Tej Parikh, a Wikistrat Researcher and global policy analyst and journalist, argues that the pound will remain weak for the next two years, as Britain negotiates its exit from the EU. There may be short-term trading opportunities, though.
Andrew K.P. Leung, a Wikistrat Senior Analyst and Chairman of Andrew Leung International Consultants Limited in Hong Kong, argues that the United Kingdom is between a rock and a hard place: It can’t start negotiating its exit from the European Union until it triggers Article 50, but when it triggers Article 50 it loses its leverage. Until that happens, Leung expects the pound will continue to fall and prices in Britain will rise.
Nicolo Raico, a Wikistrat Contributing Analyst and international affairs teacher at the University of Milan, expects the British pound will remain weak for the next few months, until negotiations to leave the EU begin. During that period, the currency will fluctuate wildly, only to settle once a Brexit deal is done.
Nicolas Lewkowicz, a Wikistrat Senior Analyst, predicts the British pound will continue to depreciate as a “hard” exit from the EU, implying loss of markets and investment, seems most likely.
Dr. Matthew Hurley, a Wikistrat Senior Analyst and Non-Resident Senior Fellow at the Mitchell Institute for Aerospace Studies, argues the pound’s future is grim. Brexit casts doubt on the United Kingdom’s willingness and ability to fulfill its commitments, he says: the basis of fiat currency.
Anurag Sinha, a Wikistrat Contributing Analyst and Founder of YourGlobal, argues that the pound is acting as a shock-absorber. He is not too worried about changes in its value in the short term. “It is far more important to observe the makings of the policy response to Brexit.”
China has joined the chorus of international condemnation of North Korea’s apparently successful nuclear weapons test. But its strategic interests in North Korea remain at odds with those of key regional powers and the United States, argues Dr. Benjamin Herscovitch, a Wikistrat Senior Analyst.
For China, the worst-case scenario is not a nuclearized Korean Peninsula. Rather, Beijing fears the collapse of the Pyongyang regime and the instability on China’s border that such political change could unleash.
Moreover, the absorption of North Korean territory into a pro-U.S. reunified Korea would be seen by China as a strategic disaster.
Of course, Beijing would prefer that Pyongyang did not conduct provocative and destabilizing nuclear weapons tests. Nevertheless, if tests of this kind secure the regime’s ongoing survival, they may well be a net strategic benefit for China.
The international community should therefore not expect China to significantly increase its pressure on North Korea in the wake of the latest test. Not only is Beijing’s diplomatic leverage over Pyongyang likely limited; it remains unclear if China would actually welcome North Korea’s abandonment of its nuclear weapons program.
The European debt crisis has forced Germany to assume a leadership role, argues Dr. Ulrich Speck, a senior analyst in Wikistrat’s expert community and a visiting scholar at Carnegie Europe in Brussels. “The alternative to German leadership is to have no leadership at all in Europe.”
Wikistrat asked Dr. Speck — who was previously an associate fellow at the Madrid-based think tank FRIDE and a correspondent for Radio Free Europe/Radio Liberty — about his thoughts on German leadership.
He pointed out that whereas after the Cold War, the United States led with a vision of “Europe whole and free,” it had abdicated that position, even though it remains heavily engaged in European security. The role of the European Union has grown, but Brussels is unable to provide leadership as power rests in the capitals of the big member states. France is struggling with its economy and Britain is toying with leaving the EU altogether. That leaves Germany, Europe’s biggest and central economy, as the only power capable to lead.
But German leadership rests on shaky grounds, Speck cautions:
It is informal and somehow contradicts the institutional set-up of the EU; it is not driven and supported by the German public; it relies heavily on the skills and network of a single individual, German chancellor Angela Merkel (who will run for a fourth term in 2017 and very likely win).
Yet German leadership has worked well. Berlin has managed to unite Europe in a tough response to Russia’s aggression in Ukraine and recently persuaded a far-left government in Greece to enact structural reforms in return for a third bailout. Read More →
British Prime Minister David Cameron may have set himself up for failure by tying his support for continued membership of the European Union to reform, warns Wikistrat Senior Analyst Shaun Riordan. Other countries wonder whether it is worth sacrificing integration to keep the United Kingdom involved when it is unwilling to play its part anyway.
Riordan, who spent 16 years in the British diplomatic service and is now a Senior Visiting Fellow at the Netherlands Institute for International Relations (Clingendael), argues that Cameron – who won reelection this month – aims to repeat the trick Harold Wilson pulled off in the 1970s: “call a referendum on U.K. membership of the EU, secure minimal reforms that justify campaigning to remain in the EU and then win the referendum.”
It worked well for Wilson, who was able to patch over divisions in his party on Europe while remaining a member of the then-Common Market. Cameron will find it much harder to pull off. The anti-European wing of his party is far more virulent than anything Wilson had to face and is backed by an openly anti-European party (UKIP) which came third in the recent elections in the popular vote. Cameron will not be able to get away with the cosmetic reforms Wilson did. He needs real reforms on immigration and return of powers to Westminster.
But other leaders may not want to play ball, Riordan warns. Most see the possibility of a British exit from the EU as an unwelcome distraction from the “real” problems of Greece and Ukraine, to which Britain has contributed very little.
Cameron’s task will not be helped by his first-term diplomacy, during which he managed to alienate even potential allies on the EU reform agenda to leave the U.K. isolated. Too many European powers now act as if the U.K. has already left.
This may be Cameron’s last political act. Cameron has said he will not stand for election as prime minister again. Once the referendum is over, the contest for his succession as Conservative Party leader will begin. Cameron does not want a “Little England” to be his legacy. This might just tempt him to campaign to stay in the EU even without significant reform. Part of his own party could rebel, but the latest polls suggest that the British people would listen.
With Saudi Arabia and other Arab Sunni powers carrying out airstrikes in Yemen and accusing their regional nemesis, Iran, of instigating the Houthi uprising in the country, Wikistrat asked its Senior Analyst Dr. Timothy Furnish, who is an authority on especially Shia Islam, Mahdism and other Islamic sects, to provide background on the conflict and explain to what extent Iran really is involved.
Dr. Furnish notes that Yemen has been a battleground for rival brands of Islam for over a millennium.
In the 900s, it was contested by dueling Shiisms: the (then-militant) Seveners, or Isma’ilis, from North Africa waged dawah and jihad against Fivers, or Zaydis, from Iran. (This was before Iran’s forcible conversion to Twelver Shiism by the Safavids in the sixteenth century.) The Zaydis won and established a militant Imamate in northern Yemen. The Ottomans occupied Yemen twice in order to safeguard the holy cities of Mecca and Medina as well as Red Sea trade. Both times, Zaydi insurgents forced them out, despite massive Ottoman efforts to delegitimize the Zaydi Shii Imamate.
In the 1960s civil war, staunchly Sunni Saudi Arabia (ironically) backed the Zaydis while Nasser’s Egypt supported the “republicans” who ultimately emerged victorious. After unification in 1990, the Sana’a government largely ignored the needs and demands of the 40 percent of the Yemeni population that was Zaydi, contributing to the sense of disenfranchisement felt by the main Zaydi tribe, the Houthis — which has now led to civil war again.
Iran has various aims in fanning the flames of the Houthi rebellion, Dr. Furnish explains: Read More →