NEWS IN BRIEF – REST OF THE WORLD

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10 Dec 22. Iran: Government Concessions.

Key Points

Concessions made by Iran’s autocratic government will fail to appease public grievances or reduce protest activity.
State repression will sustain business exposure to secondary sanctions due to human rights violations.
Regime change remains highly unlikely in the coming six months, but long-term deterioration in Iran’s security environment will sustain the likelihood of terrorist incidents.

Context

On 3 December, Iran’s General Prosecutor, Mohammad Jafar Montazer, reportedly stated that the Morality Police had been ‘shut down’, as quoted in international media outlets. Contrastingly, Iranian state-backed media only acknowledged a reduction in morality patrols, as parliament and the judiciary are allegedly reviewing the country’s national hijab laws. The developments occur as protest activity continues to spread across Iran for the third consecutive month, with hundreds of people killed as a result of violent confrontations (see Sibylline Situation Update Brief – 12 October 2022).

Forecast

Iranian President Ebrahim Raisi has reportedly called for a review of hijab laws, with a decision expected by 16 December. Despite the outcome of the review, it is highly unlikely that any government concession will result in meaningful socio-political change, as the government wishes to avoid any perception of weakness or fragility.

The ‘disbanding’ of the Morality Police has been heavily disputed by both Iranian and Western sources, with no senior Iranian official confirming its termination. State-owned outlets further reiterated that current hijab laws will continue to be enforced. Iran’s first execution of a protester on 8 December, and the approval of another five death penalties for activists participating in demonstrations, underpins Iran’s determination to enforce violent state repression.

The alleged government concession (shutting down the Morality Police) has not proved successful in minimising anti-government sentiment or the public’s will to protest, as figures suggest that the number of demonstrations doubled in mid-November compared with the previous month. This has been highlighted by another nationwide call for protest in recent days, while the sister of Supreme Leader Ayatollah Ali Khamenei urged security personnel to defect in support of anti-government demonstrations (see Sibylline Daily Analytical Update – 8 December 2022).

The prevalence of civil unrest will sustain physical bystander threats for personnel based in protest hotspots, particularly due to the regular use of heavy-handed and violent riot tactics by security forces. The likely deployment of tear gas and road closures poses operational threats in the vicinity of protests, particularly for companies that rely on overland transportation.

Amid ongoing protest activity, the Iranian government will likely continue to enforce protracted internet blackouts and enhanced state surveillance to curb civil activism and group mobilisation, impacting mobile telecommunications. The disruption of communications and internet access poses data privacy and information security risks for businesses, also sustaining the threat of operational disruptions due to sporadic system failures amid volatile internet access.

Despite indications that the Iranian government will make low-level concessions to address public dissent, any policy change will likely represent lip-service reform, failing to appease Western partners and encourage the lifting of economic sanctions. Mass executions and state-backed aggression towards women will persist, sustaining the likelihood that EU governments and the US implement additional financial penalties on Iranian government officials and state-backed entities. Businesses operating in-country or via local contractors in Iran will therefore remain exposed to the risk of secondary sanctions. Such regulatory risks will continue to complicate the ability of foreign companies to access Iranian markets.

Several countries, including France, Germany and the Netherlands, have already issued warnings urging nationals to leave amid an increase in arbitrary detentions and disappearances, namely the arrest of foreign individuals during protests (see Sibylline Daily Analytical Update – 10 October 2022). The worsening security and diplomatic environment increase the likelihood that foreign embassies close or diplomatic personnel are evacuated. Equally, Iran-based businesses and assets, particularly dual nationals, of countries which have overtly condemned Iran’s response to the ongoing anti-government protests are more likely to be exposed to questioning or retaliatory economic sanctions in the coming weeks.

In the short term, further anti-government demonstrations related to socio-economic and political grievances across Iran show little sign of abating, likely continuing in the coming weeks. In parallel, the latest protests have occurred alongside significant strike activity, with factories and shops in most urban areas closing in support of activists and existing financial grievances. Long periods of industrial action will impact business fluidity and Iran’s macro-economic outlook, hindering investment opportunities and the overall corporate environment.

In the coming six months, it is unlikely that the current trajectory of Iran’s protest movement will impact long-term government stability. A protracted state of domestic unrest will persist, facilitating the emergence of Sunni extremist groups in southern and central areas. This will drive the prevalence of terrorist actors who will likely target Shia communities as part of efforts to undermine the government (see Sibylline Alert – 17 November 2022). Equally, Kurdish Iranian separatists in northern areas will seek to exploit perceived state weaknesses to mobilise support, resulting in an uptick in attacks on military checkpoints and government institutions. (Source: Sibylline)

09 Dec 22. Mali: Higher levels of conflict between jihadist groups will endure over coming months, driving the risk of attacks. On 8 December, local officials confirmed that at least 100 people have been killed over the past week in Gao and Menaka amid clashes between Islamic State in the Greater Sahara (ISGS) and groups associated with the al-Qaeda affiliate JNIM. Both groups are competing for control of the region and key trafficking routes, driving an escalation of attacks on civilian communities deemed to be aligned with either faction. Conflict between the two groups is relatively common. However, since France completed the withdrawal of its forces from Mali in August, particularly from its Gao base, violence has escalated. A higher rate of attacks on rural communities in this region will likely endure in the coming months, increasing threats to overland movement through eastern Mali and driving population displacement. In turn, this will increase unrest over insecurity and drive the likelihood of protests in Bamako.

(Source: Sibylline)

08 Dec 22. Iraq-Syria: Foreign Incursions.

Key Points

Foreign military operations in the region will hinder local counter-terrorism mechanisms and increase the likelihood of a resurgence by the extremist Islamic State (IS) group, also known as Daesh
While government assets and security personnel will remain primary targets for Daesh, an increase in successful attacks against the security forces will possibly embolden extremist groups to strike soft targets as well.
Increased terrorist activity will pose elevated physical security threats for companies operating in border areas. Attacks will exacerbate supply chain disruption due to enhanced security checks and/or border closures.
The likely spillover of militancy into neighbouring states, including Jordan and Lebanon, will exacerbate socio-economic issues and broader regional instability.

Context

On 5 December, the Syrian Democratic Forces (SDF) resumed joint counter-terrorism operations with the US-led coalition (CENTCOM). A decision to halt operations on 2 December was in response to the reduction in US joint patrols with the People’s Defense Units (YPG), a Kurdistan Worker’s Party (PKK) offshoot and key SDF component operating in northern Syria and the tri-border area with Iraq and Turkey. Notably, the SDF played a key role in the defeat of Daesh in 2017. As a result, there are concerns about the resurgence of Daesh amid an increasingly hostile security environment. Also, rare clashes in Syria’s government-controlled Swieda city between government forces and activists on 4 December highlights how wider domestic instability will offer an optimum environment in which extremist cells are able to thrive and expand.

Forecast

Turkey’s military operations threaten to exacerbate fissures between US and SDF leaders due to the latter’s frustrations over perceived US tolerance towards foreign interference. While Washington DC officially cautioned Turkey, the chief SDF commander Mazlum Abdi criticised the US for its weak response and failure to prevent Turkey’s violation of Syria’s territorial sovereignty. Likely escalations in Turkey’s military operations in the coming weeks will almost certainly deepen tensions between US-led coalition personnel and SDF-backed units, increasing the likelihood of joint counter-terrorism operations once again diminishing or being rendered less effective. Terrorist cells will then almost certainly exploit the resultant security vacuum.

An expanded theatre of conflict will overstretch local military units and undermine their ability to thwart terrorist activities. Turkey’s violations of the 2019 US-brokered ceasefire through the striking of SDF strongholds in Syrian cities such as Kobani and Hasakah has already negatively impacted Kurdish intelligence operations and the mobility of military personnel. This was illustrated by the failure of Kurdish forces to prevent the breakout of Daesh prisoners at the Kurdish-run Ghwayran prison in Hasakah on 24 January (see Sibylline Alert – 24 January 2022). Any perceived vulnerability in Kurdish security operations will embolden Islamist militants to conduct further attacks. This will heighten the volatile security environment, particularly around detention facilities and refugee camps hosting Daesh militants near the Iraq-Syria border.

The alleged re-location of US civilian personnel from areas in northern Syria to Erbil in Iraq’s Kurdistan Region (KR) in recent days underscores a heightened security posture in border areas. While Turkey’s and Iran’s respective military operations will result in significant physical and bystander risks for in-country assets, the threat posed by the spread of terrorist activity will further complicate business operations. There has already been an increase in attacks carried by Daesh against the security forces across Iraq and Syria. This includes a sniper attack on 6 December in Tarmiyah, a strategic town for Daesh operations located around 31 miles (50km) north of Iraq’s capital Baghdad.

