Author: Rebekah Stovall
Bi-Weekly Geopolitical Podcast – #7 “The Bosnian Divide” (Posted 4/11/22)
Bi-Weekly Geopolitical Report – The Bosnian Divide (April 11, 2022)
by Thomas Wash | PDF
It took just two shots from Gavrilo Princip to change the world. That day in Sarajevo marked the end of the Habsburg dynasty, ignited the first of two intercontinental wars, and laid the groundwork for the present-day global order. Gavrilo, a Bosnian Serb, thought he would pave the way for a common South Slav state by killing Archduke Franz Ferdinand, the heir to the Habsburg throne. Almost 110 years later, the dream of a common South Slav state has yet to be fulfilled, although the sentiment is still shared among many Bosnian Serbs today.
On October 2, Bosnia-Herzegovina will hold its ninth general election since the signing of the Dayton Accords in 1995. The election has garnered international attention as there are growing concerns that the outcome could lead to another civil war. Bosnian Serbs are pushing for secession, while Bosnian Croats have called for their own entity. Both groups have threatened to boycott the upcoming election unless electoral reforms are made and there doesn’t seem to be an obvious solution.
Meanwhile, there are also growing fears that Bosnia could become Russia’s next target after Ukraine. Tensions between the two countries have risen since Bosnia-Herzegovina expressed interest in joining NATO. Last year, Russian foreign minister Sergei Lavrov warned that his country would react if Bosnia-Herzegovina joins the military alliance. Lavrov’s threat, although somewhat vague, has led many to speculate that Moscow could be plotting an intervention in Bosnia-Herzegovina. We suspect that Russia will use this election as an opportunity to assert itself within the region.
In this report, we will examine the history of Bosnia-Herzegovina, why Russia has a vested interest in the country, and how the election could play out. As usual, we will conclude with market ramifications.
Don’t miss the accompanying Geopolitical Podcast, available on our website and most podcast platforms: Apple | Spotify | Google
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Bi-Weekly Geopolitical Podcast – #6 “The New Era of Higher Defense Budgets” (Posted 3/28/22)
Bi-Weekly Geopolitical Report – The New Era of Higher Defense Budgets (March 28, 2022)
by Patrick Fearon-Hernandez, CFA | PDF
The Russia-Ukraine war has transformed the world in the blink of an eye. We think the war and its aftermath will reverse much of the economic globalization of recent decades and cleave the world into two or more blocs with only limited interplay. We believe sanctions on Russia will discourage many central banks from seeing the U.S. dollar as their preferred reserve currency. We see an isolated Russia being forced into an even tighter relationship with China, where it will be the junior partner.
Now that it’s easier to see the geopolitical and military threats from authoritarian leaders in China, Russia, and beyond, we believe the war has also ushered in a new era of high defense spending. We expect that countries around the world will now invest much more in national defense than they have in decades. This report examines the implications of higher defense spending within NATO and the potential ramifications for investors.