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22 Jul 22. Algeria: Easing Of Protectionist Law.
Key Takeaways
- Algeria remains a heavily militarised state, with the re-election of President Abdelmadjid Tebboune in June 2021 sustaining its weak democracy. State repression has largely curbed the outbreak of large-scale protest movements, though a sharp socio-economic deterioration will likely drive an increase in civil unrest in the coming months.
- Institutional corruption and bribery continue to pose notable reputational and regulatory risks for businesses operating in Algeria, including in the pharmaceutical sector. Companies with government-backed contracts will become increasingly vulnerable, with members of the political elite often implicated in or benefitting financially from the illicit trading of commodities.
- While Algeria’s recent increase in hydrocarbon exports will prompt a short-term economic rebound, longstanding delays to critical structural reforms will hinder fiscal resilience and economic diversification. Widening budget deficits and public debt jeopardises long-term fiscal recovery, sustaining investor concerns over the stability of the business environment.
- Deepening socio-economic pressures have resulted in a reduction of the 51/49 ownership rule across many industries and the consequent easing of protectionist policies. Simultaneously, lessons from the Covid-19 pandemic have accelerated regulatory framework reform in Algeria’s pharmaceutical sector, among others. However, there is a realistic probability that reluctance to authorise critical structural and economic reforms will hinder economic diversification initiatives and private sector growth.
Context
President Abdelmadjid Tebboune was re-elected during legislative polls on 12 June 2021. He formed a multi-party coalition headed by Algeria’s largest political party, the National Liberation Front (FLN). June’s polls saw a record low voter turnout of 23 percent and the subsequent resignation of Prime Minister Abdelaziz Djerad, with the formation of a new cabinet undermined by public criticism. The elections were marred by political boycotts and activism, with a dearth of public engagement and the re-election of Tebboune underscoring Algeria’s enduring political instability and weak governance principles. Moreover, Algeria’s heavily resourced military continues to penetrate every aspect of socio-political life, dictating the economic environment and undermining any attempt to implement state reforms.
Civil activism and large-scale protests have been frequent in Algeria since 2018, with the Hirak movement mobilising protests in February 2019 across the nation for 42 weeks. This prompted the resignation of the former president, Abdelaziz Bouteflika, in April 2019. The Covid-19 pandemic provided an opportunity for the government to implement repressive measures to curb protest activity, including semi-permanent curfews and quarantine measures. Improvements in the epidemiological situation and the easing of measures resulted protests re-emerging in February 2021, particularly in the run-up to the June elections.
In recent months, Tebboune’s government has intensified its crackdown on protesters and journalists, resulting in an uptick in forced disappearances and arbitrary arrests. Over the past 20 months, the government has normalised the use of emergency measures to curb state criticism, which illustrates democratic backsliding and deepening restrictions on freedom.
Algeria’ economy continues to suffer in the aftermath of the Covid-19 pandemic, though the Russian invasion of Ukraine and subsequent global energy crisis has provided short-term financial relief amid the recovering rate of oil exports to pre-pandemic levels. While Tebboune successfully passed the 2022/23 Budget Law at the end of December 2021, Algeria’s long term fiscal imbalances are making it increasingly difficult for the government to appease the public with welfare programmes and benefits. Historically, social support systems have been at the centre of Algeria’s public policy as a form of state intervention or control, namely in the form of subsidies and financial allocations. In the event that financial burdens force a streamlining of social support systems, an uptick in protest activity and anti-government sentiment is almost certain.
Business In Focus: Energy Sector
After two years of pandemic-related disruption, the Russian invasion of Ukraine exacerbated existing global supply chain issues and the volatility of commodity prices. However, as European markets seek to diversify from Russian natural resources, Algeria has strengthened its position as an alternative energy partner for European governments. On 26 May, Algeria’s state-owned energy company Sonatrach reached an agreement with Italy’s Eni to co-operate on boosting gas exploration and developing green hydrogen in Algeria. This represents an extension of a previous energy co-operation deal with Italy signed on 11 April. The deal took place during President Tebboune’s three-day visit to Rome. Here he reported that Algeria would be able to supply production increases to Italy, which could then sell these supplies to the rest of Europe.
Current and prospective energy partnerships with European governments will support Algeria’s objective of attracting foreign investment to modernise and boost production capacity. This investment would also be used to benefit other key sectors such as the strategic pharmaceutical sector, which is protected. However, significant infrastructural development is still required to boost export capacity effectively in the coming months. This compounds Algeria’s need to a balance its ever-growing domestic consumption vis-à-vis export plans and renewable energy projects.
Regarding renewable energy projects, Algeria established a Ministry of Energy Transition and Renewable Energy in 2020 and revised tender provisions, including the removal of the 51/49 ownership rule. This enabled Algeria to be better placed as a major international energy trading partner. There is a realistic possibility that similar moves will be made for pharmaceuticals, due to recent (albeit slight) easings for certain products.
While nascent opportunities signal a possible easing of some of Algeria’s protectionist strategies in strategic sectors, including pharmaceuticals, the country’s poor human rights record and institutional corruption still pose major reputational concerns for foreign businesses. These will threaten market entry and foreign direct investment opportunities, as well as the government’s ability to benefit financially from sectoral growth to build economic resilience. Moreover, while increasing energy revenues will benefit the Algerian government in the short term, market volatility and the global cost of living crisis will sustain negative socio-economic impacts in the coming months.
Business In Focus: Pharmaceutical Sector
Traditionally, Algeria has one of the strongest healthcare systems in Africa. However, the Covid-19 pandemic exposed overstretched systems, staff shortages and ill-equipped facilities due to weak public spending. Decades of insufficient financial backing rendered the heath sector incapable of coping with the pandemic, with poor access to treatments and regular testing capabilities proving inadequate to curb the spread of the virus. The government underestimated the impact of pandemic; investments of USD 100 million to import medical supplies and Covid-19 antigen tests still failed to control infections by October 2020. Although Algeria’s public health expenditure is higher than that of most other African states, it falls short of the global average, affecting its ability to respond to a public health crisis adequately. Renewed peaks of infection or the spread of Covid-19 sub-variants still threaten to overwhelm medical facilities, which will also undermine Algeria’s Covid-19 vaccination campaign.
