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Weekly Political Compass 1.24.22

January 24, 2022
By Wolfango Piccoli

Relations between Russia and the West remain tense. Chinese aircraft have entered Taiwan’s air defense zone. The voting process has begun in the Italian presidential election. Military forces have allegedly detained Burkina Faso’s president.

Meanwhile, India will celebrate its republic day, Germany is giving up on contact tracing, the text for Brazil’s budget law has been presented, and South Africa’s president might face a challenge from a populist challenger.

 

Chart of the Week

The situation along the Ukrainian-Russian border remains tense. Unsurprisingly, public opinion research shows that the Ukrainian population has highly positive views of Western countries and negative perceptions of Russia. 80% of Ukrainians believe that Germany and the UK have an overall positive influence on world affairs, and this number is only slightly lower for the US. Similarly, the perceptions of the role played by NATO and the EU are evaluated positively by Ukrainians. However, the immediately more important question is whether Ukrainian popular support for Western countries and institutions would be mirrored by greater Western willingness to assist Ukraine in the scenario of a Russian invasion.

 

What to Watch

Russia/US/NATO

The US and NATO are expected by the end of this week to provide written responses to the “security guarantees” demanded by Russia in mid-December. Moscow has indicated that its further actions will depend on these specific responses. In the meantime, Russia will likely sustain its pressure on Kyiv and its Western allies by continuing to amass its armed forces and equipment near Ukraine, preparing for new military drills, engaging in aggressive rhetoric and other threatening activities. Meanwhile, EU foreign ministers will today, 24 January, along with the US Secretary of State discuss the security situation in Europe, including potential responses in case of military escalation or other destabilizing activities in or around Ukraine.

China/Taiwan

The mainland Chinese air force flew at least 39 aircraft into Taiwan’s Air Defense Identification Zone on 23 January. According to Taiwan’s defense ministry, this was the largest mainland incursion since October, when Taipei reported 134 such flights over four days. The latest incursions were apparently a response to joint US-Japanese naval exercises in the Philippine Sea, much as the October flights were apparently a response to earlier US-led joint naval exercises in the Taiwan Strait.

Italy

In a process that could take several days, 1,008 parliamentarians and regional representatives will convene on 24 January at 3pm local time for the first round of secret voting to replace outgoing President Sergio Mattarella. Prime Minister Mario Draghi remains the front runner for the presidency, but his chances seem to be diminishing. At this stage, it is a 50-50 between Draghi and a disparate group of at least a dozen alternative candidates.

Burkina Faso/West Africa

West African regional bloc ECOWAS will confront another difficult political decision this week. This follows reports late on Sunday, 23 January of gunfire in the capital, Ouagadougou and subsequent allegations that the military has detained President Roch Kabore. There has yet to be official communication from the government and/or the military calling the events a coup, but this appears likely. The development comes two weeks after ECOWAS imposed sanctions on neighboring Mali over the decision of the military junta – who staged two coups last year – to defer the transition to civilian rule in the country.

 

On the Horizon

ASIA PACIFIC

India

The country will celebrate its 73rd republic day. This will be one of the few occasions when, because of Covid-19, there will be no chief guest – usually the head of state or government of a friendly country – to take the salute at the parade that will showcase India’s military might. The parade will march through the newly designed Central Vista, the highly contentious re-development of one of India’s most recognizable roads.

 

EUROPE

Germany

Chancellor Olaf Scholz and the 16 regional state leaders are discussing next steps in the fight against the pandemic. Amid a shortage of PCR tests, access to these is expected to be limited to vulnerable groups (as well as those who can afford buying PCR tests from private suppliers). The country also seems ready to give up on contact tracing amid structural personnel shortages in the local health administration. Two years into the pandemic, the image of continuous administrative weaknesses could undermine the push for new rules such as mandatory vaccinations (or new restrictions if these were to become necessary again at a later stage).

 

LATIN AMERICA

Brazil

The textof the 2022 Budget Law was published today, Monday, 24 January. In signing the law, President Jair Bolsonaro maintained the figure of BRL 1.7bn (USD 310mn), originally intended for wage increases for security forces, as a limit for “functions and careers” in the Executive branch, without any specific itemization. Several public servant segments continue to threaten to strike if their wages are not adjusted. The president also maintained the controversial increase of the electoral fund (from BRL 2bn in 2020 to 4,96bn in 2022) and the so-called “secret budget” of allocations to politicians (BRL 16.5bn). He vetoed BRL 3.1bn in discretionary spending by ministries to allow for mandatory spending that was not contemplated in the law.

Peru

An oil spill that took place on 15 January just north of Lima risks being exploited by the government for political ends. The spill occurred at the refinery of La Pampilla (Callao), which is operated by Spanish oil company Repsol. The company has been accused of minimizing the extent of the incident; Repsol has said the spill was caused by anomalous waves triggered by the undersea volcanic eruption near Tonga. Vladimir Cerron, the leader of the governing Peru Libre (PL) party, has been calling on President Pedro Castillo to renegotiate Repsol’s contract and is now organizing a protest march on 31 January to demand the contract be revised, renegotiated, or rescinded. While Cerron has seemingly found a new rallying cry to re-energize his supporters following splits in the PL, the risk is that Castillo echoes his party boss and/or the government revives the idea of renegotiating other contracts.

 

MIDDLE EAST AND AFRICA

South Africa

The ANC’s 20-23 January National Executive Committee (NEC) gathering is being scrutinized for signals that President Cyril Ramaphosa’s re-election as party leader could face a threat from a populist leader. Tourism Minister Lindiwe Sisulu – who made headlines by attacking constitutional democracy and “mentally colonized” judges, thus aligning herself with ex-president Jacob Zuma’s faction – is directly challenging Ramaphosa by refusing to retract her comments. Yet a successful bid against Ramaphosa currently seems to be a low-risk, high-impact scenario. Still, the political noise may be deafening in the build-up to the ANC’s December conference given the party’s advanced state of decay.

The views and opinions in these articles are solely of the authors and do not necessarily reflect those of Teneo. They are offered to stimulate thought and discussion and not as legal, financial, accounting, tax or other professional advice or counsel.

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