In Geopolitics Today: Wednesday, December 7th
High Oil Prices Fuelling Economic Growth In The Middle East, The US and the UK Launch Energy Partnership, and other stories.
Mekelle Reconnected to Ethiopia’s Power Grid
Ethiopia's state-owned Ethiopian Electric Power company has confirmed that the Tigray region's capital Mekelle has been reconnected to the national grid. The region has experienced more than a year of power outages as conflict between the Army and the Tigray People's Liberation Front (TPLF) raged.
Restoring power and communications to Tigray is one of the key stipulations of the peace deal signed last month between the leaders of the Ethiopian government and the TPLF. Parts of that agreement are already fraying, with TPLF’s disarmament seeing little progress and the presence of Eritrean military forces complicates a post-war settlement. Nevertheless, the deal as a whole still appears to be holding and the resumption of power to Tigray serves as a strong signal that the peace may hold.
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High Oil Prices Fuelling Economic Growth In The Middle East
As global economic uncertainty rises due to high inflation, geopolitical crises and supply chain insecurity, the Middle East is experiencing economic growth. Countries in the region are taking advantage of high prices for hydrocarbon resources by investing in new technologies and infrastructure projects.
By embracing digitalisation, diversification and establishing sustainable finance network, countries in the Gulf are working to mitigate future risk by bolstering economic resilience. The efforts of Gulf Cooperation Council (GCC) countries in driving the policy of the Organisation of the Petroleum Exporting Countries (OPEC) has played a key role in keeping oil prices high.
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Hungary Vetoes the EU’s Financial Aid Package to Ukraine
Hungary has vetoed the approval of a new EU package of financial aid for Ukraine. Budapest’s veto means key votes on the EU’s agenda will be delayed, including the introduction of a minimum 15% corporate tax rate and proposals to unblock 5.8 billion euros ($6.1 billion) in grants for Hungary's pandemic recovery fund.
Hungary is attempting to leverage its veto power to dissuade Brussels from freezing its cohesion funds. Should Brussels and Budapest fail to reach a compromise in the coming weeks, Hungary's veto will postpone the implementation of the tax rate and the disbursement of aid to Ukraine until early 2023. The EU may seek to approve both proposals through an enhanced cooperation that would allow Brussels to legally ignore vetoes.
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Congolese M23 Rebels Agree to Withdraw from Occupied Areas
The M23 rebel group active in the Democratic Republic of the Congo has said it is ready to withdraw from territory it occupied in country’s east. In addition, rebel group renewed its request to engage in an ongoing peace dialogue to discuss the implementation of the cease-fire agreed last month.
A withdrawal would meet the Congolese government's conditions for peace talks to begin, so the move may open the door to negotiations. However, Kinshasa and its allies in the East African Community may still refuse to negotiate. Even if negotiations do begin, violence is likely to continue, and fuel mutual distrust between negotiating parties that could still derail any progress toward peace.
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The US and the UK Launch Energy Partnership
The United States and the United Kingdom have announced a new energy partnership that promises deepened cooperation between the two powers in bringing global energy prices down and boosting energy security.
Under the UK-US Energy Security and Affordability Partnership, the two allies will jointly lead a new Action Group, which will work to cut reliance on Russian energy globally, advance renewable energy projects, and promote civil nuclear energy. As part of the partnership, the US will increase transfers of liquefied natural gas (LNG) over the next year via UK import terminals, with 9-10 billion cubic meters of LNG expected to be shipped from the US over the next year.