Azerbaijani journalist Nargiz Absalamova detained for 3 months amid crackdown on Abzas Media Committee to Protect Journalists
Day: December 2, 2023
Prime Minister Irakli Garibashvili participated in the world leaders’ summit at the 28th UN Climate Change Conference in Dubai, voicing Georgia’s vision on combating the increasingly severe impacts of climate change worldwide. While in Dubai, PM Garibashvili also met with the President of the European Council, Charles Michel, and discussed the reform process in the context of EU integration. According to the official press releases, President Michel welcomed Georgia’s continued commitment to the reform agenda, while PM Garibashvili expressed optimistic expectations on the country’s EU candidacy.
The National Bank reported that its Board has appointed two new Vice Presidents, Ekaterine Mikabadze and Ekaterine Galdava. According to the NBG announcement, the newly appointed Vice Presidents have already been and will continue to be members of the Board, the supreme body of the financial regulator. The candidacies of Mikaberidze and Galdava for the position of members of the Board were supported by the Parliament of Georgia in 2021 for seven years, i.e., from 2021 to 2028. Acting President Natia Turnava’s controversial decision to shield US-sanctioned former Prosecutor General Otar Partskhaladze led to the prompt resignation of NBG’s three Vice Presidents in September.
In the run-up to the European Council’s decision on Georgia’s EU candidacy, dozens of local civil society organizations stepped up their efforts, launching an active pro-EU campaign and holding meetings with the diplomatic missions of EU member states. During these meetings, representatives of local CSOs hand over their joint letters to the ambassadors, addressing respective governments to support Georgia’s EU candidacy status. On December 14-15, the European Council will decide whether to grant Georgia EU candidate status, following the European Commission’s positive recommendation on November 8.
Some Chiatura miners went on strike over unfulfilled promises by their employer, Georgian Manganese. They demand that Georgian Manganese switch to a 12-hour working day and reduce the number of days they work, claiming that their current working day is 8 hours, but they must produce a 12-hour standard. A miner at the Chiatura claimed that the employer had promised to move them to a new shift schedule five months ago but that the commitment still needed to be fulfilled.
Parliament hastily approved controversial additional amendments to the Defense Code in the third hearing, with 81 votes in favor. The legislative process unfolded quickly, as the bill was passed in the first hearing on November 29, just one day before its final adoption. Amendments envisage a provision allowing individuals to appeal to the court against their inclusion in the military register. However, such appeals won’t suspend the immediate enforcement of the conscript’s duty to begin service. Under the old version of the law, the appeal temporarily suspended the conscription order.
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The Daily Beat: 1 December
Prime Minister Irakli Garibashvili participated in the world leaders’ summit at the 28th UN Climate Change Conference in Dubai, voicing Georgia’s vision on combating the increasingly severe impacts of climate change worldwide. While in Dubai, PM Garibashvili also met with the President of the European Council, Charles Michel, and discussed the reform process in the context of EU integration. According to the official press releases, President Michel welcomed Georgia’s continued commitment to the reform agenda, while PM Garibashvili expressed optimistic expectations on the country’s EU candidacy.
The National Bank reported that its Board has appointed two new Vice Presidents, Ekaterine Mikabadze and Ekaterine Galdava. According to the NBG announcement, the newly appointed Vice Presidents have already been and will continue to be members of the Board, the supreme body of the financial regulator. The candidacies of Mikaberidze and Galdava for the position of members of the Board were supported by the Parliament of Georgia in 2021 for seven years, i.e., from 2021 to 2028. Acting President Natia Turnava’s controversial decision to shield US-sanctioned former Prosecutor General Otar Partskhaladze led to the prompt resignation of NBG’s three Vice Presidents in September.
In the run-up to the European Council’s decision on Georgia’s EU candidacy, dozens of local civil society organizations stepped up their efforts, launching an active pro-EU campaign and holding meetings with the diplomatic missions of EU member states. During these meetings, representatives of local CSOs hand over their joint letters to the ambassadors, addressing respective governments to support Georgia’s EU candidacy status. On December 14-15, the European Council will decide whether to grant Georgia EU candidate status, following the European Commission’s positive recommendation on November 8.
Some Chiatura miners went on strike over unfulfilled promises by their employer, Georgian Manganese. They demand that Georgian Manganese switch to a 12-hour working day and reduce the number of days they work, claiming that their current working day is 8 hours, but they must produce a 12-hour standard. A miner at the Chiatura claimed that the employer had promised to move them to a new shift schedule five months ago but that the commitment still needed to be fulfilled.
