Ukraine: Out in the cold.
Also: Israel, the US, India, Japan, and Ethiopia.
We’re pleased to announce the launch of Geopolitical Strategy, a bespoke advisory service to help your business navigate our changing world. We’d also love to get your views in our very short reader survey.
UKRAINE. Out in the cold.
Zelensky walks an increasingly lonely road.
Volodymyr Zelensky urged allies to provide more funds, following a visit to Washington and ahead of a European leaders' summit on Thursday. A US general was taking a hands-on role in Kyiv, the New York Times reported on Monday.
INTELLIGENCE. With just hours left this year for Congress to agree new funding for Ukraine, and with Hungary playing hardball with the EU, a difficult winter is set for Kyiv unless Washington and Brussels can make near impossible compromises. For the White House, this would mean further alienating the Democratic base with a hard-line border policy. For Europe, this would mean upending years of governance protocols and caving into budgetary blackmail.
FOR BUSINESS. Biden may relent – ending a crisis on the border may outweigh progressive outrage – but Brussels may stare Viktor Orban down, even if that means no deal on Ukraine. And even if Orban is rewarded, other EU members – including Austria and Slovakia – are showing discord. Either way, funds alone are not enough. Ukraine needs a strategy, as Republicans have pointed out and as Lt. Gen. Antonio Aguto’s reported deployment may prove.
Geopolitical Strategy is the advisory arm of Geopolitical Dispatch. With the same clarity of thought, but customised to your requirements, Geopolitical Strategy aims to ensure your business has the tools to manage geopolitical challenges.
ISRAEL. UNITED STATES. Hear no evil.
Biden gives a warning Netanyahu will ignore.
Israel's foreign minister said Wednesday the war in Gaza would continue "with or without international support". Joe Biden said Tuesday Israel was "starting to lose" this after the UN General Assembly voted 153 to ten for a ceasefire.
INTELLIGENCE. International criticism seldom trumps national interest, particularly in Israel, but Biden’s increasingly frank statements show real limits in US support, which Israel needs. Normally, threats would work, as they did in May 2021 when Biden called Netanyahu to declare a ceasefire. But this time the stakes are higher, including politically for Netanyahu, whose only path to staying in power (and avoiding jail) is to retain the support of his hard-line partners.
FOR BUSINESS. Netanyahu will only declare victory on his own terms, but fighting may end sooner if support coalesces around Benny Gantz or another opposition figure who can form a new government and find an offramp. In the meantime, increasingly severe measures may be taken, putting further pressure on Israel’s reputation. Some of the possibilities seem extreme. Flooding Hamas’s tunnels with seawater, for instance, could literally salt Gaza’s earth.
With the brevity of a media digest, but the depth of an intelligence assessment, Geopolitical Dispatch goes beyond the news to outline the implications.
INDIA. UNITED STATES. Firing Quad.
A pillar of the US Indo-Pacific strategy wobbles.
Joe Biden will not travel to India in January, a US official said Wednesday. Delhi had postponed a meeting of 'Quad' leaders after Biden turned down an invitation to India’s Republic Day parade the day before, local media said Tuesday.
INTELLIGENCE. India uses its guest of honour at the 26 January military parade as a signal of favour. Obama went in 2015; Putin in 2007. The president of France has been five times. Turndowns are rare, though apparently Trump refused. Yet allegations of an Indian plot to kill a US citizen in New York makes a January visit untenable, and it is hard to see a date working later in the year as Biden and Modi focus on elections. Putin may hope he’s runner-up.
FOR BUSINESS. A bigger casualty is the Quad summit, which the leaders of India, the US, Australia, and Japan agreed in 2021 to hold annually. But beyond the burden of Modi’s illiberalism (and trade with Russia) on the format’s survival, attempts by the others to steady ties with China have upset India. And as Washington uses AUKUS as its main mode of cooperation with Canberra, and its trilateral with Seoul as its mechanism for Tokyo, the Quad is losing relevance.
Written by former diplomats and industry specialists, Geopolitical Dispatch gives you the global intelligence for business and investing you won’t find anywhere else.
JAPAN. Tokyo drift.
A slide back to political and economic torpor.
Fumio Kishida reshuffled his cabinet on Thursday in the wake of a fundraising scandal. Support for his party fell to a ten-year low, a poll showed Tuesday. Revisions last week suggested a 2.9% annualised GDP decline for the third quarter.
INTELLIGENCE. Kishida's domestic woes have overshadowed his hosting of the British and Italian defence ministers to agree an ambitious fighter jet program, not to mention a summit of Southeast Asian leaders this weekend. Like its economy, Japan has strategically sought to break out of decades of stagnation. And as with the economy, this was briefly achieved under Shinzo Abe. But since Abe’s 2020 retirement (and 2022 assassination), the doldrums are back.
FOR BUSINESS. Business confidence belies these trends. The quarterly Tankan survey hit a 30-year high on Wednesday. Yet much of this sentiment is based on a cheap yen, which helps exports. A dovish turn in US monetary policy could erode this advantage, as well as lose Japan a window to revive inflation. Stagnant factory output in China, Taiwan, and South Korea doesn’t bode well either. So far avoided, Kishida may be forced to call snap elections.
Emailed each weekday at 5am Eastern (9am GMT), Geopolitical Dispatch gives you the strategic framing and situational awareness to stay ahead in a changing world.
ETHIOPIA. Addis and subtracting.
Fiscal and security promises so far don’t add up.
Ethiopia prepared for a call with bondholders on Thursday after missing a $33 million coupon payment. The country's State Minister for Peace was sacked on Tuesday amid charges he was plotting to violently overthrow the government.
INTELLIGENCE. Prime Minister Abiy Ahmed won a Nobel Prize in 2019 but things have gone downhill since. The end of the war with Eritrea was replaced by a civil war in Tigray, plus insurgencies elsewhere. Economic reforms and blistering growth early in his term have come back to earth. Increasingly unhinged comments, suggesting the invasion of neighbouring states, have spooked diplomats. The US only recently resumed food aid after systemic theft.
FOR BUSINESS. Ethiopia has huge potential, but the factors limiting its political unity – a landlocked, mountainous geography, unstable neighbours, ethnic tensions – have stymied its economic success. Abiy was once thought something of a silver bullet, but the challenges continue. Where the West has failed to ensure stability and growth, China may try. Beijing has already struck a debt deal. Now in the Belt and Road, Addis joins the BRICS next month.