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A new 1000 Naira note as the Central Bank of Nigeria releases the notes to the public, December 15, 2022.
What We’re Watching: Nigeria’s dwindling cash/patience, Bolsonaro’s next move, China's diplomatic European tour, Armenia’s olive branch
Nigeria’s currency crisis
It’s a little over a week before voters head to the polls in Nigeria, Africa’s most populous country, and temperatures on the streets are rising amid protests over a cash shortage. In November, outgoing President Muhammadu Buhari began a program of phasing out currencies of high denominations, saying it would help transition the country to a cashless economy and clamp down on the currency black market and inflation. The timing appears odd so close to an election, but Buhari’s explanation has been that the measure will curb vote buying. But fast forward three months, and banks are running low on cash, with people having to line up for hours to withdraw their own savings. After being told by the government to hand in large denomination notes in exchange for new wads of cash, many are being sent home empty-handed. This is particularly problematic because the West African country of more than 213 million is highly reliant on cash, with just 45% having access to a bank account in 2021. Violence is on the rise as frustrated Nigerians take to the streets, which presents increasing governance challenges ahead of the crucial Feb. 25 vote. In a bid to calm things down, Buhari announced Thursday that one of the three banknotes being phased out would remain legal for another two months. For more on what’s at stake, see this Q+A with Eurasia Group’s Africa expert Amaka Anku.
Bolsonaro plans to return home
The famous Brazilian singer Tom Jobim once said, in so many words, living abroad is great, but it’s crap – living in Brazil is crap, but it’s great. Brazil’s right-wing former President Jair Bolsonaro seems to agree: After months of self-imposed exile in South Florida, he reportedly plans to return to Brazil in March to lead the opposition against his nemesis, left-wing President Luiz Inácio “Lula” da Silva. Bolsonaro has been a “Florida Man” since December, after losing to Lula in a presidential election he and his supporters believe was stacked against them. Although Bolsonaro is still hugely popular in Brazil — he lost by less than 2 points — returning is risky. Brazil’s Supreme Court is already investigating his role in the January 8 riots, when thousands of Bolsonaristas ransacked government buildings in the capital, Brasilia. When Bolsonaro arrives, Lula will have a big decision to make. With things as polarized as they are, jailing Bolsonaro or banning him from politics could backfire. Who would know that better than Lula himself? He was imprisoned for corruption in 2018, only to walk free a year later and storm his way back to the presidency.
Beijing’s balancing act
Former Foreign Minister Wang Yi, a chief foreign policy advisor to President Xi Jinping, is on a whirlwind trip to Europe, where he aims to bolster economic ties. On Wednesday, he met with Emmanuel Macron, reportedly asking the French president for help in getting the US to rein in efforts to clamp down on China’s tech sector (the US recently recruited Japan and the Netherlands to join tech export controls on China). Wang is also making stops in Italy, Hungary, and finally Germany, where he’ll attend the Munich Security Conference. Relations between China and the US, as well as much of the EU, have been strained in recent months – to put it mildly. But with Beijing’s economy in decline after years of self-imposed zero-COVID chaos, Beijing is looking for friends with deep pockets wherever it can find them. This might also explain why Wang is reportedly hoping to meet with US Sec. of State Antony Blinken on the sidelines of Munich. If it happens, it’ll come just a few weeks after Blinken’s planned visit to Beijing was canceled after a Chinese spy balloon was identified – and subsequently shot down – over US airspace. EU leaders, meanwhile, are unlikely to acquiesce to China unless Beijing starts distancing itself from Russia’s aggression in Ukraine.
Armenia offers Azerbaijan a peace plan project
The search for peace in Nagorno-Karabakh continues. Armenia has presented Azerbaijan with a project it hopes will achieve lasting peace in the Caucasus region, which the two former Soviet Republics have fought two wars over since the dissolution of the USSR, killing thousands. The most recent one in 2020 ended with a Russia-brokered peace deal, but clashes late last year threatened to unravel both the ceasefire and repeated efforts at a permanent resolution to the conflict. The Armenian plan outlines monitoring mechanisms by both countries to prevent breaches of a peace deal. The region is claimed by Azerbaijan but has a majority Armenian population that has been semiautonomous since the early 1990s and enjoys close relations with nearby Armenia. Complicating matters further, Turkey supports Azerbaijan while Russia is committed to defending Armenia in case of military escalation in a region rich in oil and gas. We’ll be watching to see how Azerbaijan responds and whether the two sides can come to an agreement on ending the long-simmering conflict.
