India: Article of faith
Also: Israel, Iran, Ukraine, Russia, Germany, and lithium.
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INDIA. Articles of faith
Modi launches his re-election at a controversial temple.
Narendra Modi joined celebrities and business figures on Monday to inaugurate a temple in the city of Ayodhya, built on the site of a 16th-century mosque. Critics described the move as a political launch event disguised as religious ritual.
INTELLIGENCE. The temple’s site was handed to Hindus in 2019 by the Supreme Court, citing evidence the old Babri Masjid mosque had been built upon an earlier temple, which Hindus claim marked the birthplace of the god Ram. The Babri Masjid was destroyed by Hindu mobs in 1992, propelling the Bharatiya Janata Party to prominence. Modi gained national notoriety in 2002, when a pilgrimage returning from Ayodhya led to riots in his state of Gujarat.
FOR BUSINESS.Ayodhya is a potent symbol of Hindu nationalism. And while it opens wounds with India’s Muslims, Modi judges the Hindu majority will reward him at the ballot box. Yet the appeal to religion suggests a weaker story on national security and the economy. Despite many policy successes, Modi’s record on China, Pakistan and unemployment remains mixed. Damaged ties with the US over human rights and Russia also present new challenges.
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MIDDLE EAST. Striking while it’s hot
Israel takes the opportunity to diminish Iran’s regional presence.
TIsrael is believed to have been behind a missile strike that killed at least five Iranian Revolutionary Guards in Damascus on Saturday. Two Hezbollah militants were killed by an Israeli drone in southern Lebanon on Sunday.
INTELLIGENCE. Israel is under mounting international pressure to conclude the war in Gaza, and Benjamin Netanyahu is under mounting pressure at home to secure the release of hostages and step down. A purported offer from Hamas has been rejected, but talks continue through Qatar and other intermediaries. Irrespective of an outcome on the status of Gaza, or a Palestinian state, the war cannot continue forever. Nor can attacks against Iran’s regional proxies.
FOR BUSINESS. Israel has a limited window to degrade Hamas and its backers in Tehran. Attacks against Hezbollah and Shia militias in Syria and elsewhere are described as deterrence, but they are also expedient to carry out while there remains a direct security justification. Just as the Houthis are using the excuse of Gaza to pursue their aims in Yemen, Israel is using the conflict to limit Tehran’s sway in the so-called Shia crescent of Iraq, Syria, and Lebanon.
UKRAINE. RUSSIA. Behind enemy lines
Deadly attacks suggest degraded air defences.
Russia paused operations at its Ust-Luga oil and gas export terminal near St Petersburg on Sunday after reports of a drone strike. Shelling killed 27 in the Russian-held city of Donetsk on Sunday. Russia captured a village near Kharkiv.
INTELLIGENCE. Most aerial attacks to have recently gotten through have been from Russia, which has slowly worn-down Ukraine’s defences. But recent strikes by Ukraine, including the apparent downing of an early warning and control aircraft over the Sea of Azov, suggest that Russia’s defences have also been degraded, or new vulnerabilities have been found. None of these will change the war’s outcome, but they could improve Kyiv’s negotiating position.
FOR BUSINESS. Russia continues to gain ground in eastern Ukraine, but Moscow will want to keep the costs and consequences manageable ahead of elections in March. Kyiv continues to seek breakthrough strikes, in the hope this may boost Western support, but analysts now expect the war to end via talks, not arms. On whose terms will be key. Volodymyr Zelensky addressed this at Davos, describing Donald Trump’s talk of a deal as “very dangerous”.
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GERMANY. Right where they want them
Nationwide protests and new legislation could be a gift to the AfD.
Hundreds of thousands protested across Germany on Sunday against the far-right Alternative for Germany (AfD) party. The Bundestag on Friday voted to ease naturalisation rules and end restrictions on dual citizenship.
INTELLIGENCE. The rules bring Germany into line with its peers but will be seen as a further erosion of its borders, which has propelled the AfD from the fringe to a shot at government. Berlin’s support of anti-AfD protests, meanwhile, risks alienating the farmers and train drivers who are also on strike and feel hit by rising costs under Germany’s three-party coalition. Some in the coalition have debated banning the AfD following reports of a plan to expel migrants.
FOR BUSINESS. The AfD’s brand of nationalism is uniquely sensitive in Germany. Yet for many, it’s not nearly as sensitive as inflation or lacklustre growth. A similar dynamic is at play in France, where Emmanuel Macron is battling the once-fringe National Rally. Macron, who is currently visiting Olaf Scholz, will undoubtedly have this as a topic of discussion, alongside plans by France's largest farm union to launch protests of its own in the coming weeks.
MINERALS. Unrare earths
New reserves and competing technologies challenge the Lithium Triangle.
A one million-tonne lithium deposit has been discovered in Sichuan, Chinese media said Thursday. A separate 14.8 million-tonne deposit was announced in Thailand the same day, but officials on Saturday walked back the claim.
INTELLIGENCE. Whether or not all the resources announced in recent months are extractable lithium, there appears to be plenty of unanticipated supply, hitting mining stocks just as doubts rise over the viability of electric vehicle sales forecasts. Elsewhere, New York’s fire department is pushing for a national ban on most lithium-ion electric bikes, and Chinese engineers have announced a nuclear battery, smaller than a coin, that can go without charging for 50 years.
FOR BUSINESS. Many people will not want a nuclear reactor in their smartwatch or hearing aid, but recent advances in alternative battery technologies suggest major disruptions for the world’s lithium producers, particularly in Chile, Argentina and Bolivia. Albemarle, which operates in Chile's salt flats, said last week it would defer spending on a US refinery. Its rival SQM has been under siege from indigenous protesters following a deal with state-owned Codelco.