Israel, Palestine: Prisoner's dilemma
Also: Ukraine, Russia, the Balkans, Myanmar, and Thailand.
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ISRAEL. PALESTINE. Prisoner’s dilemma
As a hostage deal looms, debates on the future escalate.
Reports emerged Wednesday a 35-day ceasefire could soon be agreed for the release of 35 Israeli hostages. Britain said it was considering recognising Palestinian statehood. The US downplayed reports it may also recognise Palestine.
INTELLIGENCE. Benjamin Netanyahu’s beleaguered coalition is running out of road. As the IDF fails to inflict a mortal blow on Hamas, tough concessions may need to be made to release the remaining hostages and secure a semblance of peace. Opposition figures have offered to prop up the government should hardliners abandon the prime minister. Pressure from Israel’s allies is mounting, though carrots, such as Saudi rapprochement, are also being dangled.
FOR BUSINESS. A new composition in Israel’s government could create conditions for settlement though few Israelis will countenance an ongoing role for Hamas. A role for the UN’s Relief and Works Agency also looks in doubt, with Western funders abandoning the body after reports of several staff members being terrorists. Any deal will be messy, with an elegant solution satisfying all as elusive as ever. Still, almost any deal will be better than the status quo.
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UKRAINE. RUSSIA. Breaking point
As Western support stalls, pressure builds in Kyiv.
EU leaders began meeting Thursday to strike a deal with Hungary over aid to Ukraine. Speaker Mike Johnson reportedly told visiting dignitaries that aid for Ukraine would "likely" be split from border talks. Around 400 POWs were exchanged.
INTELLIGENCE. Whether from the US or EU, Ukraine needs more aid beyond piecemeal transfers, including lately via Greece. And amid reports Kyiv is being outgunned three-to-one by Moscow, whose forces have now broken through to Avdiivka, Volodymyr Zelensky needs good news politically. Rumours persist of a clash with his military chief Valery Zaluzhny, who has reportedly been asked to resign. Zelensky's approval remains high, at 62%, but Zaluzhny's is 88%.
FOR BUSINESS. Kremlin propaganda is hyping tensions between Kyiv and the army, but even if Zelensky is personally not at risk, falling morale spells trouble at the front. That malaise will be deepened by the International Court of Justice’s decision Wednesday to toss out a case over Russian terrorism, not to mention the IMF’s upgrade of Russia's 2024 GDP outlook to 2.6% from 1.1%. Figures weren’t given for Ukraine, but Euro area growth was lowered to 0.9%.
THE BALKANS. Bureking point
Kosovar and Serb nationalists lack incentive for compromise.
Serbia might reintroduce compulsory military service, Belgrade said Tuesday. The US and key allies urged Kosovo on Sunday to reconsider a ban on the Serbian dinar. Moscow awarded Serbia's former spy chief the Order of Friendship.
INTELLIGENCE. The West has offered many inducements to non-EU states in the Western Balkans, but low-level tensions continue to be fanned by politicians on all sides who are more incentivised to drum-up ill will than bury the hatchet. Moscow is routinely blamed for supporting Serb irredentism, but Ankara has also supported coreligionists behind many of Pristina’s recent provocations. Turkey and Kosovo signed a new military agreement on Monday.
FOR BUSINESS. For centuries, the Balkans have been contested by powers in Russia, Turkey and Europe. Today, most of the former Yugoslavia is relatively prosperous and free. Even in Serbia and Kosovo, things are improving. Yet stubborn partisanship is dissuading further Western investment. China is among those stealing a march. Last week, Belgrade signed a $2 billion MoU with Chinese renewables investors. Last month, a new trade body was established.
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MYANMAR. State of insurgency
Three years on, the civil war looks unwinnable for all sides.
Myanmar's junta extended its state of emergency by six months on Wednesday, the eve of the third anniversary of its coup. The US introduced further sanctions. ASEAN urged diplomacy. An alliance of rebel forces offered a peace plan.
INTELLIGENCE. Everyone marks milestones in different ways. Yet for Myanmar, few seem likely to turn a new leaf. Today, Myanmar is poorer, more divided and more vulnerable to criminal gangs. Its myriad of ethnic rebel groups will be unwilling to relinquish hard-won territory. Its Bamar majority will likely soon lose a leader in Aung San Suu Kyi, 78, who recently returned to jail. The army claims to be the only unifying force, but it is now completely discredited.
FOR BUSINESS. Even if the military were to surrender, or agree to a peace deal, Myanmar remains riven between 135 recognised ethnicities, many represented by leaders with human rights records as dire as the junta in Naypyidaw. Peacebuilding will be long and incremental. While Myanmar’s neighbours will seek to avoid the country being split, many insurgents are fighting for secession, not federal autonomy. Opium is the economy’s only real growth sector.
THAILAND. Majesté vs majority
A blow against Move Forward won't stop a changing society.
Thailand’s Constitutional Court ruled Wednesday against a proposal to amend longstanding lèse-majesté laws, which could ban its proponents in the Move Forward Party from politics. China and Thailand agreed Sunday to visa-free travel.
INTELLIGENCE. Move Forward won Thailand's May 2023 election, but establishment manoeuvres have kept it out of power. Its looming dissolution will, however, only harden sentiment against the military-royalist elite, as well as its newfound allies in the Shinawatra family's Pheu Thai Party, whose candidate, Srettha Thavisin, is now prime minister. Though Thailand has notionally returned to democracy, it remains tightly managed. It is also edging closer to China.
FOR BUSINESS. Thailand is a longstanding US ally and a hub for many Western firms, but its polarised politics, ageing population and declining competitiveness have left it trailing its ASEAN peers. Only Singapore (highly developed) and Myanmar (at war) are forecast to experience slower growth. Bangkok has turned to Beijing. Yet beyond deals on tourism and trade, China now wants risky schemes on cross-border rail and a canal bypassing the Strait of Malacca.