Recent Daesh attacks have primarily targeted local security personnel and/or other militant groups. They have typically taken place near military checkpoints and border crossings, as well as in rural areas. An increase in successful attacks against the security forces will possibly embolden militants to conduct attacks against soft targets due to a perceived reduction in the security forces’ capabilities as a result of militant activity. Threat actors will likely conduct IED attacks along major roads and in rural areas. Blasts are regularly recorded in Anbar, Diyala, Kirkuk, Salah ad Din and Nineveh governorates. This will heighten travel security risks, particularly for logistics companies reliant on overland transport routes along the Iraq-Syria border, as well as roads connecting KR to central Iraq.

A continued multilateral response from the US-led coalition and Kurdish forces in northern Iraq and Syria will largely mitigate the likelihood of a 2014-style Daesh resurgence. However, the likely intensification of Turkish military operations via air strikes and shelling will jeopardise the ability of local security units to gather intelligence and mobilise in a volatile conflict zone. Perceived US tolerance of Turkish operations will deepen fissures between the SDF and Washington DC, increasing the likelihood of counter-terrorism operations diminishing and creating an optimum security vacuum for successful Daesh operations. An uptick in successful attacks will indicate improved capabilities and possibly lead to a return to large-scale attacks against soft targets by Spring 2023.

The concentration of terrorist actors near checkpoints or in border areas will elevate operational risks due to likely delays and/or sporadic road closures in the event of a security incident. If local and/or foreign companies are suspected of co-operating with Daesh to safeguard their business activities, they will face considerable reputational risks. Such companies stand to be accused of financing terrorism and will possibly face punitive financial fines if local contractors are directly implicated with militant groups.

In the medium to long term, the increased prevalence of terrorist activity in northern Iraq and Syria will possibly spill over into neighbouring countries, including Jordan and Lebanon. In Lebanon, 30 individuals affiliated with eight separate Daesh terrorist cells were arrested between July and October. It is possible that militant groups will continue to use increased cross-border movement caused by conflict to expand recruitment opportunities (see Sibylline Special Report – 16 June 2022). This trend will continue to erode regional stability. (Source: Sibylline)

09 Dec 22. Thai Ministry of Defence’s fiscal year 2023 budget reaches THB 197.292bn. The budget allocation for defence is the fourth highest among ministries under the national budget for fiscal year 2023, which begins in October. The Defence Ministry budget is allocated as follows:

Royal Thai Army: Allocated Bt96.573bn.

Personnel spending: Bt60.237bn
National defence development and preparations to meet national threats: Bt19.486bn
Basic security operations: Bt12.906bn
Defence strategies and solving national security problems: Bt2.979bn
Operations in deep South: Bt462m

Royal Thai Navy: Allocated Bt40.322bn.

Personnel spending: Bt21.511bn
National defence development and preparations to meet national threats: Bt13.13bn
Basic security operations: Bt4.595bn
Special eastern development zone: Bt716m
Strategies to promote international relations: Bt155m

Royal Thai Air Force: Allocated Bt36.112bn.

National defence development and preparations to meet national threats: Bt18.084bn
Personnel spending: Bt14.167bn
Basic security operations: Bt3.785bn
Strategies to promote security of national institutes: Bt35m
Strategies to promote international relations: Bt23m

Royal Thai Armed Forces Headquarters: Allocated Bt14.54bn.

Personnel spending: Bt7.12bn
National defence development and preparations to meet national threats: Bt5.618bn
Basic security operations: Bt1.611bn
Strategies to promote international relations: Bt69m
Strategies to promote security of national institutes: Bt53m

Office of Permanent Secretary for Defence: Allocated Bt9.238bn.

Personnel spending: Bt4.127bn
Basic security operations: Bt3.538bn
National defence development and preparations to meet national threats: Bt1.524bn
Strategies to promote international relations: Bt26m
Strategies to promote security of national institutes: Bt17m

Defence Technology Institute: Allocated Bt504m. Budget divided as follows:

Personnel spending: Bt274m
National defence development and preparations to meet national threats: Bt165m
Development of defence industry and future services

06 Dec 22. South Korea launches new ‘localisation’ plan.

South Korea’s Defense Acquisition Program Administration (DAPA) has launched the latest version of its plan to increase the domestic production of components and systems for defence platforms.

DAPA said the new ‘2023−27 parts localisation plan’ outlines a requirement for local industry to put more emphasis on next-generation technologies, including materials such as alloys and carbon fibres.

Under the plan, DAPA said it will provide research and development funding for priority components; increase the efficiency of procuring such components from local industry; and encourage more companies from civilian sectors to take part in the programme.

DAPA said the plan is intended to bolster exports and reduce dependency on imports. Another aim of the programme is to fill gaps in international supply chains and ensure the supply of capability to the Republic of Korea (RoK) Armed Forces.

Data from DAPA provided to Janes earlier in 2022 shows that the South Korean government has stepped up its parts localisation programme in recent years, allocating a sixfold increase in related funding.

(Source: Janes)

08 Dec 22. Armenia-Azerbaijan-Iran: Iran reportedly supplies 600 missiles to Armenia, exacerbating military tensions across the South Caucasus. On 8 December, details emerged over reported clandestine military cooperation between Iran and Armenia. Azerbaijani media sources alleged that Iran supplied Armenia with around 600 missiles and also sent military personnel to the Nagorno-Karabakh region in October. The supply of Iranian weapons to Armenia is controversial given the current state of hostile relations between Armenia and Azerbaijan. The supply of the weapons is likely to be perceived by Azerbaijan as a significant provocation given Iranian warnings against Azeri irredentist claims in Armenian-held territory and recent military drills on the border. Notably, Azerbaijan and ally Turkey recently conducted joint military exercises on the Azerbaijan-Iran border. While Baku’s response to the reports remains to be seen, growing Iranian-Armenian ties are driving tensions across the South Caucasus, and will increase the risk of an escalation and return to open fighting between Armenia and Azerbaijan. (Source: Sibylline)

07 Dec 22. Austin Says Progress Made on Developing Australia’s Nuclear-Powered Subs. Australian, United Kingdom and U.S. officials met today to discuss AUKUS, the security pact between the three allies. Australian Defense Minister Richard Marles, who also serves as defense minister, and British Defense Secretary Ben Wallace met with Secretary of Defense Lloyd J. Austin III and Chairman of the Joint Chiefs of Staff Army Gen. Mark A. Milley at the Pentagon.

Since September 2021 when the trilateral security partnership was announced, progress has been made toward Australia acquiring conventionally armed, nuclear-powered submarines, Austin said.

The United States is committed to ensuring that Australia acquires this capability at the earliest possible date and in adherence with the highest nonproliferation standards, Austin added.

The three nations have also accelerated the development of other advanced capabilities for warfighters, Austin said.

“More than ever, our three countries here have similar outlook on the key challenges and opportunities confronting our world. AUKUS will enhance our shared ability to sustain peace and stability in the Indo-Pacific,” Austin said.

Echoing Austin’s remarks, Marles said the three nations are working hard to pursue nuclear-powered submarines for Australia and other advanced military capabilities.

The importance of pursuing these advancements comes at a time where the strategic circumstances around the world are complex and serious, particularly in the Indo-Pacific region, he added.

Before coming to the Pentagon, Marles visited submarine builder Electric Boat, where he viewed the complexity of building nuclear-powered submarines.

Wallace described the trilateral relations as strong and enduring with the shared values of freedom, democracy and rule of law, along with freedom of navigation.

Nuclear-powered submarines and other advanced capabilities will provide Australia with strategic reach, he said.

“We will do everything we can to help get you at that capability,” Wallace said. (Source: US DoD)

07 Dec 22. Peru: Removal Of President.

EVENT

Pedro Castillo was removed as president on 7 December following an impeachment motion passed by the Peruvian Congress. The motion was passed hours after Castillo attempted to dissolve Congress; he also announced a ‘state of exception’, under which he intended to enforce a curfew and limit gatherings. Castillo is currently detained and has been charged with several crimes, including ‘rebellion’ and ‘conspiracy to break the constitutional order’. The legislature swore in Dina Boluarte, the former vice president, to replace Castillo.

SIGNIFICANCE

Castillo’s attempt to dissolve Congress came ahead of a third impeachment vote launched by right-wing lawmakers who accused Castillo of treason and criminal misconduct. It was unclear if the motion had garnered enough support to obtain a two-thirds majority in the 130-member legislative body – the constitutional threshold necessary to remove a president.
Castillo’s attempt to dissolve Congress and impose a state of exception was immediately rejected by lawmakers, judicial officials and the armed forces. The prime minister and nine cabinet ministers in Castillo’s government also resigned following the announcement.
In total, 101 members of Congress voted to impeach Castillo, while six voted against the motion and ten abstained. Dina Boluarte was later sworn in with a mandate to complete Castillo’s five-year term, which is scheduled to end in 2026. Boluarte, a former Castillo ally, described the former president’s actions as a ‘self-coup’ and distanced herself from the attempt to dissolve Congress.
Minor protests by pro-Castillo activists took place in the capital Lima at Avenida Abancay, Avenida Alfonso Ugarte and Plaza Bolognesi. Other protests occurred in Arequipa, Huancavelica, Huancayo and Trujillo, where Castillo has historically enjoyed significant support. No major incidents or injuries were recorded during the protests.

