In Geopolitics Today: Tuesday, September 26th
Germany's Expanding Engagement in Central Asia, Central Banks Drive Global Gold Reserves to Record High, and other stories.
Germany's Expanding Engagement in Central Asia
Germany has expanded its engagement with Central Asia in recent years. High-level summits underscore Germany's aim to counter Russian and Chinese influence in the region by promoting economic ties. Germany steer Central Asian states' towards strategic autonomy, providing an alternative to Russia and China for trade and investment.
Germany's Central Asia policy exemplifies its global recalibration. Central Asia has become a strategic arena for the United States and its allies to balance Russian and Chinese influence. Building regional economic and institutional links not only advances EU strategy, but fortifies Germany's geopolitical position. Amid ruptured ties with Russia and growing rivalry with China, Germany's outreach provides Central Asian states options between powers. Managing the region's economic and security trajectory is now crucial for German interests.
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US and Kenya Sign Defence Agreement for Military Mission in Haiti
The US and Kenya have signed a defence agreement providing US support for Kenya to lead a military mission in Haiti. Kenya has offered 1,000 troops to combat surging violence if approved by the UN Security Council. The US backs the proposed deployment and has pledged funding and logistics aid.
The prospect of a Kenyan-led operation in Haiti is complex. Kenya seeks to affirm its position as a leading regional security provider. But past peacekeeping missions have been tarnished by misconduct allegations. While the US and UN see the deployment as urgently needed, others warn of potential harm to Haitians. The layered interests reveal how even well-intentioned interventions carry risks when local realities are disregarded.
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Central Banks Drive Global Gold Reserves to Record High
Global official gold reserves have hit a new record high, confirming the world's shift into a new era for the precious metal. Central banks continue acquiring gold to diversify away from the US dollar amid counterparty risks. Analysis accounting for unreported purchases puts reserves at 38,764 tonnes as of June 2023. This breaks the prior peak from 1965 and reflects gold's growing monetary role. Since 2008, central banks have bought over 7,000 tonnes, with gold's share of reserves rising after decades of decline.
The milestone underscores gold's allure for central banks hedging risks in an uncertain geopolitical environment. With massive global debts historically tamed through inflation, gold offers protection from a weakening dollar. As foreign central bank gold reserves rise, their dollar assets flatten, threatening a US funding crisis. The new record cements expectations that central banks will keep buying gold, elevating its monetary status versus the dollar. While symbolic for now, it confirms the global system is moving into uncharted territory regarding gold's future international role. The metal's resurgence has only begun.
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Russia's Strategic Focus on the Caucasus
While Russia's military focus is on Ukraine, its vulnerable southern border along the Caucasus Mountains remains a strategic concern. The region south of the mountains provides access to critical areas inside Russia and routes to the Black Sea. With Chechnya still unstable, and tense relations between Armenia and Azerbaijan, the Caucasus poses risks.
Russia wants to secure the area to protect its core territory and prevent Western penetration. Its shift from Armenia toward Azerbaijan reveals calculations to keep the region firmly within its orbit. Russia's grip on the Caucasus exemplifies its determination to assert control along its periphery. Renewed tensions offer chances to consolidate influence by mediating disputes. Support for Azerbaijan over Armenia shows priorities have shifted. For the West, penetrating the Caucasus would seriously pressure Russia, but this outcome remains unlikely. For small regional states like Armenia, Russia's realignments are perilous, as local conflicts become hostage to great power rivalry.
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US Approves Transfer of ATACMS Missiles to Ukraine
The United States has decided to provide long-range ATACMS missiles to Ukraine, a notable escalation in military aid. After months of deliberation, the US will send a version with cluster munitions, not the unitary warheads Ukraine requested. This allows strikes deeper in occupied territory but falls short of desired strategic impact.
The missile transfer reflects the complex calculus around military aid as the war drags on. Advanced weapons aid Ukraine but increase tensions with Russia, testing the limits of engagement. Despite earlier reservations, the Biden administration keeps greenlighting more lethal capabilities. But it treads carefully, limiting range and lethality for now. As Ukraine's needs evolve with the battlefield dynamics, so do American risk assessments about appropriate support. Yet the Kremlin may see any escalation as intolerable. Managing assistance amid an uncertain road ahead remains a precarious balancing act.
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Turkish President Visits Azerbaijan Amidst Nagorno-Karabakh Crisis
Turkish President Erdogan met with Azerbaijani President Aliyev in Nakhichevan as Armenians continued fleeing Nagorno-Karabakh. Azerbaijan seized the disputed enclave, recognized internationally as part of Azerbaijan but populated by ethnic Armenians. The timing of Erdogan's visit seemed provocative given Baku's demands for a transport corridor through Armenian territory.
Azerbaijan's ambitions, backed by Turkey, undermine Russia's influence. Iran worries the transport corridor could empower Israel and destabilize its borders. Though the US condemned violence, its need for Azerbaijani cooperation in the context of energy cooperation limits meaningful action. With few allies, Armenia feels increasingly abandoned. Russia likely hopes unrest could oust Armenia's pro-Western PM. The conflict encapsulates broader geopolitical realignments emerging in the South Caucasus and beyond.