Russia Will Push Forward Confidently with Its Plans to Re-Establish a Regional Sphere Of

Q2 FORECAST 2010

GLOBAL

The United States will be looking for a new approach to Iran and pressing harder in its economic disputes with China.

Russia will push forward confidently with its plans to re-establish a regional sphere of influence.

Europe will be busy fighting corrosion at the foundations of its economic and political unity.

EUROPE

In the second quarter, while domestic, economic and political troubles will still tear at European states from within, the critical trend for the Continent will be increasing dissent among member states as they try to frame Continental policy while grappling with the implications of their own disunity.

Protectionism and nationalism will increase but growth will not

Protectionism and nationalism likely will increase across the continent as economic growth remains tepid [27]. This will make it harder for European states to work together

Disaster for the Greek economy is not imminent.

The Greek debt crisis continues, but disaster is no longer imminent. In short, it is a life preserver Greece will think twice about reaching for. Greece may be able to survive until the end of 2010 without asking for the bailout.

Greece will experience more strikes and a rising potential for political violence due to economic stresses.

Greece will get a foretaste of this in the second quarter, with more strikes and potential violence, especially in the pressure cooker that is Athens.

The handling of the Greek debt crisis will increase instability across Europe. Capitals will experience protestations from unions at austerity measures and cuts to govt spending. This will not be confined to the countries that are looking to implement austerity measures. Elections in the UK, Czech, Hungary and Slovakia may be sources of instability.

First, the streets of European capitals will become embroiled in social angst as unions across the Continent protest budget austerity measures and plans to cut government outlays. This will not be confined to the countries looking to implement austerity measures; France, Germany and the United Kingdom are already experiencing strikes [26] as well. Upcoming elections in the Czech Republic (May), Hungary (April), Slovakia (June) and the United Kingdom (May) could also become sources of instability and possibly unrest.

The disunity extending from the Greek debt crisis is likely to spill in to other policy realms such as Common Agricultural Policy, Franco-German proposal on Euro-wide banking taxes, the defining of Europe’s economic government and the new diplomatic corps that the Lisbon Treaty calls for.

Greece’s debt crisis and the accompanying disunity is likely to spill over to varying degrees into several key policy areas that EU member states expect to begin handling, or at least debating, in the second quarter. Issues on the table are the Common Agricultural Policy, a Franco-German proposal on Europe-wide banking taxes, how to define Europe’s “economic government” and a new diplomatic corps called for under Lisbon Treaty.

There is less likelihood on a collective approach in handling Russia’s resurgence.

If there is no resounding reply or answer towards the Central European states fears on a resurging Russia there is likelihood that there will be a divergence of political and security interests from economic interests.

The Central and Eastern Europeans could not get France and Germany to agree [29] on countering Russia before the crisis; such agreement is even less likely now. If Europe continues ignoring Poland, Hungary, Romania and the Baltic states’ concerns about Russia, then Central and Eastern Europe’s economic interests (EU membership) will begin to diverge from their political and security interests (a military alliance with the United States).

EU and non-EU members will look to see how they can deal with and possibly exploit the disunity within the EU resulting from the Greek debt crisis.

In the second quarter, various EU members — and non-members — will begin considering how to deal with (or exploit) the realization that the European Union is not the shield from either economic calamity or a resurgent Russia it was once believed to be.

FORMER SOVIET UNION

Russia will press forward more confidently in consolidating influence in Kazakhstan, Belarus and Ukraine, along with Georgia and other former Soviet states, while searching for ways to undercut European and U.S. ties with the Baltics. Also, in the coming months, Russia’s diplomatic game with its most influential neighbors — Germany, France, Poland and Turkey — will become more important as Russia seeks to secure the tacit understandings necessary to pursue its interests elsewhere.

Moscow still has some readjusting to do in Ukraine, Kazakhstan and Belarus in order to consolidate recent gains made in increasing influence in its immediate surroundings.

Moscow still has some housecleaning to do in the second quarter in Ukraine, Kazakhstan and Belarus.

Counter moves by the US or Europeans to Russia’s consolidation plans are unlikely to come this quarter.

Russia will also be watching in the second quarter for countermoves to its consolidation plans in countries that would be supported by foreign powers, like the United States or the Europeans, though such moves are unlikely.

Russia will begin to focus on the Baltic States and Georgia in its reconsolidation of influence in FSU countries and continue to reap profits from the Kyrgyzstan political revolution. This effort will not see completion during this quarter, more so escalation and sharper definition.

