The Geopolitical Week Ahead (May 19-26, 2019)

This week, President Trump visits Japan to be the first foreign leader to meet with the new Japanese Emperor along with discussing key trade and security issues. The European Parliament elections are held this week which could dramatically alter the idelogical vision of the Parliament. Also this week, NATO leadership meets in Brussels to discuss the future of the Arctic while the the respective foreign ministers of the Shanghai Cooperation Organization meet in Kyrgyzstan. Here is what we are watching around the world this week: President Trump visits Japan • President Trump will visit Japan May 25-28, the first foreign leader to meet with Emperor

Naruhito, who succeeded his father Akihito on May 1. He will also present a trophy to the winner of the Summer Grand Sumo Tournament, which is being called “the Trump Cup” in Japan. Trump and Abe will jointly inspect Japan’s largest aircraft carrier, which may carry the new F35B fighter plane. The visit with the emperor and presentation at the Sumo tournament are part of Prime Minister Abe’s efforts to develop a close personal relationship with Trump.

− Trump and Abe are likely to focus their discussions on trade, North Korea, regional

security (including China) and Japanese support for US bases in Japan. The US and Japan are negotiating a bilateral trade agreement but talks have stalled over Washington’s demands on agriculture and Tokyo’s desire for a comprehensive FTA. Trump has criticized the $68 billion trade deficit the US has with Japan and accused Japan of being a currency manipulator. Abe will lobby for Japan to be exempted from

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The Geopolitical View: The Week Ahead

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possible US tariffs on autos and parts, on which Trump recently deferred decision by six months.

− Trump and Abe remain committed to full denuclearization of North Korea. Japan has supported US sanctions against North Korea but Tokyo worries that it has been consistently left out of negotiations; Abe is seeking a bilateral meeting with North Korea.

− Abe worries that the US and South Korea may not fully represent Japan’s interests, including the return of kidnapped Japanese citizens. Last month, Japan removed references to maximizing economic pressure on North Korea from its Diplomatic Bluebook as a way to smooth relations with Kim ahead of a possible summit. It is unclear how Trump would react to the possibility of an Abe-Kim meeting.

European Parliament elections • European Parliament elections, which are held every five years, take place May 23-26. EU

citizens vote for their national parties, and most of the elected members of the European Parliament (MEPs) will join pan-European groups organized along ideological lines.

− The European Parliament plays an important role in shaping the EU’s agenda,

responding to challenges to the EU’s future such as climate change, the rise of China, unpredictable US policy, the threat of Russian aggression and election meddling, and migration. It will also address an expected economic slowdown and internal divisions over EU values (e.g., challenges to democracy) and fiscal stability.

− This year’s elections take place against the backdrop of Brexit and shifts in the political climate of the EU.

o Brexit: Prime Minister May had hoped to avoid UK participation in the

European Parliament elections, but her failure to pass the Brexit deal she negotiated with Brussels pushed Brexit Day to October 31 and means the UK is legally obliged to field candidates. If the government manages to pass the withdrawal agreement in the House of Commons prior to July 2 (the day the new European Parliament begins work), the UK’s MEPs will not take office. However, this is an unlikely scenario, given persistent disagreements over Brexit. In the UK, Nigel Farage’s Brexit party is leading the parliamentary polls by providing a protest vote; the Greens are making gains among voters concerned about the environment and wanting to remain in the EU. The Tories and Labour expect heavy losses. A poor result by the Conservative party will further undermine May’s authority.

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Despite the failure of talks with Labour, May has committed to a vote on the withdrawal agreement in the first week of June and to resigning afterward. Once the UK formally leaves the EU, 27 of its 73 seats will be redistributed to other member states and the rest will be cut, bringing the total number of seats in Parliament down from 751 to 701.

o The rise of populism: The center-right European People’s Party (EPP) and

center-left Socialists and Democrats (S&D) will gain the most seats. However, they will likely lose the combined majority they have held for four decades. The big winners – though their bloc will remain a disruptive minority in parliament – should be populist and nationalist parties running on Eurosceptic and anti-immigration platforms. The far-right is fragmented across Europe as parties hold disparate views on the EU budget and Russia, though they may attempt to form a new group in parliament.

o A bolstered liberal bloc: European liberals (ALDE), who advocate centrist

and pro-European policies, are expected to perform well. This will be the first election in which French President Macron’s La Republique en Marche competes, and while it will not join ALDE, it has pledged to support it.

o Pan-European politics: The elections highlight a trend over the past few

years of pan-European politics. Traditionally, parties campaign on local issues but increasingly they are attempting a more coordinated message to address concerns like climate change and immigration across geographical areas.

