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Defense & Security
Israelis protest at Tel Aviv against Netanyahu anti-democratic coup

The Israeli protests: What’s happened and what’s likely to come

by Paul Scham

Monday, March 27 was supposed to be a red-letter day for the new far-right Israeli coalition government, when it planned to slide through the Knesset the central provision of its “judicial overhaul” bill, comfortably ahead of the Passover recess beginning on April 2. Instead, it ended up being one of the most extraordinary days in Israeli history. Spurred by the “firing” of Defense Minister Yoav Gallant by Prime Minister Benjamin (“Bibi”) Netanyahu the evening before, the demonstrations against the overhaul, which had been building in intensity for over two months, became overwhelming. Universities, businesses, Ben-Gurion Airport, and Israel’s embassies and consulates abroad were all closed down in protest, and a general strike was scheduled for the following day. Air Force reserve pilots and other security personnel on whom the military heavily relies were threatening to not report for training or duty. In the face of this completely unprecedented protest, Netanyahu announced he would suspend the bill’s progress “to try to reach a broad agreement during the next Knesset session,” which begins on May 1. The announcement was delayed while Bibi worked out a deal with one of his coalition partners, Itamar Ben-Gvir, minister of national security and head of the neo-Kahanist Jewish Power Party, to organize a new “National Guard,” which, its opponents charge, would constitute “a paramilitary organization that would operate inside Israel in times of crisis, mainly to deal with rioting and nationalist incidents involving Israeli Arabs.” They view it as a new reason not to compromise. Nevertheless, dialogue has already begun with the Knesset opposition under the auspices of President Isaac Herzog. Netanyahu was unquestionably forced to make the postponement concession by the massive outpouring of protest; one poll showed that two-thirds of the Israeli public was against the legislation in its current form. Nevertheless, his entire coalition supports the reform in its current form. Even Minister of Defense Gallant, who is apparently remaining in office since he was not given the requisite legal notice, stressed that his call for delay stemmed solely from fear of damage to Israel’s military preparedness after thousands of Israel Defense Forces reservists threatened not to show up for duty. The handful of coalition MKs, all from Likud, who had indicated reservations about proceeding immediately, were likewise aboard in principle. This may make the negotiations difficult, if not impossible. Dialogue, of course, is the civilized way to proceed, but finding a solution even remotely palatable to all is made significantly more difficult by the disparate composition of the coalition, in which Netanyahu holds less power and influence than in any of the previous five governments he headed. His four coalition partners are ideologically driven and all have very different visions of Israel’s society and priorities than do most Israelis or, in fact, than did Netanyahu himself during most of his political career. Moreover, with the increasing polarization of Israeli society during the last decade, the non-Arab Israeli parties have now formed into two solid blocs, usually called right and left, but they are more accurately described as “never-Bibi” and “pro-Bibi if he does what we want.” However, neither his partners nor his opponents retain any trust in Bibi’s word, and there is considerable suspicion he may push the reforms through unaltered. Thus, despite his promise to delay the bill and negotiate with the opposition, the regular Saturday night demonstration attracted as many — or more — Israelis as the previous ones.Concurrence on neutering the Supreme CourtWhile the genesis of the current crisis is complex, its way was paved by Netanyahu’s desperate attempts to end his ongoing corruption trial and Justice Minister Yariv Levin’s deep ideological commitment to shattering the existing judicial system by making it “more democratic,” i.e., rendering the Supreme Court powerless to invalidate laws passed by the Knesset majority. But the overhaul has received crucial support from a coalition of three distinct minority groups in Israeli society with their own political goals or grievances, all in the pro-Bibi bloc: 1. The two Haredi (“ultra-Orthodox”) parties, which want to block the Supreme Court’s repeated rejection of their blanket exemption from military service, exempt their schools from minimum education requirements, increase state support for yeshiva students, as well as remove the Court’s ban on Shas party Chair Aryeh Deri from serving as a minister because of two convictions for corruption. 2. Extremist settlers and supporters in the Jewish Power and Religious Zionism parties, who want to remove any legal obstacles to increased settlement, permit the annexation of part or all of the West Bank, and prevent punishment for atrocities like the recent settler pogrom in the West Bank village of Hawara, as well as make Israel “more Jewish.” While there has been an extreme anti-Arab right wing in Israel since at least the 1980s, this is the first time they have been part of a government, with their leaders in significant positions of power. They view the Supreme Court as their main obstacle, though it has only occasionally blocked settler activities in the West Bank. 3. The Kohelet Forum, a well-financed think tank that has gained significant influence in Israeli right-wing circles in recent years, which is pushing for the removal of legal norms preventing the adoption of American libertarian principles foreign to Israel. Their influence is primarily in the Likud.Deep cultural/political rootsThe broader impetus for these reforms has both a larger cultural context as well as a more political one. They emerge from a cultural polarization that has been building since the 1950s and a political tension evident since at least the time of Israel’s First Lebanon War in 1982. They can also be understood in the context of the decade-old worldwide movement toward populism and away from liberal democracy, with distinctive Israeli characteristics. The cultural context harkens back to the immigration to Israel in the 1950s of “Eastern Jews” (Mizrahim) from Arab and Muslim countries, over a million of whom arrived in Israel during the 1950s and 1960s, trebling Israel’s population. It is now generally recognized that they were demeaned and disparaged by officials from the then-hegemonic Labor movement, and Mizrahim are still, on average, less educated and wealthy compared to Ashkenazim (Jews of Central and Eastern European ancestry). Overwhelming Mizrahi support for the right-wing Likud party was a principal factor in its victory of 1977 and control of the premiership for 33 of the subsequent 45 years. All these governments were coalitions — no Israeli party has ever won an outright majority — generally with the participation of the two ultra-Orthodox (Haredi) parties, the National Religious (settler-dominated) party, and one or another centrist party that enabled Netanyahu to play one side against the other. Despite this fairly consistent political control, the single most important theme of Likud messaging has been opposition to the alleged (and partially real) “Ashkenazi”- and “leftist”-dominated Israeli establishment. This theme has been especially pronounced during the 22 years of Netanyahu’s leadership of the party (though all Likud chairmen have been Ashkenazim who rose to power within the country’s traditional power structures). The claims of elite domination have reached a crescendo in recent months and are now being put forward as the principal justification for the judicial reforms. Likud/Mizrahi complaints of being shut out of the Israeli power structure are not entirely unfounded, despite Likud’s control of the government, today and over the past four decades. There is no doubt that secular, moderately liberal Ashkenazim dominate the academic, legal, military, cultural, and business elites — obviously some more than others. However, the particular bête noir of the Haredim, the settler religious right, and the personal concern of Netanyahu and Deri is the courts, especially the Supreme Court, because that is the sole institution capable of blocking their disparate objectives. Protesters — and most of the Israeli establishment — see it as the critical — and sole — body exercising any check on the government and Knesset majority, given the absence of a written constitution, a second legislative chamber, a federal system, or any other such institution, one or more of which is present in virtually every other democratic country. The protesters are similarly, or perhaps even more, disparate than the “reformists.” Their core is indeed the educated Ashkenazi middle class, but also contains wide swathes of virtually all other social groups in the country with the exception of Israeli Palestinians, who would indeed be hard hit by the overhaul but who largely regard this as an intra-Jewish dispute. The protest organizers have been at pains to emphasize the non-ideological and non-left-wing nature of the protests, hence the ubiquitous Israeli flags and the absence of Palestinian ones. Of course the left is intimately involved and hopes these protests against the right will help to revive its depleted fortunes. The left sees the occupation as the root cause of the right’s insistence on the overhaul, and expects that Arab parties will be among the first victims of an empowered right if the reforms are enacted.Difficulties in reaching a compromiseTechnically, a compromise agreement including some of the “reforms” but leaving a viable system of checks and balances in place could easily be reached. However, this is unlikely, primarily because the two religious Zionist parties, Jewish Power and Religious Zionism, are ideologically committed to fundamental changes that the Supreme Court would certainly block. In addition, Justice Minister Levin and a few others in the Likud seem unalterably committed to the full overhaul, undercutting Netanyahu’s announced willingness to negotiate. The two Haredi parties may, however, be more flexible, as they have no commitment to the secular Israeli state and usually are able to obtain what they need through the political process. The only person in a position to transform the political debate and completely change its terms is Prime Minister Netanyahu himself. There has long been speculation that he could be offered a “get out of jail free card” by the prosecution in his ongoing trial on corruption charges, specifying that the charges would be dropped if he foreswore political activity. The opposition has no doubt that his main reason for staying in power is to change the Court and legal system sufficiently as to avoid any chance of conviction, which he indignantly denies. Some have recently speculated that the humiliation of being forced to change his mind and accept the postponement may drive him to accept the plea bargain. While chances still seem against that happening, if he did accept it, that would immediately transform the political map of Israel. A number of right-wing politicians have left Likud and the rightist bloc over the years because of their treatment by him — and they were part of the recently deposed, unwieldy 18-month “Government of Change,” which contained left, right, and centrist elements (all of the rightists and many of the centrists were ex-Netanyahu partners and supporters). Were Netanyahu to be out of the picture, a center-right coalition could be formed, perhaps even without new elections, that could pass an amended judicial reform package, presumably limiting the damage to checks and balances. The far right would be left out in the cold, the Haredim would join, and the tattered Israeli left would possibly be strengthened but would still be small. However, no one currently believes that is likely to happen. Claims have been made that Netanyahu has promised the hard-liners in his coalition that he won’t compromise, in which case there is little doubt that the demonstrations will be renewed, although whether they will be strengthened or weakened by the delay can’t be predicted. Minister Levin has promised large counter-demonstrations as well, heightening the likelihood of violence, some of which has already started. In fact, the most controversial provisions have already passed their preliminary “readings,” and could be approved on 24-hour notice once the Knesset returns. Besides the opposition in the street, the new provisions would immediately be brought before the Supreme Court, which would almost certainly declare them invalid, leading inevitably to a full-bore constitutional crisis based on the Court declaring invalid the legislation that purported to strip it of that power. Commanders of many of Israel’s security branches have already intimated that in such a contest of legitimacy, they would go with the Supreme Court rather than the government. Of course, this crisis is not taking place in a vacuum. The day after Bibi backed down, President Joe Biden warned that he “cannot continue down this road,” leading to charges of interference in Israel’s internal affairs. Closer to home, Bibi’s grandiose hopes of widespread Israeli-Arab peace based on the 2020 Abraham Accords are crumbling or, at the least, have entered a deep freeze. The United Arab Emirates cancelled a scheduled visit by Netanyahu in January, just after his government was formed, while Jordan was deeply upset by remarks that Finance Minister Bezalel Smotrich made denying the existence of a Palestinian people (something the Israeli government formally recognized in 1993), while standing on a stage festooned with a banner showing Israel’s borders as including not only the West Bank but Jordan as well. Moreover, the big prize Netanyahu hoped to bring into the Abraham Accords, namely Saudi Arabia, has closed the door on them, at least for the foreseeable future. Moreover, the kingdom’s recent China-brokered resumption of ties with Iran is a poke in Israel’s eye (as well as that of the U.S.), besides attenuating one of the main reasons for Saudi-Israeli rapprochement, namely, fear of Iran. Despite the gravity of the situation, some Israelis, at least on the protesters’ side, found reasons for optimism, apart from whether or not the overhaul would go through. Unlike many other countries in which populist regimes have enfeebled political and civil liberties — Hungary, Poland, Turkey, Russia, and India are only a partial list — Israelis chanting “De-mo-kra-tia” poured out onto the streets for months, while senior retired military, business, and civic leaders, as well as all manner of civil society institutions, declared their opposition to the overhaul, with some, such as high-tech venture capitalists, able to convincingly warn of serious consequences. This will presumably serve as a warning and check on any future governments, left or right, showing authoritarian tendencies. Even those hoping Israel will change its stance on the conflict with the Palestinians drew some comfort from the massive demonstrations, hoping that they could portend a new vision of democracy, despite the left’s dismal showing in recent elections. That, however, remains to be seen.

