July 9, 2013
Since July 3, we have seen Egypt plunge into a new period of political instability. Michael Nayebi-Oskoui argues in his recent piece that “Egypt’s military faces a difficult long-term scenario: adapt and loosen its hold on power to survive as in Algeria and Turkey, or resist and risk being overthrown as seen in the Baathist republics of Syria and Iraq.” One thing is certain in the short to medium term — uncertainty will remain the defining feature of the country, as the Muslim Brotherhood will attempt to prolong public unrest and use its organizational capabilities to undermine the military-backed transitional government as long as its interests continue to be excluded.
Meanwhile, at Stratfor, we have focused on forecasting the main trends of the next quarter. One of the findings is — of course — that Europe’s crisis is still at a stage in which a deceptive calm will prevail in the street and in the financial markets. However, unemployment rates are steadily rising and there is a growing acknowledgment that Berlin, Brussels and the institutions and tools they are using to try to manage the crisis are quickly losing legitimacy.
For China, the next three months will bring more layoffs, bankruptcies, protests and trade frictions as the new administration attempts to rein in credit expansion and cut back structural inefficiencies. Periodic injections of liquidity to manage the turmoil will send mixed signals about China’s intentions but reflect the simple truth that while China has the funds to manage financial stress, it remains anxious over its ability to maintain political stability amid a dramatic reshaping of its economic model.
Another important issue during the next quarter will be Syria. The regime is attempting a multi-pronged offensive to consolidate control over the country’s core, reinforcing supply routes to the north and south of Damascus. It is likely that Syrian President Bashar al Assad’s forces will have the advantage this quarter, considering the stream of weapons, fighters and aid coming from Iran, Hezbollah, Iraq and Russia. While the rebels will see an increase in weapons shipments as well, it is probable that it won’t be enough to match the firepower of Assad’s forces. Stratfor doesn’t expect the United States to impose a no-fly zone, nor does it expect that Assad’s forces will be able to rout out the rebels from Aleppo in this coming quarter.
Other topics that Stratfor quarterly forecast touches on are the disruptions to Libyan and Nigerian oil production, increased strain on the Mercosur trade bloc, violent strikes in the mining sector in South Africa and financial trouble in Kazakhstan — to read the entire piece, just register your email and get it for free here (link).Antonia Colibasanu