Intelligence Guidance: Week of April 26, 2009; STRATFOR

[Shawn Swanson]

www.stratfor.com

Intelligence Guidance: Week of April 26, 2009

STRATFOR TODAY » April 24, 2009 | 2139 GMT

Editor’s Note: The following is an internal STRATFOR document produced to provide high-level guidance to our analysts. This document is not a forecast, but rather a series of guidelines for understanding and evaluating events, as well as suggestions on areas for focus.

1. Dynamics in the Caucasus: Keep the information flowing on the ongoing Caucasus negotiations among the Turks, the Russians, the Americans, the Armenians and the Azerbaijanis. U.S. President Barack Obama avoided using the term “genocide” in commenting on the 1915 killings of Armenians by Ottoman Turks, but, he did refer to the killings as “one of the great atrocities of the 20th anniversary.” This language not as tame as Turkey would have liked, but the Turks and the Americans appear to have an understanding. Let’s check our assumption and keep a close watch out for the Turkish reaction to this statement. Also, don’t forget about the Turkish General Staff. We know the military has been unhappy with the Justice and Development Party’s rise. Are they on board with Turkey’s diplomatic outreach to Armenia?

2. Social discontent in Europe: Next week should give us the first real glimpse of the so-called “Summer of Rage” in Europe. It’s time for budget discussions on both the state and EU level to go public, and plenty of Europeans are going to be unhappy when they see major cuts to things like social welfare and pensions and potential increases in tax rates. Add in the fact that protesters will already be geared up for May Day on May 1, and we’ve got ourselves an explosive mix. We said in our quarterly forecast that social unrest stemming from the economic crisis will feed into government instability; governments in Hungary, the Czech Republic and Latvia have already fallen under the pressure, but the governments in Greece, Lithuania, Estonia, the United Kingdom, Bulgaria, Romania, Spain, Croatia and Denmark could soon come under pressure as well. Who will fall next?

3. Lingering protests in Georgia and Moldova: Protests are still simmering in Georgia and Moldova. We are getting deja vu from reports on South Ossetians allegedly firing on Georgia with machine guns. Let us keep an extra close eye on Russian military movements in Georgia’s separatist regions.

4. The Timoshenko-Putin meeting: Ukrainian Prime Minister Yulia Timoshenko will be meeting with her Russian counterpart Vladimir Putin in Moscow on April 29. With elections approaching in Ukraine, this is about Moscow using Timoshenko to block Ukrainian President Viktor Yushchenko’s pro-Western faction in any last-ditch efforts to shift the country politically. Russian natural gas deliveries will also be up for discussion, carrying direct implications for Europe’s energy security.

5. Pakistani security: Follow security developments in Pakistan closely this week. We are hearing indications that the Pakistani military wants to act in the northwest against Taliban that may have overstepped their bounds in the wake of the Swat deal. Has Pakistan realized its breaking point, and is the military coherent enough to respond? Also watch Karachi — the Muttahida Qaumi Movement is getting riled up and targeting the city’s Pashtun minority. This could provide a good opportunity for jihadists to strike where the U.S.-NATO supply routes originate.

6. The Kellermann death: We need to continue our investigation of the death of David Kellermann, the acting chief financial officer of the U.S. government-backed Federal Home Loan Mortgage Corporation (also known as “Freddie Mac”). Look for details in the autopsy report for any indications that this was not suicide as has been reported, or of any foul play that could have been behind the suicide. The death of the one person who was most knowledgeable about crucial decisions made at an institution that lies at the epicenter of the global financial crisis is a coincidence that cannot be passed off easily.

7. Swine flu: There are reports of a new strain of flu out of Mexico that have claimed more than a dozen lives, and Mexico City — where the first cases occurred — closed all schools April 24 to limit exposure. Cases — although no fatalities — have also occurred north of the border. No new cases have been reported in the past few days in Mexico City, so it is probably nothing to be concerned about. But there is always a chance that it will be the next major flu strain. For clarification, we are talking about the seasonal flu; at present there is no reason to suspect that this will be a doomsday pandemic virus. The World Health Organization and Centers for Disease Control both have samples and are examining the gene sequence, so we should know more over the weekend. Time to brush up on our virology and reconnect with friends and sources in the medical community.