Armenia and Azerbaijan flareup gets Russia involved
Ian Bremmer shares his insights on global politics this week on World In :60.
Are Armenia and Azerbaijan on the brink of another war?
Yesterday, it did look that way. The Azeris engaging in drone and artillery strikes literally into the homeland of Armenia, not contested territory, clearly linked to the fact that the Russians have had serious problems over the last several days in Ukraine and they are the big supporter, big ally of Armenia. Fortunately, it looks like we have a cease fire now and the Russians are engaging quite quickly with both sides to try to reduce the temperature. Engage in deconfliction. How the Turks are playing in all of this, because clearly they would've known before these Azeris were going to make those strikes, that's an interesting question. Watch that pretty carefully over the coming hours.
What do both Xi and Putin hope to take away from their upcoming meeting?
Different things. I think if you are Russia, you are pretty desperate to have the Chinese show themselves as your strongest ally on the global stage. China, of course, not very interested in that and we saw that with the Chinese number three to Xi Jinping in Vladivostok last week, didn't even mention Ukraine and all that. The Russians, of course would've loved for them to say, "No, the Russians are fighting the good fight." China wants none of it. But in terms of buying lots of oil at a significant discount and even announcing going forward they're going to start building out more gas infrastructure so that they can take advantage of the fact that the Russians will no longer be producing and supplying to the Europeans, I think we're going to move in that direction. Both sides are interested in that.
Does US inflation dampen Biden's economic plan?
A little of course, but more importantly, it's negative for midterms. The fact that we saw energy prices over the last couple months every day going down was a big deal. Some of the Republicans running increasingly recognizing that inflation was not going to be the top priority in being able to defeat the Democrats in the upcoming midterm elections. A challenging CPI inflation number earlier today does make that narrative work more effectively for the Republicans, but it's going to be tight certainly in the Senate. At this point, it is close to a coin flip. The House, on the other hand, still hard to see it going any other way than a shift to the Republican Party.
Armenia-Azerbaijan ceasefire may not hold but direct war is unlikely
Ian Bremmer shares his insights on this week's World In (More Than) 60 Seconds:
Let's go. Number one. What are the chances the Armenia-Azerbaijan ceasefire holds?
Well, I mean, in this environment, a hold is virtually zero. There's very little restraint on the ground. Local, military leaders, especially in the autonomous region of Karabakh, aren't necessarily listening to everything that the Armenian government has to say. One shot, one drone leads to more. And, there is no process by which the Armenians and the Azeri leadership can say that, "They're winning, yet." And so, that makes it hard. But the fact that the Russians are engaging, we had trilateral talks with the Armenians and the Azeris, the Russians matter the most here. They're the ones that have ensured, some level of frozen instability between the two. There's been significant behind the scene's engagement in Moscow with diplomats, from both sides. And, I think the Russians have made very clear to the Turks at this point, that the Turks are not going to get a leadership seat in the Minsk group, broader negotiations. And, that the Russians would not tolerate a broader expansion of the war that threatened Armenian territorial integrity itself, as opposed to Nagorno-Karabakh. If they were to do that, the Russians would come in and defend Armenia. So, a lot of people are dying, certainly in the high hundreds, at this point. We've got nearly a hundred thousand additional people displaced. This is a horrible thing to see happen, but it's not the tipping point of war between Armenia and Azerbaijan.
