In Geopolitics Today: Wednesday, October 4th
Kurdistan Oil Companies Demand $1 Billion Arrears Payment, Ukraine Accelerates Defence Industry Reforms, and other stories.
Ukraine, Poland and Lithuania Reach Agreement to Boost Grain Exports
Ukraine, Poland, and Lithuania have agreed to shift grain inspections from the Ukraine-Poland border to a Lithuanian port. This aims to expedite Ukrainian agricultural exports to global markets. Ukraine has struggled with grain logistics since Russia's invasion, and the deal may ease recent tensions between Ukraine and a number of EU states over restricting Ukrainian grain exports.
The agreement indicates pragmatism is overriding grievances between Ukraine and regional partners. Streamlining procedures helps Ukraine export more grain to needy countries. This reaffirms shared interest in sustaining Ukraine's economy and countering Russian aggression. However, underlying agricultural trade disputes could resurface without long-term solutions. Sustaining unity requires balancing competing interests, despite frustration on all sides.
Read more about this story here.
Kurdistan Oil Companies Demand $1 Billion Arrears Payment
Kurdistan oil companies say they cannot resume northern Iraq pipeline exports until paid $1 billion in arrears. This follows Turkey stating its pipeline to Ceyhan port is ready to restart flows. But producers want payment guarantees before supplying oil, as Baghdad now oversees Kurdish crude sales. Companies warn they will sell to buyers providing upfront payments absent a deal.
The impasse continues despite Iraq losing an estimated $1 billion monthly without Kurdish oil. The stand-off between Baghdad, Erbil, and foreign energy firms must be resolved to restore Kurdish exports. Bridging divides over contract terms and revenue sharing is key for progress. Baghdad risks permanently losing oil revenues and producer confidence if arrears remain unpaid. However, companies equally need export routes and face risks from unilateral sales. While all sides have incentives to compromise, complex political and legal issues remain obstacles. Iraq's next government faces tough bargaining ahead to revive this economic lifeline.
Read more about this story here.
Defence Priorities for Key NATO States
A recent report emphasizes the need for NATO to expedite efforts in enhancing deterrence and defence capabilities over the next five years, given Russia's current vulnerabilities. While acknowledging NATO's progress in adopting a new strategy, adjusting force posture, and committing to increased spending, the report underscores the necessity for additional measures to ensure swift reinforcement, bolster combat capabilities, and secure critical resources such as munitions.
Critical to achieving these objectives is the sustained support of the public and continued US leadership within NATO. It is recommended that each NATO member leverage their individual strengths, fostering enhanced collaboration and optimizing the utilization of security cooperation. Drawing lessons from the Ukraine conflict can further contribute to a unified effort among member states. This strategic window of opportunity is deemed vital for NATO to transition from its longstanding focus on overseas endeavours and realize authentic collective defence capabilities.
Read more about this story here.
Russia's Updated Foreign Policy Concept Emphasis on Maritime Power
Russia's updated Foreign Policy Concept highlights a significant shift towards maritime power, underscoring the importance of the "World Ocean" in Moscow's strategic goals. This shift involves prioritizing sovereign rights at sea, fostering cooperation with China, and countering Western alliances, all aimed at creating connections among emerging global powers within a multipolar framework.
This maritime-oriented approach carries substantial strategic implications, particularly as Russia seeks to move beyond its isolation resulting from the Ukraine crisis. Gaining control over oceanic regions and polar areas can potentially enable Russia to project power on a global scale. Partnerships with China and India also hold the promise of unlocking economic opportunities. Nevertheless, it's crucial to acknowledge that these possibilities remain somewhat distant, especially when compared to Russia's current isolation. While Russia's naval ambitions are noteworthy, they may appear more aspirational than realistically achievable in the near term, particularly considering the challenges posed by its international isolation.
Read more about this story here.
Report Highlights Challenges in Somalia's Battle Against al-Shabaab
A new report analyses Somalia's halting progress and setbacks in its war against al-Shabaab. It finds that after initial battlefield gains in 2022, the Somali government's counteroffensive has stalled. Al-Shabaab retains support among southern clans and is expanding regional bases to withstand pressure. Weak political consensus hampers military efforts.
The report casts doubt on prospects for decisively defeating al-Shabaab anytime soon. Instead, more realistic goals involve degrading the group and fracturing it through defection of leaders and clans. Managing expectations is key. While some progress has occurred, al-Shabaab remains adaptive and entrenched. Somalia's dysfunction fuels the insurgency. A durable improvement requires political reconciliation beyond just military action.
Read more about this story here.
Ukraine Accelerates Defence Industry Reforms
Ukraine is aggressively reforming its defence industry amid the war, moving away from its Soviet-era legacy towards alignment with NATO. It aims to become a major global arms producer and reduce reliance on foreign weapons. Ukraine is establishing partnerships with Western defence firms to facilitate technology transfer and joint production. Despite past corruption and inefficiencies, the war has created marketing opportunities and demand for Ukrainian systems like anti-tank missiles.
A modernized defence industry carries strategic benefits but risks as well. For Ukraine, domestic production enhances self-sufficiency and leverage in acquiring Western arms. Deeper defence ties with Western arms producers integrate Ukraine militarily with NATO members. Ukraine must balance pursuing arms sales abroad with preventing proliferation. Amid the wartime boom, ensuring ethics and oversight will be critical. While the war spurred this shift, sustaining a transparent, efficient Ukrainian defence industry over the long term remains a tall order.