FORECAST

Boluarte called for a truce between the executive and legislative branches of government and indicated that a new cabinet will include members of all major parties. If the newly appointed cabinet includes members from the centrist coalition or right-wing parties, as well as Boluarte’s far-left base of support, short-term political instability will likely decrease. Nevertheless, there is scant evidence to suggest that right-wing or centrist parties will not attempt to impeach Boluarte in 2023-24 if she is unable to form a working coalition and distance herself from Castillo’s policy priorities or graft allegations. This elevated level of uncertainty will add to the upward trend in domestic policy volatility since Castillo was elected as president in 2021. Increased uncertainty will likely impact the current business environment by deterring domestic and foreign investment.

A short-term uptick in domestic unrest is likely in Lima and south-western rural areas. Past protest locations in Lima include Avenida Abancay, Avenida Guzman Blanco, Campo de Marte, Paseo Colon, Paseo de los Heroes Navales, Plaza Dos de Mayo and Plaza San Martin. Protests in rural areas will likely involve roadblocks along thoroughfares. Protesters will possibly burn tyres, throw rocks and damage property. Any such gatherings are unlikely to lead to a significant or prolonged spate of unrest. (Source: Sibylline)

07 Dec 22. SIPRI Reports Arms Sales of SIPRI Top 100 Arms Companies Grow Despite Supply Chain Challenges. The Stockholm International Peace Research Institute (SIPRI) has issued a report on sales of arms and military services by the 100 largest companies in 2021. SIPRI found that such sales reached $592bn in 2021, a 1.9 percent increase compared with 2020 in real terms. The increase marked the seventh consecutive year of rising global arms sales. However, while the rate of growth in 2020–21 was higher than in 2019–20 (1.1 percent), it was still below the average for the four years leading up to the Covid-19 pandemic (3.7 percent). Many parts of the arms industry were still affected by pandemic-related disruptions in global supply chains in 2021, which included delays in global shipping and shortages of vital components. We might have expected even greater growth in arms sales in 2021 without persistent supply chain issues,’ said Dr. Lucie Béraud-Sudreau, Director of the SIPRI Military Expenditure and Arms Production Programme. ‘Both larger and smaller arms companies said that their sales had been affected during the year. Some companies, such as Airbus and General Dynamics, also reported labour shortages.’ Russia’s invasion of Ukraine in February 2022 has added to supply chain challenges for arms companies, not least because Russia is a major supplier of raw materials used in arms production. This could hamper ongoing efforts in the United States and Europe to strengthen their armed forces and replenish their stockpiles after sending bns of dollars worth of ammunition and other equipment to Ukraine. (Source: glstrade.com)

07 Dec 22. Sudan: Framework Deal.

Key Points

The framework deal will establish a civilian-led government over a two-year transition period and significantly restrict the role of the military in political affairs.
Several contentious issues remain unresolved; this will likely drive resistance committees to call for further protests in urban centres, including the capital Khartoum and Port Sudan.
The Forces for Freedom and Change (FFC) coalition is likely to end its calls for protests following the military’s signing of the framework agreement. Resistance committees will struggle to sustain mass support for protests due to the improved prospects for the resumption of international aid; this will mitigate the risk of unrest in the medium to long term.

Context

The framework deal is based on proposals made on 17 October by the FFC, a civilian coalition of political parties and civil society groups. The deal will establish a transitional authority comprising unions, rebel groups, protest groups and political parties outside the FFC. It will also establish a non-military head of state and a prime minister. While the signatories have not agreed on a timeline, these positions will be elected by civilian factions. The deal also significantly reduces the military’s political influence. The head of state will act as the commander in chief of the army, while military representation within the government will be limited to the security and defence council. The agreement will merge the Rapid Support Forces (RSF) into a single professional army and will prohibit the military from conducting investment and commercial business.

Forecast

Critically, the deal calls for a review of the Juba peace agreement signed with rebel groups in August 2020. The FFC called for this review, claiming that unaddressed areas of the deal have become a source of internal conflict. However, armed signatory groups have refused to review the agreement over concerns that the process will nullify the deal. As such, there is a realistic possibility that the review of the agreement will prompt a resumption of violence with various armed groups concerned about their possible exclusion from the political settlement. This will lead to a rise in attacks in southern and eastern parts of Sudan.

Under the framework deal, the signatories agreed to repeal the 2019 constitutional declaration before reviewing the decisions made by military leaders in the wake of the October 2021 coup. This has already become a key point of contention, with protesters denouncing the repeal. In addition, the deal does not include details about security sector reforms. If the military is given leeway to exploit contracts for profit, this will likely act as a flashpoint for anti-military protests.

Finally, while the deal reaffirms a commitment to accountability and transitional justice for war crimes, including attacks against the pro-democracy sit-in and the post-coup killing of protesters, it does not include agreements regarding investigations into the guilty parties. As such, while the FFC has reiterated that it will not agree to immunity for the military, resistance committees are highly concerned that the pursuit of justice will be abandoned in order to guarantee the handover of control to civilians.

Decisions regarding contentious issues are likely to act as flashpoints for future protests; these will lead to further clashes with the security forces in urban centres, elevating risks to bystanders. While a civilian government will likely attempt to curtail the use of excessive force by the security forces, the sporadic use of water cannon, tear gas and even live ammunition to prevent protesters from converging in central areas of urban centres will likely continue. The security forces will also continue to erect roadblocks and close bridges, including the Al Mk Nemer bridge which links Khartoum to Omdurman and Khartoum North (Bahri), to prevent protesters from entering central Khartoum. This will disrupt citywide movement, particularly along Nile Street, a primary traffic artery in Khartoum. Protests and resultant heightened security are also likely in other major urban centres such as Port Sudan.

However, the FCC will likely call off the mass protest campaign it launched in October in an attempt to persuade the military to make concessions on the agreement (see Sibylline Situation Update Brief – 9 November). While some resistance committees will likely continue to call for protests, these are unlikely to attract the same numbers as before; local groups will struggle to organise the same nationwide campaigns conducted by the FCC. This will likely result in a gradual decline in protest activity, particularly if economic conditions improve as a result of the agreement.

The deal is likely to improve economic conditions, further mitigating risks of long-term unrest

Following the October 2021 coup, international donors suspended bns of dollars in financial assistance, exacerbating an already significant economic crisis. With inflation over 100 percent, the cost of living crisis has pushed over 40 percent of the population under the poverty line and one third of the population into acute food insecurity.

International partners, including Saudi Arabia, the UAE, the UK and the US, have committed to co-ordinating economic support following the announcement of the framework deal. This will likely result in the unfreezing of pledged economic assistance and progress being made towards a debt relief agreement with the Paris Club of creditors in the coming months. This will considerably improve Sudan’s economic outlook by providing access to foreign currency, helping to stabilise the local currency and reducing debt pressures. The stabilisation of the economy will likely reduce inflation rates and improve the Sudanese population’s access to resources, reducing enthusiasm for protests in the long term.

(Source: Sibylline)

06 Dec 22. Australia, U.S. Agree to Expand Defense Cooperation. A discussion between the U.S. secretaries of defense and state and their Australian counterparts ended with a commitment to deepened defense cooperation.

“The bonds between our democracies and our peoples have been forged by shared sacrifice, shared values and shared history,” said Secretary of Defense Lloyd J. Austin III, who spoke today at the conclusion of 32nd annual Australia-U.S. Ministerial Consultations. “As we look to the future, those bonds are stronger than they’ve ever been. That was clear throughout the outstanding discussions that we had today.”

Austin said that he, Secretary of State Antony J. Blinken, Australian Foreign Minister Penny Wong and Australian Defense Minister Richard Marles discussed, among other things, Russia’s unprovoked invasion of Ukraine and the increased tensions in the Indo-Pacific.

“The United States and Australia share a vision of a region where countries can determine their own futures, and they should be able to seek security and prosperity free from coercion and intimidation,” Austin said. “Unfortunately, that vision is being challenged today.”

Austin said China’s actions in the Indo-Pacific—including with Taiwan, in the East and South China Seas, and with other island nations in the Pacific—threaten regional peace and stability. Additionally, he said, Russia’s unprovoked invasion of Ukraine is an attack on the international rules-based order and is a threat to nations all over the world.

Austin said those threats have led the U.S. and Australia to agree to an increased defense partnership.

“Today, we agreed to deepen our defense cooperation in several important ways,” Austin said. “Based upon today’s talks, we will increase rotational presence of U.S. forces in Australia. That includes rotations of bomber task forces, fighters and future rotations of U.S. Navy and U.S. Army capabilities.”

