Gulf countries take on Turkey. The Middle East Eye has reported that senior intelligence officials from Saudi Arabia, the United Arab Emirates, Egypt and Israel have devised a plan to bring Syrian leader Bashar Assad back into the Arab League to reduce the influence of Turkey and Iran. Following the report’s release, Turkish newspaper Yeni Safak reported that Saudi Arabia, the UAE and Egypt issued a fatwa, or religious decree, to attack Turkish-backed Free Syrian Army forces in Idlib, Syria. The paper also claimed that elements of jihadist group Hayat Tahrir al-Sham backed by Saudi Arabia and the UAE have escalated attacks on FSA-controlled villages in Idlib. Both of these reports should be taken with a grain of salt, but that they came out around the same time suggests they may be connected.
Russia pivots to China. Russia moved around $100 billion in U.S. holdings from its reserves into the yuan, euro and yen after new U.S. sanctions were imposed last spring. Chinese yuan accounted for 15 percent of Russian reserves in the second quarter of 2018, up from 5 percent in the first. Russia now owns roughly a quarter of global reserves held in yuan, about 10 times more than any other country. In addition, Russian nuclear energy firm Rosatom announced that it would help build and supply nuclear fuel for China’s CFR-600 nuclear reactor. As Russia gets closer to China, Western states are pulling back even further. The Federation of German Industries called on companies to reduce ties with China and on Brussels to toughen its stance against Beijing. The U.S. Federal Reserve Open Market Committee, meanwhile, expressed concern over how trade tensions have contributed to a decline in U.S. equity prices. And the Israel Security Agency called for legislation to allow the Israeli government to supervise Chinese investments, which it considers a potential security threat.
Uzbekistan eyes reforms. The Uzbek government continues to carry out large-scale economic changes as quickly as possible. On Thursday, it announced the establishment of the Economic Council, an organization that will help implement structural reforms over the next two years, including revamping enterprises with a state share, developing a national digital economy and reforming the state pension system. Uzbekistan hopes these efforts will attract foreign financing. It plans on taking in $4.2 billion of foreign investment this year and creating a Council of Foreign Investors. The changes might look good on paper, but Uzbekistan doesn’t have the best track record with implementing reforms. The government recently repealed a controversial measure allowing tax collectors to withdraw funds directly from certain bank accounts after backlash from not just the Uzbek public but also government officials. The measure and its reversal illustrate that the administration knows it must introduce reforms carefully to avoid more discontent in the country.
More of the same in Venezuela. Nicolas Maduro has been inaugurated for another term as Venezuela’s president, having won re-election last May under dubious circumstances. Some 50 countries, including most Latin American ones, have said they would not recognize his government. Colombia, in fact, has already announced plans to sever diplomatic ties. Maduro has stayed in power longer than most, including us, thought he would. He lacked the charisma of his predecessor, Hugo Chavez, and the country’s economy has steadily deteriorated during his tenure, leading to sporadic unrest. Maduro owes his longevity to the codependence between the executive and the military, a relationship that remains intact despite occasional rumors that it isn’t. (A recent one, which came courtesy of the Washington Post and cited an anonymous U.S. intelligence source, suggests that Venezuela’s defense minister asked Maduro to resign last month and said he would step down if the president refused.) Still, a prominent opposition legislator has called for military action to help restore democracy in a government that is quickly losing recognition. Civilian-military intervention has been a winning recipe for Venezuelan coups in the past, but not for the more recent ones. The opposition called on junior officers to join their cause back in 2017, to no avail, and since then the military has cracked down on dissent.
- Chinese Premier Li Keqiang announced $29 billion worth of tax cuts for small businesses, including microenterprises. The program begins later this month and aims to encourage more bank lending for this type of business.
- Germany and France agreed to extend their bilateral friendship treaty, originally signed in 1963. The agreement calls for France to support Germany’s bid for a permanent seat on the U.N. Security Council and for deeper economic integration.
- The EU trade chief said she will get permission from member states to start trade negotiations with the U.S. Europe wants deals in the automotive and pharmaceutical industries, but agriculture will not be included in the talks.
- The Central African Republic’s defense minister said his country was open to hosting a Russian military base.
- Russia accused the ambassador from Japan of misrepresenting the status of Kuril Island negotiations in Tokyo’s favor. Russia noted that such comments from Japan are unnecessary and hamper talks.
- New figures from the Centers for Disease Control and Prevention show that the U.S. fertility rate has declined for the seventh consecutive year.
- The World Bank has decreased its economic growth forecast for Brazil from 2.4 percent to 1.2 percent for 2018 and from 2.5 percent to 2.2 percent for 2019.
- On Thursday, the Taliban attacked checkpoints in the provinces of Kunduz, Baghlan, Takhar and Badghis, killing more than 30 members of the Afghan security forces.
- Nearly 50 migrants who had been stranded at sea for more than two weeks have been allowed to dock in Malta. Matteo Salvini, Italy’s deputy prime minister and head of the anti-immigration League party, accused Malta of breaking promises it made to the EU.