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Correspondent

23 August 2024 at 4:29:04 pm

Chaos Diplomacy

Donald Trump has always understood one thing better than most modern politicians that markets respond to perception. In the grinding drama over Iran, the American president appears to have weaponised uncertainty itself. One day he hints at a diplomatic breakthrough with Tehran and signals the reopening of the Strait of Hormuz which causes investors to breathe a sigh of relief. However, hours later, he reverses course by declaring there is “no rush” for a deal and that restrictions will remain...

Chaos Diplomacy

Donald Trump has always understood one thing better than most modern politicians that markets respond to perception. In the grinding drama over Iran, the American president appears to have weaponised uncertainty itself. One day he hints at a diplomatic breakthrough with Tehran and signals the reopening of the Strait of Hormuz which causes investors to breathe a sigh of relief. However, hours later, he reverses course by declaring there is “no rush” for a deal and that restrictions will remain until Iran bends fully to American conditions. The markets wobble again Trump’s defenders may argue that unpredictability is a negotiating tactic. Henry Kissinger once cultivated strategic ambiguity during the Cold War. Richard Nixon perfected the so-called ‘madman theory’ to keep adversaries guessing. Yet Trump’s oscillations differ in both scale and intent. In recent weeks, analysts and ethics experts in the United States have raised uncomfortable questions about whether political messaging is increasingly shaping market volatility in ways that benefit insiders, speculators and politically connected traders. When geopolitical brinkmanship begins to resemble a financial instrument, public trust in democratic institutions erodes. Nearly a fifth of the world’s oil passes through Hormuz. A closure or blockade affects fuel prices in Mumbai as much as manufacturing costs in Shanghai or inflation in Berlin. Trump’s repeated shifts between escalation and reconciliation have had grave implications for India, which imports more than 80 percent of its crude oil requirements. Any prolonged instability in Hormuz translates directly into higher import bills, inflationary pressures and stress on the rupee while ratcheting prices of essentials. India has spent years carefully balancing its ties between Iran, the Gulf monarchies and the United States. Tehran remains important for connectivity projects such as Chabahar Port and for India’s access to Central Asia. But allies and adversaries alike are forced into a perpetual state of recalibration because American policy itself appears unstable. Trump’s Iran manoeuvring reflects a dangerous transformation in global politics, which is the merger of geopolitics with spectacle capitalism. International crises are increasingly consumed like market-moving entertainment. This may generate short-term leverage for him or even produce tactical victories at the negotiating table. Iran, under immense economic strain, reportedly agreeing in principle to surrender its highly enriched uranium stockpile is no small development. Yet diplomacy built on volatility carries long-term costs and lead to the weakening of institutions. Markets become addicted to chaos and chaos, once normalised, rarely remains controllable. The world’s largest economy cannot afford to conduct foreign policy like a reality television script, with cliffhangers designed to manipulate sentiment every news cycle. Great powers are supposed to provide stability, not amplify uncertainty for strategic theatrics. Trump may believe that time is on America’s side. But for an anxious global economy already strained by wars, inflation and fragmentation, time spent trapped in manufactured uncertainty is becoming increasingly expensive.

Discord and Doubts

Updated: Nov 25, 2024

MVA

With barely 48 hours left for the results of the fiercely contested Assembly polls, serious cracks seem to be appearing within the opposition Maharashtra Vikas Aghadi (MVA) alliance in Solapur in western Maharashtra. A bitter feud has erupted between the Congress and Uddhav Thackeray’s Shiv Sena (UBT), raising questions about the coalition’s unity throughout the election and its ability to challenge the BJP’s formidable machinery.


The Solapur South assembly seat has become a theatre of major discord within the MVA, strongly reminiscent of the bickering between the Congress and the Sena (UBT) over the Sangli Lok Sabha seat during the parliamentary election in May this year.


On polling day on November 20, Congress veteran Sushilkumar Shinde and his daughter, Solapur MP Praniti Shinde, threw their weight behind Dharmaraj Kadadi, an independent candidate, instead of supporting Amar Patil, the Sena (UBT)’s nominee who was the official MVA candidate.


Shinde justified his move citing Kadadi’s strong local connect and the Congress’ historical dominance in the constituency, while taking a swipe at Shiv Sena (UBT)’s “unfounded claim” over the seat – a replay of the Sangli fiasco during the Lok Sabha.


Predictably, this drew sharp reactions from the Shiv Sena (UBT) with the Thackeray camp accusing Praniti Shinde of ‘betrayal,’ with party deputy leader Sharad Koli leading a vitriolic attack, calling for her expulsion from the MVA alliance. Koli went as far as alleging that Shinde had received BJP backing for her decision.


The Sena (UBT) is seething with rage at the Shindes’ behaviour given that Uddhav Thackeray had vigorously campaigned for Praniti during the Lok Sabha.


The fallout is emblematic of the MVA’s coordination problems and is particularly glaring given that a section of exit polls seem to favour the ruling Mahayuti on counting day of November 23.


Be that as may, exit polls have been frequently – and spectacularly – wrong in recent times, as evinced in the recent Haryana election result.


Meanwhile, the big question in another corner of western Maharashtra - Pimpri-Chinchwad, a former NCP stronghold is whether Deputy CM Ajit Pawar - is whether the Mahayuti have succeeded in controlling schisms within their fold.


Known for its history of electing strong independents, this industrial belt in Pune district has always been a political wildcard. However, for the first time in 15 years, this election saw the Bhosari and Chinchwad Assembly constituencies lack formidable independent contenders - a development that could lead to unpredictable outcomes.


In Chinchwad, NCP (Ajit Pawar) leader Nana Kate, initially set to run as an independent, withdrew under party pressure. Similarly, in Bhosari, former corporator Ravi Landge, now with Shiv Sena (UBT), also stepped back. However, Bhausaheb Bhoir, a Mahayuti rebel, contested as an independent.


In the Chinchwad seat, the contest is between the BJP’s Shankar Jagtap (brother of deceased Chinchwad strongman Laxman Jagtap) and Rahul Kalate of the Sharad Pawar-led NCP (SP).


Jagtap was contesting the assembly election for the first time while Kalate had twice contested the election unsuccessfully. Will the independent Bhoir queer the Mahayuti’s pitch?


In Bhosari, BJP MLA Mahesh Landge faced a tough battle against his rival and relative, Ajit Gavhane of the NCP (SP), who appeared to make late gains in Landge’s stronghold.


As the votes are counted on November 23, the results in this belt will depend on how well the Mahayuti has managed the byzantine intrigue in Pimpri-Chinchwad.

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