Diplomacy
President Xi Jinping with Vladimir Putin

Putin-Xi Summit Reinforces Anti-U.S. Partnership

by Thomas Graham

The meeting of Russian President Vladimir Putin and Chinese leader Xi Jinping in Moscow helped both give the impression of a united front, but underlying tensions were also discernible. What did the summit achieve for each side?With the pomp of a state visit, Russian President Vladimir Putin and Chinese leader Xi Jinping shined a spotlight on their ­growing strategic alignment, which is aimed at upending the U.S.-led, rules-based international order in favor of a multipolar world. Long on symbolism, short on concrete substance, the summit nevertheless served both leaders’ purposes. Putin welcomed the demonstration that Russia was not, and could not be, isolated on the world stage, as it deepened relations with one of the world’s two superpowers. By showcasing burgeoning commercial ties and unveiling plans to expand them, Putin conveyed confidence that Russia can remain resilient in the face of harsh Western sanctions.      Meanwhile, Xi’s decision to make Moscow his first foreign visit of his third term as president underscored his strong commitment to Russia and to Putin personally. He used the summit to underscore China’s determination to pursue its national interests in defiance of mounting U.S. economic and diplomatic pressure—making the point that China will not abandon its strategic partner in pushing back against U.S. pretensions to global leadership. That was a crucial message for his increasingly nationalistic domestic audience, as well as for the Global South, where the U.S.-led liberal order is under stress. At the same time, Xi subtly let it be known that China is the dominant partner. Putin had little choice but to accept Xi’s proposal that Russia use the yuan, not the ruble, in trade with the Global South to diminish the role of the U.S. dollar in world trade. Xi also gratuitously endorsed Putin for reelection in 2024, even though the Russian president has not declared his intention to run. And at the joint press availability at the end of the summit, Xi was much more restrained in his description of bilateral relations than was Putin, who was eager to lay out all the areas in which the two countries would enhance cooperation in the years ahead. That left the clear impression that Russia needed China much more than China needed Russia.What does the summit mean for the war in Ukraine?Nothing at the summit suggested that the underlying dynamic in the war was about to change. As expected, Beijing continued to provide Moscow with strong diplomatic support, echoing the latter’s narrative blaming the North Atlantic Treaty Organization (NATO) for the conflict. Despite Washington’s fears, however, Xi gave no indication that China was ready to provide lethal military aid that might radically improve Russia’s chances on the battlefield. Putin noted that China’s recently released 12-point peace plan could serve as a basis for negotiations, but neither he nor Xi suggested any practical steps that might give substance to what is largely a list of bromides about respecting sovereignty, avoiding escalation, and seeking a diplomatic solution. The reality is that China benefits from the military stalemate. Russia’s aggression distracts U.S. attention and resources from the Indo-Pacific region, while Western sanctions compel Russia to turn to China as an economic lifeline. China exploits Russia’s predicament to gain access to critical natural resources, especially oil and gas, at discounted prices.  In line with this calculus, Xi provided Putin with sufficient moral and material support so that he could continue the fight, but much less than needed to give Russia the advantage. At the same time, the Chinese continued to drive hard commercial bargains. Notably, no deal was announced to build a second Power of Siberia gas pipeline, which Putin has described as “the deal of the century.” Rather, it was simply noted that further details needed to be negotiated, as China explores alternatives.What does it reveal about the underlying tensions between China and Russia?Except for a brief period after the Communist takeover of China in 1949, China and Russia have been rivals, not partners. Until the end of the Cold War, Russia was by far the superior power.   The dynamic changed dramatically after 1991. Then, the two countries’ economies were roughly the same size. Now, China’s economy is ten times larger, and the gap continues to widen.  Moreover, China now casts a much larger shadow on the global stage: it has overtaken Russia in the development of advanced technology and its conventional military is comparable to Russia’s, even as it is moving toward nuclear parity with both Russia and the United States. What once could have been seen as a roughly equal partnership has evolved to the point where Russia is decidedly the junior partner. Despite the rhetoric of comprehensive partnership and avowals from Putin and Xi that relations have never been better, this asymmetry in power and ambition is in itself a source of friction, in addition to the civilizational clashes, racial prejudices, territorial grievances, and geopolitical competition that have strained relations in the past. But these sources of tension are currently far outweighed by the shared challenge from the United States. Washington’s current policy of dual containment only reinforces their strategic alignment and pushes the tensions further into the background.

