Don’t be deceived by Russia’s GDP. According to estimates from the Russian Federal State Statistics Service, Russia’s 2018 gross domestic product growth reached 2.3 percent, the highest growth rate since 2013 and surpassing forecasts by the Ministry of Economic Development and the Central Bank. It’s a positive trend, but not a stable one. The growth was driven by the construction sector – primarily large oil and gas projects. Rosneft, Russia’s largest oil company, hit a new profit record, earning 649 billion rubles ($9.9 billion) in 2018. Record profits mean record dividends for Rosneft (274 billion rubles), which will help replenish the Russian budget. But an oil company’s strong performance isn’t necessarily a good sign for the Russian economy: Growth based on oil and gas means Russia is still dependent on these resources and its attempts to make structural economic changes have not yet succeeded.
The U.K.’s alarm over Brexit hops the pond. The leader of Northern Ireland’s Democratic Unionist Party issued a warning over the “madness” and instability that would ensue under the current Brexit plans for the Irish question – namely, keeping Northern Ireland closely aligned with the European Union. On Tuesday, British Prime Minister Theresa May will visit the DUP, which supports her government, to try to assuage their concerns. Meanwhile, the chair of the U.S. House of Representatives’ Ways and Means Committee said Washington was very sensitive to any threats to the Good Friday Agreement. Sky News also reported that some U.K. Cabinet members fear that the U.S. might side with the Republic of Ireland if London fails to agree to the Irish backstop, which would prevent the establishment of a hard border between Northern Ireland and Ireland.
Iran chooses defense over development. Iran’s supreme leader, Ayatollah Ali Khamenei, agreed to allocate $1.5 billion (at the official exchange rate) from Iran’s National Development Fund to defense in the next fiscal year, according to a member of Iran’s parliamentary Budget Consolidation Committee. This will be in addition to the $12.1 billion already allocated to defense. In 2018, Iran was forced to supplement its defense budget with $2.5 billion from the NDF after nationwide protests. NDF funds are independent of the national budget and are normally allocated directly to economic and development projects. Iran’s economic woes are no secret, and redirecting funds away from development only impedes long-term economic growth. The move also points to the government’s dire need to fund the security forces to maintain influence abroad and power at home. For now, Tehran appears to have enough funding to keep the security apparatus satisfied, but given growing economic constraints, that may not be possible for long.
- According to a leaked United Nations Security Council document, North Korea is dispersing components of its nuclear and ballistic missile capabilities to protect them from possible military strikes.
- Catalonia’s separatist parties represented in Spain’s national parliament plan to file amendments to block the government’s 2019 budget proposal. The move could trigger snap elections.
- Eleven members of the Lima Group called on the Venezuelan military to back opposition leader Juan Guaido as president and to facilitate the delivery of humanitarian aid to Venezuela. Guyana, Mexico and St. Lucia did not support the declaration.
- Georgia and Russia have met the procedural requirements to implement a 2011 agreement that would allow for trade and transfer of goods in the breakaway territories of Abkhazia and South Ossetia.
- The head of Iraq’s parliament said Washington issued a “demand” to reorganize U.S. troops in Iraq. At least three parliamentary factions want the Iraqi government to reconsider the presence of foreign military forces in the country.