Feb 9, 2019 | 19:46 GMT

8 mins read

The Weekly Rundown: Aid Standoff in Venezuela, European Competitiveness and U.S.-Saudi Relations

The Venezuelan military blocked the Tienditas International Bridge on the Colombian border on Feb. 5, 2019, to prevent aid supplies from entering the country.
Stratfor's geopolitical guidance provides insight on what we're watching out for in the week ahead.

On the Record

If Chavez were alive, he'd overthrow Maduro.

Rafael Ramirez, former Venezuelan oil minister

On Our Radar

Are Maduro's Days Numbered? The United States is working with Brazil and Colombia to deliver humanitarian assistance to the Venezuelan border. And on Feb. 13, Colombian President Ivan Duque will meet with U.S. President Donald Trump in the White House to discuss regime change in Venezuela. Further actions by Colombia and the United States to encourage the departure of Venezuelan President Nicolas Maduro, including tighter sanctions and deeper investigations, are likely. Similarly, the aid shipments are intended to put the Maduro government in a politically difficult position. Maduro's continued refusal to let the aid into Venezuela will harm what little domestic support he retains. Venezuelan military commanders, hoping to avert a riot at the border by hunger-stricken Venezuelan refugees, may let the humanitarian aid pass, in violation of Maduro's orders. Such a move would create a significant split between Maduro and the armed forces and place pressure on military commanders to choose whether to stick by the unpopular president or cooperate with the distribution of U.S.-sponsored assistance.

Failed Merger Spurs EU Reform Effort. Germany and France announced this week that they will present plans to reform the European Union's antitrust rules within the next three months. The announcement followed the European Commission's Feb. 6 decision to block the merger of railway giants Alstom and Siemens. The Germans and the French are increasingly worried about U.S. and Chinese companies, as well companies from other countries, outcompeting their European rivals and want to create European "champions." But any reforms in EU antitrust rules will have to wait, because a new European Parliament will be elected in May, followed by the appointment of a new European Commission around October. We expect the future of antitrust policies to be one of the main debates in the European Union heading toward 2020.

Russia's Increasingly Heavy Hand in Afghanistan. Diplomacy and war are shaping Russia's positioning on Afghanistan. On Feb. 5, Taliban officials and prominent Afghan politicians outside of President Ashraf Ghani's administration met in Moscow, highlighting Russia's role as a powerful regional actor seeking to shape peace negotiations countering U.S. influence. Central Asia's exposure to Afghanistan is another core Kremlin concern. Russian Foreign Minister Sergei Lavrov toured several Central Asian countries this week, with security issues — including the potential for a second Russian military base in Kyrgyzstan — a key focus. Russia can be expected to play up the security threat posed by the Islamic State and other militant groups in Afghanistan as a means to beef up its security presence in Central Asia.

Long-Awaited Kim-Trump Summit Date. During his State of the Union address on Feb. 5, U.S. President Donald Trump announced that he and North Korean leader Kim Jong Un will meet Feb. 27-28 in Vietnam. On Feb. 8, Trump identified where in Vietnam, tweeting that he and Kim will meet in Hanoi. The past eight months have seen some reversible demolitions of North Korean test sites, the continued halt of North Korean nuclear and missile tests and a freeze in U.S.-South Korea military exercises but little progress in terms of North Korea's denuclearization. Pyongyang has been pressing the United States to provide "corresponding measures," including the rollback of sanctions. Washington, however, has hesitated to grant any concessions without first securing tangible signs that North Korea is willing to give up its nuclear weapons or at least its systems that are capable of striking the United States. Washington is now hinting it might be willing to sign a declaration, or even a peace treaty, ending the Korean War but will not do so without commensurate measures from North Korea.

Rate Cut Is a Positive Sign for Modi. The Reserve Bank of India's first interest rate cut in 18 months offers good news for Prime Minister Narendra Modi as he faces a tough re-election contest by May. On Feb. 7, the central bank lowered its key lending rate by a quarter of a percentage point to 6.25 percent. The cut arrived under new bank governor Shaktikanta Das, who took over in December after Urjit Patel quit following a prolonged tussle with Modi over policy differences. Modi hopes that the lower rate translates into more credit for small businesses, a key constituency hit hard by the government's 2016 demonetization drive and 2017 rollout of the Goods and Services Tax. While a rate cut will increase the risk of inflation, it's a risk Modi is willing to take if it boosts the chances of his party winning another five-year term.

