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Daily Memo: Explosions in Venezuela, Protests in China, Updates in Iran, Borders in the UK

All the news worth knowing today.

GPF Staff |August 6, 2018

Venezuelan President Nicolas Maduro survived an assassination attempt over the weekend – or at least he claims he did. In his version of the story, two drones carrying C4, an explosive that is hard to come by in Venezuela, exploded prematurely on their way to kill him. The government has blamed the United States and Colombia for the attack, but both countries have denied any involvement. And in any case, a group called Soldados de Franela claimed responsibility for the attack on Twitter, saying it was just a matter of time until Maduro was brought down. The government is calling the event a terrorist attack and has begun to round up the usual suspects. More arrests are likely on the way. The thing is, it still isn’t clear exactly what happened. Some reports say it was the result of a malfunctioned military drone, while others suggest it was merely an explosion resulting from a gas leak. And the rumor mill is predictably churning out stories that Maduro is simply taking advantage of the crisis. That’s always a possibility, but it’s worth noting that the government’s response has been much more measured compared to the last time something like this happened. (Tanks were let loose on the streets of Caracas after a stolen helicopter was used to attack the Supreme Court.) Whatever the case may be, the important thing is to monitor how the Venezuelan military and the political opposition react. So far, it doesn’t look like much will come of anything.

China is trying its damnedest to keep a lid on its economic problems. According to the Financial Times, the government dispatched hundreds of police officers to Beijing’s financial district this morning to shut down protests over a crisis in peer-to-peer lending platforms – small online lenders that have lost a lot of families a lot of money lately – after Beijing decided against a bailout. China’s Banking and Insurance Regulatory Commission, moreover, announced it was reducing risk requirements for debt-for-equity swaps in an attempt to relieve pressure on Chinese banks. Meanwhile, China Banking News reports that increased lending is a reflection of looser monetary policy (with year-on-year growth of 8.3 percent in money supply). More important to those outside of China, though, is that the yuan continues to weaken despite the central bank’s efforts to stop it. It’s now down to 6.85 against the dollar. Chinese leaders are surely discussing the matter at their beach retreat in Beidaihe.

Problems continue to mount for Iran. Yes, we sound like a broken record, but it’s not as if its problems are going away; if anything, more have surfaced. The first batch of U.S. sanctions set to be reimposed following the U.S. withdrawal from the Iran nuclear deal will be reinstated on Monday. This will hardly resolve the country’s problems. In the northeast, hard-line conservatives and seminary students have staged a protest against corruption and perceived challenges to Iran’s religious political structure. Over the weekend, the deputy governor of the central bank was arrested for allegedly manipulating foreign currency affairs. After throwing him and others in jail, the Iranian government unveiled a new set of policies meant to stop the rial’s rapid devaluation, including one to allow currency exchange shops to resume trading foreign currencies at unofficial rates. Mohammad Khatami, a reformist and former president, called for reforming the entire political system. And Iranian President Hassan Rouhani said he is willing to appear before the Iranian parliament to give an update on the government’s responses to the nation’s challenges. Iran may weather this storm – after all, it has weathered others throughout the year – but the sheer number of developments don’t bode well.

We end today’s memo with an update on Brexit negotiations – namely, over the border between Ireland and Northern Ireland. It’s no secret that Poland has expressed concern about the EU’s position. In June, Poland’s deputy foreign minister for European affairs reportedly asked, “are we really going to destroy the agreement with Great Britain for Ireland’s sake?” According to the Financial Times, an unnamed eurozone ambassador recently expressed concern over the same issue, suggesting that other countries besides Poland are waffling on the EU’s heretofore unified and uniform support of Ireland. The issue is not going away. In an Aug. 2 interview in Polish daily Rzeczpospolita, the deputy foreign minister for European affairs said that though Poland wanted to maintain EU unity to get the best possible deal for the bloc, “when it comes to the Irish issue, we have an impasse that threatens to cause the collapse of negotiations.” Divisions such as these will surely affect the EU’s leverage as Brexit negotiations intensify.

Honorable Mentions

  • Saudi Arabia has expelled Canada’s ambassador, frozen new trade deals with the country, and threatened “to interfere in Canadian domestic affairs.” The moves are a response to Canada’s call for Riyadh to release civil rights activists.
  • Russia’s prime minister warned that if Georgia joins NATO, a “terrible conflict” might ensue.
  • Despite some encouraging developments, there has been no movement toward an Israel-Hamas cease-fire.
  • Officials from South Korea and China met to discuss a formal declaration ending the Korean War amid reports that China is looking to increase its involvement in talks.