In Geopolitics Today: Wednesday, September 27th
Egypt Expands Exploration Rights in Mediterranean and Nile Delta, US Suspends Assistance to Gabon, and other stories.
Egypt Expands Exploration Rights in Mediterranean and Nile Delta
Egypt has awarded exploration rights in the Mediterranean and Nile Delta to Eni, BP, QatarEnergy and Russia's Zarubezhneft in its latest bid to boost domestic oil and gas production. It comes after Egypt announced a bid for 23 new blocks as it aims to become a regional energy hub. With recent major discoveries like the giant Zohr gas field, Egypt is attracting foreign investment to expand output.
Egypt's push for more oil and gas reveals its balancing act as a fossil fuel producer. While seeking energy self-sufficiency and export revenues, Egypt also wants to be a green energy leader. But insufficient renewable infrastructure still force oil and gas reliance despite growing pressures to cut emissions. With European demand rising as Russian supplies fall, Egypt sees plenty of opportunities in energy markets. However, reforming its energy mix remains critical for environmental and economic reasons. The strategy carries both rewards and risks amid the global energy transition.
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China Expands Yuan's Influence in Latin America
China is making inroads expanding the yuan's reach in Latin America, challenging longstanding US dollar dominance. Argentina now allows yuan-funded investment and imports, while paying some debts in yuan. Brazil is also boosting yuan use, dropping the dollar for China trade. While the dollar still leads, policy shifts reveal China's growing currency clout. This reflects Beijing's push for global yuan adoption, though dollar preeminence remains far off.
The yuan's spread into Latin America signals shifting monetary terrain amid US-China rivalry. As China provides alternative options, some heavily indebted nations leverage its currency to ease pressing financing needs. For China, wider yuan use chips away at the dollar's privileged status. But limits exist, as upcoming elections could reverse Argentina's tilt. And most commerce still flows in dollars. Nonetheless, with strategic goals at play, currency competition illustrates financial power's geopolitical significance.
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Eastern Mediterranean Gas Discoveries Reshape Regional Geopolitics
The discovery of sizeable natural gas deposits is transforming geopolitics in the Eastern Mediterranean. Israel, Egypt, and Cyprus are positioning themselves as potential gas suppliers to energy-hungry Europe. This is driving regional cooperation on export infrastructure like pipelines and liquefaction. Former rivals like Israel, Turkey, and Lebanon are also negotiating indirect agreements enabling extraction. While challenges remain, gas interests are fostering engagement between countries typically at odds.
Eastern Mediterranean gas reveals how energy interdependence can reorder strategic relationships. Gas exports provide economic incentives for compromise and cooperation between adversarial states. Market needs eclipse political grievances, as former enemies become business partners. Yet with long-term decarbonization, countries also risk stranded assets, underscoring the precarious nature of fossil fuel diplomacy. Nonetheless, complex interdependencies are emerging, with gas binding together traditional regional foes in commercial and political relationships.
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Chinese Politics Since Hu Jintao
A close study of Chinese political discourse since 2002 reveals an ongoing struggle between reformist and conservative camps that shaped Xi Jinping's rise. Behind Xi's strongman rule was indispensable support from conservatives after reformers briefly empowered him early on. Xi's initial straddling of leftist and rightist policies reflected unsettled elite contestation. Around 2015, conservatives gained decisive advantage, enabling Xi's ensuing consolidation of power. The analysis challenges conventional periodization and theories of elite politics under authoritarianism.
The two-line struggle perspective highlights elite dynamics that precipitated Xi's autocratic turn. As competing blocs vied to steer China's course, Xi allied with ascendant conservatives after earlier reformist backing dissipated. The protracted contest despite leadership turnover shows partial institutionalization's limits in regulating elite power transitions. Autocracy breeds perpetual tension between rules and unregulated power struggles. While personnel and policies fluctuate, lasting uncertainty persists absent fundamental political opening. The study illuminates potentials and complexities in analysing opaque elite politics through public political discourse.
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Argentina to Maintain Paraná River Tolls
Argentina will continue charging tolls on barges using the Paraná River after talks failed to resolve the dispute with neighbouring countries. At a commission meeting in Buenos Aires, Argentina defended the tolls as needed to finance dredging and maintenance. But Paraguay, Brazil, Bolivia, and Uruguay objected, questioning the costs and alleged discrimination favouring Argentine vessels. With no agreement reached, the tolls will remain in place, despite regional protests. The issue may go to arbitration next.
The Paraná River tolls spat highlights tensions over regional waterways that enable trade. For landlocked Paraguay, the route to the Atlantic is economically vital. Argentina justifies tolls for upkeep, but faces accusations of unfair costs and practices. The failure to find a solution reflects clashing interests between neighbours over resources. While arbitration could settle the immediate dispute, broader waterway access issues persist. As regional powers leverage strategic assets, commerce suffers from unresolved rivalries. The stand-off shows how infrastructure control grants geo-economic leverage, but cooperation remains elusive.
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US Suspends Assistance to Gabon
The US is pausing some assistance programs to Gabon following last month's military coup. Secretary of State Blinken announced the aid suspension as Washington reviews the unconstitutional takeover. The move aligns with steps by African bodies like the AU and Economic Community of West African States (ECOWAS). But the US will maintain diplomatic and consular activities in Gabon.
The decision reflects US caution amid Africa's coup contagion. By suspending non-essential aid, Washington signals disapproval of unconstitutional changes of power. Yet continuing critical operations shows it wants to maintain engagement during an uncertain transition. Balancing condemnation and interests is a diplomatic balancing act on Washington’s part. Gabon's political trajectory remains uncertain under military rule. The US seeks to both uphold democratic norms and retain influence amid fluid situations.