The public health crisis prompted some critical reforms in Algeria’s pharmaceutical industry, including moderate changes to regulatory and operational frameworks. As the second-largest pharmaceutical market on the African continent, Algeria’s pharmaceutical sector has recorded a 17 percent growth in the last decade and averages an annual growth of eight percent. While the industry has historically been characterised by restrictive market access for private companies, the government utilised the Covid-19 pandemic as an opportunity to expand the sector as part of a drive to bolster Algeria’s role as a regional export hub and to promote economic health. However, investments targeting the manufacture of innovative, high value-added products requiring advanced and protected technology both for domestic and export market are exempt.
The creation of the National Agency for Pharmaceutical Products (ANPP) and the Ministry of Pharmaceutical Industry (MOPI) in June 2020 signalled governmental intent to boost the pharmaceutical sector. Process updates by the MOPI since December 2020 have facilitated the growth of pharmaceutical sales, both domestically and internationally, including procedures to register new drugs. The International Trade Administration noted that regulation updates decreased the registration time from approximately five years to five months for proprietary drugs and three months for generic medicines.
In February 2021, private companies benefitted from updated legislation relating to the establishment of local representative offices for foreign entities, subsequently facilitating local market entrance opportunities. However, the MOPI still suffers from significant internal structural issues, including shortfalls in procedural consistency and a lack of regular incident reporting. Despite the aforementioned developments and improvements, pharmaceutical companies still face issues relating to oversight and accountability.
Despite the easing of limitations, Algeria maintains export bans on some domestically-produced pharmaceutical products in order to benefit local manufacturers. Such restrictions will encourage the illicit trading and smuggling of pharmaceutical products across African and Mediterranean black markets, particularly via porous borders with neighbours, elevated by the recent re-opening of the Algerian-Tunisian border. The financial fallouts associated with the Covid-19 pandemic and the maintenance of strict export bans will sustain Algeria’s sizeable informal economy, with the re-opening of land borders facilitating an increase in the movement of smuggled contraband, including medicines.
The prevalence of criminal networks near border areas will also elevate reputational and operational risks for businesses which are increasingly vulnerable to forced co-operation or bribery to safeguard the transportation of their goods. This also elevates the probability of shortfalls in product control, with pharmaceutical companies having reported issues with unexplained broken seals of medical products and counterfeit items in their trucks. Enhanced security at border checkpoints or delays to land crossings also pose operational hurdles for pharmaceutical companies, particularly during the transportation of refrigerated products which are at a greater risk of deteriorating if they are not appropriately stored.
Developments To Watch For Q3-4 2022
Tensions between Algeria and Morocco remain elevated, due to longstanding disputes over Western Sahara and Spain’s recognition of Moroccan sovereignty over the disputed territory in March, despite decades of neutrality. Recent developments highlight the potential for violent escalations and tit-for-tat hostilities in Western Sahara, though confrontations are unlikely to spill into Algerian territory or impact overland supply chain routes. For instance, even though Algeria suspended a co-operation treaty with Spain in early June, the diversity of Spanish exports will largely mitigate the possibility of market dependencies or shortages in Algeria. However, sustained tensions between Algiers and Madrid will elevate operational risks for Spanish firms in the short term, particularly with regard to arbitration processes and disputes over energy sector ventures. As a result, this will possibly trigger spill-over effects for Spanish companies operating in other strategic sectors, such as pharmaceuticals, as well as non-Spanish firms in joint ventures.
The parliamentary elections in June 2021 attracted the lowest turnout in over two decades, with the vote branded as illegitimate by the Hirak movement. President Tebboune and his government will continue to be criticised for adhering to the principles of the former regime, with the influence of the military unlikely to diminish. Similarly, any ministerial changes will likely have a limited impact on policy in key areas, as power remains relatively centralised under the president. Furthermore, with the next presidential and legislative elections scheduled for 2024 and 2026, respectively, policy direction and government instability risks are likely to remain low for the remainder of 2022. However, the repression of civil and political opposition movements, especially those connected to the Hirak movement, will persist and sustain the overall risk of domestic unrest.
Continued economic and fiscal pressures are likely to force Tebboune to reconsider tough protectionist measures which he has continued to enforce, despite efforts to expand foreign invest by easing the 51/49 ownership rule for non-strategic sector businesses and the subscription to European Bank for Reconstruction and Development shares in August 2021. However, the government is likely to remain reluctant to open Algeria’s economy to foreign borrowing, jeopardising long-term fiscal stability and the expansion of the non-oil private sector. Ultimately, Tebboune’s reluctance to authorise critical structural and economic reforms has a realistic probability of hindering the country’s ability to implement much-needed economic diversification initiatives. High levels of unemployment, weak private sector growth and heavy reliance on hydrocarbon revenues will compound the vulnerability of Algeria’s macro-economic outlook for the remainder of 2022.(Source: Sibylline)
21 Jul 22. Taiwan’s concerns on speed of arms sales will be conveyed to US, says ex-US defence secretary.
Former U.S. defence secretary Mark Esper said on Thursday he would take back to Washington D.C. concerns expressed in Taiwan about the speed of arms sales to the island and the need to get greater access to weapons like portable missiles.
Taiwan has previously talked of problems accessing some weapons it has on order, like shoulder-fired Stinger anti-aircraft missiles. Taiwan has complained of stepped up military pressure from China to force it into accepting Beijing’s sovereignty claims. read more
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The missiles are in hot demand in Ukraine, where they have been keeping Russian aircraft at bay, but U.S. supplies have shrunk and producing more of the anti-aircraft weapons has faced significant hurdles due to limited manufacturing capacity. read more
Esper, visiting Taiwan under the auspices of the Atlantic Council think-tank and where he had meetings with senior leaders including President Tsai Ing-wen, said he did not get the sense Taiwanese officials were frustrated at what arms were on offer from Washington.
“I didn’t pick up any frustration other than the speed at which we conduct arms sales,” he told reporters in Taipei. “There was an expression of the need to get greater access to weapons such as the Javelin and the Stinger.”
The Javelin is an anti-tank weapon that Taiwan also uses, and is being used in Ukraine.
“I think there was a concern about the supply chains and supply lines. That’s an issue that my delegation and I decided to take back and to share with the right people in D.C.”
