Myanmar's ethnic troubles will pose security threats

Subject Ethnic relations, politics and security in Myanmar. Significance Three developments are pushing ethnic relations to the forefront of Myanmar's domestic politics: the Muslim Rohingya/Bangladeshi migrant crisis, 'race and religion' laws and difficulties reaching a national ceasefire between armed ethnic groups represented by the Nationwide Ceasefire Coordination Team (NCCT) and the government in Naypyidaw. With elections in November, and significant international concern, resolving these problems is paramount. Yet domestic political conditions constrain this, portending growing security risks and political difficulties ahead of November, and for the post-November government. Impacts The new ethnic negotiating team will bolster NCCT unity, but its renegotiation demands will slow the peace process. A probable NLD victory in November elections will not immediately resolve the Rohingya matter. China-Myanmar cross-border relations will improve, for now.

Significance Essid has been working to form a new coalition government since general elections in late December. The new unity government will face tremendous pressure to jumpstart the economy, ensure political stability, and counter growing security threats. One major challenge -- cross-border smuggling -- poses a particularly serious threat to the new government. Smuggling costs the government some 615 million dollars per year, representing nearly 5% of total tax revenues, and undermines legitimate trade, further damaging growth. Impacts If the government fails to address smuggling, it will continue to lose critical revenue. Yet cracking down on smuggling will probably meet with considerable opposition -- particularly in rural areas and border towns. The new government's lack of a decisive mandate will impede reforms.


Subject Brazilian foreign policy under Aloysio Nunes. Significance Senator Aloysio Nunes, who took office as foreign minister on March 7, is an experienced politician from the centre-right Social Democrats (PSDB). He led the bloc supporting the government of President Michel Temer in the Senate, where he was also since 2015 head of the Commission of Foreign Affairs and National Defence. Nunes replaces Jose Serra at the foreign ministry and will seek overall continuity of Serra's agenda focused on the pursuit of trade opening and border security. Impacts Brazil lacks a clear strategy for its crucial relationship with China. Border security, a key issue for Serra, will remain important for Nunes. Domestic politics may divert Nunes’s attention as the 2018 elections approach.


Subject The political and economic outlook for Mongolia. Significance Mongolia is recovering from a largely self-inflicted financial crisis that resulted in an IMF bailout two years ago. Meanwhile, isolationism in the United States and weakened political unity in the EU leave Mongolia with little choice but to slide further towards the neighbouring powers, China and Russia -- an uncomfortable trend for the sole liberal democracy in the region. Mongolia’s return to growth and relative political calm is dampened by external forces including weakness in metals prices and emerging market currencies. Impacts The government will focus on strengthening the economy; the direction of economic policy bodes well for continued growth. Infrastructure needs, such as energy and secure long-term water supplies for the capital, will see significant progress towards resolution. The 'truce' between the two major parties makes political conditions ripe for disruption by a new political movement or politician.


Significance These have caused the United States to begin the process of shuttering its Baghdad embassy -- while signalling that it could reverse the process if the government moves more aggressively against pro-Iran groups within the Popular Mobilisation Forces (PMF) that are blamed for the strikes. Impacts Groups will step up attacks designed to lever the US-led coalition out of Iraq, while seeking to mask their identity. The United States will have greater latitude for military action to weaken Tehran in November or December, if it closes the embassy. Japanese, Saudi, Emirati and some European embassies relying on US evacuation and warning services might also be forced out. Washington might opt instead to downsize the embassy, which cannot operate normally due to COVID-19 and security threats. Even if the US embassy closed, some coalition military sites and the US consulate in the Kurdistan region would remain open.


Significance The COVID-19 outbreak is the latest blow to civil aviation in the Middle East, where airlines already face unprecedented security risks and operational complexities. Carriers routinely have to make difficult decisions around the conflict in Syria, US-Iran tensions and the Qatar boycott, leading to re-routed flights, lost profits and delays. Impacts COVID-19 has the potential to transform the entire aviation industry. Despite ongoing security threats, overflight of Iraq and Iran will be critical for carriers operating between Europe and the Gulf or Asia. Security improvements will make Egypt a more important alternate route for overflight, but operators will incur more cost by using it.


Significance Despite all this, his ruling Democratic Party (DP) has used its rare parliamentary majority to force through a raft of far-reaching legislation affecting politics, the economy and relations with North Korea. Impacts Labour and ‘fair economy’ legislation will increase costs for businesses. A third wave of COVID-19 -- the largest yet -- may finally force the government to impose a lockdown. Hopes that banning cross-border propaganda balloon launches by activists will lure Pyongyang back to engagement are unduly optimistic.


Subject Military pressures. Significance The military has become more visible in Ecuador in recent months, with soldiers and tanks deployed on the streets in October, to tackle protests over the elimination of fuel subsidies. Defence Minister Oswaldo Jarrin has become a focus of popular discontent with the security forces, which were accused of using excessive force to contain the unrest. The protests, together with increased drug trafficking and organised crime, have compounded pressures already faced by the security forces due to budget cuts, more of which are planned for 2020. Impacts Investigations into protester deaths will generate tensions between the government and security forces. Close attention will be paid to the tactics and force used by the security forces during future protests. Washington may use stronger Ecuador ties to bolster its presence in the Andean region.


Significance This comes despite increasing cases of COVID-19 cases nationwide, with the government forced this week to postpone the planned return of school students after ten teachers tested positive. Despite the relaxations, a state of emergency remains in place, which President Macky Sall appears to be using to his advantage to stifle dissent. Impacts Domestic concern will build over a possible third term bid by Sall. The country’s first exports of oil, originally scheduled for 2022, now face likely delays. Improving bilateral relations with neighbouring states bodes well for deep-sea, cross-border oil exploration.


Significance The government initiated the talks with a view to defusing tensions in domestic politics. Opposition parties boycotted the one-sided presidential election in 2014 that brought President Mohamed Ould Abdel Aziz to power for a second time since his 2009 win. Abdel Aziz initially came to power in a coup in 2008, and dominates politics along with his Union for the Republic (UPR) party. Impacts Economic growth will be driven primarily by the mining and petroleum sector. Mining companies may scale back their investment plans further. Economic hardship and discrimination may lead to more protests, but these will be limited.


Significance Days before this announcement, the government asked Congress to approve a primary deficit of up to 96.65 billion reais (some 1.5% of GDP) for this year. The sharp deterioration in fiscal performance in recent years led the three main credit rating agencies to strip Brazil of its investment grade status between September 2015 and February 2016. A profound and prolonged recession and dysfunctional politics that make it difficult to address Brazil's fiscal shortcomings have also increased concerns over the sustainability of the country's sovereign debt. Impacts The depth of the current crisis could lead to political conditions for bolder economic reforms. However, that best-case scenario is out of reach for the current government. Even fortunate future governments would only enjoy a narrow window of opportunity to seek ambitious reforms.


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