The secretary also said the U.S. and Australia will expand logistics and sustainment cooperation and look for ways to further integrate their defense industrial bases.

Austin also said the U.S. and Australia are not alone in their concerns about increased tensions in the Indo-Pacific, and he said both countries have agreed to invite Japan to integrate into the new force posture initiatives.

Marles said he and Australia’s foreign minister will visit Japan later this week to discuss that increased involvement.

“It is a great outcome of today’s meeting that we can go to Japan at the end of this week with an invitation for Japan to be participating in more exercises with Australia and the United States,” Marles said.

The Australian defense minister also said he’s excited that there were discussions about further integrating the U.S. and Australian defense industrial bases.

“Today, we have also taken steps to create a more seamless defense industrial base between our two countries,” he said. “We need to be working closer together to enhance our military capability and to develop new technologies.”

For that to happen, Marles said, regulatory barriers must be broken down that now inhibit greater cooperation.

“We couldn’t be more pleased in the sense of shared commitment that there has been on the part of both the U.S. and ourselves in relation to making real steps forward in terms of breaking down those barriers to create that seamless defense industry environment,” Marles said. (Source: US DoD)

06 Dec 22. Joint Statement on Australia-U.S. Ministerial Consultations (AUSMIN) 2022. The Governments of the United States of America and Australia released the following statement on the occasion of the 32nd annual Australia-United States Ministerial Consultations (AUSMIN). Secretary of State Antony Blinken and Secretary of Defense Lloyd J. Austin III hosted Minister for Foreign Affairs Penny Wong and Deputy Prime Minister and Minister for Defence Richard Marles on December 6 in Washington, D.C. to advance cooperation in the Indo-Pacific region and globally. Building on the November 2022 meeting between President Biden and Prime Minister Albanese, the Secretaries and Ministers (principals) noted that the U.S.-Australia Alliance and partnership have never been stronger, or more vital to regional peace and prosperity. The principals committed to advancing a stable, rules-based international order where differences are resolved peacefully and without coercion, and where states cooperate transparently to address shared challenges. They further committed to deepening their cooperation to strengthen and reform the multilateral system and galvanize collective action to address the climate crisis; protect and promote human rights and fundamental freedoms, democracy, and gender equity and equality; and advance the rules of the road for technology, cyberspace, trade, and commerce. The principals also decided to evolve their defense and security cooperation to ensure they are equipped to deter aggression, counter coercion, and make space for sovereign decision making.

Indo-Pacific Cooperation

The principals committed to deepening cooperation, bilaterally and with regional partners and institutions, to ensure an Indo-Pacific region that is free, open, stable, peaceful, prosperous, and respectful of sovereignty. The principals affirmed that regional growth and stability are underpinned by international law, which serves the interests of all nations. They committed to strengthen their engagement with Indo-Pacific countries to promote economic development, climate change cooperation, security, connectivity, good governance, disaster management, health, and resiliency consistent with regional and national priorities. The principals further committed to establishing a regular meeting between the Australian Minister for International Development and the Pacific and U.S. Agency for International Development Administrator to support closer development cooperation throughout the Indo-Pacific region and globally.

The four principals emphasized the importance of all states being able to exercise rights and freedoms consistent with international law as reflected in the United Nations Convention on the Law of the Sea (UNCLOS), including freedom of navigation and overflight. They reiterated their strong opposition to destabilizing actions in the South China Sea, such as the militarization of disputed features and dangerous encounters at sea and in the air. They also expressed concern about other actions by the People’s Republic of China (PRC), including it asserting excessive maritime claims that are inconsistent with international law. They resolved to work with partners to support regional maritime security and uphold international law.

The principals reiterated Taiwan’s role as a leading democracy in the Indo-Pacific region, an important regional economy, and a key contributor to critical supply chains. They also reaffirmed their commitment to maintaining peace and stability across the Taiwan Strait and shared opposition to unilateral changes to the status quo. They further committed to working together to support Taiwan’s meaningful participation in international organizations and enhancing economic, social, and people-to-people ties with Taiwan, and affirmed that they would continue working with Taiwan to enhance development coordination in the Pacific.

The four principals emphasized the importance of all countries managing strategic competition responsibly and committed to work together to ensure competition does not escalate into conflict. The United States and Australia look to the PRC to do the same and plan to engage Beijing on risk reduction and transparency measures. The principals encouraged the PRC to take steps to promote stability and transparency in the area of nuclear weapons. They also affirmed the importance of cooperation with the PRC on issues of shared interest, including climate change, pandemic threats, non-proliferation, countering illicit and illegal narcotics, the global food crisis, and macroeconomic issues. The principals committed to enhancing deterrence and resilience through coordinated efforts to offer Indo-Pacific nations support to resist subversion and coercion of any kind.

The principals redoubled their commitment to cooperation with the Pacific Islands in support of the objectives of the Pacific Islands Forum 2050 Strategy for the Blue Pacific Continent, guided by Pacific priorities of climate change, resilient infrastructure, maritime security, and with support for Pacific regional institutions that have served the region well over many years. The principals affirmed their commitment to encourage their partners to increase engagement in support of Pacific priorities. This includes by further developing the recently established Partners in the Blue Pacific (PBP) initiative, which is led and guided by the Pacific Islands through close consultations on its priorities and initiatives, including through the Pacific Islands Forum. Australia and the United States are contributing funding to an initiative to bolster the Pacific Islands’ ability to prepare for and respond to devastating disasters, in support of goals outlined at the first Pacific Disaster Risk Reduction Ministers meeting in September 2022.

The principals committed to strengthening coordination to deliver on Pacific priorities, including through our diplomatic missions. With the recent reopening of borders in the Pacific Islands, the principals discussed supporting the entry or re-entry of U.S. Peace Corps volunteers into the Pacific and a proposal to expand cooperation between the Peace Corps and the Australian Volunteers Program.

The principals welcomed the offer from the United States Coast Guard, developed in consultation with the Pacific Island countries that participate in the Pacific Maritime Security Program, to provide training that will enhance the benefits the Pacific Islands derive from the Australian-gifted Guardian-class Patrol Boat fleet. They also welcomed the recent discussion on making additional U.S. assets available to Pacific Island countries for maritime surveillance, reinforcing their capacity to protect their vast maritime domains. The principals also committed to further collaboration with Japan, India, and regional partners on the Quad-supported Indo-Pacific Partnership for Maritime Domain Awareness.

The principals welcomed the inclusion of the Papua New Guinea Defence Force, the Republic of Fiji Military Forces, and His Majesty’s Armed Forces of Tonga in future exercises, including in Exercise TALISMAN SABRE 2023 as part of the Australian Defence Force contingent. They expressed their desire to continue to enhance interoperability with the militaries of the Pacific, through support for and participation in regional exercises. They also decided to work together to do more to dispose of unexploded ordnance in the Pacific.

The principals noted that Southeast Asia was critical to regional stability and reaffirmed their commitment to ASEAN centrality and ASEAN-led regional architecture. They underscored the role of the East Asia Summit as the region’s premier, leaders-led forum for addressing strategic challenges and expressed their ongoing support for the practical implementation of the ASEAN Outlook on the Indo-Pacific. Australia welcomed the ASEAN-U.S. Comprehensive Strategic Partnership. The principals expressed support for Indonesia’s priorities as next year’s ASEAN chair. They also welcomed recent progress towards Timor-Leste’s accession to ASEAN.

The principals committed to work with Southeast Asian partners to support their economic, climate, energy infrastructure, and security cooperation priorities. They reiterated their support for ASEAN-led efforts to respond to the ongoing crisis in Myanmar, and their deep concern at the deteriorating situation in the country. They urged the Myanmar military regime to implement its commitments under the ASEAN Five-Point Consensus, to refrain from violence, release all those unjustly detained, and to allow unimpeded humanitarian access. They committed to expanding their partnership to deliver for the Mekong sub-region through an additional AUD $1.2m (USD $0.8m) in funding to the Mekong Safeguards Program.

The principals welcomed deepening engagement through the Quad to respond to the region’s needs. They looked forward to the 2023 Quad Leaders’ Summit in Australia to advance the Quad’s positive and practical agenda.

The principals discussed the devastating impact of COVID-19 with special regard to the Indo-Pacific region, and plan to increase collaboration to strengthen resilience to prepare for future pandemics by working to prevent, detect, and respond to outbreaks of infectious diseases. They recommitted to joint efforts to expand access to safe and effective vaccines; support pandemic prevention, preparedness, and response, including through the Quad, global health funds, and the newly established Pandemic Fund at the World Bank; and to work with other Indo-Pacific countries to promote public health best practices. They also committed to a new program of cooperative support to UN and regional organizations working in the Indo-Pacific to strengthen national and regional health security with a particular emphasis on the intersection between animal and human health. The principals affirmed their commitment to multilateral and international efforts to end the pandemic, and to strengthen the World Health Organization and the global health architecture. The principals reaffirmed the importance of research and technical collaboration in providing equitable access to healthcare, particularly in remote communities.

