In Geopolitics Today: Tuesday, January 31st
High-level Visit Reveals Little Change in US Policy towards Israel, The IMF Raises Russia’s 2023 GDP Forecast, and other stories.
High-level Visit Reveals Little Change in US Policy towards Israel
The US Secretary of State Antony Blinken visited Israel this week amid heightened tensions and violence between Israelis and Palestinians. The Biden administration has acknowledged a US interest in cooperating with Israel on efforts to damage Iran's nuclear and missile programs.
Blinken's visit reinforced Washington's “ironclad” commitment to Israel. Blinken did not criticize Israel, but praised the US-Israel alliance and did not mention the Palestinians killed by Israel this month. The Biden administration is maintaining the status quo, with no signs of change, and human rights are not a top priority. Blinken's trip is not expected to bring any change, and many Palestinians rightfully view it as an “insignificant” one to their interests.
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US-Philippine Military Deal in the Works for Enhanced Access to Bases
The United States and the Philippines are reportedly working out a deal that will see the US secure access to additional military bases in the Philippines. The expansion justifies US access to Philippine military facilities on the grounds of a need for rapid responses to natural disasters and other security concerns.
The move would fall under the terms of the 2014 Enhanced Defense Cooperation Agreement (EDCA), which currently gives US access to 5 military facilities across the Philippines. The opening of access to military facilities on Luzon island would provide the US with a strategic position for operations in the event of conflict in Taiwan or the South China Sea. Such a move would also be a major improvement in US-Philippine relations, marking a return to the same military posture that existed between the two countries in the late Cold War.
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The IMF Raises Russia’s 2023 GDP Forecast
The IMF has raised its 2023 forecast for Russia's GDP from a decline of 2.3% to an increase of 0.3%, saying the G7's oil price cap won't significantly impact Russia's crude oil exports. However, Russian economists still have a more pessimistic outlook for the country's economy in 2023.
Russia's government still predicts an economic contraction of 0.8% with a 23% drop in oil and gas revenues compared to 2022. Oil and gas exports make up roughly 20% of Russia's GDP, so higher-than-expected export prices or volumes could boost the country's 2023 GDP. Higher GDP isn't necessarily tied to economic prosperity either, and therefore, it won't affect the political stability of Russia's war in Ukraine, but it could give Moscow more resources to fund the conflict.
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Increased Autonomy Across Much of Latin America
Two trends are emerging in Latin America. The first is that the region is enjoying a newfound autonomy, with a reduced foreign influence, giving governments more room for decision-making. The second trend is that the region is governed by a coalition of leftist leaders, who share a common objective of fighting against inequality and increasing the strength and resources of the state.
This new cohort of leaders wholeheartedly reject neoliberalism and the Washington Consensus. The US recognizes Latin America as a region with immense potential that includes a number of key potential allies for Washington. Latin America could prove a reliable source of food, energy, critical minerals and large labour force for the US in the medium-long term if positive ties can be built and maintained. At the same time, Washington wants to avoid a scenario where Latin American countries align their political and economic systems with China.
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Qatar Replaces Russia's in Lebanon's Offshore Energy Deal
Qatar’s state-owned QatarEnergy has agreed to take a 30% stake in Blocks 4 and 9 of Lebanon's offshore energy exploration in the Mediterranean Sea, replacing Russia's Novatek. French multinational TotalEnergies and Italian multination Eni will join Qatar and each hold a 35% stake.
The deal follows the demarcation of the maritime border between Israel and Lebanon and is seen as concrete progress in the border agreement brokered by US energy envoy Amos Hochstein. The deal will provide job opportunities for Lebanese workers in the technical field and open the way for further investment in Lebanon's energy sector, while also dislodging Moscow from energy deals with Lebanon. TotalEnergies plans to select a drilling rig in Q1 2023, while the Lebanese Energy Ministry aims to start drilling in Block 9 this year.