ISA Global Update #514 8 th of January 2014 ISA (International Strategic Analysis) 1 Key Political Issue Key Economic Issue North American Review South

ISA Global Update #514 8th of January 2014

ISA (International Strategic Analysis) 1

• Key Political Issue

• Key Economic Issue

• North American Review

• South American Review

• West European Review

• Central and East European Review

• Middle East and North African Review

• Sub-Saharan African Review

• Central and South Asian Review

• East Asia and Pacific Review

• Statistics in Focus

The ISA Global Update

Issue #514

8th of January 2014

Published by ISA (International Strategic Analysis)

www.isa-world.com

Contents:



Key Political Issue: Wars of Religion

Summary - The ongoing conflicts in Syria, Iraq and the Central African Republic are a reminder that religion is continuing to be a divisive factor in those countries in Africa and the Middle East that are home to two or more separate religious communities. Across Africa, a host of countries were created by European colonial powers that combined Christian and Muslim territories and many of these divided countries have struggled to achieve long-term stability since their independence. Meanwhile, tensions between Sunni and Shiite Muslims in the Middle East are on the rise and threaten to further destabilize that region in 2014.

Africa’s North-South Divide• In Africa, the divide between Christian- and Muslim-populated territories divides nearly 20 countries from West Africa to the Indian Ocean coast. • At present, religious conflict is a destabilizing factor in a number of these countries. • In the Central African Republic, the seizure of power by a Muslim militant group in 2013 led to an uprising by Christian militias that has elevated into a full-scale civil war. • In Nigeria, a radical Islamist group, Boko Haram, has carried out large-scale attacks across northern and central Nigeria in recent years. • Meanwhile, Somalia-based Islamist militant groups have carried out attacks in Kenya and Uganda in recent years and have spread their activities to countries such as Ethiopia and Tanzania.

Sunnis and Shiites• In the Middle East, the greatest source of unrest at the moment is the intensifying conflict between Sunni and Shiite Muslims. • When Saddam Hussein’s Sunni-dominated dictatorship in Iraq was ousted by the United States in 2003 and a Shiite-dominated Iraqi government emerged, sectarian divisions across the Middle East grew substantially. • These divisions have led to the civil war in Syria, which has become a proxy war for the region’s leading Shiite power (Iran) and its leading Sunni states (Saudi Arabia and the Gulf States). • Moreover, this proxy war is spreading into other religiously divided countries in the region, such as Iraq, Lebanon and Yemen..

What to Watch For:• A line of religiously mixed countries stretching from West Africa to Iran are facing the threat of internal unrest amid a greater religious struggle that threatens to engulf a huge swathe of territory



Key Economic Issue: Nine Strong Economies for 2014

United States:The US economy will grow by nearly 3% in 2014 and is set for a prolonged period of strong growth, as long as Washington does not get in the way of the world’s largest economy. Growth will be driven by higher levels of domestic and export demand.

Mongolia:Mongolia’s vast mining industry has allowed that country to record some of the highest economic growth rates in the world in recent years and this trend will continue in 2014, particularly as demand for Mongolian natural resources rebounds this year.

Myanmar:Myanmar’s economy is benefitting from a surge in foreign investment that will help the country to become the next low-cost manufacturing export center in Asia. This will boost economic growth rates to near eight percent in 2014.

Colombia:Colombian economic growth will remain well below its potential in 2014, but the improving political situation in that country will attract large amounts of foreign investment to Colombia, as this is boosting the country’s long-term prospects.

South Korea:South Korea will remain one of the world’s strongest exporting economies, with GDP growth rising from an estimated 3.0% in 2013 to 4.2% in 2014. South Korea’s export competitiveness will remain very high thanks to access to key export markets.

Sweden:Thanks to the fact that it is able to export its manufactured goods to markets outside of Europe, Sweden will continue to outperform nearly all other European economies in 2014.

Congo-Kinshasa:Foreign investment in Congo-Kinshasa’s mining industry will continue to rise at a rapid pace and, if peace can be maintained in this diverse country’s key mining regions, economic growth rates could approach ten percent in 2014.

