More signs of improving U.S.-Turkey relations. After wrapping up at the U.N. General Assembly meeting yesterday, Turkish President Recep Tayyip Erdogan addressed the Turkey Investment Conference held by the U.S.-Turkey Business Council, during which he said that their “strategic partnership, which has gone through difficulties so many times, will overcome this turbulent period.” The turbulent period to which he refers involves U.S. tariffs, sanctions, support for Israel, support for Syrian Kurds, and a number of other issues. But in recent weeks those seem to have taken a back seat to Turkey’s relationship with Russia. The two managed to avoid outright conflict in Idlib, but earlier this week, Erdogan repeated his desire to remove Bashar Assad from power eventually. And just yesterday, Turkey’s foreign minister said the agreement on Idlib was a “last chance” at a political resolution to the Syrian conflict. The next step would be a constitutional committee, which suggests the introduction of elections that Assad would probably lose. Related to all this are the reinforcements Turkey dispatched to Syria yesterday. U.S.-Turkey relations may be mercurial, but they are also resilient.
Checking in on Afghanistan, a country that has a unique ability to draw in foreign powers. Its defense minister reportedly told the upper house of the legislature that more than 500 Afghan soldiers were killed in September alone. Some 700 more were injured. Just yesterday, the national security advisers of Iran, Russia, China and India met in Tehran to discuss Afghan security. They were quick to issue statements to the media – Russia’s adviser went so far as to say Afghanistan resembles Syria circa 2014, so pervasive has the Islamic State become – but stopped short of offering any plan of action. The United States continues to engage, too, seeking new ways to vacate the country even if it means reaching out to the Taliban to negotiate a settlement.
Mixed signals from Serbia and Kosovo. Kosovo’s president graced the Financial Times today with an op-ed in which he laid out Kosovo’s desire to reach an agreement with Serbia and join the European Union and NATO. The tone was markedly different from a recent speech given by Serbia President Aleksandar Vucic, who expressed concern for “what looms above this part of Europe.” One Serbian paper, Blic, claims France and Germany are no longer advocating a deal because of Kosovo’s resistance. Another Serbian paper, Vecernje Novosti, reports that increased U.S. interest will extend the deadline for reaching an agreement. Meanwhile, Vucic is slated to visit Russia early next month for talks with President Vladimir Putin. There’s a lot of fog here. The takeaway is that the U.S. is upping its involvement, and Serbia is checking in with Russia.
Chaos in the Palestinian territories. Hamas security forces reportedly arrested some Fatah officials in Gaza. A Hamas-linked paper, al-Risalah, then reported that security forces for the Palestinian Authority struck back in the West Bank, arresting dozens of Hamas members. The arrests come two days after the World Bank published a report that described Gaza’s economy as “collapsing,” and a week after Palestinian President Mahmoud Abbas threatened to cut off economic support for Gaza. (The Palestinian Authority provides almost $100 million to Gaza every month.) The situation in Gaza was primed to explode earlier this year, but the intervention of Egypt, as well as Israel’s amenability to a cease-fire, prevented the situation from bottoming out entirely. But the problems never went away. They are merely simmering.
Two developments could call into question our long-term forecast for Russia. First, the lower chamber of the Russian legislature approved an unpopular bill to raise the retirement age. The bill must be passed by the upper chamber and signed into law by Putin. Second, Moscow is planning to overhaul its fleet of railcars. In other words, Russia plans to spend almost $2 billion in the next two years as it embarks on an ambitious plan to replace more than 7,000 rail carriages, even as it enacts pension reform despite widespread protests. Russia’s economic problems are myriad. The head of the Russian Audit Chamber said today that some 13 percent of Russians still live below the poverty line, and the International Monetary Fund just issued a report that, in keeping with our own forecast, bodes ill for economic reform. We may have to reconsider that forecast if Russia can actually pull this off.
Japan may soon struggle to fill its ranks – literally. As Prime Minister Shinzo Abe continues his crusade to amend Article 9 of the constitution, which discourages the use of the military to wage war, he may have found an enemy he can’t beat: demography. According to the Japan Times, the number of Japanese men age 18 to 26 — the core of the military’s recruitment pool — has shrunk to 11 million from 17 million in 1994. The group could shrink to 7.8 million over the next 30 years. The military figures prominently in Japan’s plans to step out from under the U.S. protection umbrella, but the demographics don’t add up. It’ll be difficult for Japan to manage its own economy, let alone foster new security commitments, with a shrinking, aging population. Technological advances can only go so far.
- India’s two largest state-owned refiners have yet to order oil shipments from Iran for November, when U.S. sanctions kick in. They have until early October.
- The Iranian rial hit a record low on the dollar in black market trading (170,000 to the dollar). Its value is down 75 percent on the dollar this year.
- Japan and the United Kingdom held naval drills in the Indian Ocean. A British frigate will soon depart for the South China Sea next, against China’s protestations.
- A spokesman for the Belarusian Foreign Ministry said a permanent U.S. military base in Poland would be detrimental to regional stability.
- European Commission data showed economic confidence in the eurozone was down more than expected.
- Turkish President Recep Tayyip Erdogan is visiting Germany. Both sides seem eager to repair what has been a contentious relationship in recent months.
- The U.S. agreed to shelve auto tariffs on Japan while bilateral trade talks take place.
- The IMF increased its aid package to Argentina’s struggling economy by 15 percent to $57 billion.