Esper served from 2019 through 2020 under former President Donald Trump, whose administration approved billions of U.S. dollars in arms sales to Taiwan.
The United States is bound by law to provide Taiwan with the means to defend itself, but has also been prodding the government to focus more on asymmetric warfare – where a smaller force employs unconventional tactics against a larger enemy – using more mobile weapons, to make the island harder to attack, something Tsai has said she is prioritising.
Esper said Taiwan was never going to be able to match China in terms of conventional power, and Taiwan should be studying how Ukraine has fought Russia using asymmetric strategies.
“You don’t do asymmetric warfare with fighter jets. That doesn’t mean it can’t be part of a more comprehensive strategy, but you have to build the asymmetric capabilities first.” (Source: Defense News Early Bird/Reuters)
22 Jul 22. Sri Lanka: Heavy-handed security force operation will sustain domestic unrest and government instability risks. On 22 July, the security forces carried out a pre-dawn raid against the Gota Go Gama protesters camp in Colombo. This comes despite protesters claiming they would withdraw from these areas by Friday afternoon. The security forces reportedly beat protesters, injuring over 50. They also destroyed tents and arrested nine people. Some journalists and lawyers were also reportedly attacked. It is possible that the newly elected President Ranil Wickremesinghe, who previously declared a state of emergency, may have ordered the raid as a show of force. Protesters have called for Wickremesinghe’s resignation since 20 July. Wickremesinghe is expected to take a hard line against protesters to maintain his new position and to bolster government stability. However, the use of force is likely to sustain domestic instability by prompting further protests in Colombo and elsewhere. Moreover, these actions may undermine the prospects of securing financial support from the International Monetary Fund (IMF), sustaining socio-economic and financial risks in the long-term. (Source: Sibylline)
22 Jul 22. Mali: Security Environment.
Key Takeaways
- Russia has exacerbated anti-French sentiment across West Africa and the Sahel through social media campaigns targeting the populations of Mali and other Francophone countries. Social media posts have acted as key tools in reducing support for the French military, creating security vacuums and providing opportunities for Russian private military contractors (PMCs) like the Wagner Group.
- Through its use of social media, Russia has exploited rising levels of domestic unrest in Mali and Burkina Faso, creating narratives linking both countries’ unpopular former governments and France’s presence in the region. Russia will now be able to enter markets in countries not currently impacted by armed conflict, where it will drive anti-French protests through social media campaigns, elevating threats to French staff and assets.
- The security environment will likely deteriorate in areas where the Wagner Group has a presence and from where French military forces have withdrawn due to popular opposition. Wagner operatives are known to commit human rights abuses, exacerbating conflicts and worsening security environments across the region.
Situation
In recent years, anti-French sentiment has steadily mounted across the Sahel. This trend escalated rapidly in Mali due to recent tensions between France and the military junta over the transitional government’s rejection of a swift return to civilian rule. Social media played a key role in exacerbating these sentiments throughout the Malian public, bolstering support for anti-French protests and pressuring the Malian authorities to reject French military support.
Russia has been a key actor amid this development, exploiting government instability to find new markets for its security services and fresh opportunities to enhance its influence and access to resources. While Moscow is most prominent in Mali, anti-French sentiment has spread across social media in Burkina Faso since November. This ill-feeling drove protests which resulted in a military coup in January. Following the coup, pro-Russian posts gained further support on social media, with protesters taking to the streets waving Russian flags and calling for support from Moscow. Most recently, mounting anti-French rhetoric in Chad and Gabon have also driven protest movements, reflecting Russia’s capacity to exploit and propagate narratives that draw associations between anti-government frustrations and France’s presence across the region.
Russia has capitalised on declining support for France to increase its presence in Mali
France’s inability to resolve the conflict between the Malian state and various jihadist groups contributed to rising levels of anti-French sentiment in the country. While relations between France and Mali remained relatively cordial throughout the conflict, which began in 2013, a military coup in 2020 upended that alliance. The coup was perceived as a blow to the French president, Emmanuel Macron, who supported the ousted Ibrahim Boubacar Keita and sought to improve France’s image across West Africa. With France putting pressure on the military government to return Mali rapidly to civilian rule, the junta was able to secure legitimacy for itself by appearing to resist France, curtailing the effectiveness of France’s Operation Barkhane and further undercutting the reputation of the French in the public eye.
Since then, the public’s perception of France has deteriorated further, with reports indicating that around 45 percent of Malians believe that France was actually supporting jihadists in order to justify its military presence. The same report found that only one third of Malians were satisfied with Operation Barkhane. Following the authorities’ expulsion of the French ambassador in February, anti-French protests erupted in Bamako, where protesters burned cardboard cut-outs of Macron while waving Russian flags.
The cessation of Operation Barkhane in February strengthened Mali’s ties with the Wagner Group. In 2021, the transitional government allowed around 1,000 Wagner contractors to conduct training and counterinsurgency operations in Mali. Since December, Wagner operatives have deployed to Mopti and Timbuktu regions, though their exact numbers therein remain unclear. The deployment took place despite France’s claims that the presence of Wagner operatives was incompatible with its own military agenda. This was a key catalyst for France’s decision to pull out of Mali completely. Additionally, the Malian authorities also accepted donations of Russian MI-171 attack helicopters and accompanying weapons; these were delivered in 2021 and 2022.
Anti-French sentiment has been exacerbated through Russian disinformation campaigns
The shift in the public’s perception has been facilitated by Russian disinformation campaigns. Their efforts have helped to discredit the French military and often involve claims that France has lied about civilian casualties in Mali. To bolster these allegations, Russian operatives have frequently fabricated evidence. In April 2022, France released satellite drone footage showing Wagner operatives burying the bodies of civilians near an abandoned French army base at Gossi in northern Mali. It is likely the group intended to accuse France of war crimes, using the proximity of the bodies to the abandoned base as false evidence. Despite the counterevidence provided by the French satellite footage, social media posts accused France’s armed forces of committing the killings, generating further opposition to France’s presence in the region.
