The Daily Brief: Wednesday, Apr. 12

The Daily Brief: Wednesday, Apr. 12

Understand the world. One brief at a time.

NATO? NATO! TRUMP HOSTS STOLTENBERG

Photo: AFP/Thierry Charlier/Getty

Photo: AFP/Thierry Charlier/Getty

The tone of Wednesday‘s meeting between Donald Trump and NATO Secretary-General Jens Stoltenberg will be much friendlier than it would’ve been a week ago.

While Mr Trump has previously been critical of NATO, the recent strike against Syria’s Bashar al-Assad could prove a game changer; the US intervention has severely dented relations between Washington and Moscow; on Tuesday, Russia’s foreign ministry said relations are “the most difficult since the end of the Cold War”.

NATO members meanwhile fully supported the strike, with some of the most vocal backing coming from Eastern Europe and the Baltics; Lithuania’s president insisted that “both Assad and Russia must know the red lines”. Washington’s willingness to oppose Russia in Syria will quell fears about a US-Russia rapprochement, at least temporarily.

With relations between the Cold War adversaries deteriorating once more, Stoltenberg shouldn’t find it too difficult to explain the importance of a strong NATO to Trump. By putting Russia back on the map, Putin may have accidentally reawakened the US-Europe alliance as well.

Dig deeper: The future of Russia-NATO confrontations in cyberspace

FULL STEAM AHEAD: INDIA’S ECONOMIC REFORMS

Photo: Angela Bellas/Alamy

Photo: Angela Bellas/Alamy

India’s parliamentary budget session will close on Wednesday, but this certainly won’t be reflected in the Modi government’s push for economic reform. The ruling BJP is aiming to ride the momentum created by their sweeping victory in five state elections, including the crown jewel of Uttar Pradesh – the world’s most populous state.

New Delhi’s next hurdle will be implementing a national sales tax, the GST, which has been in the works for 17 years and is now ambitiously set to be introduced in July. Industry has raised doubts about this timeframe, calling on the government to push it back a few months; parliament has passed the required legislation regardless.

India’s current tax system has saddled businesses with confusing tax levies; different states impose different rates as goods move throughout the country. While the proposed GST is imperfect – the government had to sacrifice a single-rate GST in favour of at least four different tax brackets to gain the support of states – this single policy is expected to increase India’s economic growth by between 1 and 2% per year.

When parliament debates budget measures again next year, Mr Modi will hope to have his shiny new tax code in place.

A BIRTHDAY TO FORGET: JACOB ZUMA

Photo: AFP

Photo: AFP

It won’t be a quiet 75th birthday for South Africa’s president, Jacob Zuma. Thousands are expected to take to the streets on Wednesday in support of a no-confidence vote against the embattled leader, which will be debated in Parliament on April 18.

To oust Mr Zuma, the opposition will need to secure votes from a majority of the 400-seat National Assembly. But the president’s party, the ANC, holds a commanding 62% majority, which has allowed Zuma to see off two no-confidence motions in the past year. However, recent intra-party turmoil caused by a controversial cabinet reshuffle last month may push some ANC lawmakers to abstain in a third anti-Zuma vote, possibly giving opposition groups the edge.

The president’s allies remain defiant. Last week, ANC Secretary-General Gwede Mantashe declared no ANC lawmakers would vote against Zuma.

But even if the motion fails, the opposition has committed to using its “last resort”: an application to the Constitutional Court to impeach or discipline the embattled president. While this may offer hope to disgruntled South Africans, the uncertainty has sent a shudder through the country’s financial markets.

 

HAPPENING ELSEWHERE…

Brazil’s central bank is expected to cut interest rates by a whole percentage point – a move designed to spur investment in a country facing its worst-ever recession.

The contested regions of Jammu and Kashmir will hold a by-election. Tensions are high after eight people were killed and more than 200 injured in clashes between authorities and protestors.

Liberal-minded Hungarians are expected to take to the streets to protest a government-sponsored bill that aims to severely restrict the operations of foreign-funded non-governmental organisations. In 2012, a similar law was enacted in Russia, a country with which Hungarian PM Viktor Orban has strong links. Tens of thousands attended a similar protest in defence of the Central European University on Sunday.