Weekly Briefing: May 30, 2016
May 30:
France releases Q1 GDP figures: 0.5% growth expected
May 31:
Australia releases Q1 GDP figures: 0.6% growth expected
Turkish President Recep Tayyip Erdogan leaves for Uganda and Kenya
June 1:
Brazil releases Q1 GDP figures; -1.2% growth expected
June 2:
German Parliament votes on declaring 1915 Ottoman massacre of Armenians a “genocide”
ECB holds a monetary policy meeting; no change expected
June 3:
Shangri-La security Dialogue commences in Singapore; 28 Asia Pacific states to attend
France hosts a summit with 20 countries on Israeli-Palestinian peace
June 4:
Hong Kong holds commemoration of 1989 Tiananmen Square massacre
June 5:
Parliamentary elections in Macedonia
Referendum in Switzerland on unconditional basic income
OPEC MEET IN VIENNA
On Thursday, June 2, OPEC members will gather in Vienna to discuss the state of the oil market.
Collectively, OPEC members produce around 40 percent of the world’s crude oil and therefore have significant market power if they operate in unison.
However, recent years has seen the collapse of trust and cooperation among OPEC members, which is one of the reasons oil prices have plunged. Discussions were underway in April led by Saudi Arabia, Russia, Qatar and others about a potential production freeze to firm up prices but collapsed when Iran announced it would not be party to the deal. Having just emerged from years of sanctions, Tehran is seeking to expand production rapidly and regain its market share, estimated to be somewhere around the 4 million barrels a day mark.
Despite the lack of cooperation oil prices have recently seen an upward trajectory, due mostly to disruptions in supply in Canada (wildfires), Venezuela (economic crisis) and Nigeria (militant attacks).
No movement or agreement is expected to come out of this meeting.
GERMAN PARLIAMENT VOTES ON AN ARMENIAN “GENOCIDE” DECLARATION
Also on Thursday, the German Bundestag will vote on whether to designate the mass killing of Armenians by Ottoman forces during World War I a “genocide”.
Armenia claims that more than a million Armenians were killed in an act of genocide by the Ottoman Empire during World War I, however, Turkey refuses to define it as such. Turkey has long used diplomatic means in an attempt to prevent countries from recognising the event as a genocide.
The move could jeopardise an already troubled EU-Turkey migrant deal. The deal, struck in mid-March, was supposed to encompass a visa-free travel arrangement for Turks within the EU but talks on this important aspect have since stalled.
Adding to the complication, almost 4 million people of Turkish origin live in Germany; with Merkel struggling in the polls ahead of the country’s 2017 election, there could be domestic political implications for the move.
SHANGRI-LA SECURITY DIALOGUE
On Friday, June 3, the annual two-day Shangri-La Security Dialogue will be held in Singapore. The summit brings together defence ministers, intelligence chiefs and security advisers of 28 mostly Asia Pacific states, including the US, China, Russia, India, Japan, South Korea and Australia.
Discussions will focus on containing North Korea, combatting the jihadi threat in Asia and managing tensions in the South China Sea.
A keynote speech will be given by Thailand’s Prime Minister Prayruth Chan-Ocha.
US Defence Secretary Ashton Carter will be in attendance and is expected to hold bilateral talks with his Japanese and South Korean counterparts.
FRANCE HOSTS SUMMIT ON ISRAELI-PALESTINIAN PEACE
Also on Friday, France will launch the latest initiative aimed at bringing peace to the troubled Israeli-Palestinian conflict. Leaders and top diplomats from some 20 countries are expected to meet in Paris to lay the groundwork for peace talks.
Israeli Prime Minister Benjamin Netanyahu has rejected the French initiative, saying that peace cannot be achieved through international conferences but only by direct negotiations between the two sides. The talks would initially exclude Israeli and Palestinian representatives in the hope that indirect talks may prove more productive at building the foundation blocks of an agreement.
A similar US-led effort collapsed in April 2014 after Israel moved forward with the construction of settlements in the West Bank, earning an unusually sharp rebuke from US President Barack Obama.
On Saturday, the Arab League adopted a resolution endorsing the peace talks and possibly opening the door for Egyptian President Abdel Fattah el-Sissi to position himself as a mediator between Israel and the Palestinians.
On a separate but related note, last week PM Netanyahu announced he would broaden his right-wing government to include the nationalist Yisrael Beytenu party. The party’s hardline leader, Avigdor Lieberman, has since been appointed defence minister. It would appear that Israeli domestic politics might scupper any hopes of success for this peace initiative.
HONG KONG COMMEMORATES TIANANMEN SQUARE MASSACRE
On Saturday, June 4, Hong Kong will hold a large commemoration of the 1989 Tiananmen Square Massacre, in which several hundred were killed in Beijing for protesting for greater freedom.
The ceremony comes just two weeks after Zhang Dejiang – the Communist Party’s third most senior official – visited Hong Kong, urging the city to embrace greater economic integration with the mainland and reject calls for independence.
Tensions between Hong Kong and mainland China were exposed in 2014 when tens of thousands took to the streets of the former British colony, protesting against proposed reforms to Hong Kong’s electoral system which would give greater control to the Chinese Communist Party. Although protests have since reduced, tensions remain high and the commemoration ceremony may spark renewed calls for protests.
The ‘one country, two systems’ principle that guarantees Hong Kong’s autonomy will expire in 2047.
SWISS REFERENDUMS ON BASIC INCOME
On Sunday, June 5 Switzerland will vote in a referendum on whether to give the government a mandate to introduce a guaranteed universal basic after-tax income of $2,600 per adult and $650 to each child per year. The scheme is estimated to cost about $200 billion a year.
Advocates say that a universal basic income would protect against job losses expected from increased automation of many jobs in the future.
The latest polls indicate the referendum will not pass.
Switzerland operates a direct democracy political system, guaranteeing a referendum on an issue if 100,000 signatures are collected.