These disinformation campaigns are repeatedly employed throughout Mali. Maxim Shugaley, an associate of Yevgeny Prigozhin (the founder and unofficial head of the Wagner Group), is well known for managing disinformation campaigns through the Foundation for National Values Protection (FZNC), which is currently sanctioned by the US. In 2021, FZNC released a public opinion poll on social media indicating that 87 percent of Mali’s population supported Bamako’s deal with the Wagner Group, underlining further attempts by Russia to bolster its reputation across the country.
Facebook pages administered from within Mali, and which claim to be charity, non-profit or local community organisations promoted rhetoric to bolster support for the military’s second coup in May 2021. During this period, the military removed the civilian partners it had installed in August 2020. Five of these pages shared similar content focusing on support for Colonel Assimi Goita – the interim president of Mali and head of the junta – and the Malian army. They also endorsed Russia’s military support as a welcome alternative to France. This same network also actively supported the deployment of the Wagner Group ahead of its arrival. It is highly likely that these pages were managed by Russia and posted content to secure domestic support for Moscow while fuelling anti-French sentiments to drive protest action.
Russia is expanding its social media campaign to target other Sahelian countries, supporting its ambitions to enter new West African markets
Russia’s capacity to run social media and disinformation campaigns is not limited to Mali. A data search of French language social media posts from 13 to 20 July 2022 revealed that 967 posts included a combination of the terms “Sahel” and “France” with “Russia”, “conflict”, “scandal”, “crisis” and “deceitful”. In November 2021, the network of Malian Facebook pages mentioned previously added a new page dedicated to the Sahel. The content on this page mirrored the usual pro-Russian and anti-French narratives, and also advocated for a revolution by the Sahelian people. Facebook made official statements claiming that the platform is struggling to regulate pro-Russian and anti-Western posts, indicating the scale of Russian social media campaigns.
Russia has exacerbated political instability through these campaigns. It has also provided support for coups in other West African countries, most notably Burkina Faso. In November and December 2021, Burkinabe protesters demonstrated in the streets of Ouagadougou, demanding the resignation of President Roch Kabore due to mounting insecurity in the tri-border region between Mali and Niger. Protesters also demanded the departure of French troops from the region and called for negotiations with militant groups to resolve the conflict. These conditions undermine France’s role in the country, paving the way for the 24 January military coup. Social media was critical in influencing public opinion by amplifying the pro-Russian and anti-French narrative.
While regional governments and France have managed to maintain relatively cordial relationships with the Burkinabe military government, in part by deciding not to impose strict sanctions on the country, social media accounts continue to push claims that deteriorating security is France’s fault. Most recently, reports about the destruction of two bridges between 15 and 16 July in northern Burkina Faso prompted claims that France is actively attempting to push the conflict southwards towards the Gulf of Guinea (Figure 1). This sentiment is likely to bolster the image of Russia as a stronger alternative, encouraging other governments to accept the support of the Wagner Group.
English translation: “France moving terrorism to the Gulf of Guinea”.
Russian operatives use French language posts to bolster widespread anti-colonial sentiments across West Africa and to generate widespread suspicion that France is supporting an array of autocratic governments. This even applies to areas not facing the same security challenges as Mali and Burkina Faso. This includes Gabon, where the opposition party, Front Patriotique Gabonais (FPG), organised an anti-French protest in the capital Libreville in May to denounce the government’s defence accord with France. They also demanded the departure of French troops. The gathering reflected an increasing association between domestic anti-government sentiment and France. This association was driven by claims propagated on social media that French geopolitical influence has helped to prop up unpopular governments.
Similar sentiments were also demonstrated during opposition protests in Chad on 14 May. The Wakit Tamma civil society coalition organised protests in which participants alleged that France has supported Mahamat Idriss Deby Itno, the head of the ruling Transitional Military Council and son of the late president, Idriss Deby, since April 2021.
English translation: “The soldiers of #Ouattara, therefore of #Macron … It is always through its valets that the #France wants to continue to plunder the countries of #Afrique franc #CFA. The problem of #Afrique is the Africans. #Mercenaires #déstabilisation #putsch #Mali #CôtedIvoire #France #Afrique #Sahel”
Forecast
Rising inflation rates around the world will impact countries in West Africa, exacerbating food insecurity and driving economic deterioration in the coming months. This is likely to elevate threats to government stability in countries across the region. Russia will capitalise on domestic unrest to amplify the narrative of French support for unpopular governments via social media, further intensifying anti-French sentiments and heightening the threat of unrest.
Anti-French protests in cities across the Sahel are likely to elevate threats to French business assets. During recent demonstrations in N’djamena, Chad, protesters vandalised several Total petrol stations. Elsewhere, anti-government protests in Senegal in March 2021 also involved attacks against Total petrol stations and French retail stores. French staff working in cities where protests are likely to erupt face heightened risks. Protests in cities like Dakar, N’djamena and Ouagadougou, where the authorities tend to employ excessive force to disperse protesters, will heighten indirect physical threats to staff and assets. Elevated security deployments during periods of unrest are likely to disrupt the movement of goods and personnel in Sahelian cities. The employment of repressive governmental measures, including internet cuts, will impede business operations and communications.
If it can secure more security service contracts, Russia will likely seek to enhance its regional presence in local extractive industries to bolster its international standing. Russia perceives its military intervention as a means to extend its diplomatic leverage and to reduce France’s traditional influence in West Africa. This strategy has been seen in the Central African Republic (CAR), where Wagner operations are concentrated around mineral-rich areas, fuelling suspicions that regional governments will compensate the Wagner Group by handing it control of the mining industry. Russia’s foreign ministry previously stated that Moscow’s military aim in CAR is to strengthen national security and establish mutually beneficial mining contracts. If Russia is able to meet its objectives, the Wagner Group’s presence around mining sites will likely elevate threats to French business interests in West Africa, particularly in the extractive industry.
The presence of Russian PMCs is likely to exacerbate instability. In 2021, the EU imposed sanctions, asset freezes and travel bans against the Wagner Group following reports of human rights violations in CAR, Libya, Syria and Ukraine. In Mali, Wagner operatives have co-operated with Malian forces to commit atrocities and human rights abuses, most notably in Moura in central Mopti region, where over 300 civilians were killed during joint operations between 27 and 31 March.