Ireland:Ireland became the first European bailout recipient to withdraw from its bailout program and this was due to the strong actions taken by the Irish government to improve that country’s finances as well as an improving outlook for Irish exports.

China:China will avoid a hard-landing as the world’s second-largest economy transitions from an export-dominated economy to one driven by China’s vast domestic market. Growth rates will nevertheless remain near eight percent in 2014.



Regional Overview: North America

Regional Summary:• Janet Yellen was confirmed as the next head of the United States Federal Reserve.• A massive winter storm struck a huge area of the United States and Canada in recent days.

Yellen Confirmed:• This week, the United States Senate confirmed Janet Yellen as the next head of the US Federal Reserve by a vote of 56 to 26.• As a result, Ms. Yellen will take over from Ben Bernanke next month, becoming the first women ever to head the Federal Reserve.• When she takes over as the head of the Federal Reserve, she will face the tricky task of managing the end of the stimulus measures that had been used by the Fed in recent years to revive the US economy.

A Look Ahead:

Key Issues or Events in the Next Seven Days:• A dispute over cost overruns is threatening to delay the project to expand the Panama Canal.

Freezing Temperatures in North America:• A massive winter storm led to record low temperatures across much of the northeastern United States and a wide area of Canada.• In addition to the record low temperatures, heavy snowfall fell across many areas of this vast region, leading to major transportation disruptions.• Furthermore, this storm was accompanied by high winds, which resulting in dangerously low wind chills.• Dozens of deaths were attributed to this storm.

Regional Risk Factors to Watch:• Construction on a planned canal across Nicaragua that will link the Pacific and the Atlantic oceans that was scheduled to begin this year was delayed until 2015 at the earliest.



Regional Overview: South America

Regional Summary:• Brazilian President Dilma Rousseff is once again the favorite to win this year’s presidential election in Brazil.• South American education systems are in need of a major overhaul.

Preparing for Brazil’s Elections:• Not only will Brazil be hosting the 2014 FIFA World Cup, but presidential and congressional elections will also take place in that country in October 2014.• According to recent polls, President Dilma Rousseff has seen her support levels rebound in recent months and she is again the favorite to win the presidential election.• However, she faces two tough adversaries, the leftist candidate Eduardo Campos (and his running mate Marina Silva) and the center-right candidate from Sao Paulo, Aecio Neves.

A Look Ahead:

Key Issues or Events in the Next Seven Days:• A heatwave in Argentina is continuing to pose severe health risks for large areas of that country.

South American Education Woes:• Despite rapid economic growth in many areas of South America over the past decade, the state of the region’s education systems remains very poor.• In the latest PISA tests which compare the performance of high school students in the fields of reading, math and sciences, no South American country was ranked among the top 50% of countries in these fields.• In fact, Peru, Colombia, Argentina and Brazil were near the bottom of the rankings that included 65 countries around the world, with Peru finishing dead last.

Regional Risk Factors to Watch:• South America’s underfunded education systems have prompted large-scale student protests in many South American countries in recent years.



Regional Overview: West Europe

Regional Summary:• West Europe’s demographic situation will lead to a shake-up among the region’s largest economies in the coming decades.• A number of regions across West Europe have strong separatist movements, including Scotland, Catalonia and Flemish areas of Belgium.

West Europe’s Changing Demographics:• West Europe’s demographic situation remains highly unfavorable, with countries such as Germany, Spain and Italy facing severe declines in their working-age populations in the coming years. • In contrast, Britain and France are forecast to have more stable working-age populations thanks to slightly higher birth rates and higher levels of immigration.• As a result, within the next 30 years, Britain and possibly France will have larger economies than Germany, due mostly to the fact that Germany’s population will continue to decline during this period.

A Look Ahead:

Key Issues or Events in the Next Seven Days:• The debate over banking union in the European Union is likely to intensify in the coming days.