Moscow will start focusing on the next group of countries on its shopping list: Georgia and the Baltic states of Latvia, Lithuania and Estonia. These countries are all vehemently anti-Russian and will not be as easy to influence as the three major states already in the Russian fold
This focus on the Eurasian heavyweights, Georgia and the Baltics will not be wrapped up in the second quarter; rather, it will be escalated and more sharply defined.

Russia will focus efforts on Germany France Poland and Turkey in order to “forge and understanding” of Russia’s resurgence.

In the second quarter, Russia will also focus on its relationships with the Eurasian regional heavyweights — Germany, France, Poland and Turkey

Russia

Bombings in Moscow and Dagestan have increased pressure on the Interior Ministry and the FSB. This MAY result in a “house cleaning” of the Int. Min. and FSB that will feed in to the Clan Wars.

DISCUSSION: Is there an actual forecast concerning Russia’s security situation?

MIDDLE EAST

Iran

The US has reigned in the drift towards a military confrontation with Iran and there will be little Israel will be able to do about that this quarter.

Rather, the United States has shown it has no stomach for risking a third Middle Eastern war, and Israel has noisily resigned itself to the reality, knowing that it cannot afford to further alienate its chief security ally.

Lacking the military capability to act on its own against Iran, Israel has for now resigned itself to this uncomfortable reality

Both US and Israel will increase intelligence efforts targeting Iran, unsuccessfully increase efforts to impose heavy sanctions.

Efforts will be made on both sides to ramp up intelligence collection on Iran and efforts at sanctions will be made (with little success), but the threat of war is currently subsiding.

The US will attempt to redefine the Iran issue.

For lack of better options, the U.S. administration will attempt to redefine its Iran problem [13].

The US will pursue a containment strategy against Iran through Turkey and Gulf Arab states.

The US MAY attempt another outreach toward Iran who will play hardball with Washington.

In the second quarter, the United States will work harder with its regional allies to encircle Iran while making new diplomatic overtures to the Iranian leadership.

Iran will not be easily convinced to offer many concessions.

While pursuing a containment strategy against Iran through Turkey and the Gulf Arab states, the United States may attempt another diplomatic outreach to Tehran

The US – Israel relationship will continue to come under strain (presumably due to the disconnect on how to approach the Iran issue)

Israel, meanwhile, will see its relationship with the United States come under further strain as it watches its options on Iran narrow.

Iran will strengthen its position in Iraq through Shiite allies in the forming Iraqi government.

Iran will seek to strengthen its position through its Shiite allies in the formation of the Iraqi government.

The US will increasingly look to Turkey to balance against Iran as the Israeli relationship suffers.

the United States will also look for other possible means of counterbalancing Persian power. With the U.S.-Israeli relationship under strain, Washington will increasingly look to Turkey to fill the power vacuum in the region.

If the Sunnis are sidelined in the Iraqi power structure the level of violence in the country could escalate.

QUESTION: “Iran will keep up its guard against the US and TALK AROUND US diplomatic overtures because this is not the time to make concessions to the US”. What does “talking around” mean and what would it look like, are there any examples available that could illustrate or clarify?

Iran can be expected to keep its guard up and talk around Washington’s diplomatic overtures — this is not the time for Tehran to be making real concessions.

Turkey

Turkey will continue publicly playing up differences with the US and Israel in order to increase its credentials to the Arab/Islamic region.

Turkey will continue to publicly play up its differences with the United States and Israel to help burnish its credentials as a regional leader.

Turkey will continue to push forward with its regional leadership agenda but will pay particular attention to soft power promotion in places like the Balkans and Central Asia.

Turkey will continue to entrench itself in the Mesopotamian power struggle but will be just as active this quarter in promoting its soft power in other areas of the Middle East, the Balkans and Central Asia.

Turkey will place its rapprochement effort with Armenia on the backburner in order to patch up relations with Azerbaijan. Turkey will use energy cooperation the main means to keep its relations with Russia stabile.

Turkey will backburner its attempt to form a rapprochement with Armenia, giving Ankara some room to try to mend relations with its estranged ally, Azerbaijan, while using energy cooperation as its primary tool to keep relations with Russia on an even keel

Turkey’s internal struggle between the Islamists and secularists will continue but not actively destabilise the country this quarter.

Turkey’s internal power struggle between a rising, Islamist-rooted Anatolian class and the traditional secularist elite will continue to intensify, but is unlikely to hobble Turkey’s plans abroad.

Israel

The next quarter will be a trying one for Israel. As pressure lets up enough to give Iran room to breathe regarding its nuclear program, Israel’s helplessness to change the situation and dependency on the United States will become ever more apparent.