Nigeria's Election Approaches. As President Muhammadu Buhari and his main opponent, Atiku Abubakar, lock up final support before Nigeria's Feb. 16 election, the broader question of whether the country will pull off a vote free of controversy weighs heavily. Indeed, Buhari's recent suspension of Nigeria's chief justice — which the opposition decried — is feeding into the dynamic of potential election controversy. Whether Buhari removed the chief justice as a potential roadblock ahead of the contest or not, the election is bound to be a close affair as an emboldened opposition tries to unseat the incumbent president.

Next Round of U.S.-China Trade Talks. World markets, upbeat from last week's talks, cheered the prospect of a trade deal between China and the United States. However, the narrative from the U.S. side has quickly shifted somewhere between reserved and pessimistic. Beyond hinting of "sizable distance" between the two sides' positions, President Trump's statements that a meeting with President Xi Jinping is unlikely before the 90-day tariff truce with China ends March 1, a key signpost of progress, cast a shadow. Though we can take political rhetoric only so far, it makes the next round of trade talks that begin in Beijing on Feb. 11 even more important to watch.

Spanish Tensions. Political tensions in Spain will escalate considerably next week when a dozen Catalan pro-independence figures go on trial Feb. 12 in the Supreme Court. The trial will lead to pro- and anti-independence demonstrations in several parts of Spain. The next day, parliament will consider Prime Minister Pedro Sanchez's 2019 budget. The problem is that Sanchez's minority government needs support from pro-independence parties in Catalonia, which will be reluctant to support Madrid when some of their members are on trial. Sanchez will be under pressure to resign if parliament rejects his budget. In the meantime, we will continue to watch the slow but steady emergence of nationalism in Spain.

On Our Minds

U.S.-Saudi Relations Sour? Feb. 8 was the deadline for the White House to report to Congress on who was responsible for the killing of Saudi journalist and dissident Jamal Khashoggi and to say what actions it might take in response, but President Trump declined to meet the requirement set forth under the human rights-focused Magnitsky act. Ultimately, the U.S. response to Saudi Arabia is about how assertively Congress wants to advance gestating anti-Saudi legislation, from imposing sanctions to restricting arms deals to cutting support for Saudi Arabia in Yemen, and whether members decide that doing so advances U.S. interests. It also remains to be seen whether a congressional supermajority able to override a presidential veto exists for any proposed legislation.

France's Role in Africa. The French air force conducted several airstrikes against rebels in northern Chad this week. Chad has played a key role in supporting France's interventions in Mali and Central African Republic. The airstrikes underscored that Paris continues to play a crucial security role in the Sahel region spanning its former colonies. While in recent years France has heavily focused on countering terrorist groups operating in the vast and underdeveloped region, the airstrikes in Chad harken back to its legacy of protecting friendly African governments.

South China Sea Posturing. The Philippines and the United States will hold an exploratory talk next week to discuss whether and how to review their 68-year-old mutual defense treaty. Philippine Defense Secretary Delfin Lorenzana requested the review, arguing that Washington's ambivalence on territorial issues in the South China Sea has made clarification necessary. While the United States has hinted at making "adjustments" on the treaty, explicitly covering the disputed territory would oblige it to militarily defend its ally in a maritime confrontation — a risky calculation.

In Case You Missed It

Iran Holds Off on Retaliating to Israeli Strikes in Syria

After a Challenging Decade, Egypt Resumes Its Regional Role

A Missile Defense Review to Intensify an Arms Race

On Our Calendar

In the coming week, Israeli Prime Minister Benjamin Netanyahu visits India, Turkish President Recep Tayyip Erdogan and Iranian President Hassan Rouhani meet with Russian President Vladimir Putin and Nigeria holds presidential and parliamentary elections. For more, see our Geopolitical Calendar.

Join the Discussion

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