Middle East/South Asia
Iraq
The biggest event in the Middle East in the month of March is the parliamentary election in Iraq. The March 7 vote has implications for regional stability as Iran is working hard to ensure that its allies not only retain their dominant positions in Baghdad but also enhance them. Iranian aggressiveness, especially in the context of trying to limit a Sunni role in the Iraqi state, is a problem for the United States and the Arab states in the region, particularly Saudi Arabia. The heightened ethno-sectarian tensions, ahead of the polls, have already forced Washington to announce that it is prepared to slowdown its planned military drawdown from the country. Clearly, Washington is worried about how the situation unfolds in the country in the wake of the vote. The thing to watch for is the voting, the compilation of the results, acceptance across the board, and the negotiations to form a government, which will consume most of March and the subsequent months, especially with regard to moves to forge a coalition government.
Iran
The Iraqi elections take place at a time when the controversy over the Iranian nuclear program is also approaching a crescendo. Though Iran wants to consolidate its influence in Iraq through the electoral process, it also wants to be able to set the country on fire in the event that it is attacked by the United States or Israel because of its refusal to accept the enrichment swap offer. With the February deadline almost over, the United States is under increasing Israeli pressure to impose crippling sanctions on the Islamic republic, which requires Russian support, one that isn’t likely to happen unless Washington engages in major concessions to Moscow. The United States also needs to make sure that the Iraqi elections take place as smoothly as possible and Iranian allies can be contained. Washington somehow needs to balance the Iraqi electoral issue with tougher action against Iran, while it is surging forces in Afghanistan. Therefore, the next month bears close watching in terms of stability and security in the Persian Gulf region.
Turkey
There will be several important energy-related meetings held between Russian and Turkish officials in the coming months, the first of which will be on March 9 in Moscow. Russia and Turkey have been holding negotiations over several topics, including increasing Russian oil and natural gas exports to Turkey and, more importantly, for Russia to assist Turkey in the construction of its first-ever nuclear power plant. According to STRATFOR sources in Moscow, Russia will be intimately involved in the project, providing financing and equipment as well as supplying the nuclear fuel for the plant, all at a discount. In return, Russia will be allowed priority bidding on several key Turkish state assets that are set to be privatized (the specificity of which is unknown), and Turkey will also delay giving any firm commitment on its participation on the Nabucco natural gas project, which aims to bypass Russian territory. The upcoming meetings will therefore be important to watch as they involve two critical players in the energy sphere: Russia for its resources and Turkey for its strategic location, countries that are resurging geopolitically. Russian President Dmitri Medvedev is set to follow up on these topics with a visit to Turkey in May, and STRATFOR will continue to monitor the situation as it develops.
Yemen
The peace agreement with the al-Houthis has eased off some pressure from the Yemeni government, at least for the time being. But the truce is fragile and still needs to be operationalized and thus is prone to setbacks, which is what Sanaa will be working on in the coming month. A key part of its efforts is related to the Feb. 23 meeting between President Ali Abdullah Saleh and Saudi Arabian King Abdullah in Riyadh. The agenda for the meeting is not limited to the al-Houthis, as Sanaa needs Saudi assistance on continuing to deal with Al Qaeda and more importantly the southern secessionist movement. (Will need to include update of this meeting during fact check.) While al Qaeda is an ongoing issue, the Yemenis would like to make use of the respite they got from the al-Houthi issue to counter the southern separatist phenomenon. In March we could see greater unrest in the south, which could be exacerbated by a crackdown on the part of Sanaa.
India
India is in the process of moving toward a U.S.-backed process to de-escalate tensions with Pakistan that have been lingering since the attacks in Mumbai from a little over a year ago. In the midst of this process there was an attack in the western Indian city of Pune on Feb. 13 that was claimed by a splinter group of LeT. Though this one attack hasn’t derailed the nascent moves toward resumption of talks, additional such attacks can be expected, especially as transnational jihadists in the region come under increasing pressure from Pakistan’s shifting behavior vis-à-vis Afghanistan.Elsewhere, the arrest of a top leader of the Naxalite insurgency largely focused in the states along the northeastern coast has led to the discovery of plans by the Maoist rebels to expand their activity into New Delhi and other urban areas. Thus far, the Naxalites have not demonstrated a capability to strike beyond their turf in the rural areas of states like Chattisgarh, Orissa, Jharkhand and parts of Andhra Pradesh and Maharashtra, but it can’t be ruled out either, given the strong intent.
On the energy front, Reliance Industries over the Feb. 21-22 weekend reportedly offered $14.3 billion to acquire bankrupt Dutch oil refiner LyondellBasell Industries. Separately, the largest Indian refiner expressed an interest in Canada’s oil sands deposits in the Alberta region. Reliance is competing with BP in seeking a stake in the Canadian firm, Value Creation Inc. It is not clear to what extent the Indian firm would be successful in acquiring overseas energy assets but STRATFOR will be watching this closely in the coming months.
Sub-Saharan Africa
Nigeria
With Vice President Goodluck Jonathan only recently settling in as Nigeria’s acting president (a result of President Umaru Yaradua’s extended absence, as he continues to receive medical treatment in a Saudi Arabian hospital -- need to update), the pending legislation aimed at revamping Nigeria’s oil laws, known as the Petroleum Industry Bill (PIB), is likely to face even more delays. It has become a ritual of sorts for Nigerian politicians to declare that the PIB is on the verge of being passed, but so far this has not been the case. The bill, which has been heavily criticized by the international oil companies that own stakes in Nigeria’s oil sector, seeks to break up the state-owned Nigerian National Petroleum Corporation (NNPC) into several independent component parts as a means to increase efficiency as well as to increase the share of profits reaped from crude production to the central government. While Jonathan’s label as acting president would not in theory prevent him from authorizing any legislation that would reform the country’s oil laws, Jonathan will likely spend the month of March attempting to establish his own position, as well as those held by the positions of the IOC’s, government ministers and other leading politicians.
Sudan
The Sudanese government is expected to finalize by March 15 a pair of framework peace agreements that weresignedinFebruarywith the main rebel group in Darfur, the Justice and Equality Movement (JEM). This date is rather arbitrary, however, and will not significantly affect negotiations between the two sides. The rapprochement with JEM was directly linked to a recent thaw in relations with perpetual enemy Chad, Sudan’s western neighbor. As the JEM is a direct proxy of Chad (supported, funded and oftentimes directed to action by N’djamena), the attempt by Khartoum to seek a détente with the rebel group is likely related to the government’s desire to influence the decision making on the part of the leadership of the dominant party in the south, the Sudan People’s Liberation Movement (SPLM). With national elections scheduled for April, and an even more critical referendum on Southern Sudanese independence slated to occur in January 2011, Khartoum wants peace with the JEM and with Chad so as to afford its military the opportunity to redeploy forces from Darfur to the more strategic areas along the border with Southern Sudan, an area that contains the majority of Sudan's oil fields. The immediate aim is to shape negotiations in the run up to a possible independence bid by Southern Sudan so that any moves toward secession by the south are not accompanied by a loss of Khartoum's control over this region's oil fields. Khartoum may permit Juba to secede, but it will likely not permit Juba to take control of the oil fields with it.