Diplomacy
illustrative editorial Cartoon of Vladimir Putin President of Russia and Volodymyr Zelensky

Zelenskyy and Putin’s Distinct Understandings of National Identity Will Shape Support for Each Side in 2023

by Jessica Genauer

President Volodymyr Zelenskyy of Ukraine and President Vladimir Putin of Russia are two very different leaders. The way in which each defines a national identity shapes their leadership and sectors of support.      As we pass one year since Russia’s full-scale invasion of Ukraine, attention is fixed on how the war in Ukraine will unfold this year. What happens in 2023 will have implications not only for Ukraine and Russia but for the international order more broadly. One factor that has influenced the trajectory of war so far, and is likely to continue to do so in 2023, is the distinct leadership styles of President Zelenskyy and President Putin. Zelenskyy and Putin could not be more different as leaders. Putin leads a personalist autocracy, having risen through the ranks of the Russian security services to claim the presidency in 2000. Zelenskyy, a newcomer to both politics and government, was freely elected in competitive elections in 2019. Putin leads in the style of nationalist-populist leaders. He has slowly but consistently tightened his grip on power since his first electoral success in 2000, shaping Russia into an electoral autocracy. Putin is very much a man of his generation. At 70 years old, he grew up and established himself during the time of the Soviet Union and now surrounds himself with advisors of a similar or more advanced age. He is very far from media savvy, reportedly not even owning a smart phone. Zelenskyy, on the other hand, is a master of media communications, having operated as an actor and comedian before becoming president. Also a man of his generation at 45 years old, Zelenskyy forged a media career in the post-Soviet world of the emerging democracy of Ukraine. A self-made comedian and media personality, he is a part of Ukraine’s dynamic and entrepreneurial civil society.National identity: A glorious past or a bright future?A key factor that distinguishes Zelenskyy and Putin as leaders is the way in which they draw on national identity in their leadership. For Putin, Russia’s national identity is static and homogenous. There is one acceptable version of Russian identity; variations are considered deviant and a threat. For Zelenskyy, Ukraine’s national identity is dynamic and inclusive. The unifying elements of Putin’s vision of national identity are specific communal factors: shared language, history, religion, culture, or ethnicity. For Putin, such elements create a common bond and a common purpose among those who possess them. In 2021 Putin stated: “Russians, Ukrainians, and Belarusians are all descendants of Ancient Rus… bound together by one language…, economic ties, the rule of the princes of the Rurik dynasty, and – after the baptism of Rus – the Orthodox faith… we are one people.” For Putin, this idea of an exceptional nation simultaneously evokes Russian entitlement based on past glory, as well as Russia’s victimhood and humiliation at the hands of foreign enemies. Putin’s popularity “is tied to the idea of reanimating Russia’s past to reinstate the country’s greatness.” In 2022, Putin praised the conquests of the historical Russian ruler Peter the Great as returning to Russia what was “rightfully” hers. At the same time, for Putin, Russia’s greatness is under threat from the West. By contrast, Zelenskyy himself brings together the fractured components of Ukrainian identity in his own person. He is a Russian-speaking Ukrainian born in the east of the country who embodies a strong Ukrainian identity that is distinct from a Russian one. In Zelenskyy’s words: “[Ukrainians] are all different. They fight wearing the cross, the crescent, the star of David. Lads from Western Ukraine and from the south-east. Russian speakers from Kharkiv and Kryvyi Rih and Ukrainaian speakers from Ternopil and Ivano-Frankivsk… All different. All Ukrainians.” The unifying element of Zelenskyy’s national identity is a focus on the human striving for freedom and dignity. This factor also constitutes a universal element – uniting Ukrainians with others who share these values. In contrast to Putin, for Zelenskyy, history is not used to illustrate a glorious and longed-for past, but rather to show that the human drive for freedom can triumph over oppression to create a brighter future. As Zelenskyy stated to the UK parliament in February 2023: “[Both of] our people went through crises and growth, inflation, and periods of social losses and social gains. It was tough but we always found strength and stamina to move ahead and achieve results… We know freedom will win… We proved together that the world truly helps those who are brave in defending freedom. And thus, paves the way for a new history.”Does national identity galvanise support?Ultimately, military outcomes will be decisive in determining whether and how the war might conclude this year. However, Putin and Zelenskyy’s distinct imaginings of national identity contribute to galvanising support with audiences domestically and across the world. Domestically, Putin’s static and homogenous national identity appeals to those for whom it provides certainty and belonging to a specific idea of what it means to be Russian. For this segment of the Russian population, the ongoing war only serves to reinforce Russia’s entitlement to territorial control beyond its borders, as well as the looming spectre of humiliation at the hands of the West. This constituency will not lose faith in Putin’s war in 2023. However, if Russia fails militarily, these supporters may grow dissatisfied with the outcome, if not the war itself. Globally, Putin’s emphasis on the West as Russia’s central opponent will further isolate Russia from Western countries. However, Putin’s assertion of a homogenous identity does appeal to groups who conceptualise their own identity in a similar way within their own context. Additionally, Putin’s narrative of Russian victimhood by the West resonates in countries that are uncomfortable with a US-led global order or have an enduring historical memory of Western colonialism. Nevertheless, given Putin’s emphasis on Russian particularism, this is more likely to create tacit acceptance of Russia’s actions than stir costly action in support of Russia’s war. Domestically, Zelenskyy’s dynamic and inclusive Ukrainian identity, with an emphasis on the striving for freedom, appeals to broad swaths of the Ukrainian population – and aligns with the sense of purpose felt by those fighting on the frontlines. This is unlikely to change in 2023. As Russia doubles down on asserting its self-proclaimed right to control Ukraine, the idea of freedom and agency become ever more galvanising. Beyond Ukraine, Zelenskyy’s emphasis on a common human striving for freedom as a basis for identity invites others who align with this notion to rally alongside Ukraine. This will continue to boost support for Ukraine in established democracies – but also beyond, in places where populations or leaders resonate with a smaller state fighting against a stronger one to determine its own political and social reality. In the coming months we are likely to see military escalation between Ukraine and Russia. A less-visible factor that will contribute to the trajectory of this conflict is whether Putin and Zelenskyy’s distinct articulations of national identity will maintain traction with their respective constituencies. Will Putin’s homogenous and static national identity, that harks back to a time of historical glory, continue to appeal – or will it fracture if Russian glory on the battlefield falls short? Will Zelenskyy continue to be able to unify the diverse aspects of Ukrainian society into a coherent whole – and will this unity hold past his leadership? The answer to these questions will shape the societal impacts of this war – in both Ukraine and Russia – long after the fighting has ceased.

Defense & Security
Chief of Naval Staff Admiral R Hari Kumar with Admiral John C Aquilino, commander of the US Indo-Pacific Command