Parliament hastily approved controversial additional amendments to the Defense Code in the third hearing, with 81 votes in favor. The legislative process unfolded quickly, as the bill was passed in the first hearing on November 29, just one day before its final adoption. Amendments envisage a provision allowing individuals to appeal to the court against their inclusion in the military register. However, such appeals won’t suspend the immediate enforcement of the conscript’s duty to begin service. Under the old version of the law, the appeal temporarily suspended the conscription order.
By Wilder Alejandro Sanchez
Panama’s Supreme Court issued a historical ruling on 28 November. After deliberating for less than a week, the judiciary of the Central American country determined that a controversial and very unpopular contract between Canada’s First Quantum Minerals and the government of Panama is “unconstitutional.” While the dust still needs to settle, and repercussions are expected, including potential legal actions by First Quantum, the decision is a significant victory for the Panamanian environment and the people’s voice.
How Did We Get Here?
The situation commenced on 20 October, when the Panamanian Parliament passed a bill approving a contract between the state and First Quantum. The same day, President Laurentino Cortizo signed Law 406 (Ley 406), which approved the contract. In a 20 November press release, First Quantum highlighted its mining operations’ contributions to the Central American country. The “overall economic contribution of the mine to the State of Panama is estimated at more than $50 million per week, equivalent to around 5% of annual GDP.” As Geopolitical Monitor has previously discussed, the agreement awarded First Quantum’s Minera Panama (the subsidiary company) control of the Cobre Panama copper mine for 20 years.
The contract was not well received by the public due to environmental considerations and because local communities were not consulted. Massive protests ensued. President Cortizo announced that all new mining negotiations and permits would be suspended to calm the population. When that strategy did not work, he announced a referendum, scheduled for 17 December, where people would decide the future of Cobre Panama and the contract with First Quantum. That did not work either as the protests continued.
Several protests occurred in the capital, Panama City, where government buildings were ransacked. Moreover, major highways have been blocked, including the vital Inter-American highway. According to the Panamanian media, the Bocas del Toro and Chiriqui provinces were isolated from the rest of the country, so trucks with gas and other necessities could not arrive. Tourism has also been severely affected. Meanwhile, blocking the roads meant trucks with agricultural products could not reach major cities, including the capital; food prices skyrocketed.
One critical development is that Punta Rincón port, Eastern Panama, built and operated by Minera Panama to transport the copper, has been the target of protests (including by sea). On 20 November, the company announced that Minera Panama “has further ramped down operations at Cobre Panama to one remaining ore processing train. Without shipments arriving at the mine’s Punta Rincón port, it expects to run out of supplies for the on-site power plant during the week commencing 20 November 2023.” The company accused “the ongoing presence of an illegal blockade of small boats at the Punta Rincón port” which “continues to prevent the delivery of supplies that are necessary to operate the power plant.” The ramping down of the operations is also a prudent move to minimize potential violence. Protesters reportedly attacked buses carrying Minera Panama workers in late November.
Panamanian civil society also turned to the law, not just protests, to stop the controversial contract. Lawsuits were submitted to the Supreme Court of Panama alleging that Law 406 was unconstitutional. The Court commenced its deliberations on 24 November, and by 28 November, it ruled on their behalf.
The Fallout: Domestic Implications
Let us first discuss the fallout of this historical ruling from a domestic perspective. After the verdict was made public, President Cortizo gave a speech to the country, explaining that “as soon as we receive a formal communication of the ruling… we will publish it intermediately in the Gazeta Oficial [the state’s newspaper] and we will commence a transition for an ordered and secure closing of the mine.” The decision also forced a shake-up of the government as Commerce and Industry Minister Alfaro Boyd announced his resignation on 30 November, two days after the ruling; he was replaced the same day by Jorge Rivera Staff.
As for the situation on the ground, the government is eager for the protests to end and for people to return to work. Education Minister Maruja Gorday de Villalobos called for teachers to return to class to finish the school year. The request was also a warning, as the Education Ministry was looking to apply “administrative actions” against teachers who do not return to work, including not paying them for the second half of November. After the ruling was issued, the same Ministry announced that the measure will be suspended, and discussions with 24 teachers’ unions will begin to get teachers back in their classrooms by 4 December.
Moreover, Panama does not have armed forces; hence, internal security and border patrol operations are carried out by the police and specialized agencies like the Air-Navy National Service (Servicio Nacional Aeronaval: SENAN) and the National Border Service (Servicio Nacional de Fronteras: SENAFRONT). SENAN has deployed cargo vessels to the country’s islands in Chiriqui province to transport over 125,000 liters of milk meant for the capital. SENAN aircraft have been used to evacuate and transport medicine to that province.