A greater Russian presence across West Africa is likely to elevate operational challenges for Western businesses, particularly those operating in areas where Wagner operatives are more active. Human rights abuses will bolster jihadist messaging, driving recruitment and exacerbating conflicts across the region. This will almost certainly result in the further deterioration of West Africa’s security environment. Increasing levels of insecurity across West Africa are likely to elevate the threat of physical attacks against Western business assets and staff (See Sibylline Global Extremism Quarterly). Furthermore, rising levels of insecurity will likely exacerbate domestic unrest, elevating threats to government stability and creating a volatile investment environment in countries across the region. (Source: Sibylline)
21 Jul 22. Mali: Further deterioration of relations with UN forces likely, impeding counter-insurgency. On 20 July, authorities dismissed the representative for the United Nations Multidimensional Integrated Stabilization Mission in Mali (MINUSMA), giving him 72 hours to leave the country. The transitional government cited the representative’s unacceptable Twitter posts regarding the arrest of the 49 Ivorian soldiers working for MINUSMA on 10 July. Following the arrests, the foreign ministry temporarily suspended the rotation of all UN military and police contingents, restricted MINUSMA freedom of movement. The dismissal of the representative underlines the deterioration of relations between Mali and MINUSMA which is tied heavily to the operations of Russian private military contractor Wagner Group. Joint operations between Wagner and the Malian army resulting in frequent human rights abuses will prompt further efforts to curtail MINUSMA’s operations. Impediments to the combat effectiveness of over 7,600 troops and volunteers deployed under MINUSMA will undermine security in rural areas increasing the operation freedom of jihadist groups. (Source: Sibylline)
20 Jul 22. Syria’s continued failure to comply with its obligations under the Chemical Weapons Convention. Statement by Fergus Eckersley, UK Political Coordinator at the UN, at the UN Security Council briefing on Syria Chemical Weapons.
Thank you, Mr President. And, we’d like to thank the High Representative, once again, for her briefing, and for reminding us so clearly of the facts.
We must keep these facts in mind, and not allow ourselves to be distracted by the blizzard of disinformation that surrounds Syria’s chemical weapons programme. The OPCW Declaration Assessment Team has a mandate to ensure the Syrian Arab Republic fulfils its obligations under the Chemical Weapons Convention, as well as under this Council’s resolutions.
The team has been working since 2014 to resolve the many gaps, inconsistencies and discrepancies in Syria’s initial chemical weapons declaration.
Since April this year, the team has made extensive efforts to deploy to Syria to continue its vital work and has also proposed meeting outside of Syria.
However the 25th round of consultations between the Secretariat and the Syrian Arab Republic has still not taken place.
As the High Representative said, responsibility for this rests with the Syrian side, which has failed to respond to letters and Note Verbales from the Secretariat, and has continued to refuse to issue a visa for the lead technical expert.
As we’ve heard today, the Syrian Arab Republic has also failed to comply with numerous other commitments, including with the Conference of States Parties’ Decision of June 2018 that it should declare all chemical weapons it possesses — including sarin and its precursors — as well as the Executive Council Decision of July 2020 that it should declare facilities related to the chemical weapons used in the sarin and chlorine attacks in Ltamenah on 24, 25 and 30 March 2017.
These facts are not academic — they are deadly serious.
As we have heard many times, the 20 unresolved issues in Syria’s initial declaration, include the whereabouts of several hundred tonnes of chemical weapons agents and thousands of munitions.
The OPCW’s Investigation and Identification Team has found the Syrian Arab Republic responsible for chemical weapons attacks against its own people.
And in total, the OPCW’s Fact Finding Mission has identified 20 incidents of chemical weapons use in Syria. And, there are well-documented reports of many more.
We must keep a spotlight on these issues, not just because of our responsibilities under Article 24 of the Charter, but also because we owe it to the victims of these horrific weapons to ensure that their use does not go unchallenged.
There must be no impunity for any state that develops, acquires, or deploys chemical weapons, anywhere, under any circumstances.
Thank you, Mr President. (Source: https://www.gov.uk/)
20 Jul 22. Sri Lanka: Election Of Wickremesinghe. On 20 July, Sri Lanka’s parliament voted for Ranil Wickremesinghe to replace the recently resigned Gotabaya Rajapaksa as president of the country.
- Six-time prime minister Ranil Wickremesinghe, who is considered an ally of the deposed Rajapaksa, secured 134 votes from the 225 members of parliament despite his unpopularity amongst the general public. Wickremesinghe comfortably beat his two main competitors, Dullas Alahapperuma from a faction in the ruling Sri Lanka Podujana Peramuna (SLPP) and leader of the leftist Janatha Vimukti Peramuna (JVP) party, Anura Kumara Dissanayaka.
- Gotabaya Rajapaksa resigned as president after fleeing the country last week (see Sibylline Special Report – 18 July 2022), following months-long protests against his government which had overseen a dramatic deterioration of the country’s socio-economic health. While Wickremesinghe had been appointed prime minister by Gotabaya to replace his brother Mahinda Rajapaksa to satisfy protestors in May, this change did not have a significant effect on the country’s growing domestic unrest.
- Indeed, Sri Lanka’s economic crisis has driven spiking levels of inflation and chronic fuel shortages, that have led to significant disruptions to transport and regular power cuts, as well as shortages of key products, such as food and medicines. Sri Lanka has also defaulted on more than USD 50bn of external debt, crippling its ability to secure the necessary funds to resolve the situation.
- A state of emergency was re-declared on Sunday (17 July), by then-acting President Wickremesinghe, in anticipation of further protests with security forces deployed in heavy numbers around the capital of Colombo.
FORECAST
Protestors of the ‘Aragalaya’ movement – which means struggle in Sinhala – had made it clear before parliament made its choice that Wickremesinghe was not a desirable candidate given his ties with the unpopular Rajapaksa government and their role in Sri Lanka’s current socio-economic crisis. This was demonstrated by reports of protesters in the Galle Face area of Colombo shouting “Ranil Go Home” during the vote. Consequently, further protests against the government can be expected following this latest development. While protestors have largely pursued peaceful methods, there have been a number of escalations in recent months, with clashes between demonstrators and police leading to the use of water cannons, tear gas, and property damage, driving the physical threat to bystanders in proximity. Areas around government infrastructure, such as municipality offices or parliamentary buildings, or politicians’ homes will be the most at risk of being targeted by these instances of unrest.