India-Australia Defence Cooperation and Collaboration in the Indo-Pacific

by Dr Shubhamitra Das

The significant rise in defence and security ties between India and Australia has led to an ease in dealing with their responsibilities in multilateral regional forums. The institutionalisation of cooperation has also become more strategic.  The geostrategic positioning of India and Australia on the Indian and Pacific Oceans has helped with the convergence of interests, enabling relations to expand and steadily deepen. Unlike in earlier times when New Delhi and Canberra were searching for equal grounds for cooperation, the concept of the Indo-Pacific has made this easier, enhancing the conviction that greater engagement was an inevitability of their geographic circumstances. It made them partners to jointly take responsibility for maintaining a free, open, inclusive and peaceful Indo-Pacific, which demands a noticeable tilt towards defence and security cooperation. India has long aspired to be the key protagonist in the Indian Ocean; Australia has wanted to more naturally belong to the region. Moreover, Australia’s foreign policy over the years has emphasised playing a constructive role in the region with enhanced regional engagement. Though China looms large in each nation’s strategic calculation, the issues that unite both countries go beyond China and include the multifaceted challenges of maritime security, piracy, armed robbery, smuggling of small arms, protracted internal conflict, illegal, unprotected, and unregulated (IUU) fishing, cyber security, climate change, and ocean-born trade security. The India-Australia Comprehensive Strategic Partnership (2020), upgraded from the bilateral strategic partnership of 2009, is an effort to broaden the scope of their defence and security relationship by finding new initiatives, methods, and mechanisms to sustain mutual security interests. These have been bolstered to-date through cooperation in the AUSINDEX, Kakadu, Pitch Black, Milan, and Malabar military exercises, and with further collaboration in the Indian Ocean Naval Symposium, 2+2 ministerial dialogues, Joint Working Group for research on enhancing defence industry, mutual logistics, and intelligence support and sharing agreements. These have included, for example, the Mutual Logistics Support Agreement and officer exchange programs. In addition, Australia’s invitation to India to join Exercise Talisman Sabre, the most important military exercise between Australia and the United States, will set another milestone for cooperation. Both countries further engage in humanitarian matters, energy security, and marine and space research. Their commitment to Humanitarian Assistance and Disaster Relief in Afghanistan and within the Quadrilateral Security Dialogue in vaccine distribution, for example, highly has been successful. In energy security, both have agreed to focus on UN Sustainable Development Goals and work on new and renewable technology in solar and wind energy. One potential area for cooperation – being maritime powers – will be wave energy for sustainable and resilient energy sources. The Indo-Pacific Oceans Initiative, in which India and Australia are deeply involved, will work on a whole array of issues involving marine ecology; security of maritime borders; pollutants, like marine plastics; IUU fishing; and marine research for conservation purposes. In addition, India and Australia have updated the Memorandum of Understanding in space programs, technology advancement, and joint space programs. Australia will also be supporting India in tracking the Gaganyaan mission – India’s first space-manned mission – at Cocos Keeling Island. Currently, India and Australia are at a crucial juncture. The election of the new government in Australia in 2022 is likely to aid the strong relationship between the two nations. But the turn for India to head the G20 is also expected to facilitate greater cooperation, particularly in economic and trade liberalisation and potential reform of economic regimes such as the World Trade Organization. In April 2022, India and Australia signed their first Free Trade Agreement (FTA), the India-Australia Economic Cooperation and Trade Agreement. The fast pace at which their trade took off – from US$13.6 billion in 2007 to US$24.3 billion in 2020 – shows the many benefits of diversifying their trade. In addition, the elimination of tariffs for nearly 90 percent of Indian exports will further boost the Indian economy. The question is whether India will continue to engage its economy regionally in multilateral economic bodies. While it declined to join the Regional Comprehensive Economic Partnership, India has begun a process of seeking bilateral FTAs with most member countries. What Australia and India can achieve bilaterally to make the comprehensive strategic partnership effective is to engage in dialogue with regional littoral countries on defence and security. This engagement will help with confidence-building and familiarity among partners. However, the advantage of this type of institutionalisation of the Indo-Pacific depends upon the degree to which states seek interaction. The littoral states, in this sense, should be included within the Indo-Pacific complex as much as possible. The emerging paradigm of inclusivity and pluralism within a free, open, and peaceful Indo-Pacific will bring together the littoral and less powerful countries of the region and empower them to join and engage with others; that is, those who otherwise do not have a voice or clout in international political platforms. Along these lines, the Indian Security and Growth for all (SAGAR) initiative seeks to enhance cooperation through information sharing, capacity building, coastline surveillance, and infrastructure building. The India-Australia-Indonesia trilateral dialogue is another attempt to enhance cooperation in the same direction. Although it was presumed in India that the Labor government in Australia might be more inclined toward China, it was understood that this did not mean a policy and behavioral turnaround. Instead, Canberra’s focus will include a mix of continuity and change. Australia has come a long way in its institutionalisation of the Indo-Pacific, and its ability to diversify its interests by engaging with the littoral countries deserves special attention. To be sure, China’s increased aggression in the South China Sea and it’s diplomatic handling of Australia’s COVID-19 inquiry have been influential here. But the process has also been captive to such institutionalisation as mentioned above. Australia’s involvement with Quad and its participation in the military exercises with India and other Quad countries in the Indian Ocean will continue to strain its relations with China. In addition, the Russia-Ukraine war will likely continue to drive foreign policy activism and cooperation among like-minded countries, of which Australia figures prominently. The takeaway here is that regular interaction between the two countries on various defence-related activities has worked to enhance mutual respect and understanding of shared values. This interaction has broader implications. Both nations can support each other in addressing issues of mutual concern internationally. Their engagement in trilateral groupings like the India-Australia-Indonesia and India-Japan-Australia dialogues, as well as joint engagement in the Supply Chains Resilience Initiative and the Quad with the United States and Japan, represent successful examples of bilateral and multilateral trust and relationship-building. One significant outcome of these growing partnerships will be to revive and strengthen the Indian Ocean Rim Association in awareness generation, capacity-building, and consensus-building. Lastly, all the above initiatives are government efforts to enhance partnerships. The involvement and regular interaction of academia, think tanks, civil society, and the media have been equally important and will continue to play an important role in boosting these relationships.

Diplomacy
Al-Aqsa mosque, Jerusalem, Palestine

Netanyahu’s Jordan Visit Stops Al-Aqsa Escalation, For Now

by Osama Al-Sharif

Last week’s surprise two-and-a-half-hour visit to Amman by Israeli Prime Minister Benyamin Netanyahu, where he met King Abdullah for the first time in almost five years, is a significant diplomatic victory for the kingdom. The visit happened due to the United States’ pressure on Netanyahu and a few days after White House National Security Adviser, Jake Sullivan, was in Israel and the West Bank.  Sources say that CIA Director William Burns was also in the region before Israel’s raid into the Jenin refugee camp on Thursday and played a crucial role in facilitating the Netanyahu-Abdullah meeting. A day before Netanyahu arrived in Amman, accompanied by the chief of Israeli intelligence, sources confirmed that the heads of intelligence bodies of several Arab and Gulf countries were also in Amman.  According to Israeli sources, Netanyahu reiterated his commitment to honoring the historical and legal status quo at Al-Aqsa Mosque. This came after weeks of rising tensions between the Netanyahu-led newly-formed far-right government and Jordan. A day after the new Israeli government was sworn in early January, Israel’s new Minister of National Security, the ultra-nationalist Itamar Ben Gvir, made a short tour of the Aqsa compound, eliciting  Jordanian, Arab, and international denunciation.  Jordan has been bracing for a confrontation with the new Israeli government since Netanyahu won the elections last October and began negotiating with far-right politicians to form a coalition. King Abdullah and Netanyahu had sparred over Israeli breaches of Aqsa for years, and it is no secret that the Jordanian monarch does not trust the veteran Israeli premier. A few days before Netanyahu’s government took office, King Abdullah told CNN that he was prepared for conflict should the status of Jerusalem’s holy sites change. He expressed concern that “Israel is trying to push for changes to his custodianship of the Muslim and Christian holy sites in occupied East Jerusalem, warning that he has “red lines” and that “if people want to push those red lines, then we will deal with that.” The most dangerous escalation occurred on January 17 when Israeli police blocked a routine visit by Jordan’s ambassador to Tel Aviv to the Aqsa. He was later allowed but not before a diplomatic crisis got out of hand. While Israel claimed it was a misunderstanding, Jordan viewed the incident as setting a dangerous precedent. Here, the king called for the support of Jordan’s allies in the Gulf, Europe, and the United States. It is believed that Jordan was certain that the next provocation, which would be the most critical, needed to be pre-empted. This was when the US stepped in, putting pressure on Netanyahu to visit Amman and pledge to honor the status quo. Brinkmanship For King Abdullah, further escalation at the Aqsa would push both sides to adopt a policy of brinkmanship whose outcome would be disastrous. Facing mounting economic challenges at home, a crisis at Aqsa would force the king to take drastic measures. His “red lines” could go as far as suspending the peace treaty with Israel. However, that would open a political Pandora’s Box. The United Arab Emirates (UAE), a signatory to the Abraham Accords, has stood firmly by King Abdullah during the recent crisis. The UAE stands with Jordan on two basic premises – its support for the two-state solution and status quo for Aqsa. Several analysts had noticed that the royal court statement, released following the meeting, did not mention the Hashemite custodianship. However, it underlined the need to observe Aqsa’s historical status quo. Some argue that the legal and historical status quo, which goes back to the late 19th century and has been observed by the Ottomans, the British, the Jordanians, and later by Israel, makes it legally impossible for Israel to disregard. The Hashemite custodianship, referred to as “a special role” in the 1994 Jordan-Israel peace treaty, is less precise. According to another view, Jordan wants to ensure that responsibility for maintaining the status quo at Aqsa is not restricted to Jordan alone but is an international commitment. While Ben Gvir vowed to repeat his Aqsa breaches a day after the Amman meeting – saying only Israel has sovereignty over Jerusalem and the Temple Mount – it is believed that Netanyahu, at least for now, will avoid further provocations with Jordan. All eyes will be on the US Secretary of State Antony Blinken’s ongoing visit to the region. He is expected to underline support for Jordan’s custodianship and the status quo understanding at Aqsa.