− On May 28, European leaders will discuss top EU jobs, principally that of the European

Commission President. The party that wins the most votes for the European Parliament will be best positioned to lobby for its preferred candidates.

Source: FT Indonesia releases election results • Indonesia’s General Electoral Commission (KPU) will announce the official results of

April’s presidential and legislative elections on May 22. President Joko Widodo (Jokowi) leads opposition leader Prabowo Subianto 56% to 44% with more than 82% of ballots counted; it is unlikely Subianto can overtake him as the last votes are counted.

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− In the House of Representatives (DPR) Jokowi’s political party, the PDI-P, is estimated

to have won 20% of ballots, while the Gerindra party of Subianto could have up to 12%. Of the nine parties that will have representation in the House, five of them, led by the governing PDI-P, are allied with Jokowi and represent 65% of the chamber’s seats; this would mean an increase in support for Jokowi. The other four opposition parties, led by Subianto’s Gerindra party, account for 35%.

− A second Jokowi term will likely continue economic reforms and infrastructure investment schemes that have kept growth at a healthy 5% annual rate during his first term. The challenges are equally great: Jokowi has to create jobs for new entrants to the market and deal with the increased Islamization of the political structure, which his vice presidential running mate has called for.

− Despite his apparent defeat by a large margin, Subianto has called the elections fraudulent and has vowed to reject the results. He alleges that Jokowi’s victory was the result of millions of fictitious voters, as well as data entry errors and illegal money contributions. Government authorities fear that Subianto’s accusations will incite mass protests in Jakarta after the results are announced. The government has deployed 32,000 extra police to respond to any demonstrations.

NATO conference on Arctic policy and security • NATO’s May 20-22 High North conference in Oslo will focus on NATO’s command,

control, intelligence, and surveillance capabilities in the Arctic, as well as how the alliance can leverage innovative technology from private enterprise to assist NATO goals in the region. Solutions to the lack of satellite communications in the Arctic will be a high priority. As climate change accelerates, the struggle over who dominates the Arctic will become increasingly important to US and NATO strategic and economic interests.

− The conference occurs as tensions in the Arctic have risen. The US recently backed

out of the eight-member Arctic Council’s sustainable resource development declaration due to disagreements about how climate change affects the Arctic (as well as a US desire to focus on security interests in the region).

− As the ice sheets melt quicker in the summer months, new energy and fishing resources will become available for exploitation. The question of who will control the vast new reserves of resources and trade routes could lead to conflict. The US and NATO have long viewed Russia as their main adversary in the Arctic, but China’s recent actions have brought Beijing to NATO’s attention.

− In 2018 China declared itself a “near-Arctic” nation in an attempt to insert itself into discussions about Arctic security and trade, specifically its proposal to establish a “Polar Silk Road” that would deliver goods from China to Europe over new Northern

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sea routes. China has also tried to invest in projects, such as three new airports in Greenland, which have military implications for the balance of security in the region.

Zimbabwe opposition party holds electoral congress • Amid accusations of government meddling and threats of mass protests, Zimbabwe’s

primary opposition party, the Movement for Democratic Change (MDC), will hold its electoral congress May 24-26. On May 8, Zimbabwe’s high court ruled that Nelson Chamisa’s leadership of the MDC was illegal. Chamisa will appeal the ruling and has accused the court of attempting to undermine the opposition and bolster President Mnangagwa.

− He has told party members to prepare for public demonstrations after the electoral

congress. The MDC lost general and presidential elections to Mnangagwa’s Zanu PF party in 2018 after the ouster of former President Mugabe. The next presidential election is scheduled for 2023, but failure to relieve the economic crisis could contribute to an escalating cycle of protests and harsh reprisals that undermines the legitimacy of Mnangagwa’s rule.

