Proxy war turns hot

Balance of Power
Bloomberg

A forgotten frozen conflict has exploded into renewed fighting, triggering a diplomatic scramble by major powers. Russia and Turkey, in particular, are jostling for position.

The roots of periodic clashes between Azerbaijan and Armenia over the disputed Nagorno-Karabakh region go back decades. Russia first brokered a cease-fire in 1994 and has sought without success together with the U.S. and France to mediate a peace accord.

Formally neutral, Russian President Vladimir Putin has much at stake. Armenia hosts Russia's only military base in the Caucasus and they have a defense pact. The Kremlin sells weapons to both sides and uses the unresolved conflict to maintain influence in its former Soviet backyard.

Turkish President Recep Tayyip Erdogan says his country backs Azerbaijan "with all its means," after the two allies held joint military exercises last month. Erdogan has talked a good game before, however, without Turkey entering the fray.

Is it different this time? The war adds to tensions between Moscow and Ankara over proxy conflicts in Syria and Libya, while the U.S. is distracted by November's presidential election. Putin and Erdogan have shown they're willing to assert their interests militarily if necessary.

Azeri President Ilham Aliyev has gambled before on reclaiming territory from the Armenians, with little change on the ground, and can ill-afford to come up empty-handed again. Defeat carries major risks, too, for Armenian Prime Minister Nikol Pashinyan, who led its 2018 revolution.

The likelihood is still that Russia will ratchet up pressure to restore a cease-fire after a few days of fighting. But the longer the violence goes on, the greater the risks that Azerbaijan and Armenia turn to larger allies for help.

—  Anthony Halpin

Tell us how we're doing or what we're missing at balancepower@bloomberg.net.

Global Headlines

Trump's taxes | President Donald Trump faces renewed scrutiny of his personal finances just weeks ahead of Election Day, after a New York Times report raised fresh questions about his business savvy and the integrity of his accounting. Citing tax documents, the paper said Trump, a billionaire, paid no income taxes in 10 of the past 15 years and only $750 in 2016 and 2017. Trump called the report "totally fake news."

  • Trump repeatedly discussed with advisers the idea of naming his daughter Ivanka as his running mate in 2016, Jennifer Jacobs reports, based on a forthcoming book from Trump's former deputy campaign chairman.

Campaign 2020

There are 36 days until the election. Here's the latest on the race for control of the White House and Congress.

Trump and Democratic challenger Joe Biden square off for 90 minutes in their first debate tomorrow, and political pros on both sides are fretting the most about a viral moment that can turn a good performance into a disaster that's remembered for generations.

Other developments

Sign up to receive daily election updates as a direct mobile notification on Twitter. Simply click on this link and like the tweet.

Lost trust | British and European Union negotiators meet in Brussels this week for a final round of talks on future U.K.-EU relations. While both sides are showing cautious optimism that an agreement can be reached, the EU is hardening its demands over enforcing any accord after Boris Johnson's attempt to rewrite last year's divorce pact. As Ian Wishart reports, the trust deficit risks complicating the prime minister's goal of reaching a deal by Oct. 15.

TikTok ban halted | A U.S. federal judge temporarily blocked Trump's ban on TikTok, dealing a blow to the administration's showdown with the popular Chinese-owned app that it says threatens national security. It's the second legal ruling against U.S. efforts to crack down on popular Chinese apps after WeChat users won a court injunction against a ban last week.

  • The Trump administration is maintaining pressure on Chancellor Angela Merkel to exclude Huawei from Germany's fifth-generation wireless network.
  • China's largest chipmaker, Semiconductor Manufacturing International, retreated to a four-month low in Hong Kong after the U.S. imposed export restrictions.

Unwelcome record | South Africa's statistics agency is expected this week to report unemployment rose to a record 34.8% in the second quarter, the highest of 83 countries Bloomberg tracks. As Prinesha Naidoo reports, measures to contain the pandemic shut all but essential services and helped cause the loss of 3 million jobs, including skilled ones, in Africa's most industrialized nation. A lack of urgency in implementing policies to boost growth and convince businesses to invest isn't helping.

Ayanda Mbatha, a 26-year old mechanical-engineering graduate, hands out his resume to passing motorists in the affluent Hyde Park district of Johannesburg.

Source: Ayanda Mbatha

Frayed ties | Malaysia's state of Sabah — which went to the polls last weekend — continues to be a thorn in the side of Prime Minister Muhyiddin Yassin, who controls a razor-thin majority in parliament. After a close victory, his party named its own candidate for chief minister in the key state, placing him on a collision course with a prominent coalition ally at a time when rival Anwar Ibrahim says he has the numbers to form a new government. An announcement is expected from the palace later today.

What to Watch This Week

  • The Group of 20 Leaders' Summit, which had been planned for Saudi Arabia's capital Riyadh, will now be held "virtually" Nov. 21-22.

  • A growing band of Tory rebels wants to check Johnson's emergency coronavirus powers, as the House of Commons plans a vote Wednesday on renewing legislation that allows ministers to impose new rules to combat the pandemic without parliamentary approval.

  • European Council President Charles Michel gives his third keynote speech on "strategic autonomy" in as many weeks today, a concept that will be identified as a "key objective" of the EU when its leaders meet Thursday.

  • U.S. Secretary of State Michael Pompeo told Iraq's prime minister Saturday that Washington may close its embassy in Baghdad unless the Iraqi government can protect its diplomats and staff. Pompeo is visiting Greece, Italy, and Croatia this week.

  • French President Emmanuel Macron charged Lebanese politicians had committed a "collective betrayal" of their commitments to France and the international community for failing to form a new government to carry out reforms.

Thanks to all who responded to our pop quiz Friday and congratulations to Zeke Rosenberg who was the first to name Ethiopia and its president, Abiy Ahmed, as the leader who is battling an eruption of ethnic tensions less than a year after winning the Nobel Peace Prize.

And finally ... As Germany cleared away spent fireworks and slept off its hangovers on New Year's Day, Christian Drosten got a sobering wake-up call: A member of his virology team at Berlin's Charité hospital reported that a strange pneumonia was spreading in the Chinese city of Wuhan. Drosten, whose subsequent role advising Merkel's pandemic response has sparked comparisons to Anthony Fauci in the U.S., sprang into action. Now he's worried about the second wave.

Drosten is even more famous in Germany than Fauci is in America, thanks to a wildly successful podcast he introduced in February.

Photographer: : Christian Charisius/dpa/Getty Images

 

 

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