China’s economic outlook. Chinese Premier Li Keqiang laid out the government’s 2019 economic plans to the National People’s Congress on Monday. The growth target for this year has been reduced to 6-6.5 percent while the budget deficit is expected to reach $411.6 billion, or 2.8 percent of gross domestic product. The country’s defense budget will grow by 7.5 percent, reaching $177.6 billion, according to Xinhua. Cuts in the value-added tax were made across various business sectors including construction, manufacturing, electricity and communications. Local governments will be allowed to issue $320 billion worth of special purpose bonds, which are not counted as government debt. All of these figures point to an expectation of continued strain on the Chinese economy, only a small part of which results from U.S. trade measures. While Beijing is still in trade talks with Washington, it is also introducing measures to increase lending, shift to “high quality jobs” over gross employment, and attract foreign investment.
Belarus warms up to the West. The Polish and Belarusian defense ministries are holding talks this week on bilateral military cooperation and regional security issues. The meetings are somewhat surprising given that Belarusian officials recently said their country was ready to respond if Poland were to allow the U.S. military to build a base on their shared border. Meanwhile, Belarusian President Alexander Lukashenko said today his country would seek to establish relations with NATO “based on mutual respect that would help strengthen our country’s security.” He added that attempts to build stronger ties with the West “sometimes cause tantrums” in Russia.
The IRGC pushes ahead. It seems Iran’s Islamic Revolutionary Guard Corps is following through on its plan to play a greater role in solving the country’s socio-economic problems. An IRGC commander said the organization’s paramilitary branch, known as the Basij, would establish a marine unit to take over some duties of the IRGC’s navy, including the oversight of civilian shipping and the protection of local fishermen. The Energy Ministry also said it would partner with the IRGC to carry out cloud seeding projects across the country to help mitigate the damage of the country’s drought. Meanwhile, Iran’s central bank announced over the weekend that five lenders that have links to military institutions will be merged with the state-run Bank Sepah. It’s unclear if the move is meant to curb military influence in the banking system or if it’s just part of broader reforms to Iran’s banking sector.
The heat is on Kosovo. The U.S. has been increasing pressure on Kosovo to lift 100 percent tariffs on goods from Serbia and Bosnia-Herzegovina. A U.S. State Department official said these tariffs were hurting relations between the U.S. and Kosovo, and the response from politicians in Kosovo has been swift. The leader of the opposition Democratic League of Kosovo said his party could not be part of a government that also included the Democratic Party of Kosovo, one of Kosovo’s main governing parties, and that a snap general election may be necessary to protect ties with Washington. Kosovo’s National Assembly speaker also hinted at the possibility of removing Prime Minister Ramush Haradinaj. Haradinaj said he would resign if the U.S. asked him to but would not budge on the tariff issue. He also said that the U.S. would not close down the Bondsteel military base or withdraw from NATO’s Kosovo Force over the tariff question. Representatives from Belgrade and Pristina will meet later this week to try to resolve their differences.
- The U.S. will end preferential trade status granted to India and Turkey because “they no longer comply with the statutory eligibility criteria,” according to the Office of the U.S. Trade Representative.
- The chief of general staff of Kyrgyzstan’s armed forces met last week with the Chinese commander of Xinjiang military district. They discussed prospects for further defense cooperation and regional security issues, including terrorism, extremism and separatism.
- Russian Deputy Foreign Minister Grigory Karasin said Georgia needed choose between regional stability and its U.S.-Europe policy. A Georgian security analyst, meanwhile, said Turkey would seek greater influence in Georgia as Ankara’s relations with Russia improve and its relations with the U.S. deteriorate.
- Turkish Foreign Minister Mevlut Cavusoglu called on Muslim countries to show a united front against Israel and the U.S., particularly with respect to the status of Palestine.
- The U.S. government will allow its citizens to file lawsuits for damages and compensation against blacklisted Cuban companies.