In addition to public discontent, the newly appointed president will also face the unenviable task of stabilising the economy. One key element the new government will focus on to improve the immediate economic situation will be securing a bailout package from the International Monetary Fund (IMF). However, while negotiations are ongoing, the necessary guarantees required by the IMF, such as tax rises and spending cuts, will be unpopular and likely prompt significant public opposition. Until such a bailout is secured, continuous irregular supplies of fuel and other key imports will drive disruptions for firms and individuals operating in Sri Lanka. (Source: Sibylline)
20 Jul 22. Iraq: Attack On Resort. On 20 July, heavy artillery shelling killed at least eight people and injured up to 25 in a tourist resort located in Zakho, the Duhok Governorate of Iraq’s Kurdistan region. Local media outlets reported that the attack was carried out by Turkish government forces, whilst Iraq’s Ministry of Foreign Affairs stated that it was a “flagrant violation of Iraq’s sovereignty”.
SIGNIFICANCE
- The latest incident comes amid an intensification of the Turkish government’s offensive against the Kurdistan Workers Party (PKK) named Operation Claw-Lock (see Sibylline Situation Update Brief – 27 April 2022). The Duhok Governorate is often at the centre of fighting due to its proximity to the Turkish border, with today’s shelling likely representing a retaliatory attack for the death of two Turkish soldiers during clashes with the PKK on 17 July.
- Confirmation of Turkish responsibility threatens to deepen Iraq’s political instability and inflame tensions both between parties in the Kurdistan Regional Government (KRG), and between the KRG and Baghdad’s central government. Already, Shia Cleric Moqtada al-Sadr has called for the complete severing of ties with the Turkish government and submitted an official complaint to the United Nations (UN), with sentiments shared by Duhok’s Representative Jaiya Timur. Therefore, any perceived tolerance by the Kurdistan Democratic Party (KDP) of Ankara’s actions threatens to drive political hostilities and exacerbate delays to Iraq’s government formation.
- Moreover, al-Sadr’s submission to the UN and Turkey’s repeated targeting of civilian entities will not only place added international pressure on Ankara, but will also drive anti-Turkish sentiment across the entire Kurdistan region and wider, underscored by the storming of the Turkish visa office in Iraq’s Najaf today (20 July). Turkish President Recep Tayyip Erdogan utilised the Russian invasion of Ukraine as an international distraction to launch campaigns in northern Iraq and potentially Syria, however, the uptick in civilian deaths threatens to strain diplomatic and domestic relations with Arab and international leaders.
FORECAST
The incident is likely to sustain cross-border escalations and result in a reinforced military presence along the Turkey-Iraq border in the coming days and weeks. This will increase overland travel disruptions, as well as significantly heighten physical security risks for personel and assets based in the area. The reported attribution of the incident to Turkish government forces will heighten anti-Turkish sentiments throughout the broader Kurdistan region, increasing risks for Turkish business staff in Kurdistan, as well as Iraq.
Continued deterioration in the region’s security environment threatens to deepen socio-economic insecurities across communities in northern Iraq. The uptick in cross-border attacks has already triggered an increase in internally displaced persons, with host communities facing major financial strains, elevating the likelihood of domestic unrest. The expansion of Operation Claw-Lock’s conflict zone provides an optimum environment for surrounding Islamist extremist groups such as Daesh to exploit vulnerable communities and increase their presence.
While still a remote area, the incident further elevates risk levels for businesses in the Kurdistan region, which may trigger personel evacuations from the area in the coming days and dampen investor confidence in the short-term. Whilst the Duhok Governorate has long been considered a high-risk area for personnel and foreigners, Erbil and Sulaymaniyah’s security status has not yet warranted the same level of travel security procedure, with businesses currently enjoying a greater degree of freedom compared with Baghdad and surrounding areas. Therefore, the resulted unlikely targeting of a tourist resort is likely to have spill-over effects on tourism and hospitality sector growth for the broader region, deterring visitors and foreign businesses from establishing local footholds.
Additionally, the incident is likely to strain the transactional relation between the Erbil-based Kurdistan Democratic Party and Turkey. This will further threaten the KRG’s fragile alliance, increasing the likelihood of additional tensions among the leadership, which will sustain Iraq’s wider political instability in the coming weeks. (Source: Sibylline)
20 Jul 22. Tunisia: Elevated threat of nationwide civil unrest and operational disruption ahead of constitutional referendum. Industrial workers are reportedly planning to protest on 20 July outside the General Administration of Customs building in Tunis. They are demanding improvements to Tunisia’s manufacture licensing and regulatory frameworks. Tunisia’s capital has been at the centre of continuous protest activity in recent days, with activists criticising President Kais Saied’s failure to implement democratic reforms a year after he dissolved parliament (see Sibylline Alert – 23 September 2021). The threat of civil unrest will remain elevated in the coming days, particularly ahead of the constitutional referendum on 25 July. Most protest activity is likely to take place in major cities like Tunis and Tataouine, though marginalised communities in central and southern regions are also set to experience demonstrations. The likelihood of clashes between protesters and the security forces is heightened, particularly in the vicinity of official buildings, prompting moderate business continuity disruption. This includes overland transport services. (Source: Sibylline)
20 Jul 22. China-India: Tensions over new infrastructure projects near disputed territories will raise the risk of limited military confrontation, miscalculation. Tensions between China and India are expected to rise in the medium term over disputed border areas along the Line of Actual Control (LAC). This follows the release of construction plans for China’s new G695 highway. The highway is one of 345 national infrastructure projects Beijing plans to complete by 2035 as part of its economic recovery plans (see Sibylline Daily Analytical Update – 6 July 2022). While both countries have stepped-up infrastructure development in border areas, Beijing’s projects are perceived as being overly aggressive and expansionary. While new infrastructure would boost regional connectivity and socio-economic health, it will also provide improved military logistics capabilities. Both countries failed to end a two-year-long stand-off in eastern Ladakh during talks on 17 July, though they agreed to maintain ‘security and stability’ in the LAC’s western sector. Nevertheless, China’s military has recently increased and improved its troops and capabilities; it has also stepped up drills near the border, raising tensions and the risk of a security crisis. (Source: Sibylline)
18 Jul 22. Australian Official Sees Shared Mission With U.S.. Australian Deputy Prime Minister Richard Marles, who is also defense minister, came away from meetings with U.S. defense leaders with a sense that the two countries shared a mission. Marles met with Secretary of Defense Lloyd J. Austin III and National Security Advisor Jake Sullivan during his trip to Washington – the first visit by an official of Australia’s new government.
