Manage your expectations of the global economy. The International Monetary Fund will release some pretty discouraging forecasts next week as risks noted in earlier reports finally begin to materialize. Foremost among them, according to IMF head Christine Lagarde, is the U.S. trade war, which threatens to negatively affect trade, investment and manufacturing worldwide. But the bad news doesn’t stop there. IMF reports also bode ill for emerging markets, whose portfolios could lose as much as $100 billion. Argentina, Turkey, Indonesia, South Africa and Pakistan are especially vulnerable. Last, the reports made sure to note how concerned the IMF was about total global debt, which now stands at $182 trillion.
Heavy traffic in the Indo-Pacific. A Chinese destroyer has engaged in “aggressive” maneuvers in close proximity to a U.S. destroyer sailing in the South China Sea, at least according to a report from the U.S. Department of Defense. Nearby Taiwan has said it will commission in November two Perry-class guided missile frigates it bought from the United States. Japan, meanwhile, has sent its largest warship to Sri Lanka, the recent recipient of a modest Japanese loan. (The outreach is meant to counter China, which has dramatically deepened its influence in the island nation over the past decade.) Then there is India, which has sent three naval vessels to help tsunami victims in Indonesia. The two countries are already jointly building a port in Indonesia near the Strait of Malacca, and these kinds of deployments are good for building interoperability between navies. Finally, the Philippines sent a strategic sealift vessel to the Russian port at Vladivostok – the first time it has done so. Manila balances between China and the United States, but it looks like Russia has been added to the mix.
Russian aggression along the European border. A Ukrainian news agency reported that Russia is examining ways to replace Belarusian President Alexander Lukashenko, with whom Russia has uncharacteristically disagreed lately. In Moldova, rumors are swirling that Russia is shoring up influence ahead of upcoming elections. In Ukraine, the foreign minister said he suspected Russia may be storing or displaying nuclear weapons on Crimean territory. Russia may act tough, but these are the actions of a country terrified of losing ground in its hallowed buffer zone.
- The International Court of Justice has ruled that Chile is not, in fact, obligated to negotiate with landlocked Bolivia over its access to the Pacific Ocean.
- North Korea said ending the Korean War would not be a sufficient concession to spur more steps toward denuclearization.
- Serbian President Aleksandar Vucic will ask Russian President Vladimir Putin for assistance in the Kosovo dispute.
- India’s central bank will inject nearly $5 billion into financial markets throughout October.
- Mexican state-owned oil company Pemex will import 350,000 barrels of light crude from the United States in late October.
- The European Union has agreed to allow third parties such as the United States and the United Kingdom to participate in PESCO defense projects on a case-by-case basis. PESCO is a voluntary EU defense pact that aims to integrate member countries’ militaries.