Monthly Risk Spotlight: June 2023


Second Attempt at South American Integration
In a continent historically divided among itself, where political ideologies can manifest in extreme shifts to the right or left side of the political spectrum and where regional rivalries are plentiful, there is an ongoing, revitalized attempt to create a South American regional block. If successful, a South American block may begin a process that leads to increased economic development, a unified currency and market, and easier travel to and between South American states.

It is not the first attempt at regional integration in South America. The Union of South American Nations (UNASUR) was first touted in the mid aughts by the mostly conservative governments of South America a proto–European Union organization with the goal to create a regional governing body, a single currency and easing border restrictions in the region to further increase trade. This was possible when most governments in the region were firmly in agreement politically and leaned on the right side of the political spectrum. However, shortly after its founding, political instability in the region saw the rise of left-wing autocratic states, like Venezuela, and as a result, UNASUR’s memberships dwindled down to just five nations that were all left leaning.

Today, the political realities of South America have shifted yet again, but now the continent is mostly united on the left side of the political spectrum; and as a result, talks about the revival of UNASUR and regional integration took center stage in Brazil as President Luiz Inácio Lula da Silva called for a meeting of heads of state in Brasília to recommit the continent to regional integration. The same major goals of the past regionalization attempt are back, with the creation of a single currency, which is expected to increase interregional trade while reducing barriers to travel between countries.

Although spirits are high as political ideologies have aligned in the region and efforts for integration are seriously considered, the reality is that the political pendulum swings constantly. Elections in Chile have led to a resurgence of conservative rule in one of the wealthiest nations in the region. Argentina is entering an election cycle in which the conservative candidate is highly popular and may win the election. There is considerable risk that due to political disagreements between states, UNASUR may never be implemented.

The political question becomes even worse when regional rivalries are considered. For example, Colombia and Peru have been locked in decades-long border disputes while the conservative president of Uruguay has been outspoken with the human rights violations taking place in Venezuela. Ultimately, UNASUR as a tool for political integration is ill-advised.

Acknowledging the major issue of political consensus, President Luiz Inácio Lula da Silva of Brazil has emphasized that the group must focus on economic and environmental integration first with the goal of creating a unified currency, lowering barriers to trade and travel, and creating a unified energy market. If these goals remain the focus, a single passport to access the region and a currency that works from Colombia to Chile could come to fruition. This will be a major opportunity for travel to South America to be simplified and boost the tourism industry. Perhaps in the distant future, if political rivalries and continent-wide ideological shifts can be lessened, a unified South America can emerge as one on the world stage.


A War Criminal’s Return to the Arab League
Syria and President Bashar al-Assad have been welcomed back into the Arab League after twelve years of isolation. In 2012, Syria was removed from the Arab League in response to Assad’s deadly crackdown on civilians and protesters. Within the last two years, many countries began normalizing relations with Syria again. Last month, Assad attended the Arab League’s 32nd summit in Jeddah, Saudi Arabia, for the first time since his readmittance.

Although many countries are looking forward, it’s important not to forget the crimes perpetrated by the Assad regime against its own people. The Syrian civil war may have calmed, however, Syrians in rebel and opposition held areas of the country are still under threat from the regime. On February 6, 2023, two devastating earthquakes struck southern Turkey within hours of each other. The catastrophic double earthquakes left large-scale death and destruction throughout southeastern Turkey and northwestern Syria. The international community responded quickly to Turkey’s call for humanitarian aid. While opposition-held areas of northwestern Syria also called for aid, including Aleppo and Idlib provinces, the response was inadequate. President Assad and his government require humanitarian aid to be sent directly to him, so they may distribute it properly. Because the worst-hit areas of Syria are controlled by the opposition, it comes as no surprise that Assad withheld most of the earthquake aid.

Syrian Investigative Reporting for Accountability Journalism (Siraj) and Middle East Eye conducted a joint investigation into the earthquake response in Syria, which has prompted accusations of negligence against UN officials. They said the UN failed to make use of protocols and principles that should have allowed them to send in rescue teams on humanitarian grounds without Assad’s consent.

Withholding aid and assistance meant for opposition-held areas is not a new tactic for Assad. The Assad regime has stolen well over $100 million in aid from the UN since 2019. In 2020 alone, 50% of foreign aid sent to Syria by the UN was taken by Assad. This is a systematic way of diverting aid before it can even be implemented or used properly. Not only did Assad withhold the earthquake aid meant for northwestern Syria, but the government also obstructed rescue efforts. International emergency response teams deployed to southeastern Turkey were not asked to assist in Syria. These response teams needed Assad’s consent prior to deploying to the area.

Search and rescue efforts relied on Syria Civil Defense volunteers, also known as the White Helmets. The organization reportedly rescued 2,950 people from the rubble and 2,172 bodies from 182 different locations across the provinces. If withholding international aid for earthquake victims is not enough, the Syrian government continues launching attacks on the affected areas. The Syrian Network for Human Rights reports the government has bombed the area over 132 times since the February earthquakes.

