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Weekly Geopolitical Summary: Iran Lashes Out, Washington Eyes Billions

68 Dead in Karachi, Pakistan Political Killing Spree
Russia, Venezuela Sign Nuclear Power Station Deal
Washington Eyes Billions in India Deals
Netherlands Antilles Ceases to Exist
Iran Lashes Out at BP for Refusing to Refuel Commercial Jets
Tajikistan Attempts to Buy Russian Help over Uzbek Water Dispute

68 Dead in Karachi, Pakistan Political Killing Spree

Violence began over the weekend in Karachi, Pakistan, by Tuesday the death toll had risen to 68, according to Pakistani media reports. On Tuesday, at least 10 people were killed and more than a dozen others injured by gunmen on motorbikes who stormed the Shershah Market, shooting into the crowds indiscriminately. Also on Tuesday, armed men threw three dead bodies near the Sattar Mosque, not far from the local police precinct, while more gunmen on motorbikes opened fire at a tea stall. Businesses are closed and public transport halted amid the ongoing violence.

Analytical Note: The killing spree appears to be political and sectarian in nature. The killings follow provincial assembly by-elections to replace Raza Haider of the Muttahida Qaumi Movement (MQM), who was murdered in August. The MQM managed to retain the seat in the by-elections. The violence is likely connected to the elections. When Haider was murdered, violence broke out immediately, leaving at least 100 people dead. Karachi has a long history of ethnic tension and sectarian violence. Karachi's Urdu-speaking community traditionally supports the MQM, which is part of the governing coalition in the Sindh province. The rivals are the Awami National Party (ANP) and the Pakistan People's Party (PPP), which traditionally enjoy the support of the Balochi and Pashtun peoples. The by-election was boycotted by the ANP over the army's refusal to provide supervision. Importantly, the political tide appears to be changing in Karachi, which has never (even at the best of times) been a stranger to political violence. While the MQM has traditionally held on to this seat (and has managed to do so once again), the ANP is gaining ground, having won two Sindh Assembly seats from Karachi in 2008, according to Pakistan's DAWN magazine. Indeed, it may have successfully challenged the MQM if it had not boycotted the by-election. Some local observers believe that this week's violence was intended as a demonstration of the MQM's power, or the power of its supporters, in the face of ANP gains. Only local law-enforcement are on hand to contain the violence, as the government and military have stood back quietly, discussing how to deal with the crisis.

Russia, Venezuela Sing Nuclear Power Station Deal

Late last week Russia and Venezuela signed an agreement to construct two 1,200 megawatt nuclear reactors in Venezuela, following on a deal reached in April. The $1.6 billion agreement was signed during Venezuelan President Hugo Chavez's visit last week to Moscow. In addition, Russia's state-owned oil giant Rosneft is poised to purchase a 50% stake in German Ruhr Oel refinery company from Venezuela's state-owned PDVSA. US President Barack Obama responded to news of the nuclear reactor deal by saying that Venezuela had the right to develop a peaceful nuclear energy program, but must "act responsibly".

Analytical Note: Russia and Venezuela have taken steps in recent years to strengthen bilateral ties. Chavez has supported Russia by offering recognition for the independence of South Ossetia and Abkhazia, two breakaways regions of Georgia, over which Russia and Georgia fought a short war last year. Venezuela has invested over $4 billion in Russian weapons since 2005, and the two countries have signed a number of agreements, including an "action plan" dealing with cooperation in terms of finance, weapons sales, agriculture, telecommunications, transportation, culture, atomic energy, and hydrocarbons. Although Venezuela is rich in oil and gas, it also suffers severe water and energy shortages. Chavez faces elections next year, and security water and electricity supplies is vital to his re-election, as the public appears to view the shortages as a matter of government inefficiency. The deal with Russia should first and foremost be viewed from this platform.

