In Geopolitics Today: Friday, January 27th
Iraq's Supreme Court Rules Budget Transfers to Kurdistan Illegal, Israel and Gaza Exchange Fire Overnight, and other stories.
Iraq's Supreme Court Rules Budget Transfers to Kurdistan Illegal
The Federal Supreme Court of Iraq has ruled budget transfers to the Kurdistan Regional Government (KRG) illegal, marking a setback for relations between Erbil and Baghdad, who appeared to be close to reaching a deal on a new constitution.
Oil exports are the KRG's biggest source of revenue, while it also depends on a portion of the federal budget, which remains a point of contention as long as the Kurds are signing unilateral oil contracts and exporting oil to Turkey, bypassing Baghdad's oil marketer. The Supreme Court decision renders illegal budget transfer orders authorized by the previous government of former prime minister Mustafa al-Kadhimi. The KRG has rejected the decision.
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The US Designates Wagner Group as Criminal Organization
The Wagner Group, a Russian private mercenary organization, has been designated as a significant “transnational criminal organization” by the US Treasury Department, and sanctions have been imposed on multiple individuals and organizations that are part of the transnational network supporting its operations. The move comes after sanctions on the Wagner Group have already been implemented by the US, the United Kingdom and the European Union.
Last month Washington said the Wagner Group had taken delivery of an arms shipment from North Korea to help bolster Russian forces in Ukraine. The designation is expected to appease those US lawmakers who have called for Wagner to be branded as a foreign terrorist organization and Russia as a state sponsor of terrorism. The sanctions may hamper the group's ability to operate globally, and the designation could discourage some governments from considering cooperation with the organization or its partners. Additionally, sanctions on a technology company that supplied satellite imagery to Wagner and an aviation firm used by the group may reduce the group's effectiveness.
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Mackinder's Century-Old Foreign Policy Paper Still Relevant Today
A paper titled “The Geographical Pivot of History" was delivered by Halford Mackinder at the Royal Geographical Society's meeting on January 25, 1904 in London. It has been considered one of the most important foreign policy papers of the 20th century, where he outlines a geo-historical sketch of the globe, foreseeing the struggles for power that dominated the 20th century.
The paper is still relevant today as China strives to dominate Asia in the 21st century. The inspiration for the paper was from Britain's war in South Africa and the Russo-Japanese War, which led Mackinder to study the historical evolution of the expansion of British sea power and Russian land power in the preceding decades and centuries. The paper identified the pivotal role of the “heartland” of the Eurasian landmass and the potential it holds for global hegemony. The paper was later refined in later works, and it's concepts were confirmed by the events of the First and Second World War and Cold War.
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Record Low for Pakistan’s Rupee as Black Market Dollar Trade Flourishes
The cap on the exchange rate of the US dollar was removed by the Exchange Companies Association of Pakistan (ECAP) on Wednesday, resulting in a 1.2 percent decrease in the value of the Pakistani rupee to 243 against the US dollar on the open market. This led to a further 9.6 percent decrease in the value of the rupee on the following day, hitting a record low of 255.4 rupees to the dollar.
The ECAP's move highlighted the existence of three effective exchange rates in Pakistan. This spectrum of exchange rates is causing difficulties in manufacturing, exporting, remitting, and everyday banking activity in Pakistan, and is the result of the fixation of Finance Minister Ishaq Dar to “bring the dollar below 200” after taking charge in September. This plan has so far not been successful, as expected foreign investments and loans have not materialized and the State Bank of Pakistan's reserves have fallen to $4.1 billion. The situation is further complicated by the informal integration of the economies of Afghanistan and Pakistan, which has resulted in a growing dollar cartel.
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Israel and Gaza Exchange Fire Overnight
Air strikes were launched on the Gaza Strip at dawn on Friday by Israel, after rockets were fired from the Palestinian enclave. Warplanes fired 15 missiles on a site in al-Maghazi refugee camp, causing damage to property and resulting in a power outage in the area. Two other sites are said to have been destroyed and set on fire in the north and southeast of Gaza as well.
Rockets were fired from Gaza towards Israel on Thursday night and into Friday morning. Responsibility for the rockets was claimed by the leader of the Islamic Jihad movement in Gaza during a rally in the enclave. The attack came a day after a deadly Israeli raid on the Jenin refugee camp in the West Bank killed nine Palestinians and wounded 20 others. A three-day national state of mourning was declared by Palestinian President Mahmoud Abbas and his government announced it would be stopping its policy of security coordination with Israel in response to the attack.