Stratfor Worldview: The Weekly Rundown

 

THE WEEKLY RUNDOWN RISKS AND OPPORTUNITIES THAT WILL SHAPE THE COMING WEEK

KEY DEVELOPMENTS WE'RE TRACKING

European governments discuss the energy crisis. France will host a meeting of EU energy ministers on May 2 to discuss how to deal with Russia's decision to halt natural gas supplies to Poland and Bulgaria. The meeting will happen as EU member states demand more clarity from the European Commission over whether Moscow's demand that EU energy companies pay for natural gas in rubles can be acceded to without violating EU sanctions on Russia. It will also happen as the European Union is making progress on conversations over the next round of sanctions, which is likely to include an embargo on Russian oil.

Malaysia increases its minimum wage. Malaysia on May 1 will increase its monthly minimum wage by 25%, from 1,200 ringgit (about $276) to 1,500 ringgit; the change will apply to private employers with five or more employees. The National Wage Consultative Act of 2011 obligates the government to review the minimum wage every two years, and raising the minimum wage has been a major political issue since 2018. Just how the wage increase will be implemented, however, has not been detailed.

Turkey's president visits Saudi Arabia. Turkish President Recep Tayyip Erdogan began a state visit to long-time Turkish rival Saudi Arabia on April 29, and the coming days may see a flurry of pledges of cooperation between the two countries. These could include Saudi promises of investment or support for Turkey's unstable currency and Turkish efforts to sell its now-famous Bayraktar TB2 drone to Saudi Arabia. While these pledges may start to emerge in the coming week, it may take some time for such deals to close and bear fruit for Turkey's struggling economy, which is becoming the biggest handicap for Erdogan's reelection chances in 2023.

The Australian central bank debates a rate hike. The Reserve Bank of Australia on May 3 will meet and decide whether to raise interest rates in what would be Australia's first rate hike in more than a decade. Early expectations had been that the bank might delay the hike until its June 7 meeting so as not to sway the May 21 election. But Australia's Q1 consumer price index showed a 5.1% year-over-year increase, the highest annual rate in 20 years, putting additional pressure on the bank not to delay the rate hike. Either way, the contentious matter may bode ill for Prime Minister Scott Morrison, who is already in a close race with opposition Labor Party candidate Anthony Albanese.

MOST READ ANALYSIS FROM THE WEEK

Sri Lanka's Mounting Economic Crisis Could Give Way to a Political Reckoning

The mass protests spurred by Sri Lanka's deepening economic crisis may provide a catalyst for political change, but the country's long-term financial outlook remains grim -- portending more unrest as basic goods and services become increasingly scarce. Social unrest driven by the severe economic crisis in Sri Lanka has morphed into a popular movement demanding political change in the country. In recent days, thousands have protested against the government amid widespread shortages of food, fuel, medicines and power. A combination of economic mismanagement and protracted negotiations with the International Monetary Fund (IMF) over a bailout package has exacerbated tensions between Sri Lankans and their political leaders in Colombo. Against this backdrop, calls for the resignation of President Gotabaya Rajapaksa and Prime Minister Mahinda Rajapaksa have grown as the public blames their authoritarian style of leadership for the country's woes.

Read More →

Explosions in Moldova's Breakaway Region Fuel Fears of a Wider Russian War

While Russia is unlikely to invade Moldova in the short-to-medium term, a series of explosions in a Moldovan breakaway region near Ukraine could eventually grant Moscow a justification for doing so, in addition to destabilizing the pro-EU government in Chisinau. The attacks also risk distracting Kyiv from Russia's renewed offensive in the eastern Donbas region by amplifying the threat to southern Ukraine. A spate of suspicious explosions in the pro-Russian Moldovan breakaway region of Transdniestria starting on April 25 has stoked fears that Russia may soon launch an attack toward Transdniestria from the Ukrainian territory it's seized during the ongoing war. The explosions did not result in casualties, but prompted Transdniestria's government to raise the unrecognized republic's terrorist threat level to high and order the erection of checkpoints outside towns and cities and at the borders with the rest of Moldova and Ukraine.

Read More →

In Ethiopia, Ethnic Violence Endures Despite the Government's 'Humanitarian Truce'

Recent peace initiatives have not quelled ethnic violence in Ethiopia, and a host of complications mean that the war is likely to continue with high humanitarian and economic costs. In late March, the Ethiopian government unilaterally declared it had reached a ''humanitarian truce'' with the rebel forces in Tigray, which some international aid groups had heralded as the beginning of the end to the 18-month war. But violence between ethnic militias throughout the country has nonetheless persisted. Last month, Prime Minister Abiy Ahmed also urged all Ethiopians to participate in the national dialogue, which he described as a ''golden opportunity'' that ''will allow us to address the political challenges we have been facing for centuries and lay the groundwork for our future.'' However, the government continues to exclude the Tigray People's Liberation Front (TPLF) -- its primary opponent in the ongoing civil conflict – and the Oromo Liberation Army (OLA) from participating in the process, fueling accusations by both ethnic militant groups that Abiy's supposed push for peace is disingenuous.

Read More →

PODCASTS Visit Stratfor's podcasts page for conversations on geopolitics and world affairs with analysts and authors. Listen Now →

Copyright © 2022 2022 RANE Network Inc. • 510 Fifth Avenue • New York, NY 10036