Diplomacy
Customers line up outside a grocery store with distance from each other for social distancing during the Corona or Covid 19 virus outbreak

Digital Disinformation and Anti-Chinese Resentment in the Philippines

by Jason Vincent A. Cabanes , Fernando A. Santiago, JR

In the Philippines, digital disinformation campaigns have become central to electoral politics. Unfortunately, their use of vitriolic and socially divisive techniques has become increasingly normalised in the country’s politics, as these techniques are put into play even between national voting seasons. In the Philippines, one pernicious technique that digital disinformation campaigns use is to fan the flames of toxicity on social media. By instigating the loudest and most polarised online supporters to express support for a particular political camp, disinformation producers ignite social media engagement from the broader public. These producers target the most socially divisive of people’s ‘imaginaries’ about politics. As the authors wrote in a previous piece, these imaginaries refer to people’s shared narratives and collective emotions about the political world in which they live.  The year preceding the Philippines 2022 national elections saw disinformation stoking Filipinos’ nationalist and racist sentiments. This was done by hyping up the Chinese military’s supposedly impending occupation of the Philippines and by blaming the pandemic situation on Manila’s rapprochement with China. Such campaigns targeted deep-seated Filipino narratives and emotions of resentment towards the Chinese, which problematically lump together the Chinese state, Chinese nationals, and even Filipinos of Chinese descent.  Some anti-Chinese sentiments are historically rooted. However, more recent resentment has arisen in reaction to China’s increasingly assertive claims in what the Filipinos call the West Philippine Sea (that is, the Philippine-claimed portion of the South China Sea), the feeling of a subtle invasion due to the almost 300 per cent increase of overseas Chinese in-migration to the Philippines between 2016 to 2019, and even the fear of China annexing the Philippines as a province.  Despite former Philippine president Rodrigo Duterte’s so-called pivot to China, Filipinos generally disliked China’s disregard for the 2016 United Nations Permanent Court of Arbitration’s decision favouring the Philippines on the territorial disputes in the West Philippine Sea. The presence of Chinese Philippine offshore gaming operators (or POGO) workers, Chinese-only restaurants, Chinese-subtitled movies in cinemas, and reports of Chinese tourists being rude to Filipinos also heightened the sense that the country was being gradually ‘colonised’. In the lead-up to the 2022 Philippines elections, disinformation drawing from such shared narratives and collective emotions regarding anti-Chinese resentment featured in campaigns across political camps. Supporters of Duterte disseminated content like misleading videos to bolster his image as a strong leader and master tactician. This played into the crafted narrative of him pursuing the Philippines’ best interests by hedging between China and the U.S. Meanwhile, supporters of anti-government factions targeted Duterte’s perceived closeness to Beijing, thinking that this was one of the few weaknesses in his campaign. These anti-Duterte elements put out content falsely attributing quotes to Duterte and his allies that were aimed at amplifying the image of his government as China’s lapdog. To explore the impact of such disinformation on Filipinos, the authors conducted qualitative interviews from June to December 2021 with 15 of Manila’s precarious middle-class citizens. Although these individuals had incomes that technically allowed them a taste of the middle-class lifestyle, they did not live in gated communities and were still exposed to the difficult grind of life in Manila. The interviewees answered questions on disinformation about the Philippines-China territorial disputes and the Covid-19 pandemic. When interviewees who supported Duterte were confronted with disinformation meant to positively portray his government’s approach to Beijing (that included friendlier ties with China), that they would engage in mental acrobatics to reconcile this content with their narratives and emotions of resentment against the Chinese. One of the clearest articulations of this came from a 29-year-old administrative assistant, who disliked feeling that the Philippines was becoming a “province of China”. Without differentiating between Chinese nationals and Chinese Filipinos, she said that Manila’s Chinatown was teeming with Chinese people. She added, however, that even if she were uncomfortable with the Chinese influx into Manila, there was nothing “majorly wrong” with Duterte wanting to be close to China. She could forgive the president for this one thing.  Meanwhile, the interviewees who leaned towards opposing Duterte were adamant that despite their opposition to his stance towards China, they were “not racist”. However, their exasperation that no difficult issue could strike a mortal blow to Duterte’s popularity led to remarks that validated, even if only subtly, their internalised narratives and emotions of anti-Chinese resentment.  For instance, a 45-year-old store supervisor who claimed to have a nuanced view of China-Philippines relations expressed his unfounded belief that 90 per cent of the Chinese migrants presently in the Philippines were “illegal” and had “no papers”. He thought that the government’s laxity with these migrants was probably why Covid-19 spread in the Philippines. This reflects the problematically racist assumption that links the Covid-19 pandemic to the recent increase in the migration of Chinese into the country.  These interviews indicate that anti-Chinese digital disinformation from across political camps does not shift individual Filipinos’ political positions. However, these disinformation campaigns can reinforce toxic nationalism and racism in people’s shared narratives and collective emotions. This kind of impact is an urgent reminder that those engaged in counter-disinformation need to pursue a cross-sectoral code of conduct in election campaigns that explicitly shuns socially vitriolic and marginalising stances, which should include, amongst other factors, racism. 

Defense & Security
PM Benjamin Netanyahu with Spanish PM Pedro Sanchez and Belgian PM Alexander De Croo

PM Netanyahu Meets with Spanish Prime Minister Pedro Sanchez and Belgian Prime Minister Alexander De Croo: - Your moral values do not stand up if you're not willing to fight for them. -

