Friday, September 29
NO WAY OUT
Deadline approaches for Iraq’s Kurds to hand over control of airports
After 93% of 3.3 million voters living under Iraq’s Kurdistan Regional Government (KRG) voted for independence from Baghdad on Tuesday, Iraqi Prime Minister Haider al-Abadi demanded KRG President Masoud Barzani hand over control of Kurdish airports to Iraq’s central government by today.
The airport dispute is the latest attempt by the KRG’s neighbours to isolate it from the outside world. Bagdad has blocked incoming flights to Kurdistan, and Turkish President Erdogan has threatened to cut off the flow of Kurdish oil exports, which are crucial to the economies of both the KRG and Turkey.
Military tensions are running high. After the vote, the Iraqi parliament asked Abadi to send troops to Kirkuk, a disputed oil-rich city under KRG control that is only 50% Kurdish. Meanwhile, Iran conducted military exercises on the Kurdish border last week, and the Turkish parliament passed a bill reauthorising military intervention in Iraq.
The Kurdish referendum is legally non-binding, and some believe Barzani will merely use it as a bargaining chip for greater autonomy. But if he does push for independence, military conflict between the KRG and Baghdad will become more likely.
Delve deeper: Kurdish independence vote: status quo or powder keg?
DISHONOURING THE FLAG
Verdict to be delivered in Hong Kong flag desecration case
Hong Kong lawmaker Cheng Chung-tai will today discover whether he is found guilty of desecrating the Chinese and Hong Kong flags. Mr Cheng pleaded not guilty to the charges earlier this month.
Cheng was charged after upending a number of Chinese and Hong Kong replica flags in the Legislative Council of Hong Kong (Legco), last October. The lawmaker faces up to three years in prison if found guilty.
Despite the apparent absurdity of the charges, the case epitomises the ongoing struggle in Hong Kong between the pro-independence and pro-Beijing movements. Cheng upended the flags in protest after Beijing removed pro-independence lawmakers Sixtus “Baggio” Leung-Chung-hang and Yau Wai-ching from Legco due to improper oath-taking.
Protests remain a common occurrence in Hong Kong; tensions have simmered since the “umbrella revolution” protests of 2014.
Whether Cheng will be found guilty depends on whether the replica flags are deemed to be of the requisite size to be considered under the law. Protests are likely if Cheng is found guilty today. He would be the third pro-independence lawmaker to be removed from Legco under questionable circumstances since last year’s elections.
BULLISH BEAR
Russia’s Duma set to approve 2018 budget
Today Russia’s parliament will consider the 2018 budget, which is expected to reduce the country’s deficit by 0.6% to 1.5% of GDP.
The shrinking budget deficit is the latest in a string of positive indicators for the struggling Russian economy, which started slowly growing in the last three months of 2015 after two years of recession. The 2.5% growth registered last quarter was Russia’s best in years.
Last week, Fitch revised its outlook on Russia’s sovereign credit to “positive” and signalled they would likely upgrade their credit rating to BBB, making Russia more attractive to foreign investment.
However, Russia faces the same challenges that caused a recession in 2014. Oil prices have increased modestly but remain stuck under $60 a barrel. Moscow had hoped the Trump administration would loosen American sanctions targeting its financial elite and energy sector. However, US legislation passed in July redoubled measures while restricting Trump’s ability to alter them without congressional approval.
Even with these persistent challenges, the World Bank estimates Russia will experience modest 1.5-2% growth for the next several years. After showing it can weather Western economic backlash to its military adventurism, Russia looks set to remain a significant power in Eurasian politics.
Delve deeper: US-Russia relations: the relentless power struggle