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📰 Hungary's Chad mission

📰 Hungary's Chad mission

and Putin wants de-dollarisation

Ross Crabtree & Billy Robinson
October 24, 2024

Hello and welcome back,

In the last 24 hours, Hungary and Chad have formed an unexpected strategic alliance, while Israeli airstrikes continue to devastate Lebanon and Gaza. Meanwhile, a deadly attack—thought to have been carried out by the Kurdistan Workers Party (PKK)—has struck Turkiye’s key aerospace facility.

Today’s headline story centres on the BRICS conference in Kazan, Russia, where new member states—including Turkiye, Vietnam, and Nigeria—have been officially inducted. Brazilian President Lula emphasised the need to prioritise shared development goals over geopolitical conflicts, underlining a collaborative approach for the group moving forward.

Top 5 Stories

1️⃣ 🇹🇷 Turkish aerospace facility attacked: On Wednesday, a deadly attack targeted Turkish Aerospace Industries (TUSAS), a key player in Turkiye’s defence sector, killing at least five people and injuring 22. The assault follows an unexpected statement by Devlet Bahceli, leader of the nationalist MHP party and ally of President Erdoğan, suggesting a potential revival of peace talks with the outlawed Kurdistan Workers’ Party (PKK). The PKK, which Turkiye, the US, and the EU classify as a terrorist group, has fought a four-decade rebellion against the state. Observers speculate that the timing of the attack signals the PKK’s unwillingness to pursue a peace process. Turkish National Defence Minister Yasar Guler blamed the PKK, but no group has yet claimed responsibility. Experts, including Omer Ozkizilcik from the Atlantic Council, note the symbolic impact of targeting TUSAS, given the strategic role of Turkish drones in counterterrorism efforts. The attack's implications remain uncertain, but it highlights the fragility of peace prospects in Turkey’s ongoing conflict with the PKK.

2️⃣ 🇱🇧 🇵🇸 🇮🇱 Tyre and Beirut bombarded, Gaza’s civil institutions fold under Israeli onslaught: Israeli airstrikes in Lebanon have targeted civilian areas, including a site near Beirut’s Rafic Hariri Hospital. This followed Israeli accusations that Hizbollah was hiding cash and gold worth half a billion dollars in a bunker beneath Beirut’s al-Sahel Hospital—a claim later exposed by BBC reporters as fabricated. In southern Lebanon, the UNESCO heritage city of Tyre, renowned for its historical and cultural significance, also faced intense bombing. Meanwhile, in Gaza, relentless strikes and destruction of civilian infrastructure have plunged the economy into crisis. A report by UNDP and ESCWA warned that even with $280 million in annual aid, the Palestinian economy cannot recover to pre-war levels. Gaza’s development has regressed by nearly 70 years, with unemployment soaring to 80%. The UNDP emphasised the urgent need for long-term investments and lifting restrictions to avert further regional destabilisation.

3️⃣ 🇦🇷 Argentina receives $2bn USD World Bank loan: The World Bank announced on Tuesday its commitment to provide Argentina with over $2 billion in loans to address the country's challenging social conditions. The government, led by Javier Milei, is focused on stabilizing the economy through an austerity plan aimed at reducing the fiscal deficit and inflation, though it has heightened poverty and impacted economic growth. Carlos Felipe Jaramillo, World Bank Vice President, stated on X that the funds will target social protection, education, and improve access to transportation and energy for the most vulnerable populations. The announcement was made during a meeting in Washington with Economy Minister Luis Caputo, who is attending the IMF and World Bank summit. Caputo, alongside key officials, indicated that Argentina is negotiating a new program with the IMF after exceeding several goals in the current arrangement.

4️⃣ 🇭🇺 🇹🇩 Hungary sends troops to Chad in an unlikely entente: An unexpected partnership is emerging between Hungary and Chad, aimed at curbing migration to Europe. Over the past year, Hungary has opened a diplomatic mission in N’Djamena, launched a humanitarian centre, and pledged $200 million in aid to Chad. Additionally, it plans to send troops to help fight armed groups. While Hungary has no economic ties or diaspora in Chad, Prime Minister Viktor Orban emphasised the importance of collaborating with Sahel countries to address migration, citing armed conflicts and political instability as key drivers. Hungary’s new humanitarian centre in Chad will coordinate up to €200 million ($216 million) in aid, focusing on agriculture, education, and healthcare. During a state visit, President Mahamat Idriss Deby Itno and Orban formalised this aid agreement, Hungary’s first with an African nation. The initiative underscores Hungary’s strategy to address migration by fostering local stability.

