In Geopolitics Today: Monday, January 1st
Ethiopia Signs Agreement with Somaliland for Berbera Port Access, Argentina's President Rejects BRICS Membership, and other stories.
Ethiopia Signs Agreement with Somaliland for Berbera Port Access
Ethiopia has signed an agreement with the breakaway region of Somaliland to use its strategic Red Sea port of Berbera. Under the deal, Ethiopia would gain commercial access to Berbera port while also pledging to become the first nation to recognize Somaliland's independence from Somalia. The pact comes after Ethiopian rhetoric about asserting rightful access to the sea concerned regional neighbours.
The Berbera port deal reflects Ethiopia's pressing need to diversify trade routes, but risks inflaming regional tensions. Binding port access to Somaliland recognition may encourage further separatism. Somalia still claims dominion over Somaliland and opposes its statehood ambitions. While potentially opening economic doors for Ethiopia, the agreement seems likely to face resistance and have complex implications for regional dynamics around autonomy and central authority. Ethiopian assurances of non-aggression provide some reassurance, but the path ahead remains uncertain.
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Argentina's President Rejects BRICS Membership
Argentina's new President Javier Milei has formally rejected an invitation for his country to join the BRICS alliance of major developing economies comprising Brazil, Russia, India, China, and South Africa. Milei cited economic troubles at home for saying the “moment is not opportune” to join as a full member. However, he expressed openness to strengthening bilateral ties with BRICS countries to boost trade and investment.
Milei's snub of BRICS membership reveals his prioritization of alliances with Western powers over cooperation with the developing world. This risks constraining Argentina's economic options even as it grapples with a financial crisis. However, Milei also recognizes the bloc's growing influence and seems to want the best of both worlds — cordial BRICS ties without fully joining. This approach may prove difficult to sustain long-term if political divisions sharpen. Much depends on whether the US delivers substantively on promises to support Argentina's recovery. If not, rejection of BRICS may prove short-sighted.
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Moldova’s Government Ties Elections to EU Referendum
The Moldovan parliament approved a law allowing referendums to coincide with elections, paving the way for a 2024 vote on EU membership alongside the presidential ballot. President Maia Sandu proposed the referendum to boost turnout and support her reelection bid against pro-Russian forces vague on integration. While the details remain unclear, the referendum is an attempt to secure reelection even as protests and instability persist ahead of the pivotal vote.
Sandu seeks to solidify Moldova's pro-European trajectory by linking the referendum to the high-stakes presidential race. Using the popularity of EU accession to mobilize voters could marginalize opponents wavering on integration. However, excluding Transnistria also risks alienating some Moldovans. If the gambit pays off and Sandu claims a new mandate, she would gain momentum to advance EU aspirations over the objections of Moscow-aligned factions. But the coming year may see those groups obstruct her agenda ahead of balloting.
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US and UK Intensify Pressure on Houthi Rebels
The United States and the United Kingdom are ramping up pressure on Yemen's Houthi rebels to deter attacks on commercial shipping in the Red Sea. US helicopters recently killed 10 Houthi fighters and sank three of their boats after they fired on a cargo vessel. The clashes are a part of regional turmoil sparked by the Gaza conflict. Shipping giants and insurers are suspending Red Sea passage over the unrest, forcing costly detours.
The expanding maritime crisis highlights how the Gaza war continues reverberating across the Middle East. Seeking leverage over Israel, the Houthis are weaponizing the Red Sea lifeline. Their capabilities to strike vessels at will alarms the US and the UK. But even limited direct clashes risk entangling international forces in Yemen's civil war. With no Gaza ceasefire in sight, the Houthis have little incentive to stand down at sea. Their attacks seem likely to exacerbate regional instability and choke off trade, absent concessions from Israel or pressure from other regional forces.
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Armenia's Westward Overtures Limited by Integration with Russia
Armenia's overtures to the West are face limitations due to geopolitical realities that constrain the country's foreign policy options. Yerevan remains deeply integrated with Russia militarily and economically. Withdrawal from these arrangements lacks established procedures and risks severe backlash. Although Armenia has pursued limited military cooperation with the United States, its opportunities to reorient Westward appear restricted without fundamental shifts in the regional balance of power.
Armenia's heavy reliance on Russia for security ties it firmly within Moscow's orbit for now. Although relations have frayed, Armenia likely recognizes it currently has no viable alternative to replace Russian protection. Meanwhile, there is no clear path for Armenia to exit the Eurasian sphere through bodies like the CSTO or EEU. While cultivating positive EU and US relations has value, expectations for dramatic foreign policy shifts are unrealistic barring major changes in the status quo. Armenia's leaders will likely continue their delicate balancing act between East and West until regional realities evolve.
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China Surpasses Russia as Top Trade Partner for Central Asian States
China surpassed Russia to become the top trade partner with Central Asian states in 2023, accounting for over 21% of total trade turnover in Kazakhstan and Uzbekistan. This reflects China's rising economic influence in the region through its imports of energy and other commodities, as well as exports of finished products. However, issues like border delays and illegal transportation of Chinese goods still affect trade flows.
China's rising position as the top trade partner across Central Asia signals its growing geopolitical influence in what has traditionally been Russia's sphere of dominance. Beijing's Belt and Road Initiative focuses heavily on overland transit infrastructure connecting China to Europe via Central Asia, providing new trade routes that allow China to potentially supplant some of Russia's energy exports to Europe over time. Meanwhile, the flow of cheap Chinese manufactured goods poses competitiveness issues for domestic industries. This expanding economic footprint risks fostering dependence and compliance among Central Asian states.