In Geopolitics Today: Tuesday, September 19th
Azerbaijan Launches Military Operations in Nagorno-Karabakh, Venezuela Denounces Guyana's Offshore Oil Auctions, and other stories.
Malaysia Turns to Resource Sovereignty for Critical Minerals
Malaysia has announced plans to ban exports of rare earth elements like lanthanides and monazite, used in high-tech industries. The move aligns with a regional trend toward resource nationalism, as countries aim to boost domestic mineral processing. Malaysia currently provides 5% of global rare earth imports. While not a top producer, it hopes to leverage its reserves to develop rare earth refining capacity and associated high-tech manufacturing. The bans intend to guarantee maximum economic benefit rather than exporting raw materials.
Malaysia's gambit represents developing countries' growing assertiveness over their strategic resources. With China dominating rare earth refining, Malaysia wants to claw back value and reduce dependence. However, its limited deposits and technological capacity provide little leverage compared to China's near-monopoly. Success will hinge on attracting foreign know-how. Meanwhile, more export bans may be on the horizon as Malaysia and others pursue resource sovereignty. While questionable economically, these moves have political logic. But they risk fragmenting supply chains and inflaming great power tensions over critical minerals access.
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Azerbaijan Launches Military Operations in Nagorno-Karabakh
Azerbaijan has launched a military offensive in the disputed Nagorno-Karabakh region, with the stated goal of conducting "anti-terrorist operations" and demanding the "complete withdrawal" of ethnic Armenian forces. Armenia accused Azerbaijan of "full-scale aggression" against the local Armenian population and urged Russian peacekeeping troops to intervene. The fighting has led to casualties on both sides, with France and the EU condemning Azerbaijan's actions and calling for an immediate ceasefire.
This latest flare-up of violence threatens to destabilize the entire Caucasus region. It could undermine tentative peace talks between Armenia and Azerbaijan, jeopardize Russia's role as a peacekeeper, and increase involvement from outside powers like Turkey. Moreover, the fighting undermines confidence-building measures that were aimed at establishing economic ties between Armenia and Azerbaijan. With world leaders gathered at the UN General Assembly, the international community will be pressed to prevent the violence from spiralling further. Intensified diplomacy and mediation efforts led by Russia, France and the US may be required to enforce the ceasefire and prevent the outbreak of another brutal war over Nagorno-Karabakh.
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Turkmenistan's Gas Reserves Key to Europe's Energy Future
Turkmenistan holds one of the world's largest natural gas reserves, and has been pursuing agreements to export its gas to Europe as an alternative to Russian supplies. In August, Turkmenistan signed a framework deal to export gas to Hungary, which is seeking to end its dependence on Russian gas when its contract expires in 2024. Turkmen gas could potentially be delivered via pipeline swaps through Iran and Azerbaijan, using spare capacity in the Southern Gas Corridor. Meanwhile, Iraq is also negotiating a gas deal to help meet its domestic electricity needs.
With Russia cutting gas flows, Europe is scrambling to line up new stable suppliers. Turkmenistan has the reserves but lacks export routes. Azerbaijan and Turkey are key to unlocking Caspian gas through potential pipelines. But major investment is required to build the infrastructure, as infrastructure will be required to export larger volumes directly across the Caspian Sea to Europe. EU member states will likely need to provide financing support if they want to accelerate gas exports from Turkmenistan. Geopolitics also come into play, with Russia wary of a new Caspian pipeline challenging its regional gas dominance. While deals are incremental now, Turkmenistan's huge reserves could make it a strategic player in Europe's future gas supply if regional issues can be resolved.
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EU-Mediated Talks Between Serbia and Kosovo Fail to Yield Progress
The latest round of EU-mediated talks between Serbia and Kosovo ended without progress on September 14th. The negotiations aim to normalize relations between the Balkan neighbours after conflicts surrounding Yugoslavia's breakup. The United States expressed disappointment at the lack of agreement. The dialogue is seen as vital to stabilizing the region and advancing Serbia and Kosovo’s EU aspirations. However, long-standing divisions remain unresolved.
Despite years of EU facilitation, fundamental gaps persist on issues like Kosovo’s independence and Serb minority rights. With nationalism still prevalent, compromises face seemingly insurmountable domestic opposition. Still, normalization remains critical for both sides' future integration into Europe. While slow, these talks establish needed communication channels. Patience and pragmatism, not grand bargains, may be the best path forward. Small confidence-building steps are a way to lay the groundwork for reconciliation between these estranged neighbours over time.
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ASEAN Launches Joint Military Exercise
The Association of Southeast Asian Nations (ASEAN) commenced a five-day joint military exercise involving all 10 member states plus Timor-Leste. The maritime drills focus on disaster response and rescue operations rather than combat. They were originally planned for disputed waters in Indonesia's exclusive economic zone, but were shifted to avoid escalating tensions with China. While not directly challenging China's claims in the South China Sea, the exercises showcase ASEAN unity and could lay the groundwork for more coordinated security efforts.
The exercises represent a small but meaningful step for ASEAN amid divisions over the South China Sea. Cambodia likely opposed drills in disputed waters, given its close China ties. But finding common ground remains crucial as China presses its claims. While limited now, greater ASEAN security collaboration could bolster regional resilience. However, deep differences over how to engage China will persist. Managing ties with Beijing while asserting autonomy will require deft diplomacy. With no simple path ahead, these drills could signal either greater ASEAN coordination, or continued struggle to reach consensus.
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Venezuela Denounces Guyana's Offshore Oil Auctions
Venezuela has denounced Guyana's recent offshore oil auctions in disputed waters claimed by both countries. Caracas asserts Guyana lacks sovereign rights in these areas under international law without an agreement between them. The long-running border controversy centres on the Essequibo region, spanning over 160,000 square km rich in resources. While Guyana recognizes a 1899 boundary set by arbitration, Venezuela argues that was invalid and refers to a 1966 deal with the UK calling for a negotiated settlement.
The dispute highlights competing historical claims and uncertain international arbitration. With billions of barrels at stake, oil exploration has intensified tensions. While Venezuela protests the auctions, Guyana sees offshore development as vital for its economy and future. With mistrust on both sides, compromise will not come easily, and avoiding unilateral actions while maintaining dialogue will be crucial to prevent miscalculations. Creative solutions like jointly developing resources could enable pragmatism to overcome national self-interest in solving this complex territorial dispute.