5️⃣ 🇺🇸 US is the ‘engine of global growth,’ says IMF: The U.S. economy is expected to remain the key driver of global growth through 2024 and 2025, fueled by strong consumer spending despite inflation and high interest rates, according to the International Monetary Fund (IMF). In its latest World Economic Outlook, the IMF raised U.S. growth projections for both years, making it the only advanced economy to see such an upgrade. The IMF praised the Federal Reserve for largely achieving a "soft landing," where inflation eases without severely impacting employment. Emerging markets like India and Brazil also showed positive outlooks, while China's growth forecast was lowered for this year and held at a below-trend 4.5% for 2024. Global GDP growth for 2024 remains at 3.2%, while 2025 growth was slightly revised down to 3.2%, with medium-term projections fading to 3.1%, below pre-pandemic trends. The IMF warned of potential risks, including rising trade tensions, conflicts, and tight monetary policies. It outlined a scenario involving tariff increases among the U.S., eurozone, and China, estimating a potential 0.8% drop in global GDP by 2025 if such policies were enacted. The IMF also cautioned against industrial policies aimed at protecting domestic industries, arguing they often fail to improve living standards sustainably.

Major Story

🇷🇺 🇨🇳 🇧🇷 🇮🇳 🇿🇦 BRICS CONVENES IN KAZAN: PUTIN CALLS FOR ALTERNATIVE INTERNATIONAL FINANCE SYSTEM

Background

At the expanded BRICS summit in Kazan, Russian President Vladimir Putin advocated for a new international payment system to challenge the dominance of the US dollar, which he criticised as being used as a political tool. Highlighting that 95% of trade between Russia and China is now in rubles and yuan, Putin emphasised a shift towards de-dollarisation. However, this move has created unease among some BRICS members, particularly Brazil and India, who are wary of BRICS becoming overtly anti-Western and pro-Chinese.

Membership Expansion

The summit witnessed the addition of new members, expanding BRICS to include countries like Turkiye, Iran, Vietnam, and Nigeria. While the enlargement was framed as a response to growing global south interest, Brazil and India have resisted transforming the group into a purely anti-Western bloc. Brazilian President Luiz Inácio Lula da Silva stressed the need for a focus on common development goals rather than geopolitical divisions.

Divergent Agendas

Despite Putin’s calls, the summit’s communique showed limited advancement on alternative payment systems. Tensions surfaced over differing visions for the group's future, with Brazil and India pushing to prevent BRICS from becoming a mouthpiece for Russia and China.

Peace Efforts and Broader Geopolitical Ramifications

The summit’s final communique made brief mention of a joint Brazil-China peace proposal for Ukraine but focused heavily on condemning Israel’s actions in Gaza. The absence of concrete steps towards peace in Ukraine left Ukrainian officials sceptical, further underscoring divisions within BRICS regarding global conflicts.

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Other News

1️⃣ 🇺🇸 🇨🇾 U.S., Cyprus enter bilateral strategic dialogue: U.S. and Cypriot officials initiated a strategic dialogue on Wednesday to enhance security and stability amid the Eastern Mediterranean’s ongoing crises. The partnership aims to strengthen counterterrorism efforts and tackle sanctions evasion, with a focus on personnel training from Middle Eastern countries. “It feels like a historic moment for our nations,” said James O’Brien, U.S. Assistant Secretary of State for European and Eurasian Affairs, during a press conference. Cyprus has shifted its foreign policy to deepen ties with the U.S., particularly after Russia’s 2022 invasion of Ukraine. A key initiative is the U.S.-funded CYCLOPS centre in Cyprus, which provides training on maritime, cybersecurity, and counterterrorism. Cypriot Foreign Minister Constantinos Kombos emphasised the nation’s commitment to humanitarian efforts, such as establishing a maritime corridor to deliver aid to Gaza, which is currently under Israeli siege. Last month, both countries signed a defence cooperation framework to address regional security and humanitarian challenges.

2️⃣ 🇳🇬 Nigeria’s Tinubu reshuffles cabinet: Nigerian President Bola Tinubu has carried out a significant cabinet reshuffle, dismissing five ministers and appointing seven new ones to enhance government efficiency amid rising public discontent, according to a statement on Wednesday. Amid growing economic challenges, Tinubu named new ministers for humanitarian and poverty reduction, trade and investment, labour, and livestock development, as well as junior ministers for foreign affairs, education, and housing. The reshuffle saw the removal of the education, tourism, women’s affairs, and youth development ministers, along with the junior minister for housing. Since taking office last year, Tinubu has introduced reforms to reduce government spending and attract foreign investments. However, inflation has reached a 28-year high, and the naira is at record lows against the dollar. Ongoing economic hardships have fueled mass protests, including deadly clashes in August demanding better job opportunities.