PEACE OR NO PEACE
Venezuela talks to resume in the Dominican Republic
Today, the Dominican Republic will host discussions to mediate Venezuela’s political crisis.
The talks follow preliminary discussions held between Nicolas Maduro’s regime and its opposition earlier this month. There, the parties agreed that representatives from Mexico, Chile, Bolivia and Nicaragua would participate in the mediation to ensure fairness. Mexico and Chile have strongly criticised Maduro’s regime in recent months, while left-wing Bolivia and Nicaragua have been among Venezuela’s staunchest allies.
After those preliminary dialogues, President Maduro claimed, “We are close to an agreement, of political co-existence, of peace and sovereignty”. The opposition, led by Julio Borges, the president of the National Assembly, was sceptical, stating that any agreement must include provisions for a fair election by the end of 2018, freedom for jailed activists, and acceptance of humanitarian aid.
Following a turbulent period of political unrest that caused at least 120 deaths, the deliberations have been welcomed by many. Regardless, the talks are likely a stalling tactic to relieve pressure from the Maduro regime, which has faced severe condemnation and sanctioning from the international community. As such, it is unlikely today’s discussions will achieve meaningful change in Venezuela.
NEW DEALS IN NEW DELHI
Indian-Afghan trade show gets underway
Today marks the beginning of a three day India-Afghanistan trade show in New Delhi, where government and business officials will meet to discuss expanding economic cooperation and trade.
The show is sponsored by the United States Agency for International Development as part of its ongoing effort to rebuild Afghanistan’s economy. Persistent economic problems —including 10% unemployment and 35% of citizens living under the poverty line — have pushed many disenfranchised Afghanis to join the Taliban and various criminal enterprises.
For India, building a strong Afghani economy prevents it from falling prey to influence by New Delhi’s regional rival, Pakistan. Afghanistan’s 5th largest donor, India has poured $2 billion in aid into the country since 2001 and invested $100 million to finance the construction of the Shahtoot Dam. The two countries opened direct flights in June, creating an Indian trade route to Central Asia that circumvents Pakistan’s ban on many Indian products.
Given their shared interests and American backing, we can expect a plethora of business deals to be struck at today’s summit. Nevertheless, with the power of the Taliban continuing to grow, India’s nation-building efforts will likely be for naught.
Delve deeper: Cold War echoes: Russians in Afghanistan
OIL FOR SALE
Brazil auctions off oil and gas exploration rights
Brazil will hold its 14th round of bidding for many of the country’s oil and gas reserves today. 287 blocks will be offered, 110 of which are located offshore.
The auction, covering a total area of 122,622 square kilometres, is expected to attract 32 bidders, including heavyweights Shell and BP. Another auction next month will sell off highly valuable pre-salt mines, often rich in resources, in the Santos and Campos basins.
The auction comes as Brazil’s economy recovers from one of the worst recessions in the country’s history. After shrinking by 3.8% and 3.6% in the past two years, Brazil’s economy grew by 0.2% last quarter. Today and next month’s auctions will support that recovery, with Brazil expecting to make $2.7 billion off signing agreements, along with a further $63.5 billion in investments over the next ten years.
Endemic corruption continues to squeeze Brazil’s economy. Brazil’s state oil company, Petrobras, has been at the heart of a three-year corruption scandal, which has negatively affected the oil sector. While oil auctions will relieve some pressure Brazil’s stalled economy, a strong recovery is impossible until the pervasive corruption that has crippled the country is addressed.
US tax reform, Kenyan standoff, Franco-Italian rapprochement
The Republican Party will unveil its tax reform plans. Tax cuts across the board—for both businesses and households—are expected. The dramatic cuts raise questions of how the federal government will plug the revenue gap; reports suggest the Trump administration’s arithmetic is based on optimistic economic growth figures. This may make the plan difficult to sell to fiscally conservative Republicans, who worry the country’s $20 trillion debt burden could blow out.
Yesterday, scuffles broke out between Kenyan security forces and opposition supporters demanding the resignation of election officials. Today, representatives from both sides will meet with the electoral commission to discuss how to hold a rerun of last month’s annulled election. Incumbent President Uhuru Kenyatta—who won the August 8 vote—wants to press his advantage and hold the rerun by the end of October. His opponent, Raila Odinga, says changes to the electoral commission must take place first. The impasse threatens to plunge Kenya into a constitutional crisis. With an ominous history of election violence, investors and onlookers will watch over today’s meeting anxiously.
The leaders of France and Italy will meet in Lyon as reports swirl of an impending deal over control of a French shipyard. Shortly after coming to power, Emmanuel Macron temporarily nationalised the STX shipyard—one of the world’s largest shipbuilding locations—undercutting a deal made by Italy’s state-owned Fincantieri. The move caused a diplomatic spat between Paris and its southern neighbour; a resolution today could pave the way for cooperation on important regional matters, including migration issues and Mr Macron’s plans to reform the eurozone.
22 refugees, who have been held in an Australian detention centre on Manus Island, will leave for resettlement in the United States. The refugee swap deal, which will see Australia accept Central American refugees from the US, was the source of a heated phone call between Donald Trump and Malcolm Turnbull in January. Despite the rocky start, relations between the two leaders have since warmed.