− Mnangagwa’s tenure has been marked by a poor performing economy and a failure to address rampant corruption. The country also suffers from crumbling infrastructure, fuel shortages and electricity black-outs, and high rates of poverty. Zimbabwe has not had access to international capital markets since 1999 and owes $8.2 billion to foreign lenders, including the World Bank, the African Development Bank, and the European Investment Bank.

− The IMF, which expects the economy to contract by 5.2% in 2019, has not approved a new loan or aid. Despite high hopes for a “democratic awakening” post-Mugabe, Mnangagwa’s government has responded to popular criticism with arrests and retaliation against protesters.

Foreign Ministers of The Shanghai Cooperation Organization meet • Kyrgyzstan will host the foreign ministers of the Shanghai Cooperation Organization

(SCO) May 21-22. The SCO – comprised of China, Russia, Kazakhstan, Tajikistan, Kyrgyzstan, Uzbekistan, Pakistan and India – has emerged as a significant multilateral organization that accounts for almost half the world’s population and over 20% of global GDP.

− China is the main driver behind the SCO, which has become one of the principal ways

that Beijing pushes the investment projects of the Belt and Road Initiative (BRI) to its neighbors in South and Central Asia. SCO members have pledged to increase the inter-

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connectivity of their economies and boost their exports through large scale BRI infrastructure projects.

− In addition to continuing BRI talks and preparing for a leader-level summit in mid-June, foreign ministers will discuss terrorism and arms control.

Airplane Reading War on the Rocks, "the Morning After Maduro in Venezuela"

One day Venezuelans – and the markets – will wake up to the news that Venezuela’s President Maduro and his regime have ended. What happens next?

Council on Foreign Relations, "Belt and Road Tracker" CFR has launched a tracking system to update those interested in how China’s Belt and Road Initiative is progressing – and how it is changing countries’ bilateral economic relationships with China over time.

Der Spiegel, "Sudan Revolution Struggles to Keep Momentum"

In a working-class neighborhood of Khartoum, six friends helped topple Sudan's dictator, Omar al-Bashir. Now, as they hope for a transition to civilian power, they are afraid their protest is devolving into a street party, and that the military will remain in control.

New York Times, “Your 5G Phone Won’t Hurt You. But Russia Wants You to

Think Otherwise” The New York Times investigates the emerging pattern of Russian efforts to spread misleading stories about the health effects of 5G phones and infrastructure in an effort to undermine the new technology, which US firms will play a large role in providing.

The Economist, “Populism and polarization threaten Latin America”

The Economist delves into why democratic institutions in the region have eroded over time and evaluates the repercussions of an increase in dictator-like regimes in the future.

The Atlantic , “The Next ‘South China Sea’ Is Covered in Ice” The Atlantic examines the evolution of Greenland’s strategic importance and Arctic relations in general as climate change impacts Russian, Chinese, US, and European objectives in the region.

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Foreign Policy, “India Is Trapping Its Young People” Foreign Policy analyses how the dominant Indian political parties have failed to address growing unemployment concerns for young Indians and why the consequences of a jobs crisis could have a global economic impact.

The German Marshall Fund, “Brussels Should Avoid the Temptation of Trade Appeasement” Bruce Stokes writes for the German Marshall Fund that European policymakers should not assume that appeasing the Trump administration in order to win tariff relief is worth US demands or, indeed, that appeasement will actually work.

International Security, "Why China has Not Caught Up Yet: Military-

Technological Superiority and the Limits of Imitation, Reverse Engineering, and Cyber Espionage" Political and military observers have long argued over at what point China would equal and eventually surpass the United States in technology and military superiority. But it has not happened yet – why?

Foreign Policy, "Erdogan Just Committed Political Suicide" The author argues that by overturning an election in Istanbul, President Erdogan may have triggered a Turkish Spring.

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Contacts:

Katherine Thomas Editor, Geopolitical Weekly Government and Public Affairs Americas DC Office: +(202) 662-1605 katherine.thomas@db.com

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