As of 25 November, 1,274 individuals (1,119 adults and 155 minors) have been arrested for their role in the protests. For a country with an estimated population of 4.3 million, the number of detained people gives an idea of the size of the protests and the level of discontent. Ministry of Public Security Juan Manuel Pino argued that “extremist and violent groups” took advantage of popular discontent against Law 406 “to foment chaos and commit crimes like vandalism, attacking people, theft… and damage to private and public property.” The statements were likely a strategic move by the government to justify the security forces’ operations. The government had previously stated that it respected the right to peaceful assembly and protest. By arguing that “extremist and violent groups” carried out violent acts, authorities can imply that crackdowns by security forces were aimed at “violent” individuals, not the population in general.
First Quantum’s Response
In a carefully worded statement issued after the Supreme Court’s ruling, the Canadian company explained on 28 November,“the Company is reviewing the ruling and continues to reserve all its local and international legal rights in regards to developments in Panama.” In a previous statement, the company had mentioned its intention, along with Franco-Nevada Corporation, to begin arbitration proceedings at the International Centre for Settlement of Investment Disputes (ICSID). We can expect a lengthy and expensive legal case, or cases, about the Cobre Panama copper mine soon.
Interestingly, in the company’s recent statement, First Quantum once again mentioned the protesters “continued illegal blockades” at Punta Rincón port and on the roads to the site. As a result, “the Cobre Panama mine has suspended commercial production.” As previously mentioned, protesters have, in fact, blocked the Punta Rincón port. It is plausible to assume that protests around the mine, the port, and against mine employees will be used as evidence in the upcoming legal battle to justify any financial demands the Canadian company may have.
Finally, the 28 November statement explains, “the security and safety of the workforce at Cobre Panama remain a priority for the Company.” This is a curious statement as Minera Panama, First Quantum’s subsidiary, has issued an internal memo announcing that the contracts of approximately seven thousand mine workers will be temporarily suspended. While the company argues that it cares about the security and safety of its workers, their financial well-being is apparently not a major concern or priority. The mine workers are protesting because they are concerned about losing their jobs.
Looking Ahead
It is worth remembering that, as a way to calm the population, in late October, President Cortizo announced a referendum, to be held on 17 December, about the controversial contract with First Quantum. Given the Supreme Court’s ruling, it is unclear if the referendum will still occur. It would be logical for the referendum to happen since we can expect the majority of the population to vote against the contract. Hence, the Panamanian government can have more evidence to support its decision to shut down the mine in the upcoming legal battle with First Quantum.
The protests in Panama are the largest social upheaval since a military junta governed the country from 1968 to 1989, which ended with the downfall of General Manuel Antonio Noriega. In other words, the scale of the protests across the strategically located Central American country has not occurred in over a generation. Similarly, the decision by the Panamanian Supreme Court is a significant victory for the country’s population and environmental movement. Unfortunately, there are losers too, particularly the seven thousand employees of the mine, as First Quantum has “temporarily” suspended their contracts. Looking to the future, we can expect a very lengthy legal battle to commence soon between First Quantum Minerals and Panama’s government over the Court’s resolution.
The people’s will has been heard in Panama, and the environment around the Cobre Panama copper mine will be protected. Courts do not often side with the population against major corporations, particularly in the very profitable mining industry. Hence, this victory should be enjoyed, at least until Round Two begins.
- About the author: Wilder Alejandro Sánchez is President of Second Floor Strategies, a consulting firm in Washington, D.C. He is an analyst who monitors defense & security, geopolitical, and trade issues across the Western Hemisphere, Eastern Europe, and Central Asia.
- Source: The views expressed in this article belong to the authors alone and do not necessarily reflect those of Geopoliticalmonitor.com.
The conflict in Gaza and Israel is causing immense human suffering. In addition to the direct impact, the conflict will also have consequences for the broader Middle East and North Africa region, with impacts on both people and economies. This comes at a time when economic activity in the region was already expected to slow, falling from 5.6 percent in 2022 to 2 percent in 2023.
The extent of the impact on the region remains highly uncertain and will depend on the conflict’s duration, intensity, and spread. A large-scale conflict would constitute a major economic challenge for the region. Its containment hinges on the success of international efforts to prevent further escalation to the broader region. What is certain is that forecasts for the most directly exposed economies will be downgraded and that policies to buffer economies against shocks and preserve stability will be critical.
