Weaker AKP would reduce Turkish president's authority

Significance The ruling Justice and Development Party (AKP) should easily get the most votes, but it faces a likely setback and a dent in its authority. Weakening support from its voters and Turkey's proportional representation system are likely to drive its number of parliamentary seats down from the 327 out of 550 seats it won in 2011, perhaps even to the point where an overall majority is in doubt. Impacts Market confidence and the lira may weaken, but will not deteriorate drastically, unless AKP is forced out of office -- a remote scenario. Fiscal and monetary policy may be loosened to win support until a new government able to last for a full four-year term is in office. A politically weaker AKP risks long-term splits, but these will not emerge unless there have been months of instability. Growing internal discord -- and the government's defiant response to its critics at home and abroad -- may isolate Turkey internationally. The United States and EU will continue to avoid confrontation with the Erdogan government as far as possible.

Significance Last week, its partners in the ‘Quad’ grouping -- the United States, Japan and Australia -- agreed to help increase its vaccine manufacturing and exporting capacity. Each of the Quad members is wary of China, which like India is gifting and selling coronavirus jabs around the world. Impacts India’s manufacturing sector will attract more foreign direct investment. Greater cooperation over supply chains will help strengthen India-Australia ties. Indian pharma will in the long term aim to ease dependence on imports of active pharmaceutical ingredients from China.


Significance The deal reached between Iran and the P5+1 negotiating group (UN Security Council permanent members plus Germany) on July 14 promises to end most sanctions on the country, in return for suspension and monitoring of its nuclear programme. If ratified by all parties, it will create opportunities for an expansion of Iran's gas production and exports. Iran is the holder of the world's largest gas reserves, according to BP estimates. It is also the third-largest producer (after the United States and Russia, and probably having overtaken Qatar during 2015), and the fourth-largest consumer. Impacts Iran could increase gas exports by advancing projects stalled by sanctions, although most of these will take some years to come to fruition. Iran would seek to attract foreign investment into its gas industry to increase production and exports in the longer term. If this occurs, Iran will compete with other gas exporters, particularly Russia, into the 2020s.


Subject Palace politics Significance Military courts earlier this month handed down the most severe sentences thus far in lese majeste cases, sentencing two people to 30 and 28 years in prison for criticising the monarchy on Facebook. The sentence, which has drawn sharp criticism from the United States and the UN, reflects a broader trend of tighter political and legal controls by the military in the context of the monarch's declining health. Impacts Domestic consumption will suffer as long as political uncertainty regarding the return of civilian rule persists. The palace has become more partisan since 2006; this is likely to continue after the royal transition. Lese majeste prosecutions will damage US-Thai relations, but Washington will not expand sanctions.


Subject Gulf states lobbying in the United States. Significance The Gulf states have long been among the largest spenders on lobbying initiatives in the United States, promoting their economic interests and perspectives on regional geopolitics. This has intensified since 2017 as the Qatar dispute has polarised the region and both sides have sought to win over crucial US decision-makers. These efforts have often backfired and drawn accusations of improper behaviour that could damage bilateral relationships and may affect US domestic politics. Impacts Others considering influencing US policy will look carefully at the successes but also the controversies this lobbying has generated. There is a risk of long-term damage to some Gulf-US relationships amid growing suspicion of foreign influence. Robert Mueller’s probe into the Trump campaign and Russia, which may conclude this year, may also implicate some Gulf states.


Significance The presidency will put Romania's isolation in the spotlight. It has no backers in the EU prepared to overlook its escalating retreat from democratic and reform commitments, and there is no sign that the United States is prepared to act as a counterweight. Impacts Romania is ill-prepared for the presidency while political warfare at home will absorb government energies. It is likely that real decision-making will reside in Brussels with Romania having no more than a ceremonial role. Dragnea’s hostility to Brussels makes a tough EU response likely in response to more creeping authoritarianism.


Subject Profile of Ko Wen-je. Significance There are strong indications that Ko Wen-je, the independent mayor of Taipei, will run for election as Taiwan’s president in January 2020. Presidential hopefuls often launch their election campaigns with US trips to shore up relations with Washington, Taiwan’s key security backer; Ko will make a nine-day visit to the United States later this month. He also stated last month that he was considering forming a new political party; the single reason he would need a party of his own would be to make a run for the presidency. Impacts Ko would be a controversial and probably one-term president. Ko could have a game-changing impact in the short term but is unlikely to alter Taiwan's political landscape fundamentally in the long term. Ko would likely take a more moderate stance on China than Tsai does. Ko's outspokenness is what makes him popular, but it also makes him prone to gaffes that could ultimately undermine him.


Significance The United States and Iran are both fighting against ISG in Iraq, but their rivalry elsewhere, such as taking opposite sides in Syria and Yemen, and historic enmity has prevented explicit cooperation. They are likely to be the two most significant external actors in helping Baghdad reclaim Iraqi territory from ISG. Impacts The symbolic impact of capturing Tikrit would be significant, but its actual impact on the wider military campaign will be limited. It would provide Prime Minister Haider al-Abadi time to prepare Iraqi Security Forces (ISF) to a greater level of readiness. However, rapid success of militia forces could lead to even more difficult political choices.


Significance In the midst of economic and security problems at home and accelerating instability in the region, President Abdel Fatah al-Sisi has looked outwards to seek help. Partnerships with the Gulf have aided a reeling Egyptian economy while active relations with Russia have provided military benefits. Yesterday it was announced that Russia will supply Egypt with 46 new Ka-52K Alligator Helicopters for Egypt's two new French Mistral warships. Impacts Any differences with the Gulf on Syria will not be acute enough to damage relations. Besides, Egypt's direct involvement and impact on the Syrian civil war are negligible. However, Egypt will continue taking a more active role in Libya. Relations with the United States will be sustained given the decades-old strategic partnership that is still important to both sides.


Significance Islamabad wants to ease some of the loan’s conditions. Separately, the United States, the IMF’s largest shareholder, recently said it would reassess its relations with Pakistan. Washington has concerns over Islamabad’s future role in Afghanistan, given the Pakistani military’s long-standing ties with the Taliban. Impacts Pakistan will increasingly rely on macroeconomic support from key partner China. Islamabad will step up efforts to get external players to engage politically with Afghanistan’s Taliban government. The ‘Kamyab Pakistan Programme’, a microcredit scheme designed to help poor people, may help raise living standards in the long term.


Significance The White House had opposed the bill, and launched one of the most energetic lobbying campaigns on Congress of Barack Obama's presidency. After the bill's passage through the committee, both Republicans and Democrats argued that the legislation favoured their agendas, which had been largely mutually exclusive. Impacts The Corker bill creates some credibility problems for the United States on long-term sanctions relief. With US sanctions more likely to be lifted, other nations may follow Russia in lifting unilateral sanctions. Iran will nonetheless become a major issue in the Republican campaign for the presidential nomination. This could lead to a subsequent Republican administration seeking to reimpose sanctions on Iran for different reasons. The deal will not affect US-Iranian tacit cooperation in Iraq and hostility in Syria and Yemen.


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