The United States is holding firm by not supporting normalizing relations with Assad. U.S. Secretary of State has said the United States’ policy toward Syria will not change “until there is irreversible progress toward a political solution, which we believe is necessary and vital.” The United States is unlikely to reverse this decision in the near future, as some members of the U.S. Congress have introduced a bill entitled “Assad Regime Anti-Normalization Act of 2023”. The bill is meant to prohibit any official action to recognize or normalize relations with any government of Syria that is led by Bashar al-Assad.

Syria’s re-acceptance into the Arab League signals an end to Assad’s isolation, despite his reputation, as the main theme at last month’s summit was welcoming back the regime. The widespread acceptance of Syria seems to overshadow the humanitarian disasters on the ground. While members of the Arab League are able to put differences aside for what they believe is the best course of action for the region, the United States may be on the right side of history, supporting civilians fighting for democracy while the odds are stacked against them.


Sri Lanka’s Road to Economic Recovery
Sri Lanka’s economic collapse was beset by many factors, including poor economic management and decision-making on fiscal policy initiatives. Starting around 2016, the economy was afflicted by a series of economic policy missteps, made worse by the COVID-19 pandemic which weakened foreign reserves and put immense strain on the economy. At the start of 2022, thousands of Sri Lankans took to the streets to protest the government’s mishandling of the economy, which resulted in fuel shortages and blackouts throughout the country. With a lack of foreign currency in circulation, many fell into poverty as inflation rose. By September, inflation rates soared to almost 70% causing the government to turn to the International Monetary Fund (IMF) for aid.

Since the country’s near bankruptcy last semester, Sri Lanka has made crucial steps to alleviate the crisis and continue operations. With a $3 billion rescue package from the IMF, the island nation got the boost it needed to restructure its debt and can expect economic growth by 2024. The first quarter of 2023 shows an increase in the nation’s GDP by 3.6%, which is a huge increase compared to previous quarters. This development is attributed to a number of factors such as an increase in industrial production and agricultural industry. Additionally, the nation has seen a 30% increase in tourism since the start of 2023, which is a significant feat as the tourism industry was hit hardest by the pandemic.

Sri Lanka’s government has surprised markets by cutting interest rates for the first time in three years, signaling that the worst of the financial crisis is over. Rates are currently at their lowest level since March of 2022. The Central Bank of Sri Lanka states that the big rate cut will help steer the economy further into a rebound phase.

Despite this financial progress, the country has not produced a concrete plan to manage its debt. Instead of focusing on fixing the economy, the government has imposed a series of tax hikes and reduced subsidies to alleviate strain on its reserves. The year2024 will be crucial for the island nation as it gears up for a presidential election. Due to the unpopularity of the tax hikes, it is likely that the next administration will back off from these hikes, hindering the little progress made by the government. Sri Lanka’s economy is still running on a ventilator, and with economic progress set back by the debt crisis, the government can only hope that people will have enough patience to wait until reforms start working.


Senegal and the Country’s Political Uncertainty
Over the last month, widespread violent protests have engulfed Dakar and other areas throughout Senegal causing uncertainty for the country’s political future. Senegal has been widely known as one of the most stable democracies in Western Africa but has recently seen an increase in violent protests following opposition leader Ousmane Sonko’s court cases and President Sall’s potential run for re-election. Opposition leader Ousmane Sonko has been at the center of many political protests since 2021 as he has had a myriad of legal cases against him. Protests over the last month have focused on the court cases as protesters believe the charges are politically motivated to hinder Sonko’s eligibility to run for president in February. Current President Macky Sall has not officially announced if he will seek re-election in February, disregarding the two term-limit, but Sonko is President Sall’s biggest competitor in the upcoming elections. There has been a history of other potential competitors against President Sall being charged with crimes making them ineligible to run for president. Sonko has two separate cases in which he has been accused of libel and rape. While protests have occurred frequently as Sonko’s cases have developed, the protests have steadily become more violent.

On May 8, Sonko was charged with defamation of Tourism Minister Mame Mbaye Niang. The charge against Sonko put his eligibility to run for president at risk. In response to the trial, Sonko called on his supporters to take to the streets to protest President Sall. Protests broke out across Dakar in May to protest President Sall potentially running for president for a third time. Along with Sonko’s court cases, the possibility of President Sall running for a third term has caused widespread concern since Senegal has a two to five-year term limit for presidents. Protests revolving around Sonko have often turned violent as protesters frequently clash with security forces around the capital. In May, the presiding judge over the rape case had to postpone the trial until May 23rd due to widespread violent clashes between Sonko’s supporters and the security forces. Police frequently respond to protests with tear gas in attempts to disperse the protesters.