No doubt, Israel and the West Bank and Gaza are hardest hit. But the economic impact extends far beyond the area of fighting. The neighboring countries of Egypt, Jordan, and Lebanon are already enduring economic reverberations. Amid concerns about the threat of escalation, visitors have been canceling travel to the region, hitting hard at the very lifeline of these economies. Tourism, which accounted for 35 percent to almost 50 percent of goods and services exports in these economies in 2019, is a critical source of foreign exchange and employment. Tourism-dependent economies like Lebanon, where hotel occupancy rates fell by 45 percentage points in October compared to a year ago, will see knock-on effects for growth.
The impact on energy and financial markets has been limited and temporary. After an initial surge, oil prices retreated and are now below pre-conflict levels, reflecting changes in global demand conditions (as there was no disruption to oil production). Natural gas prices have also come down after a large spike but are still about 25 percent above pre-conflict levels.
Government bond yields have climbed for some economies, but the broader impact has so far been minimal. Net portfolio flows to the region—a sign of investment sentiment—were on a downward trend that accelerated with the crisis but have since reverted to pre-conflict levels.
Despite these factors, elevated uncertainty about the trajectory of the conflict is eroding consumer and firm confidence, which could drive a drop in spending and investment. Absent a lasting ceasefire, and even if the conflict remains contained, uncertainty could impact the broader Middle East and North Africa region. Thus, where the impact has been limited so far, growth could deteriorate if hesitancy begins weighing on investment decisions.
And crises can also expose underlying vulnerabilities, exacerbating downside risks to the outlook. Rising risk premia could push up borrowing costs, which could quickly impact highly indebted economies. Moreover, fragile and conflict-affected states in the region, such as Somalia, Sudan, and Yemen, could experience a decline in critical aid flows if the focus of donors shifts away and the envelope of international aid does not expand to meet rising global needs.
Risk of escalation persists
Against this background, an escalation of the conflict could be a tipping point for the region. The ramifications would be far-reaching, quickly spreading beyond immediate neighbors to economies such as Iraq, Iran, Syria, and Yemen. The more prolonged the conflict, the more impacted the tourism, trade, investment, and other financial channels would become. Refugee flows could increase significantly, adding to social and fiscal pressures in the countries that receive them and potentially causing more protracted weakness.
In a region that produces 35 percent of the world’s oil exports and 14 percent of gas exports, the impact of a potential production disruption looms large. However, unlike in past episodes, even if prices were to spike in response to events, oil producers, particularly those in the region, can tap into ample spare capacity to quickly boost production, helping to mitigate the impact.
Prepare now
Undoubtedly, this crisis will reshape the region’s future. Where the economic impact is acute, or risks are elevated, prudent crisis management and precautionary policies will be critical in the near term. This crisis could inaugurate an era of high uncertainty for many countries if not properly addressed.
For others bracing themselves for the potential shock waves to come, it is key to not lose sight of the important reform and resilience agenda, especially considering existing structural challenges and a more shock-prone global environment. Countries must prepare by fortifying policy buffers where needed and ensuring fiscal and external sustainability. As highlighted in our latest Regional Economic Outlook, appropriately designed and sequenced structural reforms can help support both near-term growth and longer-term growth prospects. Stronger and more resilient economies are also more likely to withstand sudden shocks.
The IMF is closely engaged with the region to help countries mitigate the impact of adverse spillovers. Countries with IMF-supported program engagements (Egypt, Jordan, Mauritania, Morocco) can use these programs to anchor good policies. In Egypt, staff is engaged with the authorities to move forward with the program reviews. The recent staff-level agreement on a Fund-supported program for Jordan—in train since mid-2023—sets the path for continued shelter against the storm. Morocco’s Flexible Credit Line arrangement, which reflects its very strong fundamentals and policy settings, also serves as a buffer against adverse shocks.
More broadly, addressing these challenges provides an opportunity to reset. The IMF is revising the economic outlook for the Middle East and North Africa in close collaboration with its members and stands ready to step up needed support through policy advice, technical assistance, and financing to countries in the region.
—This article reflects contributions by Bronwen Brown and other staff across the Middle East and Central Asia Department.
About the authors:
- John Bluedorn is a Deputy Division Chief in the Regional Analytics and Strategy Division of the Middle East and Central Asia Department. Previously, he has been a deputy chief on the World Economic Outlook (WEO) and a senior economist in the Structural Reforms Unit in the Research Department, a member of the IMF’s euro area team in the European Department, and worked on the WEO as an economist, contributing to a number of chapters.
- Taline Koranchelian is the Deputy Director in the Middle East and Central Asia Department of the International Monetary Fund (IMF), where she oversees the regional work of the department as well as the IMF’s work in Algeria, Djibouti, Iraq, Mauritania, Morocco, Tunisia, and Yemen.
Source: This article was published by IMF Blog