In Geopolitics Today: Tuesday, July 25th
European States Confront a Long-Range Strike Conundrum, Japan’s Semiconductor Export Restrictions Go Into Effect, and other stories.
UK's Defence Paper Reveals Funding Shortfall for the Royal Navy
The recently published UK Defence Command Paper (DCP23) has shed light on the challenges facing the Royal Navy amid funding shortfalls and a lack of detailed commitments. The paper confirms an £11 billion increase in the Defence Budget over 5 years, with an additional £5 billion available to the Ministry of Defence in the next two years. DCP23 fails to provide specifics on the future force structure, avoiding any new commitments on platforms, and sparking concerns about accountability and transparency.
As the UK faces ongoing economic uncertainties and political changes, the DCP23 leaves many questions unanswered, with no outline order of battle and a lack of clarity on major projects such as Type 32 frigates and Multi-Role Support Ships. The paper promises a Defence Global Response Force (GRF) but relies on re-branding existing high-readiness forces without introducing new assets. While there is a focus on personnel and efforts to address procurement inefficiencies, the lack of concrete plans for the future of the Royal Navy raises concerns about its capabilities and readiness in the evolving geopolitical landscape.
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European States Confront a Long-Range Strike Conundrum
The ongoing war in Ukraine has underscored the strategic importance of long-range strike weapons in modern warfare. Such capabilities allow for engagements at operational and strategic depths, enabling offensive and defensive manoeuvres critical for battlefield victory. However, European states have largely neglected investments in long-range strike arsenals. Consequently, their current missile stockpiles are ill-equipped for high-intensity warfare.
The war in Ukraine has showcased the value of long-range strike weapons, but European states have lagged behind global counterparts in embracing this critical capability. The relatively compressed European geography makes long-range strike missiles more effective for reaching a larger set of targets and providing rapid response to enemy attacks, contributing to NATO's forward defence objectives. However, existing European long-range strike arsenals fall short of operational needs, particularly for dedicated long-range land-attack capabilities. European states must now grapple with the challenge of meeting their own strategic needs while simultaneously supplying Ukraine with long-range strike weapons. The limited excess capacity in Europe will further strain stockpiles, necessitating a new approach to long-range strike capabilities.
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Iraqi Prime Minister's Visit to Syria Signals Regional Realignment
Iraqi Prime Minister Mohammed Shia al-Sudani's recent visit to Damascus, where he met with Syrian President Bashar al-Assad, marks a significant development in Iraqi-Syrian relations. This visit is the first by an Iraqi prime minister to Syria since 2010. The meeting covered various issues impacting both countries, including terrorism, water, drug trafficking, refugees, Israeli attacks, US sanctions, and economic development. Baghdad sees engagement with Damascus as essential for its national interests, especially amid Damascus's increasing reintegration into the region's diplomatic fold.
Throughout history, Iraqi-Syrian relations have been complex and marked by periods of hostility and thawing. The rise of a pro-Iranian political order in post-Ba'athist Iraq paved the way for recent rapprochement with Syria. Now, with Sudani and Tehran-aligned allies governing Iraq, and most of the Arab world normalizing relations with Assad, bilateral ties between the two countries have significantly improved. Engaging with Damascus is a pragmatic move by Baghdad due to shared border, security, economic, and environmental challenges. However, US sanctions under the Caesar Act pose risks to Iraq's economic ties with Syria, limiting economic cooperation. Despite this, Iraq seeks to strengthen border security, combat the Islamic State, and address water and environmental issues in collaboration with Syria.
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French President Focusing on New Caledonia's Status
French President Emmanuel Macron is currently on a trip to Oceania, with a two-day visit to New Caledonia to address the nation. During his 2018 visit, he launched a series of independence referendums under the 1998 Nouméa Accord. Now, the political scene remains deeply divided between pro-independence and loyalist blocs after three referendums. Macron confirmed that a constitutional reform will determine New Caledonia's future institutional framework within France, and he emphasized the need for a consensus among political forces during discussions on the archipelago's status.
The visit comes as negotiations on the territory's future institutional framework continue, with both sides invited to Paris for a trilateral meeting on the issue. The Nouméa Accord requires a reform of New Caledonia's status after three referendums, and both separatists and non-separatists are engaged in discussions about the future electorate and residency requirements for voting in provincial elections. Macron's emphasis on consensus indicates the complexity and sensitivity surrounding New Caledonia's path to self-determination.
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Oil Pipeline Closure Impacts Kurdish Autonomy and Economy
The Kurdish Regional Government (KRG) in northern Iraq faces a significant challenge as its oil pipeline, responsible for 10% of Iraq's overall exports and 0.5% of global production, has been closed since March 25. The stoppage has cost the KRG nearly a billion dollars a month, exacerbating the region's dependency on oil exports, which account for 80% of its budget. While the KRG and the Iraqi government reached a temporary agreement on oil export methods, Turkey has yet to renew exports, utilizing its leverage to negotiate payment terms and settle ongoing disputes between the two countries.
The dispute between the KRG and the Iraqi government highlights the broader struggle for Kurdish autonomy in Iraq. Despite past agreements, tensions have arisen over control of the energy sector and revenue distribution. The current budget law, approved in June, seeks to address the conflict by requiring the KRG to provide 400,000 b/d of oil to be marketed by Iraq's state oil company, while receiving 12.7% of the national budget in return. However, political dynamics in Baghdad and the region's fragile stability may challenge the sustainability of this arrangement. Additionally, the issue of natural gas remains unresolved, potentially further impacting the KRG's economic and political autonomy. The KRG's acceptance of these new arrangements may alleviate some economic problems, but could also signify a significant loss of autonomy as Baghdad asserts greater control over nationwide energy development and policy.
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Japan’s Semiconductor Export Restrictions Go Into Effect
Japan has implemented new restrictions on exports of advanced semiconductor production equipment, following the United States' lead. The restrictions, which target 23 specific types of equipment, are broadly aimed at China but lack specificity. The impact on Japanese equipment makers and Japan-China relations remains uncertain. If the restrictions result in a worst-case scenario, billions of dollars in sales could be at risk, and China might retaliate with restrictions on critical materials. Japan's significant trade with China and its reliance on international trade underscore the potential risks associated with the country's stance.
The decision to impose export controls on semiconductor equipment reflects Japan's concerns about China's push for advanced technologies. While Japan is trying to coordinate its controls with the US and the Netherlands, differences in chip-making equipment controls may test unity among the three countries. The uncertainty around the impact of the restrictions and potential retaliation from China has sparked debates within Japan about its foreign policy stance and alignment with the US. The ongoing discussions reflect a contingency planning approach and signal to China that Japan is not pursuing a single-minded policy but is rather focused on taking advantage of the market and safeguarding its trading interests.