In Geopolitics Today - Friday, April 8th
India Turns to Domestic Arms Production, Israel and the UAE Establish Free Trade Zone, Mapping Risks to Stability in Latin America
India Turns to Domestic Arms Production
The increased political and financial costs of purchasing military equipment from Russia are rising, prompting India, which relies heavily on Russian defence exports, to look for viable alternatives. As a rising power, India looks set to ramp up the production of military equipment domestically, with officials in New Delhi exploring ways of manufacturing helicopters, engines, missiles and early warning systems at home in order to offset any shortfall from Russia.
India’s Defense Ministry officials have proposed that weapons systems will likely be produced by a combination of state-run and private defence manufacturers over the next five years. India currently depends on Russia for an estimated 60% of its defence and military supplies, a reliance which new government plans are aiming to reduce by making the Indian armed forces self-sufficient. In the near-term, this will be a difficult task for India to accomplish as the country’s air force alone operates roughly 400 Russian aircraft, including Sukhoi Su30s, MiG-21s and MiG 29s, all of which require Russian-made spare parts. But with arms purchases from Russian defence companies under strict US-led sanctions, India will consider purchasing spare parts from former Soviet republics. In this regard, Bulgaria, Georgia, Kazakhstan, Poland and Ukraine could serve as viable short-term alternatives that India could approach to acquire the necessary spare supplies needed to service its Russian-made weapons systems.
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Israel and the UAE Establish Free Trade Zone
Since the signing of the Abraham Accords, political and economic ties between Israel and the UAE have transformed. Once shunned by much of the Arab world, Israel has found new allies where once there were hostilities, and has taken the opportunity offered by a thaw in regional relations and a reconfiguration of security concerns to push for mutually-beneficial bilateral trade ties with countries in the Middle East. In this context, Israel has now agreed to establish a free trade zone which promises to facilitate trade between Israel and the UAE.
Since the Abraham Accords were signed in 2020, there has been a significant growth in trade between the UAE and Israel, with trade between the two countries in 2021 exceeding $1 billion. The new agreement is set to further increase economic and political ties between the two. The free trade agreement negotiated this month will be the first comprehensive trade deal between Israel and any Arab state in the region, and is expected to go into effect once the ratification by both countries’ governments is completed. The agreement covers issues pertaining to the trade of goods, and includes regulations, duties, services, electronic trade and intellectual property rights. An estimated 95% of all products already traded between the two nations are part of the agreement, and these are expected to be exempt from duties going forward.
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Mapping Risks to Stability in Latin America
As Latin America emerges from two years of coronavirus pandemic, much uncertainty remains on its short- to medium-term outlook. The International Institute for Strategic Studies (IISS) has released a report which focuses on socio-political, economic, and security factors as key variables threatening stability across the region. According to the report, the region is expected to experience growing instability in the near-term, with several potential flashpoints and risks identified as key drivers of this trend.
The IISS study is underpinned by a concept of stability defined by an (in)capability of the state to perform its main socio-economic, political and security functions. The study recognizes that surging inflation and upcoming fiscal tightening are set to take a toll on real incomes across Latin America, which may ignite social unrest and lead to an increase in violence and instability. Social unrest is also expected to rise across the region due to pervasive discontent over inequality of access to basic services as well as a perceived inefficiency derived from failed structural reforms and stagnant growth. This social unrest is expected to become an important driver of insecurity in many Latin American countries, with the region as a whole transforming into a complex geopolitical order presenting a new set of security risks. The increased geopolitical relevance of the region to great power competition between China and the United States cannot be understated, with China’s growing influence over economies in the region set to be challenged by the US, which still views much of the region as a part of its own sphere of influence.
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