On June 1, Sonko was acquitted of the rape charge but found guilty of corrupting a minor and sentenced to two years in prison. Sonko again called on his supporters to protest resulting in three days of violence. The sentence would make Sonko ineligible to run in the February presidential elections. As of June 6, Sonko had not received a warrant for his arrest, and it is unknown when and if he will be arrested. The protesters burnt tires and cars, and threw rocks at police officers. Widespread looting of stores, gas stations, banks, and public transportation was seen throughout Senegal. The main university in Dakar was closed due to significant damage and vandalism across campus. The military was deployed in parts of Dakar to help security forces quell the riots. Social media and messaging apps such as WhatsApp, Facebook, and Twitter were also restricted in attempts to limit the planning of additional protests and violence. By June 6, at least 15 people have been reported killed during the week’s protests, marking some of the worst unrest Senegal has seen in decades.

Since the cases against Sonko began in 2021, 500 people have been detained during the violent protests which have occurred periodically over the last two years. The belief that the charges against Sonko are politically motivated, coupled with the uncertainty of whether President Sall will run for president again have been the catalyst for the unrest and political uncertainty throughout the country. It is likely that protests will continue throughout Senegal as protesters continue to see charges made against Sonko as being politically motivated. In the event Sonko is issued an arrest warrant or detained, protests are incredibly likely to occur.


Frozen Conflict Between Moldova and Transnistria
The frozen conflict between Moldova and Transnistria is relatively understudied globally. Currently, this conflict is viewed as a major potential flashpoint with serious consequences for not just Moldova but the region at large.

The collapse of the world socialist system and the dismemberment of the USSR into 15 independent states between 1988 and 1990 allowed Moldova to adopt the Declaration of Independence and become a member of the United Nations. The Ceausescu regime in Romania reopened the border with Moldova in May 1990, leading many to believe a union was inevitable. The integration between the two neighbors alarmed segments of the Russian-speaking population and secessionist movements flared in Transnistria. In August 1990, a referendum was organized and in September of the same year anti-constitutional structures and self-proclaimed Transnistria was formed. From 1990 to August 1992 a war was fought across a wide front along the Dniester River from the northern regions of Otaci and Soroca to the southern regions of Talmaza, Ciobruciu, and Palanca.

As far as Moldova was concerned, this war represented a fight to defend the continued existence of a sovereign and independent Republic of Moldova. To Russia and the separatists in Transnistria, it was a war to prevent the union of Moldova with Romania and to maintain at least some degree of geopolitical dominance in the region by freezing the conflict for an extended period of time.

Following Russian advances, a cease-fire agreement was concluded in July 1992 between Russian President Boris Yeltsin and Moldovan President Mircea Snegur. Under this cease-fire agreement, Russia has maintained an official military base in Transnistria and effectively shifted its legal presence in the occupied territory from that of the aggressor to peacekeeper. The territory occupied by the Transnistrian independent authority lies within Moldova’s borders which is not recognized as a sovereign state. Moldovans were and continue to be the largest national group in Transnistria. But the leaders of the region exclusively identify as ethnically Russian, selected by the Kremlin. Russia makes direct efforts to ingratiate the population by providing free natural gas, pension supplements for the elderly, dual citizenship, and supporting the import/export of manufactured goods. Although Transnistria continues to fall under the jurisdiction of Moldova, life on the territory is regulated by the laws adopted by the secessionist authorities and is firmly Russian. Moldovan legislation is not legally enforced in Transnistria.

Russia’s war on Ukraine has added another dimension to the Transnistrian conflict. Ukraine also played a role in this development as the members of the ruling elite in Ukraine and Russian economic officials created a smuggling ring centered on Transnistria that bolstered the economy in the breakaway region, making it impossible for Moldova to exert any economic control over it. Over the years, corrupt members of the Moldovan elite have also been drawn into these illicit transactions. But all has changed with the Russian invasion of Ukraine. Currently, Ukrainian authorities have closed and secured the Transnistrian section of the Moldovan-Ukrainian border with tanks. This brought an end to contraband.

The government in Moldova is convinced that the Transnistria conflict should only be resolved by peaceful means and in a way that does not obstruct Moldova’s pro-EU course. Moldova has plans to end its dependence on Transnistrian electricity and Russian gas. Without the smuggling routes through Ukraine and the gas supplies from Chisinau, Transnistria has little to no chance of survival. Exactly what the shift from the status quo looks like is dependent on many factors, but it is difficult to predict and might involve risks of escalation. However, Ukraine’s new strategic interest in the end of Transnistria is most likely to drive a change. Some options include Ukraine supporting and directly supplying Moldova with the means to complete its goal of isolating Transnistria completely from Russia. Another is Ukraine could directly step in to remove Russian influence from the breakaway region. Russia would likely view either one of these options as a serious provocation, but it is equally likely that Ukraine will not permit a Russian-controlled Transnistria to persist.


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