Security crisis in Mozambique will worsen, for now

Significance Dhlakama insists that any talks must be mediated by international bodies. It follows the deployment of security forces in the capital Maputo late last month, amid fears that the current unrest could escalate and spread. Impacts Refugee outflows to Malawi will exacerbate resource constraints there, particularly of food given the regional drought. Low prices for exports such as coal and weak agricultural output will cut GDP growth to around 5.8% in 2016 from 6.3% last year. If the United States -- the largest bilateral donor -- joins other donors in suspending aid it would deepen the fiscal crisis. Nyusi will likely use his visit to China to ask for new loans to cover fiscal gaps, probably underpinned by resources guarantees.

Significance Sectarian tensions in Iraq were exacerbated when the radical Sunni Islamic State group (ISG) seized Mosul in 2014 and Iraq's Shia militias were mobilised to fill the security vacuum left by the collapse of the Iraqi army. Impacts Sectarian tensions will prolong political paralysis and, therefore, undermine efforts to reform the politics and economy of the country. Iran will extend its influence over Baghdad, at the expense of the United States. Political paralysis and weaker US ties would deepen Iraq's fiscal crisis.


Subject The macroeconomic outlook for China. Significance Despite fears of a slowdown, China has kept up GDP growth of 6.8% year-on-year for three successive quarters. However, key measures of economic activity have weakened, and tensions are escalating with the United States over trade and technology. Impacts A swathe of new financial regulations and high-profile arrests will likely continue in 2018. Negotiations are likely to alleviate the immediate pressure from Washington, but underlying concerns over the tech sector will continue. A recently announced sweeping government reorganisation will be implemented, helping to tackle financial and environmental risks.


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 At the same time as pursuing peace talks with the Afghan government, the Taliban are using calibrated armed force to push the United States into withdrawing all its troops. In an incontrovertible breach of their agreement with Washington, the insurgents launched their largest military offensive in years in October. As though this were not happening, President Donald Trump ordered the US force in Afghanistan to be reduced to 2,500 by the end of his term. Impacts NATO and other coalition allies in Afghanistan will mirror the US exit with proportionate troop drawdowns. Opposition to talks is hardening in Kabul as sceptics claim the Taliban are acting in bad faith. Reverses suffered by the Afghan security forces will focus debate on whether they can cope once US forces leave. The Afghan president is accelerating the creation of the 'Territorial Army', recruited from the militias of former warlords.


Subject Mexico's exchange rate and trade outlook. Significance In October, the IMF reduced its 2016 GDP growth forecast for Mexico from 2.5% to 2.1%. Relatively low growth in the United States, in addition to the plunge in oil prices from mid-2014, have triggered a contraction in trade. Previous trade slumps have hit the economy hard, given its degree of openness and its close integration with the United States. Impacts With oil prices having apparently found a floor, the peso should continue to recuperate from its recent lows. Neither the government nor the opposition is likely to advocate a surge of trade protectionism. Any NAFTA renegotiation, even under a Clinton administration, would probably reduce the scope of free trade within North America.


Subject Prospects for the US economy in 2017. Significance In recent years, the United States has become accustomed to sub-par 2% GDP growth and sustained low inflation. However, following disappointing performance in 2016, the US economy is poised for a moderate rebound in growth in 2017.


Subject Nigeria-US military ties. Significance Relations between the United States and Nigeria were strained under former President Goodluck Jonathan's government. President Muhammadu Buhari's trip to Washington in July rejuvenated the relationship, but has not amounted to substantial new military support. The congressionally imposed 1997 Leahy amendment restrictions on Nigerian military units involved in counterinsurgency still apply. A substantial amount of political will would be required to lift them for a Nigeria that is now less important to US energy needs. Impacts Boko Haram's shift back to sporadic bombings suggests continued adaptability to losing territory. However, claims over new leadership raise questions over the group's cohesion on the back of military incursions. Recent unsophisticated attacks using horses over vehicles may also suggest that the group is suffering from resource constraints.


Significance However, the government forecasts just 2.60% growth for the full year 2018. GDP growth in Taiwan is volatile but it is trending downward, averaging 2.5% annually during the years 2011-17. Taiwan’s disputed sovereignty and ambiguous international legal status make it difficult for it to maintain its global competitiveness as a small, highly trade-dependent economy. Impacts Other regional states will find an eager and active partner in Taiwan but they will be wary of antagonising China. Trade tensions between China and the United States threaten Taiwan's economy, since many Taiwanese companies supply Chinese exporters. Beijing may insist that regional trade agreements do not accept Taiwan as a member unless they include China, too.


Significance However, the United States has already blocked a Kuwaiti-drafted statement expressing “outrage” at Israeli security forces’ killings of protesters and calling for an independent investigation. The demonstrations by thousands of Gaza Palestinians approaching the Israeli security fence coincided with the formal opening of the new US embassy in Jerusalem. Impacts The turn in international opinion against Israel could bolster Iran and its Lebanese protégé Hezbollah. Events in Gaza make progress in the stalled Egypt-backed ‘reconciliation’ agreement with the West Bank authorities even more unlikely. Few countries will follow the US example of moving their embassies to Jerusalem, despite Israeli inducements. Israeli Prime Minister Binyamin Netanyahu’s recent foreign policy successes could bolster his position against corruption investigations.


Subject New UN mission. Significance The UN Security Council announced in late June that it had approved a new mission to Haiti, which will start up in October immediately following the drawdown of its current mission. The move signifies the ongoing commitment to Haiti of the UN, which has been present in the country since 2004. Three successive missions launched by the organisation have had reduced military peacekeeping components in recognition of Haiti’s improving stability. However, with political and social unrest rising, Haiti may feel the lack of an international component to support its fledgling security forces. Impacts The end of Temporary Protected Status for Haitians in the United States in 2020 will exacerbate social pressure on Haiti. The Dominican Republic may increase border security during Haiti’s protests in order to prevent any migration surges across the border. The new UN mission is currently open-ended and could be revised should tensions worsen.


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