Independence Movements in West Europe:• This year’s scheduled referendum on Scottish independence has prompted other region’s seeking independence across West Europe to push ahead with plans for their own independence.• In Spain, Catalonia’s government is planning to hold a referendum on the region’s independence from Spain later this year, although the Spanish government has vowed to prevent this referendum from taking place.• In Belgium, Flemish nationalists that favor a break-up of that country remain the most popular political force in the Dutch-speaking part of that country.

Regional Risk Factors to Watch:• Inflation rates in the Eurozone trended downwards again last month as deflation remains a serious risk in many European countries.



Regional Overview: Central and East Europe

Regional Summary:• A power struggle between Turkey’s prime minister and a popular cleric has intensified in recent days.• Latvia became the 18th member of the Eurozone.

Power Struggle in Turkey:• The struggle for power in Turkey between Prime Minister Recep Tayyip Erdogan and the US-based cleric Fethullah Gulen continued in recent days as hundreds of police officers were sacked on charges of corruption.• This prompted Turkey’s judiciary to order an investigation into the government officials that have been handling these corruption cases.• Many high-ranking members of Turkey’s judiciary and police forces are aligned with Mr. Gulen’s Hizmet movement and Prime Minister Erdogan has been attempting to have them removed from their positions.

A Look Ahead:

Key Issues or Events in the Next Seven Days:• Greece assumed the rotating six-month presidency of the European Union this month.

Latvia Adopts the Euro:• Last week, Latvia became the 18th European Union member state to adopt the euro as its currency.• Despite the problems that the euro has faced in recent years, Latvia hopes that the adoption of the euro will reduce the volatility that has plagued the country’s economy since Latvia’s independence from the Soviet Union.• Moreover, Latvia is hopeful that the euro will help to reduce the country’s dependency on Russia.• Nevertheless, polls showed that 60% of Latvians were opposed to the adoption of the euro.

Regional Risk Factors to Watch:• The recent terrorist attacks in the Russian city of Volgograd have raised concerns about the risk of such attacks during the upcoming Winter Olympic Games in the southern Russian city of Sochi.



Regional Overview: Middle East and North Africa

Regional Summary:• Militants aligned with al-Qaeda seized control of the Iraqi city of Fallujah.• Rebel groups battled with one another in northern Syria.

Militants Gain Ground in Iraq:• Last week, militant groups aligned with al-Qaeda seized control of the Iraqi city of Fallujah, highlighting the growing strength of Sunni militant groups in Iraq.• In response, Iraqi Prime Minister Nouri Maliki called on the citizens of Fallujah to drive out the militants from the group known as the Islamic State in Iraq and the Levant (Isis).• Sunni militant groups operating in Syria have been infiltrating Iraq in large numbers in recent months, equipped with large amounts of arms and thousands of fighters.

A Look Ahead:

Key Issues or Events in the Next Seven Days:• The trial of former Egyptian President Mohammed Morsi will eventually begin in the near-future, despite this week’s postponement.

The Situation in Syria:• Syria’s civil war raged on in the first days of 2014 with no end in sight.• In recent days, fighting between rebel groups intensified in northern Syria, with an alliance of rebel groups battling with the forces of the Islamic State in Iraq and the Levant (Isis), a militant group aligned with al-Qaeda.• The al-Qaeda affiliated militant group has been accused of major human rights abuses in the areas of Syria under its control.• Meanwhile, the first shipment of chemical weapons left Syria this week for dismantling abroad.

Regional Risk Factors to Watch:• Saudi Arabia may feel pressured to provide even more backing for anti-Assad rebel forces in Syria.



Regional Overview: Sub-Saharan Africa

Regional Summary:• South Sudan is facing yet another internal conflict.• Foreign troops have been unable to bring peace to the Central African Republic.

South Sudan Descends into Chaos:• The political situation in South Sudan continued to worsen as various groups jockeyed for power.• The main conflict at present is pitting government forces loyal to South Sudan’s President Salva Kiir against rebel forces loyal to his former deputy, Riek Machar.• More than 1,000 people have been killed in this latest round of fighting in South Sudan.• Meanwhile, ethnic violence is continuing in many areas of South Sudan, particularly in states in northeastern South Sudan such as Jonglei.