EURASIA

April 26-May 2: Latvian Prime Minister Valdis Dombrovskis will visit Germany on an unspecified date the week of April 26 for talks with German Chancellor Angela Merkel.

Latvia is facing a severe economic crisis, and the visit will give an indication of Germany’s level (or lack) of support for the struggling economies of emerging Europe.

April 27: Bulgarian Prime Minister Sergei Stanishev will visit Moscow to meet with his Russian counterpart Vladimir Putin. The two will discuss terms of a new Bulgargaz-Gazprom contract, with Sofia pushing for more favorable terms. The two prime ministers are also expected to sign a deal on the South Stream gas pipeline.

April 27-30: U.S. Attorney General Eric Holder will travel to London, Prague and Berlin to meet with his counterparts in Europe. He will discuss cooperation on counterterrorism and fighting transnational organized crime.

April 28: Ukrainian President Viktor Yushchenko will visit Hungary. The trip was originally planned for January but canceled due to the Ukraine-Russia gas dispute.

April 29: Ukrainian Prime Minister Yulia Timoshenko will meet with her Russian counterpart Vladimir Putin and discuss Russian natural gas deliveries.

April 29: The European Commission will present its 2010 preliminary draft budget.

May 1: Protests are planned across Europe for May Day. Such actions are expected to be particularly strong in Berlin. In Croatia, protests are planned to oppose the value-added tax for food products and to call for higher pensions and voting reform.

MIDDLE EAST/SOUTH ASIA

Apr 21-25: Bangladeshi Prime Minister Sheikh Hasina will visit Riyadh to meet with Saudi King Abdullah.

Apr 27-28: Syrian President Bashar al Assad will visit Austria and then Slovakia for talks with his counterparts on bilateral relations and other areas of mutual interest.

Apr 29: Turkish Army chief Gen. Ilker Basbug will meet with reporters.

Apr 30: India enters the third phase of national elections for the lower house of parliament.

EAST ASIA

April 26-May 2: South Korea will send a proposition to North Korea for a second meeting sometime the week of April 26 to negotiate the renewal of contracts for the joint Kaesong Industrial Complex.

April 25: Indonesian President Susilo Bambang Yudhoyono’s Democrat Party will meet to nominate presidential and vice presidential candidates, as will the Islamic Prosperous Justice Party, which is a possible coalition partner for the president. Key legislation, including a corruption bill, is being held up by the political machinations that will likely continue until after the July presidential poll.

April 25-29: Taiwan and China will hold their fourth dialogue on expanding ties. They will sign agreements allowing their banks and other financial institutions to invest in each other. The two sides will also expand on direct daily flights that began in December, allowing charters to become regularly scheduled flights while adding cross-Strait routes and destinations.

April 26: Energy ministers from Asian oil consumers and Middle Eastern oil producers will hold their biennial meeting. The ministers could agree that letting oil prices rise eventually in order to stimulate investment is just as vital as keeping crude at $50 for now to aid the ailing world economy.

April 27: The Japanese government will submit its $150 billion economic stimulus plan to parliament; a full-scale debate is likely after a holiday period that ends May 7.

April 27-May 2: Peruvian First Vice President Luis Giampietri Rojas will visit China. The two countries will sign a free trade agreement during his visit.

April 29-30: Japanese Prime Minister Taro Aso will make an official visit to even though China recently criticized Aso for sending a gift to the Yasukuni shrine. Aso will discuss the global financial crisis and North Korea during his visit.

April 30-May 1: Mohamed ElBaradei, the director-general of the International Atomic Energy Agency, will visit Mongolia. He is expected to meet with President Nambaryn Enkhbayar, Prime Minister Sanj Bayar and other leaders.

LATIN AMERICA

April 26: Ecuador will hold legislative and presidential elections in which current President Rafael Correa is strongly favored to win a second term.

April 29: Brazilian President Luiz Inacio Lula da Silva will meet with Paraguayan President Fernando Lugo to discuss the jointly-owned Itaipu dam. Paraguay is demanding that Brazil increase the amount paid to Paraguay for electricity from the dam. Brazil is expected to offer a financing package worth $1 billion for industrial projects in Paraguay in response.

April 30: Colombian President Alvaro Uribe Velez will have a private audience with Pope Benedict XVI in Vatican City.