Wednesday, 13 April 2016

Sitrep - 13 April, 2016

Ukraine’s Prime Minister Arseniy Yatsenyuk announced his resignation over the weekend, a result of continued factional infighting in Kiev. More political instability is expected as the country now enters an early election cycle. In a post-revolution environment, alliances often fall apart while bureaucracy takes the place of fervour, so while the infighting is painful it is not surprising.

However, a weak Kiev will slow the country’s path towards integration with the West and may give Russia a chance to increase influence. While much of Ukraine’s population is pro-Western and wary of Russia, given the latter’s annexation of Crimea and separatism in the eastern Donbas region, Ukraine’s politicians and oligarchs are hoping to balance the West and Moscow.

In pictures released on April 9, a new North Korean rocket engine test is worrying the arms control community. The images show a clustering of two engines together in a new configuration, burning cleaner fuel and mounted on a structure mimicking one of Pyongyang’s intercontinental ballistic missiles (ICBM). It also appears to be working.

The test is not good news as it proves the regime’s claims about delivery capability are not a hoax. It shows a surprising level of engineering sophistication and new flight tests are likely within a year. The new engines boost the North’s potential ICBM range and payload curve towards the upper estimates, placing New York and Washington DC within range.

Meanwhile the financial and geopolitical world is measuring the impact of the so-called Panama Papers leak. Up to 11.5 million sensitive client documents exposing various heads of state and 214,000 offshore shell companies were released to media a year ago. Journalist reports have been trickling into headlines over the last week.

While shell companies are not illegal, they could be involved in illegal activities. Already the heads of state with accounts at the law firm are facing domestic pressure to answer prickly questions. An overrepresentation of developing countries suggests the broader impact will be muted, as corruption is both endemic and dissent quashed in those countries. However, as China ramps up its anti-corruption campaign, the leaks could introduce unwanted new targets on the ruling party.

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