The principals also committed to ensuring Indigenous Peoples’ voices are heard at the international level, and that we protect, learn from, and embed their knowledge and experience to deal with global challenges. The United States and Australia are also highlighting the role of Indigenous Peoples in our societies through projects to connect indigenous business stakeholders, including the exchange of best practices and development of cross-Pacific networks.

The principals expressed serious concerns about severe human rights violations in Xinjiang, the human rights situation in Tibet, and the systematic erosion of Hong Kong’s autonomy, democratic institutions, and processes undermining the commitments made by the PRC before the handover. The principals strongly condemned the ruthless suppression of peaceful protests by Iranian authorities, and remain committed to standing with the Iranian people, especially women, as they demonstrate extraordinary courage in standing up for their rights. They also discussed ways to continue advancing gender equality and human rights, including the rights of all women and girls, in the international rules-based system and through initiatives in the Indo-Pacific region, including through convening a bilateral Strategic Dialogue on Gender Equality.

The principals reaffirmed their commitment to achieving the complete denuclearization of the Korean Peninsula and to addressing the Democratic People’s Republic of Korea’s (DPRK) unlawful nuclear and ballistic missile programs, which pose a grave threat not only to peace and stability on the Korean Peninsula but also the Indo-Pacific region and the world. In this context, Australia welcomed the Phnom Penh Statement on the U.S.-Japan-Republic of Korea Trilateral Partnership for the Indo-Pacific. They committed to continued bilateral and multilateral coordination and reaffirmed the need for the international community to fully implement all relevant UN Security Council resolutions related to the DPRK. Acknowledging their shared belief that diplomacy is essential to denuclearization and the establishment of a permanent peace on the Korean Peninsula, the principals called on the DPRK to engage in sustained dialogue and cease its destabilizing behavior. They noted with grave concern continuing reports of severe violations of human rights in the DPRK.

Climate, Clean Energy, and Environment

The principals emphasized the need for urgent action on climate change and the importance of a clean energy transition, committing to pursue these as a new pillar of the U.S.-Australia Alliance. This partnership builds on Australia’s updated Nationally Determined Contribution (NDC) and its legislated target to reduce emissions by 43 per cent below 2005 levels by 2030, and the United States’ NDC and its target to reduce emissions by 50 to 52 per cent below 2005 levels in 2030. It also builds on the landmark climate action and investment by the United States, including under the Inflation Reduction Act and the Bipartisan Infrastructure Law, and on the Australian Government’s Powering Australia Plan. Principals committed to work together across the whole of their respective governments to strengthen investment in climate mitigation, including renewable energy and associated infrastructure, clean transportation, nature-based solutions, and climate resilient infrastructure, in line with efforts under the bilateral Net-Zero Technology Acceleration Partnership, the Clean Energy Demand Initiative, and the U.S.-Australia Energy Security Dialogue.

The principals pledged to drive stronger global action to address the climate crisis and to strengthen efforts throughout this critical decade to keep a limit of 1.5 degrees temperature rise within reach. The principals also committed to continue coordination on building greater climate preparedness and resilience, especially in consideration of those most vulnerable to the effects of climate change, including women, girls, Indigenous Peoples and First Nations, and people with a disability. Building on Australia’s support for the Global Methane Pledge, both nations committed to work towards significant reductions in methane, particularly in the energy and waste sectors. Australia and the United States also decided to cooperate and share experiences to support reducing public sector emissions globally, building on the Net-Zero Government Initiative the United States launched at COP27 and Australia’s commitment for the Australian Public Service to achieve net-zero by 2030.

The principals decided to strengthen coordination to support climate mitigation, adaptation, and resilience efforts in response to the needs of partners in Southeast Asia and the Pacific, including to support information and expertise sharing on climate finance and clean energy investment. They intend to continue working together and with Indo-Pacific partners to deliver meaningful climate outcomes in alignment with existing regional architecture, including the Indo-Pacific Economic Framework for Prosperity (IPEF), ASEAN, the Pacific Islands Forum, Partners in the Blue Pacific, and the Quad.

The principals committed to taking greater action to support global protection and conservation of land and oceans, including to address the critical issue of biodiversity loss. The United States and Australia have committed to the global ambition of conserving 30 percent of our land and oceans and the successful development of the post-2020 Global Biodiversity Framework, complemented by Australia’s recent endorsement of the U.S.-led Ocean Conservation Pledge. Both countries support avenues to invigorate existing ocean related partnerships, such as the International Partnership for Blue Carbon, and intend to work closely together on issues that impact the ocean’s health. Australia and the United States intend to continue to support global efforts to halt and reverse forest loss and land degradation by 2030, including through the Forests and Climate Leaders’ Partnership. Both countries recognize the growing problem of plastic pollution and intend to actively support the development of an ambitious global response to end plastic pollution by 2040.

Acknowledging the national security challenge posed by climate change, the principals committed to strengthen information sharing and exchange best practices between both Departments of Defense to accelerate progress towards climate resiliency objectives. This includes exploring the inclusion of updated climate verbiage in a review of the 2005 Joint Statement of Environmental and Heritage Principles for Combined Activities. The principals also committed to explore establishing a new senior officials working group to share assessments and advice on the national and regional security risks posed by climate change.

Prosperity, Innovation, and Resilient Supply Chains

The principals welcomed the upcoming negotiations of IPEF and its vision for a free and open, connected, prosperous, resilient, inclusive, and secure Indo-Pacific region. Together with 12 other IPEF partners, the United States and Australia plan to address economic challenges and opportunities, including through commitments related to trade, supply chains, clean energy, and tax and anti-corruption. The principals are committed to ensuring that IPEF delivers for everyone, especially workers, consumers, and under-represented groups such as Indigenous Peoples and women. The United States appreciates Australia’s hosting of the first in-person IPEF negotiating round in Brisbane from December 10-15.

The principals highlighted the United States’ and Australia’s shared commitment to supporting security across the information and communications technology (ICT) ecosystem as a critical foundation for expanding connectivity and bridging digital divides. They identified additional areas for collaboration and financing opportunities to support trusted ICT infrastructure, including promoting supplier diversity and innovation to build more resilient supply chains in the Indo-Pacific region and globally. They also discussed how additional public-private partnerships on topics such as 5G/Open RAN, standards, and supply chains could augment our work to support critical and emerging technology among Quad governments.

The principals welcomed and acknowledged the role of APEC, the premier economic forum in the region, in improving the region’s resilience to future economic shocks; promoting a free, fair, and open trade and investment environment; strengthening supply chains; addressing health-related threats; and advancing inclusive, sustainable growth, including during the United States’ APEC 2023 host year.

The United States and Australia reaffirmed their commitment to supporting quality, transparent infrastructure development that addresses the needs of Indo-Pacific partners and generates local employment opportunities. They welcomed the renewal of the Trilateral Infrastructure Partnership (TIP) MOU with Japan, which brings together key agencies to deliver quality and sustainable infrastructure projects across the Indo-Pacific region. TIP partners completed a joint mission to Vietnam in October 2022, and have another mission planned to Indonesia in early 2023. The principals also noted the role that the Blue Dot Network could play in promoting quality infrastructure projects across the region and supporting infrastructure investment in low- and middle-income countries. The United States and Australia are also partnering with Japan to support digital projects that improve access to digital services in the Pacific. The U.S. International Development Finance Corporation and the Japan Bank for International Cooperation will, subject to final approvals, provide $50 m each in credit guarantees for Export Finance Australia’s financing package, which was provided to support Telstra’s acquisition of Digicel Pacific’s telecom assets in Papua New Guinea and the Pacific, that will assist network upgrades to improve security and performance.

The principals emphasized the importance of diverse, resilient, and sustainable supplies of critical minerals throughout the energy transition value chain and to our economic and national security. Both countries are committed to working bilaterally and with like-minded countries through forums such as the Minerals Security Partnership, Energy Resource Governance Initiative, Conference on Critical Materials and Minerals, and International Energy Agency to identify and develop critical minerals extraction, processing, and manufacturing opportunities to secure supply chains essential to clean energy, electric vehicles, semiconductors, aerospace, and defense, among other sectors. Both countries plan to work with industry and international partners to promote high environmental, social, and governance standards for critical minerals production and processing.

Defense and Security

The principals decided to formalize the Enhanced Force Posture Cooperation announced in 2021 as ‘Force Posture Initiatives’ under the Force Posture Agreement. In doing so, these areas of cooperation—Enhanced Land Cooperation, Enhanced Maritime Cooperation, and the Combined Logistics, Sustainment, and Maintenance Enterprise—will sit alongside the existing initiatives that were announced in 2011. They affirmed that Australia and the United States would continue the rotational presence of U.S. capabilities in Australia, across air, land, and maritime domains. This would include U.S. Bomber Task Force rotations, fighters, and future rotations of U.S. Navy and U.S. Army capabilities. The principals decided to identify priority locations in Australia to support enhanced U.S. force posture with associated infrastructure, including runway improvements, parking aprons, fuel infrastructure, explosive ordnance storage infrastructure, and facilities to support the workforce.

