Israel, Palestine: Waiting for Rafah
Also: Yemen, the Indian Ocean, Russia, Ukraine, and Venezuela.
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ISRAEL. PALESTINE. Waiting for Rafah
A Ramadan assault looks increasingly unavoidable.
The US vetoed a UN Security Council resolution on a Gaza ceasefire Tuesday, saying it would jeopardise hostage talks. Only Britain abstained. Reuters reported Monday that the US had drafted a rival resolution calling for a temporary pause.
INTELLIGENCE. Washington is crabwalking toward demanding Israel end the war before, as Netanyahu’s cabinet has warned, an assault on Rafah begins at the start of Ramadan next month. Israel says it wants to apply maximum pressure on Hamas to release hostages but has also made clear it will destroy Hamas at any cost, irrespective of “international diktat”. Contingencies are being made for a worst-case scenario, including a refugee area inside Egypt.
FOR BUSINESS. With Hamas unlikely to surrender and Israel unlikely to concede, the US will need to decide how far its support goes. The Israeli public, while generally supportive of the war’s aims, will also need to decide whether the costs are worth it. Israel's GDP shrank at an annualised 19% in the fourth quarter. A regional grand bargain with Saudi Arabia looks impossible. The host of this year's G20, Brazil's Lula da Silva, has been declared persona non grata.
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YEMEN. Hou’s in charge?
The US is failing to end the Red Sea crisis.
Yemen’s Houthis have downed a US Reaper drone, the Pentagon said Tuesday. The US made five strikes against the militia Sunday, including on an unmanned submarine. The Houthis said Monday a British ship they’d struck was sinking.
INTELLIGENCE. The Belize-flagged British cargo ship has been abandoned and could become the first vessel the Houthis have sunk since 7 October. As the Houthis’ strikes become more sophisticated – each Reaper costs $50 million – the US faces another Middle East decision: whether to escalate (as it did in Iraq, with apparent success) or make a deal (with the Houthis seemingly immune to Iran’s warnings on the risks of war, unlike other regional proxies).
FOR BUSINESS. A deal with the Houthis would look bad during a US election year but would entail fewer risks than all-out conflict. A deal might also have the upside of reducing Tehran’s sway over a tribal group that was once relatively moderate and conventionally nationalist. Such a deal would need to involve Saudi Arabia, which, until 2022, was at war with the movement. Any grand bargain on Israel and Palestine may as well involve a sidebar for Yemen.
THE INDIAN OCEAN. Paradise lost
Regional tensions wash up on the beach.
India's president visited Great Nicobar in the Andaman Sea Tuesday, amid plans for a $9 billion naval and trade hub to make the island a "Hong Kong". Australia said it would double its surface fleet. Iran's foreign minister visited Sri Lanka.
INTELLIGENCE. Conscious of tensions at the ocean’s entrances – chiefly the Gulf of Aden and the Malacca Strait, which leads to the South China Sea – India is bolstering its presence in the Andamans in the east and Lakshadweep in the west, despite environmental concerns by locals and civil society. Likewise, India wants to ensure its friends in Mauritius and Seychelles don’t go the way of the Maldives in a pivot to China. Ditto for perennial bugbear Sri Lanka.
FOR BUSINESS. India is cooperating with Seychelles on Somali pirates (and, inter alia, the Houthis). A major e-commerce deal with Mauritius has recently gone live. And India’s focus on these once-sleepy idylls could increase further should Red Sea shipping continue to go around Africa, France’s position in the region weaken due to moves limiting citizenship rights in Mayotte, or Britain concede to the ongoing challenges to its sovereignty of Diego Garcia.
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RUSSIA. UKRAINE. Making it personal
Putin takes a gamble with dissidents and dual nationals.
Alexei Navalny's mother filed a suit Tuesday for the release of her son's body as the US promised new sanctions after the opposition figure's death. A defected Russian pilot was killed in Spain. A dual US citizen was arrested for treason.
INTELLIGENCE. Ahead of elections, Vladimir Putin is doubling down on the tough guy image, though in doing so he risks awakening the members of the US public who are yet to be troubled by his invasion of Ukraine. Donald Trump backtracked (somewhat) on his comments on Navalny. The arrest of an LA-based ballerina for donating $51 to Kyiv comes as fellow detainee, Wall Street Journal reporter Evan Gershkovich had his pretrial detention extended.
FOR BUSINESS. Putin may seek additional leverage with the West, but just as Americans become resigned to the war he risks the storm of public outrage. Unlike mere statistics, as terrible as they have been, nothing captures headlines like a human story. Sanctions advocate Bill Browder has proposed a "Navalny Law" to seize Russian central bank assets, which states have otherwise been reluctant to consider. The EU has announced a 13th sanctions package.
RUSSIA. VENEZUELA. Friends in low places
Two pariahs come together.
Russia's foreign minister visited Caracas Tuesday, affirming support amid the threat of renewed US sanctions over democracy and threats to Guyana. Venezuela received its first cargo of Urals crude in five years, Bloomberg reported.
INTELLIGENCE. Russia and China kept Venezuela alive during the last period of sanctions, which have only been lifted amid the US border crisis and empty talk of democratisation. Tehran has also come to Caracas’s aid, albeit in a smaller way – from proposed refining joint ventures in Syria to aircraft sales (though one plane, a 747, was seized in Florida last week). In return, they get to distract the US and undermine what’s left of the Monroe Doctrine.
FOR BUSINESS. As Sergei Lavrov went to the presidential palace, Guyana’s new ambassador presented credentials. Guyana needs peace with its larger neighbour, despite their border dispute. Notwithstanding offers of US arms and pledges from Exxon to stay in the country, there remains the risk that other partners will want to wait it out. Guyana’s president has urged the “immediate” development of gas reserves. A $1.9 billion power project has been delayed.