with China’s entry into Sri Lanka’s economy. This entry began in earnest in the immediate aftermath of the successful conclusion of the counter-insurgency campaign against Tamil Tiger rebels in May 2009. At the time Colombo was chafing under Western criticism of its alleged human rights abuses, notably the reported killing of thousands of Tamil civilians in the northern Jaffna Peninsula in the closing stages of the war.

China, similar to Russia, has a policy of non-intervention in the domestic politics of the countries it tries to cultivate. To that end, the Chinese not only did not care about the possible massacre of Tamil civilians, but in fact they undertook active measures – by way of diplomacy and media propaganda – to protect Sri Lanka from Western criticism.

Since 2010 China has invested significant sums in infrastructure projects in southern Sri Lanka and more recently Beijing has begun to invest in northern Sri Lanka as well, including the Jaffna Peninsula, which was the site of the most ferocious battles of the Sri Lanka Civil War of 1983-2009. For example, a major Chinese engineering company is set to build 40,000 houses in the Jaffna Peninsula.

Whilst successive Sri Lankan governments have welcomed Chinese investment, Beijing’s increasing economic influence on the island nation is not completely free of controversy. The case of the Hambantota Port Development Project is being increasingly cited to highlight the exploitative dimension of China’s investment strategy in Sri Lanka.

Construction of the port began in January 2008 and it is set to become Sri Lanka’s largest port, displacing the Port of Colombo from the top spot. But the project incurred heavy losses and was only kept going by Chinese loans, to the point where Sri Lanka was effectively forced in December 2017 to lease the port for 99 years to the Chinese.

China’s critics and detractors often use this case to demonstrate Beijing’s alleged cynical use of loans and investment funds to advance political and strategic ambitions. They also argue that massive infrastructure projects driven and funded by Chinese loans and associated finance potentially undermine the sovereignty of small states like Sri Lanka and to that end they can be construed as a form of Chinese imperialism.

How stable is Sri Lanka?

At present Sri Lanka is embroiled in a political crisis after President Maithripala Sirisena fired Prime Minister Ranil Wickremesinghe only to replace him with hardliner Mahinda Rajapaksa. This arbitrary dismissal of a sitting government has been fiercely resisted by the Sri Lankan parliament, to the point where there is political stalemate.

Sri Lanka is currently in the strange position of having two prime ministerial claimants – and potentially two rival governments – and hence on the threshold of deep political turmoil and potential bloodshed. However, despite the deep political uncertainty, the country is relatively calm and smooth administration continues apace.

This speaks to Sri Lanka’s bureaucratic resilience as embodied by the country’s civil service. In the past ten years China has tried hard to cultivate deep links to Sri Lanka’s bureaucracy with a view to investing in the country’s long-term stability. By cultivating allies in the Sri Lankan civil service Beijing believes it can mitigate the instability emanating from Colombo’s volatile politics.

In the final analysis, all the available evidence suggests that China – in keeping with its far-sighted global strategy – is set to deepen its influence in Sri Lanka in the years and decades to come.

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