Rapid-Fire Friday: Geopolitics Issue
The Daily SITREP for Friday, February 10, 2023
🌐 A rapid-fire roundup of some of the big geopolitical issues today: Tunisia, the Turkey / Syria earthquake, Russian sanctions, the Nigerian Election, and Israel-Palestine.
The Cyprus election run-off is this weekend and America will be watching a football game while eating a record number of nachos and wings.
See you on Monday!
There have been no steps to address the lack of a decisive outcome in the election runoff that took place two weeks ago despite protests and complaints that the government of President Saied is illegitimate. Instead, the President has sanctioned a crackdown on the opposition, increasing the number arrested or charged with frivolous offenses and is describing the opposition on the terms of a “cancer” on the country.
🇷🇺 Sanctions on Russia
The Western sanctions against Russia following the invasion of Ukraine have not had such a big effect on oil and gas revenues as hoped.
This leaves Russia in a stronger financial position than many had expected, or hoped, making it much easier for Moscow to afford the war in Ukraine well into the year.
🇹🇷 🇸🇾 Aftermath of the Earthquake in Turkey & Syria
The death toll from Monday’s earthquake and aftershocks has now surpassed 20,000 in Syria and Turkey with tens of thousands more wounded. Enormous rescue efforts are underway and aid is pouring into the Turkish areas affected but only a trickle has been able to reach the rebel-held part of Syria. Some estimates put the amount of aid in Sirya reaching government-controlled areas as high as 99% of the total despite the area affected being equally split between the government and rebel groups. Read more in Al Monitor.
Politically, President Erdogan is coming under increased criticism for the initial response to the disaster as well as previous decisions made to waive some construction laws, which may have contributed to the weak state of some buildings. Read more in The New Arab.
President Erdogan at one of the areas hit by the earthquake, Feb. 8, 2023. Photo: ADEM ALTAN/AFP via Getty Images
In Syria, President al-Assad is using the tragedy as another opportunity to normalize relations with other states further. Read more in The New Arab.
🇮🇱 🇵🇸 Israel-Palestine
Tension remains very high in the West Bank and Gaza as violence continues between Palestinians, the Israeli Defence Force (IDF) and Israeli settlers. Clashes are almost a daily occurrence and the number of Palestinians injured or killed is rising steadily. There have been no attacks in Isreal since the attacks of January 27 but there are fears that more serious attacks could be planned.
There are reports that the Palestinian Authority has no control or influence over any part of the protests and demonstrations going on, increasing the chances of a spill-over into outright conflict. CIA Director Bill Burns, who was a US diplomat in the region for many years, noted that the current conditions are very similar to those which preceded the second intifada. Read more in Al Monitor.
Meanwhile, arguments and protests continue in Israel over proposed changes to give the Knesset effective veto power over the country’s supreme court. Read more in The Times of Israel.
🇳🇬 Nigerian Elections
There’s a good summary of the big issues that will affect the upcoming elections in Nigeria by Professor Jideofor Adibe in The Conversation. The Chair of the Independent National Electoral Commission (INEC) has said that preparations for the election are in good shape. Read more in All Africa.
On to the numbers
Relative Values (90-Days)
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Potentially impacting: Fuel prices | Gound shipping costs. | Plastic prices | Changes to fuel subsidies (potentially leading to unrest) | Cost of living (especially transport and heating) | Changes to traffic volume/transportation choices | Demand for automotive products | Theft and smuggling.
Brent Crude is high for this 90-day interval. Prices decreased moderately over the last 21 days after significant fluctuation.
Iron and Steel
Potentially impacting: Cost of construction projects | Construction project timelines | Cost/availability of raw materials | Infrastructure project timelines/costs | Cost and availability of finished metal goods | Value of scrap | Value of 2nd hand equipment/vehicles.
Iron and Steel are very high for this 90-day interval. Prices ended relatively flat over the last 21 days after slight fluctuation.
Market Volatility (VIX-US)
Potentially impacting: Availability of capital for investment | Interest rates| Share prices | Consumer confidence | House prices/rent | Financial certainty/uncertainty | Financial models | Stock-based compensation values.
Market Volatility (VIX) is low for this 90-day interval. The index decreased moderately over the last 21 days after moderate fluctuation.
Potentially impacting: Bread, pasta, couscous & noodle prices | Changes to food subsidies (potentially leading to unrest) | Cost of living | Movement from low-income to food insecure to undernourished | Increased theft or graft in loosely governed areas | Demand on charities.
Wheat is very high for this 90-day interval. Prices ended relatively flat over the last 21 days with little fluctuation.
Ocean Freight (FBX)
Potentially impacting: Supply chain costs (direct and indirect) | Supply chain delays | Port capacity/throughput speed | Customs clearance | Availability of goods and materials | Consumer demand/hoarding.
Shipping (FBX) is very low for this 90-day interval. Prices decreased moderately over the last 21 days after significant fluctuation.
Apruary is the cruelest month...
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