Recognizing logistics cooperation is a key line of effort for force posture cooperation, the principals decided to preposition stores, munitions, and fuel in support of U.S. capabilities in Australia and to demonstrate logistics interoperability through joint exercises. To support Enhanced Air Cooperation, Australia and the United States committed to co-develop agile logistics at nominated airfields—including at bare bases in northern Australia—to support more responsive and resilient rotations of U.S. aircraft. Further, to strengthen U.S. land presence, the principals decided to expand locations for U.S. Army and U.S. Marine Corps forces, to enable exercises, activities, and further opportunities for regional engagement, including in the context of Humanitarian Assistance and Disaster Relief support to the region.

Consistent with the recent Australia, Japan, and United States Trilateral Defense Ministers’ Meeting commitment to advance concrete and practical security initiatives, the principals decided to enhance trilateral defense cooperation activities and invite Japan to increase its participation in Force Posture Initiatives in Australia.

The principals commended the significant progress AUKUS partners have made on developing the optimal pathway for Australia to acquire a conventionally armed, nuclear-powered submarine capability at the earliest date possible. They confirmed that the AUKUS partners are on track to announce a pathway forward by early 2023. They reaffirmed AUKUS partners’ commitment to setting the highest possible non-proliferation standards and to continue working transparently with the International Atomic Energy Agency towards an approach that will strengthen the non-proliferation regime. They further lauded AUKUS efforts on the trilateral development of advanced capabilities for deterrence and operational effectiveness.

The principals condemned in the strongest possible terms Russia’s illegal and immoral invasion of Ukraine. They once again called on Russia to immediately, completely, and unconditionally withdraw its forces from within the internationally recognized borders of Ukraine. They noted that Russia’s nuclear threats are a serious and unacceptable menace to the peace and security of the entire international community, and that the use of nuclear weapons would be met with resolute responses by the international community.

The principals committed to continued support for Ukraine’s rightful resistance to Russia’s naked aggression, and to hold individuals, entities, and nations that facilitate Moscow’s war on Ukraine to account for the extreme suffering they have helped unleash on the Ukrainian people. They recognized that Russia’s war is affecting food security, energy, agriculture, and fertilizer imports by countries globally, hampering regional economic recovery from the pandemic. They called on Russia to continue participating in the Black Sea Grain Initiative, which reduces the prices of essential grains, cereals, and oil.

They also committed to enhance cooperation to prevent proliferation of nuclear or other weapons of mass destruction, and to defend the global multilateral non-proliferation architecture, including the Nuclear Non-Proliferation Treaty (NPT) as the cornerstone of the global non-proliferation and disarmament regime.

Securing our Technological Edge

The principals emphasized that robust industry and technological innovation are fundamental to promoting positive social and economic outcomes. They highlighted how our bilateral partnership in critical and emerging technologies helps to provide a model for the entire Indo-Pacific region. This includes joint capacity building and outreach to Southeast Asia and other Indo-Pacific partners on responsible deployment of new technologies like artificial intelligence and facial recognition.

The United States also reaffirmed its support for Australia’s Guided Weapon and Explosive Ordnance (GWEO) Enterprise, given the criticality of resilient supply chains. The principals committed to locally maintain, repair, and overhaul more priority munitions in Australia to improve existing stock holdings through GWEO.

The principals welcomed the robust technology and capability collaboration being undertaken across the Alliance and noted the criticality of combining strengths to effectively respond to the tougher strategic environment. The principals committed to strengthening efforts to better streamline and facilitate technology transfer and information sharing, including under the Australia-United States Defense Trade Cooperation Treaty. They also committed to work closely on future E-7A Wedgetail Airborne Early Warning and Control Aircraft cooperation, including through the training of United States Air Force personnel by the Royal Australian Air Force in Australia.

The principals decided to enhance space cooperation and space domain awareness and strengthen assured access to space through future bilateral space arrangements. They also acknowledged an important milestone in bilateral space collaboration, with the U.S.-built Space Surveillance Telescope, recently marking initial operating capability in Western Australia in September 2022.

Australia looks forward to hosting the next AUSMIN in 2023. (Source: US DoD)

06 Dec 22. Iran-Turkey: Regional Competition.

Executive Summary

Strategic interests will sustain Iran and Turkey’s axis of rivalry in the region, exacerbating government instability and the risk of armed conflict.
Turkey and Iran’s consolidation of regional alliances vis-à-vis military and ethno-religious support will bolster their power but undermine conflict resolution.
The expansion of military drills or incursions in border areas will pose a threat to supply chain continuity and key transit routes, increasing operational risks for logistics and energy companies.
Turkey and Iran’s unilateral expansion into neighbouring economic markets will intensify their geoeconomic competition, bolstering regional trade.
Iranian-Turkish competition will likely expand beyond the region in the coming months as both states seek to broaden foreign policies to reap diplomatic and economic benefits.

Context

Iranian and Turkish hegemonic and ideological rivalry in the Middle East, North Africa and South Caucasus region threatens to aggravate existing conflicts through direct military support and/or ideological backing. Turkish President Recep Tayyip Erdogan’s extensive military foothold and perceived expansion of neo-Ottoman pursuits represents a security threat for Iran, inflaming underlying ethno-religious tensions and emboldening autonomist separatist movements.

Iranian efforts to counter Turkey’s influence in the South Caucasus will drive supply chain disruption in border regions

Iran’s offer to mediate flare-ups in territorial disputes between Azerbaijan and Armenia (see Sibylline Alert – 13 September 2022) underpins its interest in securing a stronghold in the South Caucasus. Iran is wary of what is perceives to be deepening anti-Iranian sentiment among Azeri Turks, who maintain a strong presence in north-western Iran as well as Azerbaijan. Tehran considers this sentiment to be a threat to regime stability.

Iran has historically utilised religious values to increase its influence over Azerbaijan’s sizeable Shia Muslim population. However, Turkey’s consolidated ties with Azerbaijan has prompted Iran to increase support for local armed groups, driving ethno-religious tensions in the South Caucasus and Iranian border areas in recent years. The alleged detention of Iran-backed Shia Islamist ‘Huseyniyyun’ guerrillas by the Azerbaijani security forces on 1 November will likely exacerbate growing anti-Iranian rhetoric and ethnic tensions in the short-to-medium term.

Iran will likely exploit heightened volatility in the region amid Russia’s continued prioritisation of its military activities in Ukraine to reinforce its bulwarks against Turkey’s expanding influence. It will also look to quash any spill-over threats to regime stability from the Caspian Basin and South Caucasus. There is a realistic probability that Iran will also aim to spoil any Turkish efforts to mediate a peace treaty between Azerbaijan and Armenia to bolster its own geopolitical influence.

The intensification of Iran and Turkey’s regional competition will likely be characterised by an expansion of military drills in border areas, similar to Iranian exercises launched on 17 October near the Aras river as part of operation ‘Mighty Iran’. Such exercises threaten to disrupt regional trade routes. They will also elevate physical security risks for logistics companies, particularly those moving produce overground (namely agricultural) between Iran’s Ardabil and East Azerbaijan provinces. There is also a realistic possibility of sporadic retaliatory attacks near Iranian-Armenian trade routes. In particular, this will affect overground transport movement along key transit routes near the tri-border area close to Armenia’s Syunik province.

Iran will seek to contain Turkish influence in northern Iraq and Syria, but avoid direct confrontation

On 20 November, Turkey announced the launch of ‘Operation Claw-Sword’, a new aerial campaign targeting the Kurdistan Worker’s Party (PKK), which is backed by Iran. This comes amid an uptick in attacks by Iran’s Islamic Revolutionary Guard Corps (IRGC) against Kurdish Iranian separatist groups in northern Iraq. These groups support the Turkish-backed Kurdistan Democratic Party (KDP). Iranian and Turkish interventions in Iraq’s Kurdistan Region (KR) aim to advance individual national security priorities and bolster influence through the support of local proxies.

An enhanced Turkish military foothold represents a clear threat to Iran’s geopolitical influence in the area. It limits Iran’s capacity to target Kurdish-Iranian separatists (see Sibylline Situation Update Brief – 27 April 2022). Additionally, greater co-operation between the KDP and the Turkish government will consolidate Ankara’s access to Kurdish energy resources, facilitating its plans to export natural gas to Turkey from Duhok governorate. Importantly, Turkey’s expanding access to energy resources, particularly natural gas, will reduce its reliance on Iranian supplies.