I do think that there needs to be new reinvigorated negotiations. The fact is, that the Armenians presently hold, not just Karabakh, which is the territory that had been given to Azerbaijan by Stalin but is mostly Armenian. And, that was taken by the Armenians after the Soviet Union collapsed, that's not going to change. That's kind of like the Crimea situation between Russia and Ukraine. But there's also been territories around Karabakh. There are Azeri territories that the Armenians have occupied as a buffer zone. And, there has to be an ability to get off of that, to negotiate a way from that. I also think that if there are more people killed on both sides, not only is it harder for both sides to climb down, but the potential for the Armenian say to formally recognize Nagorno-Karabakh as part of Armenian territory, which makes the Azeris harder to climb down their own leadership, and weakens, presently if that's real. So, there is positioning, it's not just about the fact that this is still going to be a frozen conflict, and we know what the contours of the eventual solution will be. But, it's also that you have two leaders in place, that can't be seen as losing, these of these, the other on an issue that is incredibly important for them. I don't see an either one has provided significant diplomatic support, looks like some mercenaries, and some direct military support, but I can't see in any way, the Turkish military directly intervening on the Azeri side. So again, even though this is horribly damaging from humanitarian perspective, I would personally be really stunned to see this lead into Armenia, Azerbaijan direct war.
Okay. What's happening with Britain's new coronavirus lockdown measures?
Well, as you probably know, the United Kingdom has some of the highest levels of cases, per capita in the world, right now. This was a UK that originally was letting the virus rip through the country, and just going to protect the older people. That didn't work. They had to lock down. They then started opening up, and the cases have now gone up a lot. Boris Johnson has had to start locking down. Again, they didn't want to, they said, "They weren't going to." They now have this three-tier system between medium, high, and very high of alert systems. And, that's going across the country. But it's really hurting the poor North the most, that have the biggest transmission per capita, and are being locked down the hardest. Obviously, that's creating an enormous amount of agitation against Boris Johnson, both inside his own conservative party; and also providing more support for the labor party in the country. He doesn't have to run for elections anytime soon, but this is a real problem. If you are Boris Johnson and the UK right now, it's going to hurt their economy much worse, than pretty much any other economy in Europe, certainly more than the United States. Also, gives him more incentive, the silver lining, not to accept a no deal hard out. They're in World Trade Organization land, with Europeans at the end of this year. So, a little more likely they end up with a post-Brexit trade deal with the EU. Always got to be a silver lining.
Does the Taliban really support Donald Trump?
Well, I mean support. Do they like American leaders? No, of course they don't. They don't like the Americans. They would rather, the Americans leave. They like Trump more than Biden, because Trump's the guy that's been pushing to end the war, as far, as fast as possible, even against the interests of the military leaders, and advisors inside the Pentagon; as well as many American allies. Some have claimed that Trump is cutting and running, but of course this war has been going on for decades now. Most Americans really tired of it; the costs, the lack of success, the human costs. I mean, all of this is deeply problematic. And so, if you're the Taliban, and the United States has facilitated both direct talks, multilateral talks, a peace deal, but is also saying, "Irrespective of what happens, we're ending the war, we're pulling out." Well, if you're the Taliban, all you have to do is hunker down, pretend you're engaged in negotiations. And once the Americans are out, you can do what you want. So absolutely, the Taliban are happier with Trump, than they would be with Biden.
Now, there has been a big flap about whether or not the Taliban endorsed President Trump. I don't think the Taliban is really in the practice of formally endorsing leaders. But there was a CBS interview a few days ago, with the Taliban leadership and their spokesperson that said that, "Trump would be better for them." And, there was a senior official in the Taliban that said that, "He wants Trump to win," even though originally that was reported as the Taliban formal spokesperson said that, "They endorsed Trump." So, I mean, there's a lot of noise around this. None of it really matters. But I understand why it made a bunch of news. And, the reality is that the United States is getting out of Afghanistan, and President Trump has done more to accomplish that, than others. Not a surprise, the Taliban finds that that kind of a vacuum is useful. But at the end of the day, the relationship between any U.S. President and the Taliban, is going to be pretty strange. By the way, kind of like the Chinese, kind of like the Russians, kind of like the Iranians, it's interesting that individual U.S. Presidents may say very different things, but their ability to fundamentally move the needle, is a lot less on these issues. There a lot more constrained, than is widely reported.