“What has really struck me in the meetings that we’ve had over the course of the last few days … is a real sense of shared mission in this moment, between Australia and the United States,” Marles told the Defense Writers’ Group. “There is a sense of the moment that the global rules-based order that has been built by the United States, by Australia, by many other countries is under pressure now in a significant way.”
Marles said that system is under the greatest pressure it has seen since the end of World War II. That order is the reason there has not been a great power war since 1945. “Obviously, what’s going on in Eastern Europe with Russia’s invasion of Ukraine is an example of that pressure,” he said. “And, in this moment, the need to have a sense of shared mission, to be projecting forward with a sense of team is really important.”
Part of his mission to the United States has been to express that concern to the U.S. government, he said. He said he was pleasantly surprised to find the concern over the future of the rules-based order was shared. “We’ve really felt that reciprocated in all the meetings we’ve had, but at a more detailed level,” the deputy prime minister said.
One example of this is discussions on the defense industrial base and looking for ways to have the U.S. and Australian bases work more seamlessly together.
Marles’ visit shortly after taking office was to affirm the importance of his country’s alliance with the United States in its world view, he said. “None of that is in doubt, but it’s an important thing to say from the point of view of a new government coming to meet with the U.S.,” he said.
It was not the first high-level meeting between the close allies. Australian Prime Minister Anthony Albanese participated in the meeting of the Quad – Australia, Japan, India and the United States – on his first day in office. Albanese, along with Indo-Pacific leaders from Japan, South Korea and New Zealand — also attended the NATO Summit in Madrid.
Marles also met with Austin at the Shangri-la Dialogue in Singapore soon after taking office.
Marles noted the Quad is not a defense alliance in any sense of the words. “It is a group of four like-minded countries engaged in the Indo Pacific who support a global rules-based order and who seek to promote the prosperity that order underpins,” he said.
He noted it is a forum for the four nations to work together on common interests. He cited the work the Quad did on combating COVID-19 and building a more efficient vaccine rollout for the region as an example of one way the Quad can operate.
Another initiative is building maritime domain awareness. This is important in deterring illegal fishing – a matter of life and death for many nations in the Pacific.
China has criticized the Quad saying it is working against Chinese interests. “It’s not for any other country to say who we should work with,” the deputy prime minister said. “The Quad is not aimed in a negative sense at anyone. It’s about trying to promote prosperity in the region for like-minded countries.” (Source: US DoD)
18 Jul 22. China demands U.S. cancel potential arms sale to Taiwan. China has demanded that the United States immediately cancel its latest arms sale to Taiwan, the Chinese state broadcaster reported on Monday, citing the country’s Ministry of National Defence. The Pentagon said on Friday that the U.S. State Department had approved the potential sale of military technical assistance to Taiwan worth an estimated $108 m. (Source: Google/Reuters)
18 Jul 22. Sri Lanka: Threat of unrest remains heightened despite declaration of state of emergency. On 17 July, acting president Ranil Wickremesinghe announced a further state of emergency, with the parliament expected to vote on a new president on 20 July amid an ongoing political and economic crisis. While reports indicate that anti-government protests have eased in intensity since Gotabaya Rajapaksa was removed as president, the emergency order is likely designed to prevent unrest from building again. In previous states of emergencies, the military have been deployed to arrest protestors and contain unrest, however they have had limited success in keeping order. The volatility of the current situation means several trigger points for greater unrest remain. If the parliament are unable to come to an agreement regarding the new president, or if they decide on a publicly unpopular candidate, such as Wickremesinghe, then further demonstrations are expected. Rallies will likely concentrate near government buildings in Colombo and the Galle Face area, prompting heavy security deployments. (Source: Sibylline)
18 Jul 22. Peru: Indefinite transport workers’ strike will cause widespread disruption, supply shortages. On 16 July, the Association of Transporters of Peru (Asotrape) cargo transport workers’ union announced a 24-hour strike from 18 July over transport system reforms and rising fuel prices. The announcement follows failed negotiations with the government and an unsuccessful strike staged on 4 July. Union representatives have stated that compliance with the strike is guaranteed by 80 percent of sector workers in 24 of Peru’s 25 regions, indicating significant disruption. Associated protest action is also likely in the form of blockades of major highways and other main roads. This will likely cause severe supply chain and food security concerns, heightening unrest risks amid the fuel price spike caused by the war in Ukraine and sustained food security pressures as a result of ongoing protests. Widespread travel disruption is very likely across the country. Demonstrations and related protests will increase incidental threats to bystanders. (Source: Sibylline)
18 Jul 22. Mali: Attack on checkpoint indicates elevated threats of attacks on movements around Bamako. On 15 July, Mali’s security ministry stated that gunmen killed two gendarmes, a police offer and three civilians in an attack on Zantiguila checkpoint, around 70 kilometres from Bamako on the RN6 road, on 14 July. On 24 June, jihadists attacked a police station on the same road, 130 kilometres from Bamako. Jihadist operations in Mali have previously been concentrated in the northern and central regions, particularly around the Mopti region, with the threat of attacks around Bamako in the southwest being limited. However, jihadists are increasingly pushing into southern Mali, a process that will likely be exacerbated by the loss of French military support, increasing disruption to UN military operations and human rights abuses committed by the Malian army backed by the Wagner group. This trend will elevate the likelihood of attack around Bamako, particularly surrounding checkpoints on key roads, driving threats to the safety of personnel and goods moving from Bamako to cities such as Segou.