As such, Turkey’s expansion in the KR threatens to drive an increase in retaliatory attacks against Turkish forces and infrastructure by Iran-backed militias, including Kata’ib Hizballah (KH), Harakat Hizballah al-Nujaba (HHN) and Asai’b Ahl al-Haq. Iran-backed militia groups have already conducted attacks against Turkish military bases this year. This includes an attack against an outpost in Ninevah governorate (Iraq) in response to air strikes targeting PKK militants. The PKK also conducted attacks against the Kirkuk-Ceyhan oil pipeline in January.

Iran will exploit Turkey’s military activities in the KR to heighten anti-Turkish sentiment among pro-Iranian politicians and Kurdish communities. For instance, a deadly Turkish-led attack against a tourist resort in Duhok on 20 July prompted the retaliatory targeting of Turkish businesses and associated visa offices (see Sibylline Alert – 20 July 2022). Iran will almost certainly seize on any opportunity to peddle anti-Turkey rhetoric in the wake of future such Turkish-led operations.

While US forces are usually the primary target of Iran-backed military action in northern Iraq, the intensification of Ankara’s activities provides additional opportunities for groups sponsored by Tehran to consolidate their legitimacy and bolster public sentiment against foreign interference. Iran and Turkey’s use of northern Iraq as a theatre for regional competition will ultimately exacerbate Iraq’s political fragility, entrenching divisions between government factions aligned with opposing sides.

Unilateral expansion into neighbouring markets threatens to undermine bilateral economic ties and inflame geoeconomic tensions

Iran and Turkey currently maintain a strong bilateral trade partnership; non-oil imports from Iran to Turkey have increased by 49 percent in the past six months compared with the same period in 2021. Ankara’s purchasing of Iranian gas remains pivotal for Tehran’s ability to circumvent UN- and US-imposed sanctions on its energy sector, despite Western pressure against Turkey. Nevertheless, Turkey is actively seeking to reduce its dependency on Iranian energy sources and enhance national economic security by expanding access to neighbouring markets (including the Eastern Mediterranean) and restoring ties with Egypt.

As relations become more centred on competition rather than co-operation, Iran and Turkey will likely accelerate economic diversification efforts by securing access to natural resources and market share through direct financial and military support to non-state actors in Libya and Yemen, among others.

Turkey’s economic and diplomatic re-alignment with Gulf partners in recent years, such as Saudi Arabia, Qatar and the UAE, represents a point of geopolitical friction with Iran. Turkey’s reconciliation with wealthy Gulf partners underpins President Erdogan’s desire to avoid another currency crisis; oil-rich states offer a means of replenishing central bank reserves via currency exchange.

Saudi Arabia is reportedly set to deposit around USD 5 bn into Turkey’s central bank. This would help to stabilise the Turkish lira. Turkey’s expansion of trading markets will assist in mitigating the risk of secondary sanctions due to Ankara’s existing partnerships with Iran. However, the rebuilding of ties with the Gulf Cooperation Council (GCC) will almost certainly inflame geopolitical tensions, especially as Iran’s relations with the UAE and Saudi Arabia continue to deteriorate.

Forecast

While Turkey and Iran’s mutual economic dependency has maintained a degree of co-operation between the two states, deepening ethno-religious and hegemonic pursuits will intensify their long-standing regional competition well into 2023. Both countries will reinforce their military campaigns in northern Iraq and Syria to advance national security interests while also bolstering regional alliances with conflicting military groups to expand geopolitical power.

In the short term, the intensification of aerial and ground incursions in the tri-border area between Turkey, Iraq and Syria will enhance physical and bystander security risks for companies with in-country operations. Attacks near checkpoints will likely cause transport delays or sporadic road closures. Iran-backed militias based in Iraq are likely to exploit rising levels of local anti-Turkish sentiment to encourage attacks against Turkish assets, specifically critical infrastructure and embassies. A strengthened narrative against foreign intervention will elevate the overall threat towards foreign personnel and businesses in the KR, as well as Iraq proper. Due to Iranian efforts to consolidate control over Iraq’s energy sector, any oil and gas facilities deemed to be associated with Turkey will be at greater risk of being targeted in retaliatory attacks.

In the medium term, Iran and Turkey’s presence in the region, whether direct or indirect, will continue to de-stabilise the wider regional security landscape in the coming months. Military and diplomatic support for opposing regional governments or armed groups will ultimately underpin efforts to secure economic partnerships and regional hegemony; it will fuel protracted conflicts, including those in the South Caucasus, Libya and Yemen, among others (see Sibylline Situation Update Brief – 2 August 2022). The increased presence of Iran- and Turkey-backed proxy networks therefore pose credible security risks for businesses operating in-country, jeopardising investor confidence and foreign investment opportunities.

In the long term, a security vacuum in the Middle East, North Africa and South Caucasus region driven by Russia’s war in Ukraine will facilitate the expansion of Iran and Turkey’s political posturing. While it is unlikely that Moscow will fully withdraw from the region, the protracted nature of the Russia-Ukraine conflict will almost certainly result in diminished military and financial support, providing opportunities for Iran and Turkey to expand their influence. The spill-over impact on border and political insecurity will sustain operational and reputational risks for businesses which continue to operate in areas of protracted conflict. (Source: Sibylline)

06 Dec 22. South Africa: NEC support for president reduces impeachment threat. On 5 December, the National Executive Committee (NEC) of the ruling African National Congress (ANC) ruled that MPs should reject the adoption of the panel report on President Cyril Ramaphosa’s fitness for office (see Sibylline Daily Analytical Update – 1 December). The National Assembly vote on the report, initially scheduled for 6 December, has been postponed until 13 December. The NEC’s ruling was not unanimous, reflecting significant divides within the ANC, particularly among the Radical Economic Transformation faction aligned with former president Jacob Zuma. However, even with this divide, it is unlikely that the opposition will garner a two-thirds majority in the vote which is needed for impeachment. This will ensure broad policy continuity and the pursuit of economic reforms designed to restore investor confidence. (Source: Sibylline)

06 Dec 22. Russia deploys defence missile system on Kurilisland near Japan. Russia’s defence ministry has said it has deployed mobile coastal defence missile systems on a northern Kuril island – part of a strategically located chain of islands that stretch between Japan and the Russian Kamchatka Peninsula.

Japan lays claim to the Russian-held southern Kuril islands that Tokyo calls the Northern Territories, a territorial row that dates back to the end of World War Two when Soviet troops seized them from Japan.

The Russian Bastion missile systems, which have missiles with a flight range of up to 500km (310 miles), were deployed on the island of Paramushir in the northern portion of the Kuril Islands, the Russian defence ministry said on Monday.

“Coastal servicemen of the Pacific Fleet will keep a round-the-clock watch to control the adjacent water area and strait zones,” it said.

The ministry said that a military camp was set up on Paramushir with conditions allowing for year-round service, accommodation, recreation and food for personnel.

This deployment comes a year after Russia set up the Bastion systems on the island of Matua, in the central part of the Kuril ridge, the ministry said in a statement.

The Washington-based think tank Center for Strategic and International Studies said in a September report that overshadowed by the invasion of Ukraine, Moscow’s militarisation of the Kuril Islands “has flown largely under the radar.”

“Russia’s steps to boost its presence suggest that the islands will continue to play a pernicious role in the future of Russo-Japanese relations and that Japan and the United States should deepen consultations regarding Russia’s activities in the region,” according to the report, published on the Centre’s website.

Japan has joined its Western allies in slapping economic sanctions on Russia after it sent tens of thousands of troops into Ukraine in what Moscow calls a “special military operation.” Ukraine and its allies say Russia launched an unprovoked war. Russia withdrew from peace treaty talks with Japan and froze joint economic projects related to the disputed Kuril Islands because of Japanese sanctions over Russia’s invasion of Ukraine. (Source: Reuters)

05 Dec 22. Pakistan: Attack against ambassador in Afghanistan will weaken bilateral ties. On 4 December, Islamic State-Khorasan Province (ISIS-K) claimed responsibility for a shooting which targeted Pakistan’s ambassador to Afghanistan on 2 December. Although the ambassador was not harmed, a security guard was critically injured. The incident comes amid fraught relations between Afghanistan and Pakistan and took place during the visit of Pakistan’s foreign minister Hina Rabbani Khar. The attack was likely conducted to coincide with the visit, which was arranged to help ease tensions between both countries. The embassy has since resumed operations. The incident highlights the weakness of the Afghan Taliban to ensure security for foreign diplomatic missions and their personnel. It will sour relations between the two nations, and will possibly impact cross-border movement. (Source: Sibylline)