A Look Ahead:

Key Elections in the Next Seven Days:• A presidential election will take place in the autonomous region of Puntland in Somalia.

No Improvement in the Central African Republic:• The presence of French and African armed forces in the Central African Republic (CAR) has done little to stem the violence in that country.• Over the past month, the number of internally displaced people in the CAR has nearly doubled to 935,000 people, with over half of the people living in the capital city, Bangui, having fled their homes in recent weeks.• Moreover, foreign soldiers have been unable to protect the country’s airports and main roads, thus preventing aid from reaching the displaced people in the CAR.

Regional Risk Factors to Watch:• The unrest in South Sudan and the Central African Republic is threatening the stability of their neighboring countries.



Regional Overview: Central and South Asia

Regional Summary:• The political opposition did not take part in this week’s national elections in Bangladesh.• A new anti-corruption party will contest India’s national elections later this year.

Disputed Elections in Bangladesh:• National elections took place this week in Bangladesh, but were marred by the fact that all of the country’s leading opposition parties did not take part in the election.• As such, the ruling Awami League easily won the election, as more than half of the seats were uncontested.• Moreover, widespread violence accompanied the election, with at least 18 people dying in recent days.• The opposition Bangladesh Nationalist Party (BNP) called for more general strikes this week.• Meanwhile, Bangladesh’ main Islamist party, the Jamaat-e-Islami party, was barred from taking part.

A Look Ahead:

Key Issues or Events in the Next Seven Days:• The trial of former Pakistani President Pervez Musharraf on charges of treason is expected to begin shortly, despite a series of delays due to health-related issues.

New Party to Contest India’s National Elections:• India’s new anti-corruption political party, Aam Aadmi Party (AAP) announced that it intends to take part in India’s national elections that will take place sometime in the spring.• The AAP came to prominence after it won the elections in the state of Delhi in December 2013.• The AAP now heads the state government in Delhi under the leadership of party leader Arvind Kejriwal.• The AAP emerged from the anti-corruption movement that began in India two years ago, but it remains to be seen if it can do well outside of its base in Delhi.

Regional Risk Factors to Watch:• The level of unrest in Bangladesh is expected to remain very high in the coming days and weeks.



Regional Overview: East Asia and Pacific

Regional Summary:• Tensions remain dangerously high in East Asia.• Thailand’s early parliamentary elections scheduled for next month may not take place on time.

East Asian Tensions:• Tensions in East Asia continued to rise in recent weeks, with Japanese Prime Minister Shinzo Abe’s recent visit to the controversial Yasukuni shrine adding to the already considerable tensions in the region.• This visit was condemned by China and South Korea, while the United States expressed its disappointment.• The shrine is controversial because 12 convicted Japanese war criminals from the Second World War are among the war dead that are honored at the shrine.• Meanwhile, territorial disputes in the East China Sea continue to stoke tensions in the region.

A Look Ahead:

Key Issues or Events in the Next Seven Days:• The recent purge in North Korea has resulted in high levels of tension on the Korean Peninsula.

Tense Thailand:• As Thailand prepares to hold early parliamentary elections next month, political tensions between the government of Prime Minister Yingluck Shinawatra and the political opposition remain very high.• This week, Thailand’s corruption watchdog announced that it would bring charges of corruption against hundreds of members of the governing Pheu Thai on issues related to the government’s recent efforts to change the country’s constitution.• This, along with other registration issues, may make it impossible to hold these elections on time next month.

Regional Risk Factors to Watch:• Japan’s population declined by a record 244,000 in 2013, highlighting the demographic collapse facing that country.



Statistics in Focus: Germany’s Urban Centers

• Germany does not have a single dominant urban center, unlike France or Britain.

• Instead, it has many large cities, each of which is often a leader in a certain field or industry in Germany.

• Even with the capital having moved back to Berlin in the early 1990s, that city has not developed into the clear leading city in Germany.

Chart: Largest Urban Centers Summary:

Source: World Gazetteer

Documents

ISA Global Update #514 8 th of January 2014 ISA (International Strategic Analysis) 1 Key Political Issue Key Economic Issue North American Review South