by Benjamin Netanyahu

Prime Minister Benjamin Netanyahu, today, at the Prime Minister's Knesset office, met with Spanish Prime Minister Pedro Sanchez and Belgian Prime Minister Alexander De Croo. Prime Minister Netanyahu showed them sections of the horrific footage from the IDF Spokesperson's Office and told them afterwards: "We face a peculiar kind of enemy, a particularly cruel and inhuman foe. They're genocidal. They're not fighting for this or that territory; they're fighting to eliminate the Jewish state in whatever boundary. They say so. Their charter says if you find a bush and a Jew is hiding behind it, kill the Jew. Kill all the Jews. Their goal goes beyond the destruction of Israel. They're part of an axis of terror: Iran, Hezbollah, Hamas, Houthis. They say death to America—that's the Great Satan. Israel is the Small Satan. I hope I don't find any offense with any of you. You're a middle-sized Satan. They hate our free civilization. They want to bury it. They have an ideology that is mad. In the 21st century, after the Enlightenment, after the Scientific Revolution, after the advance of human rights and democracy, this is sheer madness. I don't give it relative moralism that says, moral relativism that says, well, they have this society. They can do these horrible things to women. They can do these horrible things to human beings. That's their value system. That's not a value system. That's something that has to be fought. And one thing that we discovered in the 21st century is that our assumption that we can live our civilized lives in our advanced countries, seeking peace, prosperity and progress, and we can just sit back and the barbarians will not come back, they come back. They come back in many places, and if we are unwilling to fight the barbarians, they will win. There's a great historian that I admire, an American Christian Humanist by the name of Will Durant, who wrote, in the last century he wrote "The History of Civilization." And he said history does not favor Jesus Christ over Genghis Khan. History favors the strong. Your moral values do not stand up if you're not willing to fight for them. Here is a classic case of savagery and barbarism against civilization. Now, this savagery has two techniques. One is to deliberately target civilians. The whole laws of war, humanitarian law, which we're committed to completely, makes a simple distinction. On one line, they draw, they draw a line in the middle of the world and they say on one line are combatants, and the other line are non-combatants. You can target the combatants. You should target the combatants. But don't deliberately target the non-combatants. They can be hurt, unintentionally. That accompanies every legitimate war. What the terrorists do is erase the sense of sin. They say everyone is a target. These girls in a music festival, these women. They're targets. Babies. They're targets. Old people. They're targets. Holocaust survivors. They're targets. Everyone is a combatant. Everyone! They not only target everyone, every citizen, no one is a civilian, no one is exempt from their murder, from their harm. They also hide behind their civilians. They deliberately implant themselves in hospitals, in schools, in residential areas, in UN facilities. They fire their rockets from there. Thousands of them. We might have an alert as we speak. There is no symmetry here! These people target directly our cities all the time. Thousands and thousands and thousands of rockets. Falling on Barcelona, falling on Madrid, falling on Brussels, falling on Antwerp. Or any one of the European cities. Thousands! Israel is a small country. They deliberately target civilians and they deliberately hide behind civilians and use them as a human shield. That's a war crime. So what is a democracy, committed to the human, to the laws of war, supposed to do? Do the laws of war give exemption to such criminals? And the answer is: They don't. They say do your best to target the terrorists. Do your best to minimize civilian casualties. But if we, the democracies, accept, say that under no circumstances should we go in because civilians tragically get killed, then we lost. We lost before we begin. You lost and you lost. Spain lost. Belgium lost. Because this will spread. You will see it. Very soon. Because the Axis of Terror is not going to stop. If they can emerge victorious here, they intend to bring down the Middle East, and next they'll go to Europe. After that they'll go elsewhere. If you think I'm exaggerating, I am not. This is where the pivot of history now is going to be decided. Do we stop them there? Or do they come to you? Now, how do you stop them? What do you do? What did the Western countries, what did the democracy do when terrorists embed themselves amidst civilians? Let me say from the start that any civilian death is a tragedy. Any one. And to avoid them, what you do is first, you try to get the civilians out of harm's way. And that's exactly what we did. We asked, called, sent leaflets, phoned the civilians in the areas where we were going to hit the terrorists, the Hamas terrorists, and we said please leave. When they tried to leave, Hamas kept them at gunpoint. Stay, because Hamas doesn't care that their civilians are killed. This is a messianic death cult that hides in the bunkers. As one of their spokesmen said: the underground belongs to Hamas; aboveground, so civilians, that's Israel's problem and the UN problem. Not their problem. On the contrary. It's their shield. So, what do you do? We ask them to leave. Hamas tries to stop them from leaving. Thankfully, many left. We set up a safe corridor, from the north of Gaza, where we were concentrating our effort against the terrorists, to the south. A safe zone in the south, safe corridor to the south. Hamas shot the safe corridor. They fired on the safe corridor, so the people would be trapped in. But they kept on leaving. I'm happy to say that there is a decline in civilian casualties, which is our goal. Our goal is to have none. And primarily that's because of the ground action. The ground action has resulted in the fact that the warnings that we give are addressed by the population, the civilian population that goes south. When they go south, we give them humanitarian support. There are about 150 trucks now going in. Probably go up to 200 and beyond: food, medicine, water. I have not seen yet the effort that I'd like to see from the UN and the international agencies to build there shelters. Winter is coming and there is no reason not to build tens of thousands of tents in the safe zone, next to the safe zone. Because they don't enter the safe zone, the UN, which I think is shocking. I said, okay, we'll give you a lot of little zones. And they're building little safe zones to get the population out of harm's way. Israel is doing everything in its power to get the population out of harm's way. Hamas is doing everything in its power to keep that population in harm's way. That's the facts. I'll give you an example – Hitler, the original Nazis, they invade Europe, they do these horrors on a mass scale. And by the way, these killers would do exactly what Hitler did if they could away with it. The difference is only in capability, not in intent and not in savagery. Hitler invades Europe, perpetrates these horrible savageries, the Holocaust and so on. And so on. And the Allies invade. They invade Normandy. The German army is in the cities. You've seen the footage. The Allies say, "No, we can't do anything. We can't fire," because they're amid civilians? Of course not. They try to do exactly what we are doing: try to minimize the cost. And then they go through the cities of France and they go through the cities of Germany. And unfortunately, many, many, many civilian casualties occur. I don't know what history would have been like if we had demonstrations and protests in the West against the Allies for incurring civilian, German civilian casualties. I know history would have been very different. But we are the Allies, along with the moderate Arabs, with the United States, with Europe. We're the Allies. And they're the new Nazis. Israel cannot be held to a standard that no one is being held to. We have to fight the terrorists. We're in complete compliance with international law. I think in many ways, we're setting a different standard. We seek to minimize civilian casualties, and Hamas seeks to maximize it. And I would strongly urge you to make that distinction, not merely because it's right and just, but because your very societies are on the line. You're next. This is a battle for civilization. It has to be won. We will win it, because we have no other choice. We don't have a future if we don't. Hamas has already said, 'We'll do it again and again and again.' So we'll have to eradicate them. Just as you couldn't leave a reduced Nazi presence, you know, in Germany. You couldn't do that. And we are not going to leave a reduced Hamas presence in Gaza. But the consequences are much bigger. And I think that we should all unite in making sure that this kind of savagery never shows its face again. I thank you." The views and opinions expressed in this article solely belong to the author and do not represent the perspectives or stance of World and New World Journal, nor do they reflect the opinions of any of our employees. World and New World Journal does not endorse or take responsibility for the content, opinions, or information presented in this article. Readers are encouraged to consider multiple sources and viewpoints for a comprehensive understanding of the subject matter. Thank you for your understanding.

Energy & Economics
Tourist exchange rates at a streetside booth as the Thai Baht falls for the 7th week on June 9, 2013 in Bangkok, Thailand

Strong dollar snowballs across Asia

by Brad W. Setser

The dollar’s strength is placing pressure on economies around the world, including in developing Asia. What makes this bout of dollar strength unique is that the stress is not limited to Asia’s developing economies. Asian economies are diverse and the direct financial impact of dollar strength varies. Some regional economies have significant foreign currency debts and limited foreign currency reserves. Unsurprisingly, these economies are in financial trouble. Sri Lanka defaulted on its bonds earlier in the year and is now trying to restructure its external debt. Pakistan has had to seek an emergency financing package from the International Monetary Fund, backstopped with pledges of additional support from both China and the Gulf. Bangladesh has proactively sought out IMF financing in the face of a terms of trade shock. Laos is, in all probability, relying on the continued forbearance of China’s policy banks to manage its unsustainable debt loads. All these countries are struggling to pay for imports of oil and natural gas. A broader set of Asian economies have relatively strong foreign currency balance sheets and are not at risk of immediate financial distress. Many have been able to rely on their local currency bond markets to finance fiscal deficits, limiting their direct financial vulnerability to swings in the dollar. India is in a much stronger position than during the 2013–14 ‘taper’ tantrum. It started 2022 with US$650 billion in foreign reserves, more than double the US$250 billion it held in 2012. The Indian government’s external debt, primarily to the multilateral development banks, only totalled US$125 billion. Thailand’s government started 2022 with over US$250 billion in foreign exchange reserves — or over 50 per cent of its GDP — while owing a bit over US$30 billion to external creditors. Other countries have more subtle strengths. For example, a substantial share of Indonesia’s US$80 billion in international sovereign bonds are denominated in yen. At the same time, balance sheet resilience is not sufficient to insulate a country’s broader economy from the impacts of a strong dollar. Even countries that have little to fear financially worry about the impact of currency weakness on households’ costs of living. There has been little correlation to date between the extent of currency depreciation across the main Asian currencies and the underlying strength of countries’ foreign currency balance sheets. The currencies of advanced Asian economies have actually depreciated more than the currencies of developing Asian economies. Japan — with plenty of reserves, significant foreign assets in its government pension fund and insurance companies that are structurally ‘long’ dollars — has experienced the largest depreciation. Taiwan and South Korea have followed. Meanwhile India, Indonesia, Malaysia and Thailand have experienced smaller depreciations. The reason for this is simple. Up until Japan’s heavy intervention in late September 2022, lower income Asian economies had been more willing to defend their currencies through a combination of rate increases and foreign reserve sales. There are signs that this is changing. Japan intervened heavily in September and October. South Korea is now worried that the won  has become too weak and is seeking to join Japan in obtaining a standing Federal Reserve swap line to meet dollar liquidity needs in its financial sector — potentially freeing up more of its existing reserves for intervention. Even though the dollar is now off its October peak, developing Asian economies continue to face several risks. The first is that certain economies may overestimate their balance sheet strength and sell foreign exchange for longer than is prudent. The basic principle is that temporary shocks can be financed with borrowed or reserve sales while permanent shocks require adjustment. The longer global energy prices remain high and the dollar remains strong, the more difficult it will be for countries to avoid adjustment. The second risk is the possibility of an additional shock from Japan. Japan’s efforts to limit the yen’s depreciation through intervention may fail, as it is harder for Japan to defend its currency through intervention than it is for smaller economies, whose financial markets remain less integrated into global markets. There is the additional risk that yen weakness and imported inflation could lead the Bank of Japan to abandon its policy of ‘yield curve control’ and that the associated rise in long-term Japanese government bond rates could push up interest rates globally. Many emerging economies would likely need to raise their domestic interest rates to avoid importing additional inflation, and to limit popular pressure for fiscal subsidies to offset higher fuel prices. This would be the Asian version of what is now called a reverse currency war. The third risk is a currency shock from China. China has long relied primarily on the signal sent by the People’s Bank of China’s daily fix — the central reference point for daily trading — to manage the yuan with only limited direct intervention by its central bank. To date, the pressure on China appears manageable. News reports suggest that the PBoC has leaned on China’s large state banks to use their balance sheets to help maintain the trading band around the yuan, but there is little evidence of pressure on the central bank’s reserves. However, if its economy remains weak, China may choose to allow more depreciation — both against the dollar and against the currencies of its trading partners to restart its economy. This would be an admission that China’s ability to avoid a prolonged stall through internal demand is limited and that exports are again required for growth. A yuan that is as weak as the yen could easily trigger a race down across the currencies of developing Asia. Many, though not all, developing Asian economies are less vulnerable to a repeat of the 1997 crisis. But few countries will be able to escape the fallout from the dollar’s current strength. A broader overshoot of many currencies that amplifies concentrated pockets of debt difficulties and complicates the fight against inflation globally remains a real risk.

