Asia/Africa update: April 1 2019

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ASIA

AFGHANISTAN

The Taliban (probably) attacked an Afghan security checkpoint in Sar-e Pol province late Sunday, killing at least five Afghan personnel. Then on Monday another Taliban unit attacked another checkpoint in Badghis province, killing at least three Afghan personnel. In general, both the Taliban and the Afghan government have been stepping up their military activity, which is a function both of the start of the spring campaign season and of a desire to strengthen their bargaining positions as talks between the Taliban and the US advance. While that’s a rational tactic for adjusting to peace talks, it also carries the risk of undermining and upending those talks.

CHINA

Chinese and US negotiators may be close to concluding a new trade agreement, although there have been reports to that effect circulating for about a month now and, well, here we are. Nevertheless, by all accounts the basis of any deal is going to be Section 301 of the Trade Act of 1974, which deals with technology transfers and intellectual property. Analyst Roncevert Almond wonders if that’s really a solid basis to settle what is a pretty wide-ranging trade dispute:

Indeed, reliance on the mechanics of Section 301 may not be sufficient to address the greater problem of what Harvard Law’s Mark Wu has called “China Inc.” In his view, China, Inc. is defined by six elements: (1) state assets oversight, (2) financial sector organization, (3) role of state planning, (4) forms of corporate networks, (5) political party involvement, and (6) state-private sector linkages.  The unique economic structure works as follows:

“Alongside the state is the Chinese Communist Party (“Party”), a separate political actor that plays an active role in the management of state-owned enterprises (“SOEs”). The economy embraces market-oriented dynamics, yet it is not strictly a free-market capitalist system. Networked hierarchies and embedded relationships exist among businesses, but not necessarily in the way they operate elsewhere in the world. It is an economy where the Party-state remains all-powerful, but private enterprise drives significant economic activity.”

The result is a significant challenge to U.S. economic relations and the global trading system. For example, Wu notes that foreign companies may stand at a competitive disadvantage due to the close relationships between – and coordinated action by – the Chinese party-state and Chinese companies, both state-owned and private. Given the power of the party-state, U.S firms may be coerced into shifting their manufacturing to China, joint-ventures with Chinese firms, and purchasing from Chinese suppliers. The state can also restrict market access to Chinese firms for importing, purchasing, marketing, and selling particular goods and services in China’s enormous domestic market.

AFRICA

LIBYA

Tarek Megersi of the European Council on Foreign Relations argues that Khalifa Haftar’s recent sweep through southern Libya was a significant win, but the ex-general is going to need to do more than that to break Libya’s political stalemate:

This recent move south was bold and significant. But this operation—slick as it was—will not be sufficient to break the status quo. Haftar has held the majority of Libya’s oil production since 2016, not to mention his de facto control of Libya’s elected legislature and its self-appointed government, which has been administering the east in opposition to the Government of National Accord in Tripoli (which was itself created by the Libyan Political Agreement).

But Haftar has failed to translate his factual control on the ground into real political currency—namely, a leadership position in the internationally recognized government. His attempt to independently sell oil in June 2018, which could have been a game changer, was met with concerted international resistance that ultimately forced him to back down. Since that blunt power grab was stifled, Haftar and his backers have made a subtler attempt at generating influence where it matters, amongst Tripoli’s de facto power holders and the international community driving Libya’s political process.

Haftar has toyed with the idea of attacking Tripoli, but that’s a dicey proposition and if it were to fail he’d be in serious trouble. What he may do instead is use his control over Libya’s eastern and now southern oil fields to force changes at Libya’s central bank, which depends on oil sales. If he could oust unfriendly bank governor Sadiq al-Kabir, or at least force Kabir to do his bidding, Haftar could use the central bank to buy influence in Tripoli and “take” the city without having to attack it.

ALGERIA

President Abdelaziz Bouteflika’s office announced on Monday that he will be stepping down at some point before his current term’s scheduled end on April 28. This is a big win for Algerian protesters, who began demonstrating earlier this year against Bouteflika’s plan to seek a fifth term in office and continued their protests after Bouteflika’s office announced that he was dropping his bid for another term but was going to indefinitely extend his current term while Algerian officials wrote a new constitution. Now he’s leaving, but it may well be too late for that to be enough to satisfy the protesters. Their demands have expanded from simply getting rid of Bouteflika to more fundamental change to Algeria’s political establishment.

I’m not sure how this fits in to what’s happening other than the “rats fleeing a sinking ship” theory, but Algerian authorities arrested businessman and Bouteflika ally Ali Haddad as he was attempting to flee to Tunisia. In the aftermath of his arrest, the Algerian government has suspended the passports of seven other leading Algerian businessmen, according to the privately-owned Ennahar TV.

Author: DWD

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