Israel’s inability to satisfy its regional agenda and dependency on the US will become more obvious resulting in pressure on Netanyahu and the ruling coalition in Israel.

Unfulfilled Israeli demands on the Iranian nuclear issue will threaten the stability of Israeli Prime Minister Benjamin Netanyahu’s already fragile coalition.

This is already resulting in the Palestinians looking to capitalize on the situation, increasing attacks on Israel

This will inevitably cause friction in the Israeli-Palestinian theater this quarter. While competing Palestinian factions attempt to exploit the strain in U.S.-Israeli relations by launching attacks,

and this, along with increasing internal pressure on Netanyahu will lead Israel to responding with its military to strengthen its domestic political standing but will risk greater friction in relations with the US.

Netanyahu’s government will execute its own military response to the conflict to brandish its national security credentials at home.

Egypt

Should Hosni Mubarak die this quarter there is no indication that there will be a power struggle. Omar Suleiman will take over and hold the position in place for Hosni’s son Gamal.

this quarter authorities will prepare to carry out a succession plan.

we do not anticipate a major power struggle to ensue in the event of Mubarak’s death.

SOUTH ASIA

Afghanistan

Fighting in Afghanistan will pick up with the change of seasons this quarter.

Fighting season in Afghanistan will kick into high gear this quarter

The Taliban will continue its guerilla tactics of eschewing direct combat with the US as they look to continue with its COIN operations in the south.

The Taliban will continue their classic guerrilla strategy of declining direct combat and focusing instead on hit-and-run attacks and on building expertise in improvised explosive devices

The success of the US COIN strategy will not be felt in this quarter

the success of the U.S. strategy will not be measurable in the months ahead.

There will be no meaningful movement in the effort to negotiate between the two sides of the fight this quarter

The demands on both sides remain irreconcilable at this point, making any meaningful traction in these negotiations unlikely for the foreseeable future.

Pakistan/India

Strains between the US and Pakistan will be apparent in their continued détente as the US asks for increased intelligence cooperation concerning the Western border region of Afghanistan. Pakistan will respond by demanding a strengthening of the partnership through military aid, economic assistance and limiting India’s presence in Afghanistan.

STRATFOR expects this detente to continue into the next quarter but face renewed strain as the United States demands more Pakistani cooperation in providing intelligence on targets on the Afghan side of the border. Pakistan, feeling that its cooperation to date has been sufficient, will in turn demand that the United States deepen its partnership with the Pakistani state though political assurances, military aid and economic assistance and guarantees on limiting India’s presence in Afghanistan.

The US will continue to balance between India and Pakistan.

The United States, unable to satisfy the demands of either Pakistan or its rival India, will continue a difficult balancing act on the subcontinent.

EAST ASIA

Japan

Stress between Japan and US will increase

for the second quarter is an escalation in disagreements between Japan and the United States.

China

The US will intensify pressure tactics towards China to influence them to readjust the value of the Yuan and the trade imbalance.

So beneath the diplomacy the pressure will inevitably rise.

LATIN AMERICA

Venezuela

The control over the nation of the Chavez regime may come in to question toward the end of this quarter.

The survivability of Venezuelan President Hugo Chavez’s regime could come into question toward the end of this quarter.

If rains do not come enough to fill the Guri dam there is a reasonable chance that Venezuela will hit crisis point this quarter

cannot say whether Venezuela will receive the rainfall it needs to avert this crisis.

there is a reasonable chance that Venezuela could hit this crisis point in the third month of the quarter.

Considerable stress will be felt early in the quarter as the regime turns to “survival instincts”.

Venezuela will come under considerable stress in the first part of the quarter as the government, under Cuban guidance, turns to survival instincts.

Should any energy rationing take place this quarter the oil producing facilities and Caracas will be spared the brunt of cut backs whilst the interior, particularly the Guayan highlands where heavy industry is located.

The government will spare Caracas and the oil-producing facilities from the harshest effects of the crisis for as long as it can. However, the Venezuelan interior will bear the brunt of the crisis, particularly in the Guayana highlands where heavy industry is located.

Energy cut backs would result in large drops to productivity and a spike in crime would occur. This would then likely result in Chavez using his militias for security. This would likely lead to friction in the military creating a greater threat for the regime.

daily productivity would plummet and crime would skyrocket, creating a situation in which Chavez would likely have to turn to his Chavista militias for security reinforcement. Such a move likely would lead to friction within the armed forces and further threaten the stability of the regime.

Were the situation allowed to deteriorate challenegers will emerge and the govt will likely crack down on media and political/student opposition