Energy & Economics
Oil refinery plant in Louisiana, United States of America

US Needs to Play Larger Role as Swing Producer of Oil and Gas in the Current Crisis

by Thomas J. Duesterberg

In response to Russian aggression in Ukraine, European nations have drastically reduced imports of crude oil, refined petroleum products, and natural gas from Russia. The 2021 levels of these energy imports were around 2.2 million barrels per day (mbd) of crude oil, 1.2 mbd of refined products, and 155 billion cubic meters (bcm) of natural gas on an annual basis.In addition to extreme difficulties in obtaining new sources of natural gas and to a lesser extent oil, the price increases throughout Europe since the onset of the war have been of historic proportions. In the days following the invasion, natural gas prices shot up by 62 percent, and UK energy prices were up by 150 percent. The full impact of the war, along with the related need to rein in the highest inflation numbers in over 40 years, has pushed Europe into a recession that threatens households and small businesses as well as European manufacturers’ ability to remain competitive. As a result, if the region cannot quickly assemble alternative supplies, the European commitment to assist in containing Russian aggression may weaken.  Swing Producers Alternative sources of crude oil and refined products are more readily available than natural gas since the latter requires costly new infrastructure to be put in place. Building new pipelines, liquified natural gas (LNG) facilities, and transportation infrastructure and ramping up production all require permitting and financing that is difficult to obtain , at least in the developed world. Saudi Arabia and other OPEC members were the traditional swing producers of crude oil and some refined products until the fracking revolution in the US. OPEC has decided to cut back production in the current situation, apparently at least in part to placate its Russian fellow traveler. Both the Saudis and the Emiratis, despite embarrassing entreaties from the Biden administration, have publicly sided with President Vladimir Putin on the question of supplies in the short run. Both Venezuela and Iran, whose oil sectors are now under US sanctions, could conceivably put new supplies on the market. The ongoing negotiations to renew the Joint Comprehensive Plan of Action (JCPOA)—which the European Union and some voices in the Biden administration are promoting—and behind-the-scenes US-Venezuela talks are both intended in part to address existing shortages and high prices. In addition to how agreements with these two rogue powers would damage long-standing US policy, relying on these authoritarian states would set back any hope of progress in reducing atmospheric pollution. Figure 1 shows some of the world’s largest emitters of methane, which is 80 times more potent as a greenhouse gas than carbon dioxide (CO2). Methane is responsible for about 25 percent of today’s global warming, according to the Environmental Defense Fund. Russia, Iran, and Venezuela rank among the world leaders in this race to the bottom, even though the much larger US, European, and Chinese economies produce more of this gas. Figure 2 shows that, in terms of methane intensity, the US emits about 35 tons of CO2 equivalent in methane per million dollars of GDP. The equivalent number is 404 for Russia, 733 for Iran, 137 for Saudi Arabia, and 1,864 for Venezuela. Figure 3 gives similar comparisons for CO2 intensity for leading countries. Again, Russia is much more profligate in its performance than the US or EU, releasing about 1,006 tons of CO2 per million dollars of GDP. Iran, Venezuela, and Saudi Arabia spew out 2,162, 1,756, and 651 tons of CO2 per million dollars of GDP, respectively.  China now produces about 750 tons of CO2 per million dollars of GDP, compared to 225 for the US and 174 for the EU. China is by far the world’s largest producer of CO2, with higher levels of greenhouse gas emissions than all members of the Organization for Economic Cooperation and Development combined (see figure 4). This measurement does not include emissions that will occur after the completion of 94 thousand megawatts (MW) of new coal-fired electric generation capacity that is now under construction or the 196 thousand MW of new capacity already permitted. China is not a major oil and gas producer but has built up 30 percent excess capacity in oil refining, using crude oil imports in large and growing quantities from Russia, Venezuela, and Iran at favorable prices. Figure 5 shows recent data, derived from Chinese customs statistics, on the level and price of crude oil imports from Russia.   As the US and Europe have closed refineries in recent years, due in part to policies that made the financing of new fossil fuel projects uneconomic, China could possibly rush to compensate for current shortages of diesel fuel and aviation fuel. Whether for crude oil or refined products, relying on US- or European-based products is clearly preferable from an environmental point of view.  There are of course many other producers of crude oil: Norway, the United Kingdom, Brazil, and Africa. The reserves of these countries are large, and for the most part, their production has not been subject to political instability, except in certain African countries. Nonetheless, there are limits to their future expansion in the near term. Much of the production outside Africa is offshore, where the fields are difficult, expensive, and time-consuming to ramp up. Many Sub-Saharan countries rely on Chinese development assistance, which has already resulted in distressed debt in 60 percent or more of these countries. Volumes from these areas are unlikely to meet immediate needs. Finally, as figure 6 illustrates, Central Asia and the Caucasus have been exporting around 1 mbd to the EU. Much of this comes to Europe through a pipeline from Tengiz in Kazakhstan to the Black Sea and onto Europe and other destinations. But the pipeline passes through southern Russia and is potentially subject to sanctions from the EU and the US. Russian firms hold about 36.5 percent of the project while US majors own about 22 percent. Russia could cut off the flows through this pipeline at any time. Huge amounts of oil reserves are available in this region but must be transported via Russia or Iran to reach western destinations. Neither of these allied powers is keen on competition from non-aligned sources of petroleum, although Russia has allowed some exports of oil from Azerbaijan. Larger supplies of oil from Kazakhstan across the Caspian Sea could be brought through pipeline via Turkey, but these too are complicated by the interests of the Iran-Russian entente. Sources of Natural Gas for Europe Since February 24, 2022, Europe has only had partial success in replacing the huge amounts of natural gas that either EU sanctions or Russian actions have cut off. Most of the replacements have been in the form of LNG. A relatively mild summer in East Asia and price arbitrage allowed cargoes contracted to this region to be resold to Europe, but this source of supply is beginning to decline as winter approaches. The EU also has negotiated new pipeline supplies from existing sources in North Africa and Norway. Prior to the Russian aggression, Norway regularly supplied Europe with about 100 bcm yearly. It has raised supplies by some 8 percent since late 2021, but this represents only a small proportion of the 155 bcm that Russia previously delivered. There is huge potential to increase pipeline imports from Central Asia and the Caucasus. But again, the difficulty of bypassing Russian and Iranian territory and these countries’ opposition to competition makes any near-term additions unlikely. The existing “Southern Corridor” pipeline from Baku is delivering about 10 bcm of Azerbaijani gas through Turkey and into southern Italy. Plans to increase production and pipeline throughput are in place but remain difficult due to political instability in the Caucasus and hesitations of both buyers of the gas and financial providers to undertake long-term, risky investments at this time. Figure 7 shows the largest LNG exporters as of 2021. The Gulf Cooperation Council members have ample supplies of gas, but only Qatar ships LNG in any material amount to Europe. Its exports via LNG to Europe were about 11 bcm in 2021. Qatar has plans to expand capacity significantly, but not until 2026 at the earliest. Its plans also depend on securing long-term contracts with buyers, and European buyers remain hesitant to agree to these. Australia was the biggest LNG exporter in 2021 but sent only 0.037 bcm directly to Europe that year. Australia has no current plans to expand its capacity for exports, and internal politics have turned against new exports in any case. Role of the United States The US will have the largest volume of LNG export capacity in the world when new plants that are now being built and are expected to become operational in the next two years start production. Figure 8 charts the progress of LNG export capacity in the US, which in 2022 has already become the largest exporter of this comparatively clean fossil fuel resource, with projected exports of 114 bcm. New capacity coming online between 2023 and 2025 represents more than 50 bcm of capacity. The newest facility started exporting in August and represents 17 bcm of additional capacity. The US has already exceeded President Joe Biden’s pledge in March to increase LNG exports to Europe by 15 bcm this year, and it is estimated that the total increase will reach 45 bcm in this calendar year.Total production of natural gas in the US has reached all-time records throughout 2022, facilitating increases in exports. The US is thus poised to steadily increase its exports to Europe and the rest of the world if public policy does not undermine further gains in production or infrastructure construction. It is worth noting that, as of 2020, only 11 percent of total natural gas production in the US originated on federally owned lands. Reliance on private property for gas production will limit the current administration’s ability to reduce production, although it does have other means to prevent the building of new infrastructure and discourage financing of new projects. In short, the US does have the means to be a swing producer and exporter of natural gas to address the current energy crisis. US production of crude oil and refined petroleum products remains below peak levels set prior to the pandemic. The pro-production policies of the Trump administration, as well as the de facto tolerance of the Obama years, facilitated production and export capacity growth. In contrast, the Biden administration has adopted a whole-of-government effort to discourage and prevent crude oil exploration and development, as well as the construction of infrastructure required to bring supplies to refineries, chemical plants, and export facilities. Over 25 percent of crude production in the US originates on federally owned lands. New federal leases for exploration and development on federal lands are at the lowest levels since just after World War II, partially explaining the loss of production in recent years. Crude oil production in 2022 is averaging about 1 mbd below the peak reached in late 2019. Total exports of crude oil and petroleum products declined in 2021 but grew to early 2020 levels during the summer months as prices rose and the administration depleted the national petroleum reserve to levels not seen since the 1980s. However, exports of crude and refined products to leading destinations in Europe are trending upward. Figure 9 shows that EU imports of oil and gas from the US by volume have increased substantially in the last five years. The pace of increases has accelerated since February 24. Summary Europe is in a desperate economic slump. High prices for energy are sapping the ability of homeowners to heat their homes, small businesses to remain solvent, and energy intensive industries to keep operating. High prices are also affecting other countries around the world, including close allies in the Pacific Rim. The US has the raw resources of oil and gas to be a bridge producer to meet much of the current shortage. The Biden administration ought to make a more substantial contribution to alleviating these problems. Instead, it asserts that the US must concentrate its ambitions and funding on developing renewable energy resources, even though these new sources will require decades to replace oil and gas power in the modern economy. Biden’s approach also ignores the fact that renewables production relies on China—which accounts for 80 percent of global supplies of solar panels, 58 percent of wind turbines, 60 percent of the rare earths needed for solar energy and ubiquitous semiconductors to power the modern economy, and nearly 80 percent of the lithium-ion batteries needed for electric vehicles and power storage in a renewables-based electric grid. China is also the largest emitter of CO2 and methane in the world and continues to build new fossil fuel capacity. The US needs a realistic course correction to address the economic and political crisis caused by Russia’s aggression against Ukraine, and to minimize the environmental damage caused by the need to replace Russian oil and gas from other sources.

