The Weekly Rundown: Another Brexit Delay, Reinforcing Hong Kong's Status and Blocking Balkan EU Bids

7 MINS READOct 19, 2019 | 19:29 GMT
In this photo, Tunisians celebrate Kais Saied's victory in Tunisia's presidential election on Oct. 13, 2019.

Supporters celebrate in Tunis after Kais Saied, an independent candidate, soundly won Tunisia's presidential election on Oct. 13 with 72.7 percent of the vote. Saied's victory represents a widespread public rejection of institutional politics in Tunisia as the country struggles to manage an ongoing economic crisis.

(YASSINE GAIDI/Anadolu Agency via Getty Images)

On the Record

These arrangements will become the settled position in these areas for Northern Ireland. This drives a coach and horses through the professed sanctity of the Belfast Agreement.

Northern Ireland's Democratic Unionist Party, rejecting the British government's Brexit deal

On Our Radar

The Brexit Saga Continues. Lawmakers in the United Kingdom's House of Commons voted Oct. 19 to force Prime Minister Boris Johnson to ask the European Union to delay Brexit from Oct. 31 to Jan. 31. Johnson reached a withdrawal agreement with the European Union on Oct. 17, but members of Parliament are worried the legislation required to enforce the agreement may not be approved in time to avoid a no-deal exit. A defiant Johnson reacted to Parliament's postponement by promising that he will still make Brexit happen on Oct. 31, though he will be under legal and political pressure to request a delay.

Another Layer of Complication Has Been Added to the U.S.-China Dynamic. The U.S. House of Representatives passed the Hong Kong Human Rights and Democracy Act by unanimous voice vote Oct. 15, requiring the U.S. secretary of state to review annually whether Hong Kong "is sufficiently autonomous to justify special treatment by the United States" and allowing sanctions against officials responsible for violating Hong Kong's autonomy. The U.S. Senate is expected to pass the bill in the coming weeks, but President Donald Trump could veto the measure. China has been betting on Trump's relative restraint over Hong Kong to avoid additional policy pressures or threats that could disrupt trade talks. Although the United States will tread carefully around Hong Kong's special status, as it works in favor of U.S. business, the bill's targeting of China's Hong Kong policy provides the White House critical leverage vis-a-vis Beijing.

South Africa's Ongoing Power Woes Underscore the Deep Economic and Infrastructure Problems It Will Continue to Face. The South African government was dealt a blow this week after power generation units failed at Eskom, the embattled state-owned power utility, causing forced and unplanned blackouts for several days and leaving South Africa's lackluster economy even more threatened amid blackout uncertainty. As the country's leaders scramble to get Eskom back on its feet, time will be of the essence: South Africa is heading into its hot summer months, which will further stress the already-strained power grid.

A Wobbly Cease-Fire in Syria Solves Little and Delays Much. The Trump administration brokered an unstable cease-fire between Turkey and the Kurdish-led Syrian Democratic Forces (SDF), the U.S. ally in the fight against the Islamic State, on Oct. 17 as Turkey's invasion of northeastern Syria continued. But the cease-fire is rife with violations and has done little to de-escalate the political outrage caused by Turkey's incursion. The U.S. Congress is still preparing sanctions, Europe is preparing its own measures and Turkey has made it clear it considers the cease-fire more of a pause than an end to the fighting. Moreover, Syrian and Russian forces are moving in to support the SDF, raising the risk that Turkish troops may end up in confrontations not only with the SDF but also with Ankara's newfound allies in Damascus and Moscow.

China's Slow Growth Won't End Anytime Soon. China's GDP growth slowed to 6 percent in the third quarter, its lowest quarterly growth rate since 1992 and down from 6.2 percent in the second quarter and 6.4 percent in the first. China's weak growth rate, combined with a rather bleak global forecast by the International Monetary Fund, points to the potential for a synchronized global slowdown in the months ahead. The fiscal policies and stimulus efforts of many of the world's powers, including China, are not only reaching their limits but are also becoming increasingly controversial. Furthermore, Beijing is saddled with needing to grow domestic consumption to promote continued economic growth, a necessity made even more urgent by the ongoing trade war with the United States. Slower Chinese growth and the subsequent effects on Chinese consumption will trickle down to emerging markets and specific sectors that rely heavily on the Chinese market for support and demand.

On Our Minds

France's Hard-Line on EU Membership Threatens Key Soft Power Tool. The European Union postponed membership talks with North Macedonia and Albania on Oct. 18 after a small group of countries, led by France, blocked an invitation to the two Balkan countries to start negotiations on joining the European Union and demanded a redesign of the accession mechanism. For years, the promise of membership has been one of the European Union's main soft power tools, as the bloc used the prospect to influence political developments in the countries that aspired to join. North Macedonia is a clear example, as the country went as far as to change its name to fulfill EU requests. France's push to make it even harder for new members to join the European Union now threatens to weaken the bloc's credibility when it comes to pressuring prospective members to introduce institutional and economic reforms, and opens the door to those countries reassessing their priorities and looking to other partners (such as China or Russia) to eventually replace the European Union.

Lack of Clear Electoral Majority Could Throw Canadian Government Formation Into Serious Difficulty. There could be a political crisis brewing in Ottawa as neither the Liberals nor the Conservatives are likely to win an outright majority in Canada's election on Oct. 21, but leaders of the New Democratic Party and other parties on the left have said they're open to preemptively forming a coalition with Prime Minister Justin Trudeau's Liberal Party to shut down the Conservative Party's ability to form a government. Conservative Party leader Andrew Scheer has said that Trudeau should resign if his party fails to win a plurality and allow Scheer first crack at forming a government as this has become the modern convention in Canadian politics. Scheer is trying to head off an attempt by the Liberal Party to form a coalition. Next week's election will be important to watch as any of the three most probable outcomes — a Liberal minority government, a Conservative minority government or a coalition — could produce different priorities.

After a Month of Fast-Paced Progress, Saudi Aramco's IPO Has Been Delayed Once Again. Saudi Arabia had been hoping to formally announce its initial public offering for the Saudi Arabian Oil Co. and release its prospectus next week ahead of the Oct. 29-31 Future Investment Initiative conference in Riyadh, but that won't be the case. Instead, Saudi Arabia wants investors to look at third-quarter results before preparing the IPO. A number of complexities led to the delay, including issues over Saudi Aramco's valuation. These complexities cannot be resolved easily and further delays to the IPO are likely. In the meantime, Saudi Arabia will need to get creative in raising money for its Public Investment Fund, which holds Saudi Aramco right now.

Questions Abound After Mozambique's Elections. Unofficial results suggest a resounding win for Mozambican President Filipe Nyusi and the long-ruling Frelimo party in elections on Oct. 15. Nevertheless, allegations of widespread vote-rigging and voter intimidation are clouding Frelimo's victory narrative. Renamo, Mozambique's main opposition party, called on Oct. 19 for an election do-over, AP reported. It will be important to monitor Renamo's reaction in the days ahead as it grapples with what appears to be another successful effort by the Mozambican government to shut it out of political power. Doubts about the credibility of the elections could endanger the peace accord the government and Renamo signed in August, increasing the potential for a return to the low-intensity conflict that has been a hallmark of Mozambique's post-civil war landscape.

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On Our Calendar

In the coming week, Canada and Bolivia hold general elections, Russian President Vladimir Putin hosts dozens of African leaders at the inaugural Africa-Russia Summit in Sochi and a trade deal between Iran and the Eurasian Economic Union takes effect. For more, see our Geopolitical Calendar.

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