05 Dec 22. Armenia-Azerbaijan: Stand-off along key transit route will increase risk of fresh escalation. On 3 December, traffic along the only road into the autonomous region of Nagorno-Karabakh was paused after Azerbaijani officials began to inspect vehicles transiting the Lachin corridor. Officials in Nagorno-Karabakh announced that a group of Azerbaijanis in civilian clothing shut the road near the city of Shusha, effectively isolating around 120,000 people from Armenia. They also expressed concern that the move might represent a prelude a humanitarian disaster. The Lachin corridor has been controlled by Russian peacekeepers since 2020. However, in recent weeks Baku has claimed that the transit route has been used to move military equipment, in breach of a ceasefire agreement. Although the road was re-opened by 1600hrs (local time) on 3 December, a recent increase in the frequency of ceasefire violations being reported by each side illustrates the growing threat of escalation and limited transport access along the only remaining corridor. (Source: Sibylline)

05 Dec 22. Mexico: Co-ordinated prison riot in Zacatecas underscores elevated threat posed by criminal gangs. The security forces suppressed a riot and break-out attempt by prisoners at a detention centre in Cienaguillas (Zacatecas state) on 4 December. The authorities did not confirm whether anyone had been killed, but suggested numerous injuries had occurred. The riot was co-ordinated by an unidentified armed group; it staged arson attacks targeting vehicles and road infrastructure outside Zacatecas city to aid the attempted break-out. Officials said the incident was caused by overcrowded conditions inside the facility, but added no further details. Armed groups in rural Zacatecas regularly erect roadblocks and carry out arson attacks to frustrate police operations. This practice increases risks to bystanders and transport operations in the immediate vicinity. (Source: Sibylline)

05 Dec 22. El Salvador: Government deploys 10,000 troops in San Salvador, raising human rights concerns. President Nayib Bukele announced on 3 December that around 10,000 security personnel will be deployed to Soyapango municipality in the capital San Salvador. The move is intended to combat gangs in the area. The deployment includes specialized extraction teams which are charged with capturing gang members. The municipality in the eastern part of the capital is known for being a stronghold of the Mara Salvatrucha gang. The move comes after the government introduced a state of emergency in March which has led to the arrest of over 50,000 people. Although the policy is largely popular in El Salvador, several NGOs claim that it has increased arbitrary detentions and incidents of force abuse. This increases reputational concerns for firms associated with the specific government policy, including defence manufacturers and firms servicing or constructing prison facilities. (Source: Sibylline)

05 Dec 22. Honduras: State of emergency will suspend constitutional rights in specific areas amid rise in crime. On 3 December, the government confirmed that it will suspend several constitutional rights for at least 30 days in Tegucigalpa and San Pedro Sula cities, citing a state of emergency order designed to suppress a rise in gang extortions. The order will come into force on 6 December at 1800hrs (local time). It will allow the police to raid homes and break up assemblies. It will also cause transport disruption in the affected areas (though no specific areas have yet been identified). The measure comes after pressure from the business community, which indicated that extortion activity – mostly by the Mara Salvatrucha and Mara Barrio 18 gangs – has increased since mid-2022. The measures will increase the likelihood of armed confrontations between gangs and the security forces, elevating the risks for bystanders. (Source: Sibylline)

05 Dec 22. Iran: Perceived government concessions will not reduce short-term risk of civil unrest. According to local media, General Prosecutor Mohammad Jafar Montazer stated on 3 December that Iran’s Morality Police had been ‘shut down’. Contrastingly, Iranian state-backed media only acknowledged a reduction in morality patrols. The parliament and the judiciary are also reportedly reviewing the country’s national hijab laws, with a decision likely to be made by 16 December. These developments come as nationwide anti-government protests continue for a third month; hundreds of people have been killed as a result of violent confrontations (see Sibylline Update Brief – 12 October 2022). No senior Iranian official has publicly confirmed whether a major change to the hijab laws will be introduced. However, President Ebrahim Raisi previously highlighted this as an option. While the government will possibly bring in limited concessions in response to the civil unrest, this is unlikely to underscore a broader policy direction change. Bouts of civil unrest and labour strikes will highly likely continue in the coming days, sustaining physical security and bystander risks for business staff and assets. (Source: Sibylline)

02 Dec 22. Russia-China moving towards closer bomber co-operation. In an unprecedented boost to interoperability, long-range Chinese and Russian bombers landed in each other’s airbases for the first time, as part of a joint air patrol. According to the Japanese Ministry of Defence (MoD), the drills began on the morning of 30 November. Two Chinese H-6K bombers were observed as they flew over the East China Sea.

“After passing through the Tsushima Strait, [the Chinese aircraft] advanced into the Sea of Japan [East Sea]. It was confirmed that it flew north towards the continent,” the MoD said in a statement. (Source: Janes)

02 Dec 22. Israel: Coalition agreement will facilitate imminent government formation, exacerbate wider ethno-religious tensions in West Bank. On 1 December, Israel’s Prime Minister-designate, Benjamin Netanyahu, formed a coalition agreement with Bezalel Smotrich’s far-right Religious Zionism party. The alliance will facilitate government formation, with Netanyahu required to form a cabinet by 11 December. A Likud spokesperson added that Smotrich will become the government’s finance minister, placing him at the forefront of sensitive issues pertaining to the socio-economic environment of the Palestinian Territories. While the coalition will improve government stability in the short term, the consolidation of a right-religious bloc within Israel’s new cabinet will almost certainly exacerbate internal political fissures between Arab Knesset members and inflame wider ethno-religious tensions. Moreover, a nationalist Israeli government will likely embolden armed Palestinian factions to conduct retaliatory attacks on Israeli assets and the security forces, worsening the security environment in the West Bank and Gaza Strip and elevating bystander risks and travel disruption. (Source: Sibylline)

02 Dec 22. South Africa’s senior military airman not ruling out fighter deployment. Lieutenant General Wiseman Mbambo at the SAAF communication forum. SA Air Force (SAAF) Chief Lieutenant General Wiseman Mbambo, with a weather eye on hostilities in the Democratic Republic of Congo (DRC), maintains it would be “imprudent” not to think of “possible fighter capability employment”.

The three-star was addressing a communication forum at SAAF headquarters in Pretoria between 29 and 30 November and gave those present his thinking on a range of air force related topics. These ranged from implementation of suggestions received in a force-wide survey done earlier this year through to establishment of a Space Command and changing work rules to ensure “value for money across all capability areas”.

“The involvement of the SA National Defence Force (SANDF) in two external operations (MONUSCO and SAMIM) has a direct impact on the commitment of the SAAF’s air transport and helicopter capabilities. Given the degree of unpredictability of the conflict in the near future it will be imprudent for the SAAF not to appreciate possible employment of fighter capabilities,” he told headquarters staff. “Additional to the two external operational commitments, there is also internal theatre support to other state departments to attend various contingencies such as the 2021 July unrests and the recent floods in the KwaZulu-Natal province.”

On a Space Command for the airborne service of the national defence force, Mbambo said, following a presentation by Brigadier General Lancelot Mathebula, “air and space power are relevant in the SANDF journey to greatness” adding the 4th industrial revolution did not favour “those characterised by a slow pace and lengthy procrastination”.

In current air force operations Mbambo maintains the contracting model used by the SAAF is not at “a preferred efficacy scale” with the airborne service paying “more fixed costs” and “little or nothing” going to available capabilities.

He wants SAAF contracting philosophy and management “revisited to ensure value for money across all capability areas”.

SAAF social media writer Captain Tebogo August reports the three-star general telling those at the communication period “there is enough knowledge, suitable facilities and equipment to commence the SAAF’s in-house design and manufacturing capabilities”.

“We need a new pathway to innovation that will propel the SAAF to its new vision. Our outsourcing footprint is too large and in the process we deprive our young engineers and technicians of opportunities to grow.

“We need to improve in financial management and what also requires urgent attention is how we use the limited resources allocated to us. Our net assessment must be logical to what we need to do, less voluminous and ambiguous. It must appeal to both the intellectual and the ordinary mind and provide technical updates without introducing a fundamental overhaul of the entire system.”

The SAAF must migrate from its current unfavourable position to its envisioned destination, August writes, adding: “we will certainly get there, through the SAAF vision of ‘Projecting Effective Air and Space Power through Innovation in the theatre of our operations’”.

On communication, Mbambo told headquarters staff it was, “pivotal to the success or failure of the SAAF air and space power strategy implementation. The demand for timeous, detailed and accurate internal and external communication on material issues of the SAAF vision, strategy and plans are imperative to appropriately compete with trending topics on different social media platforms. The image of the SANDF in general and the SAAF, in particular, is of cardinal importance”.

“The SAAF must migrate from its current unfavourable position to its envisioned destination. We will certainly get there.”

Going back to the survey he initiated earlier in the year, Mbambo said it pointed to low morale and other material concerns in the organisation.

“It is my command and expectation that ethical leadership must prevail at all levels of the SAAF. The undertaking made to members that feedback in terms of action plans to address concerns must be honoured without fail. Remedial action plans must be executed with immediate effect by all allocated those responsibilities.” (Source: https://www.defenceweb.co.za/)

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