18 Jul 22. Republic of Congo: Allegations of election fraud raise threat of protests in key cities. On 15 July, government officials announced that the ruling Congolese Labour Party (PCT) of President Denis Sassou Nguesso had won 103 of 151 assembly seats in the first round of the legislative election on 10 July. Pro-PCT parties won 13 seats while opposition parties won eight, with the remaining 27 to be filled in a second round before the end of August. With another round of voting to go the results already represent an increase in the power of the PCT which held 101 seats in the previous assembly. However, the election was highly contentious, two opposition parties boycotted the polls, driving low voter turnout in both Brazzaville and Porte Noire, and participating opposition parties are already contesting results over alleged fraud. This will likely prompt the organisation of protests in Brazzaville and Porte Noire, disrupting the movement of goods to the country’s primary port and likely prompting clashes with police driving threats to bystanders. (Source: Sibylline)
18 Jul 22. Indonesia: Palm oil levy exemption will boost exports in the short-term, but trade policy uncertainty, socio-economic health risks remain. According to Indonesia’s finance ministry officials, the country’s export levy for palm oil products will be scrapped between 15 July– 31 August, after which an export levy ranging between USD 55-240 per tonne of crude palm oil will be applied. The decision seeks to reduce overflowing stockpiles, some of which have been left to rot, via export. The policy decision follows Zulkifli Hasan’s replacement of Muhammad Lufti as Minister of Trade to shore up support for the president (see Sibylline Daily Analytical Update – 16 June 2022). The move is expected to further lower palm oil prices, which have dropped by 50 percent as the country has attempted to bolster exports after restrictions were implemented in April. Similar unpredictable and sudden trade policies, including potentially protectionist measures, such as the mandatory domestic market obligation (DMO), are expected over the medium-term as Indonesia’s socio-economic health continues to face headwinds through 2022. (Source: Sibylline)
18 Jul 22. North Macedonia: Parliament is likely to reject constitutional amendment, delaying EU accession talks. On 16 July, North Macedonia’s lawmakers passed the proposal to settle disputes with Bulgaria regarding minority rights in the region in order to pave the way for accession talks with the European Union. According to the proposal, North Macedonia will have to change its constitution, so it recognises Bulgarian minorities in the country and protects their rights. According to the European Commission President Ursula von der Leyen, the passing of the vote now facilitates accession talks with the EU which could start as soon as next week. While the vote will almost certainly reduce regional tensions with Bulgaria, at least two-thirds of the North Macedonian parliament would have to support the constitutional change. It is currently unlikely that opposition parties will support the proposed changes about minority rights, further delaying the country’s EU accession. (Source: Sibylline)
18 Jul 22. Kazakhstan: Inflation on food continues to rise, increasing the likelihood of protests. Kazakh President Kassym-Jomart Tokayev has criticised lawmakers over skyrocketing inflation on food and growing shortages which have reached seven year highs. The latest figures indicate that inflation on food has risen to almost 20 per cent, with price of certain commodities, such as sugar, increasing by 80 per cent. Resolution of this issue is unlikely in the short term, especially given that the country is dependent on imports and following the war in Ukraine, Russia has introduced a commodities export ban to Central Asia. Historically, socio-economic and food security issues have triggered bouts of unrest in Kazakhstan, with unprecedented protests in January, highlighting the underlying potential for public discontent to transform into violent unrest. As such, should the state fail to alleviate the problem, the likelihood of protests will increase, though these are nevertheless unlikely to reach the same scale as the unrest at the beginning of the year. (Source: Sibylline)
18 Jul 22. Colombia: Killing of FARC dissidence commander hinders dissidence’s consolidation but likely to weaken ELN negotiation prospects. On 15 July, Colombia’s defence minister, Diego Molano, confirmed that the armed forces have killed Néstor Gregorio ‘Iván Mordisco’ Vera, the commander of a FARC dissidence group. Mordisco is the second FARC dissident commander killed in two months. The government led by President Iván Duque is effectively pursuing a ‘kingpin strategy’ campaign before the end of its term, killing the leaders of the two main FARC dissident groups over the past month and extraditing the head of the Gulf Clan criminal group. While this campaign will weaken these groups’ capacity to continue expanding, further splintering remains a concern as this dynamic commonly results in spikes of violence as competition increases. The killing of Mordisco further strengthens expansion incentives for the ELN guerrillas in southern Colombia, weakening the prospects of the incoming Gustavo Petro administration establishing peace talks with the ELN. Still, the killing of FARC dissident leaders will highly likely impede the consolidation of a unified dissidence bloc in the next three to five years. (Source: Sibylline)
18 Jul 22. Yemen: Failure to renew conflict ceasefire will heighten the threat of Houthi cross-border attacks. On 16 July, the Houthi Political Council announced that it will not renew the UN-brokered ceasefire between warring parties in the Yemen conflict. The truce between the Saudi-led Coalition, Iran-backed Houthis and Yemen’s Armed Forces was introduced on 2 April and is scheduled to expire on 2 August. The ceasefire has resulted in a notable decline in civilian deaths, however, local media outlets regularly report violations, including the use of explosive-laden drones by Houthis. Senior Houthi leaders, including Yahya Mohammad Yahya al-Houthi, have reiterated their “frustrations” over the ceasefire, denouncing any “American-Saudi war on the Yemeni people” parallel to US President Joe Biden’s visit to the Middle East. Failure to renew the truce will exacerbate maritime insecurity in the Red Sea and elevate the threat of cross-border aerial attacks in Saudi Arabia and the UAE, whilst drone and missile attacks on critical infrastructure will increase the physical threat for personnel and staff. (Source: Sibylline)
18 Jul 22. Libya: NOC deal likely to provide only short term stabilisation for national energy sector. On 17 July, Prime Minister Abdul Hamid Dbeibeh, stated that Libyan oil production and shipments will fully resume. This comes after the lifting of force majeure measures and a deal with groups that had been blockading major facilities and terminals over the past months, facilitated by the new head of the National Oil Corporation, Farhat Bengdara. However, security forces mobilised in Tripoli yesterday in response to armed convoys from Az-Zawiya and Wershiffana assembling west of the capital seeking to pressure Prime Minister Debeibeh to reverse the dismissal of Mustafa Sanallah, former NOC chairman. Developments underpin the contested nature of the NOC’s new leadership, which will sustain a volatile security environment in the coming days and weeks. Whilst a first Italian-flagged tanker has entered the Brega oil terminal to load a shipment over the weekend, the complete resumption of exports and energy sector stability remains threatened by sustained political polarisation and militia violence in the short term. (Source: Sibylline)
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