In Geopolitics Today: Thursday, February 15th
US and Somalia Agree to Build New Military Bases, Israel's Offshore Gas Exploration Licenses Spark Legal Threats, and other stories.
US and Somalia Agree to Build New Military Bases
The United States and Somalia have signed a memorandum of understanding to construct up to five new military bases in the country. This agreement aims to enhance the capabilities of Somalia's Danab commando brigade, an elite force battling the al-Qaeda-linked al-Shabaab insurgency. It comes amid gradually declining African Union peacekeeper numbers in Somalia.
The new bases will provide support to Somali security efforts as international forces draw down. However, sporadic al-Shabaab attacks persist, underscoring the continued threat. US assistance reflects enduring engagement with and support for enhancement of Somalia's security apparatus. But reductions in external personnel could risk ceding hard-won gains if Somali forces cannot fill gaps. With President Hassan Sheikh Mohamud declaring “all-out war” against al-Shabaab upon his re-election, the capacity boost from US training, equipment and infrastructure will improve the capacity of local forces.
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Lessons from Ethiopia's Chinese-Built Railway to Djibouti Port
Nearly six years since its launch, Ethiopia's Chinese-built railway connecting Addis Ababa to Djibouti port offers lessons on infrastructure development and debt risks. Operational handover in 2023 saw a transition from Chinese state companies to the Ethiopia-Djibouti railway corporation, with some technical advisors staying on. Cargo volumes are growing, but still lag original plans. Meanwhile, benefits spread through new housing and businesses around stations.
Debt obligations pose ongoing constraints, with nearly half Ethiopia's Chinese loans tied to the railway. After loan renegotiations, the government secured repayment suspensions into 2024 while working on IMF deals. Boosting local expertise and participation is important for Ethiopia to achieve financial viability and attract more passengers. Regional integration promised by the railway also remains stunted without better connections. While the project expanded Ethiopia's links to global shipping, fully realizing the railway's economic potential requires strategic engagement by stakeholders within and beyond the two nations it connects.
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Taiwan Coast Guard Chase Leads to Drowning of Chinese Fishermen
Two Chinese fishermen have drowned after Taiwan's coast guard chased their vessel for illegally entering prohibited waters one nautical mile off the Kinmen archipelago. The incident elicited a strong condemnation from Beijing, which alleged the coast guard used “violent and dangerous methods” against the Chinese boat.
While the deaths are unusual, the encounter highlights risks from increased fishing and sand dredging activity observed around in the South China Sea. With both sides celebrating Lunar New Year, restraint has so far prevailed, preventing further escalation. But frequent naval manoeuvres and unchecked gray zone operations raise chances of accidents. Still, even recent aviation route changes bringing Chinese planes near Taiwan's airspace have not triggered acute crises. While risks endure, measures to improve communication could mitigate misunderstandings, if political will exists.
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Funding Changes in 2024 US Defence Bill Reflect Ukraine Debates
The Fiscal Year 2024 United States National Defense Authorization Act (NDAA) contains several key provisions and funding changes related to US policies and posture towards Russia and Europe. The legislation increases funding for US European Command and the NATO Security Investment Program by 13.6% and 63.4% respectively compared to last year. However, it also implements notable cuts in areas like the European Deterrence Initiative (-14.95%), Ukraine Security Assistance Initiative (-62.5%), and NATO Alliance Ground Surveillance (-99.76%).
The diverging trajectories in NDAA funding reflect ongoing tensions in the US Congress around how extensively the US should support Ukraine financially and militarily. The over 60% slash in Ukraine aid conveys hesitation by some legislators to continue large-scale backing. Meanwhile, boosts for NATO and European Command signal a desire to bolster capabilities on the continent. The bill also establishes an Institute for Transatlantic Engagement and restricts the president's ability to withdraw from NATO without Congressional approval — indicating enduring commitment to the alliance.
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Mexico Emerges as Top US Trade Partner in 2023
Mexico has emerged as the top US trading partner in 2023, with two-way trade flows reaching nearly $800 billion. By mid-2023, Mexico had secured $13 billion in new investments, mostly in the automotive and auto parts sectors. This builds on advantages like duty-free export programs and free trade pacts that established Mexico's status as a manufacturing hub decades ago.
Multiple converging factors explain the current spike in interest in Mexico operations. The US-China trade war, supply chain adjustments, and the war in Ukraine have all motivated companies to diversify and regionalize production networks rather than centralize in Asia. Mexico's geographic proximity, developed manufacturing workforce, and infrastructure planning give it an edge. Potential obstacles include instability and currency issues, but market dynamics could offset those over time. US nearshoring looks set to drive enduring growth, cementing Mexico's position in North America's economic future.
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Israel's Offshore Gas Exploration Licenses Spark Legal Threats
Israel's awarding of gas exploration licences to Eni, Dana Energy and Ratio Petroleum for areas overlapping Palestine's declared maritime boundaries has sparked legal threats. Palestinian NGOs warned the companies could face legal action for breaching sovereignty and war pillaging, while alleging Israel's allocation of licences defies UNCLOS principles. Over half the tendered zone falls within boundaries Palestine delineated upon joining UNCLOS in 2015.
The developments reflect enduring tensions around Palestinians' rights to offshore resources, as gas discoveries transform regional energy flows. With Israel preventing Palestinian drilling yet profiting from sales to them, the licence awards signal continuation of the status quo favouring Israeli interests. However, the NGO and court challenges highlight legal risks for international firms entering disputed zones, as well as dependence on Israel assuming unilateral control without negotiations. If upheld, Israel's approach could produce facts on the ground cementing inequities around Mediterranean gas. But potential reputational, commercial and legal liabilities for companies may compel more cautious approaches.