Washington Eyes Billions in India Deals

US President Barack Obama's visit to India in early November is expected to net up to $5.8 billion in deals to sell New Delhi military-transport aircraft and other equipment. The visit is aimed at relaxing increasingly tense commercial relations between the two countries. Washington is planning to sell New Delhi 10 Boeing C-17 transport aircraft and seal the deal for India to buy jet engines from General Electric, freight locomotives, and reconnaissance aircraft, the Associated Press reported, citing sources in Washington. It is projected that upcoming deals in India could garner US companies up to $12 billion in the end.

Analytical Note: Washington is eyeing India and the Gulf for defense and aerospace industry exports in an attempt to stave off expected reductions in exports in the coming years from traditional markets. The deals could help to make up for the drawdowns in Iraq and Afghanistan. Western companies are increasingly placing their bets on India for energy, technology, retail, health, and banking deals. That said, India still has some work to do to convince foreign investors that the business climate is as attractive as it appears on the surface, or as attractive as New Delhi makes it out to be.

Netherlands Antilles Ceases to Exist

On 10 October, the Netherland Antilles ceased to exist after Curaçao and St. Maarten became separate countries with special status within the Kingdom of the Netherlands, as Aruba once the sixth island of the defunct territory, The Netherland Antilles, did in 1986.

Analytical Note: Both islands' defense and foreign policy would remain under The Netherlands' jurisdiction. However, both islands would have greater self-government. St. Maarten and Curaçao would now have the ability to collect their own taxes and would share a central bank and supreme court. The smaller islands which had also made up the Netherland Antilles - Saba, St. Eustatius, and Bonaire - all became municipalities of Metropolitan Netherlands. (Analysis/copyright, all rights reserved, from GIS/Defense & Foreign Affairs).

Iran Lashes Out at BP for Refusing to Refuel Commercial Jets

Since a new round of UN-backed sanctions against Iran were put in place in June this year, BP has cut off ties with Iran Air, meaning that Iran Air commercial jets are still allowed to land at London's Heathrow Airport, but they are refused refueling there, making it necessary for them to stop over in Germany or Austria for fuel supplies upon their return to Iran. There are also unconfirmed rumors that Germany and Austria could soon halt refueling of Iran Air jets. Iran has responded harshly, with a Foreign Ministry statement saying: "The continuation of this approach by these companies will jeopardize their interests. We will not tolerate it, and confronting them is on the agenda."

Analytical Note: The US-led sanctions do not require BP to refuse to refuel Iran Air commercial jets. However, observers note that BP (among others) is going beyond the call of duty in regard to sanctions in an effort to appease Washington, particularly because of their involvement in the oil leak in the Gulf of Mexico. In terms of Iran, Tehran's harsh response indicates that the sanctions are having an effect, however minimal, but critics point out that refusing to refuel Iran Air commercial jets hits more at Iranian civilians than the government, which was not the stated intention of the sanctions.

Tajikistan Attempts to Buy Russian Help over Uzbek Water Dispute

Officials in Tajikistan may be seeking to cut a deal with Russia to give Moscow access to its Ayni air base in return for Russia's strong arm in a Tajik-Uzbek water dispute, EurasiaNet.org reports. The Ayni air base was opened in September thanks to $70 million in renovations sponsored by India. Its opening has sparked speculation about who will now have access to the base, with Russia, India, the US, and France all eyeing its use. Despite the fact that India made the opening of the base possible, Russia, for clear geopolitical purposes, appears to be the favorite. In fact, Tajik officials have said that talks over the use of the base are only being held with Russia at this time.

Analytical Note: The water dispute with neighboring Uzbekistan centers on Tajikistan's plans to build a hydroelectric power plant, which Uzbekistan says will reduce its agricultural waters supplies. Tajikistan is clearly hoping that Russia use its influence to force Uzbekistan to back down over the power plant in return for access to the Ayni air base. EurasiaNet quoted Russian analysts as saying that the Kremlin was not likely to involve itself in the dispute, which could promote instability in the region. The Ayni air base is certainly useful to Russia, but not useful enough to step into the fray of the water dispute.

By. Jen Alic of the Global Intelligence Report


The global Intelligence Report is a Private news & Intelligence service for sophisticated news consumers, investors and energy market participants. To find out more please visit: http://www.globalintelligencereport.com/categories/Professional-Level-1


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