In Geopolitics Today: Wednesday, March 8th
Oman Offers New Batch of Oil and Gas Concessions, South Africa's Parliament Downgrades Diplomatic Ties with Israel, and other stories.
Oman Offers New Batch of Oil and Gas Concessions
Oman's energy ministry has announced an upcoming offer of new onshore oil and gas concessions by the end of this month, followed by a new batch of offshore oil and gas blocks by the end of June. This has attracted interest from China, which has been targeting Oman due to its strategic location on the coastlines of the Gulf of Oman and the Arabian Sea.
Oman occupies a crucial geopolitical position in the oil and gas world, with the country's long coastlines and key ports offering an alternative to the politically-sensitive Strait of Hormuz. China has already invested in accessing the Strait of Hormuz through an all-encompassing 25-year deal with Iran. The same deal also gives China access through the Bab al-Mandab Strait, lying between Yemen and Djibouti.
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China and the United States Ramp Up Military Preparations
The geopolitical landscape between the United States and China has been tense for quite some time, with both nations ramping up their war preparations in response to forceful statements made by senior officials.
It remains unclear what the future holds for these two nations, but tensions continue to rise, and both countries seem to be preparing for the worst. The US is increasing its military and diplomatic initiatives across China's periphery, while China has drastically increased its aerial patrols near Taiwan’s air defences that often feature dozens of military aircraft and drones. Both countries are now engaging in semi-secret strategies that are pushing both powers toward a direct confrontation.
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Inflation Risks Threaten Global Economy's Stability
The global economy is facing increased recession risks due to high inflation rates in the United States and Europe, which will lead to a further tightening of financial conditions. This will have negative impacts on the economic and financial outlook of countries worldwide, especially those in Latin America and Africa. However, Asian countries will be less affected due to China's economic rebound.
The US and Europe have implemented substantial monetary tightening over the past year, but have not yet reduced inflation. While headline inflation has declined, it remains above the inflation target, and core inflation has remained unexpectedly high. The IMF expects the US and euro area economies to experience slower growth this year due to the impact of policy rate hikes. To reduce inflation, interest rates will need to be substantially increased, but this may also increase unemployment and cause a recession. China's economic rebound is expected to offset some of the increased recession risks in the West.
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South Africa's Parliament Downgrades Diplomatic Ties with Israel
South Africa's parliament has voted in favour of a motion to downgrade the Israeli mission to the country from an embassy to a liaison office. While the decision is politically significant, it is not legally binding, and the South African government would have to adopt the motion for it to take effect. The government has yet to issue a reaction to the vote.
Bilateral relations between Israel and South Africa have been complicated ever since the end of apartheid in 1994, due to Pretoria's solidarity with Palestinians and ties with Palestinian groups. In 2018, South Africa decided to downgrade its mission in Israel, and since then, no new ambassador has been appointed. The decision highlights the complicated nature of bilateral relations between the two countries, with Pretoria's solidarity with Palestinians and ties with Palestinian groups remaining a major sticking point. It remains to be seen whether the South African government will adopt the motion and inform Israel of the downgrade.
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Philippine Coast Guard to Expose China's Aggression in South China Sea
The South China Sea is a disputed area where tensions have been running high. The Philippine coast guard has taken a proactive stance by publicizing instances of Chinese aggression in the area. Their efforts have included intensifying patrols in the disputed waters, documenting and publicizing Chinese behaviour, and releasing videos and photographs of Chinese actions to the public.
This strategy has sparked international condemnation and put Beijing under the spotlight. The Philippine coast guard's role as a mouthpiece against Chinese aggression allows like-minded states to express condemnation and reproach, which puts growing pressure on Beijing. While the Philippine government may come under Chinese pressure to stop publicizing China's actions, this strategy reshapes public opinion to favour the Philippines and increase international scrutiny of China.