Defense & Security
Protestors take part during a demonstration in front of the Iranian embassy in Brussels, Belgium, following the death of Mahsa Amini

Tehran lashes out at Israelis’ support for Iranian protest movement

by Alex Vatanka , Jonathan Harounoff

For seven weeks, Iran has been gripped by widespread protests — the first of their kind driven by women — following the death of 22-year-old Mahsa Amini at the hands of the regime’s so-called morality police. These demonstrations represent perhaps the most sustained domestic challenge to the clerical leadership since 1979, despite efforts by authorities to quell the unrest through mass arrests, beatings and killings, and internet and social media cuts. The head of Iran’s Islamic Revolutionary Guard Corps (IRGC) even warned protesters that Oct. 29 would be their “last day of riots,” in a sign that security forces will intensify their crackdown on the unrest, which Iranian leaders have blamed on Israel and the United States. The charge against Israel is nothing new; but as with previous rounds of accusations, Tehran has yet to produce tangible evidence to substantiate its claim that the Israeli intelligence service is, together with the U.S., the real mastermind behind the protests. Ironically, while the official narrative from Iran has long been that Israel is a decaying power unable to stand up to Tehran, it is Israeli assessments on the state of the protests that appear to be of most interest to the senior leadership in Tehran. Kayhan, the newspaper closest to Supreme Leader Ali Khamenei, who appoints the paper’s chief editor, wrote in an editorial in mid-October that even Israel has accepted that the protests will ultimately fail to topple the regime. By quoting a couple of Israeli television commentators, the paper wishfully concluded that Israeli experts have determined that “the number of protesters in Iran is small and they lack [a shared] ideology” and that “Unrests in Iran require maturity, leadership, planning and political vision, and currently we do not have any of these.” The stock Khamenei’s top men put in Israeli assessments of the prospects for popular unrest would seem bizarre if it were not so clearly intentional. Pointing the finger at Israel is self-serving for officials in Tehran. Trying to pin a nationwide uprising on a detested regional rival, one whose existence the Islamic Republic has refused to accept since 1979, is obviously more convenient than acknowledging the genuine grievances pushing Iranian protesters to the streets. In reality, Iran’s leaders know very well that while the U.S. and Israel both might have an interest in shaping and aiding the protest movement once it began, this large-scale mobilization of the Iranian public is a result of the regime’s own policies. No foreign intelligence service would be able to orchestrate such a large-scale popular revolt on its own; the population of the country would not have risen up like this had it not been so chronically beaten down by the regime’s policies since 1979. But yet the very same anger that the Islamists have created among the Iranian public has become an opportunity for the Israelis in their multi-front campaign against Tehran. The ongoing threat of nuclear brinkmanship has long loomed over Israel’s decades-old shadow war with Iran. While cyberattacks and assassinations might be effective tools deployed by Israel to destabilize Iran’s internal apparatus, the protests have revealed another powerfully simple yet possibly destabilizing strategy at its disposal: speaking directly to the Iranian people. Iran’s leaders would likely contend that this isn’t the first time foreign powers have intervened in Iran’s domestic politics, pointing to the role the Central Intelligence Agency (CIA) and the British secret services played in overthrowing Prime Minister Mohammad Mossadegh in 1953. For their part, Israel and the U.S., while denying involvement in the protests’ inception, would say that that, today, they are merely expressing support for a population that’s looking to break free from the tight grip of Tehran’s militant clerical political class. Israel’s political landscape is famously divided, which is why, yesterday, Nov. 1, the country held its fifth national election in less than four years. But there is virtual unanimity across the political spectrum when it comes to supporting the protesters in Iran. And since the protests began in mid-September, Israel’s public diplomacy efforts have been ramping up across all levels of society in more direct ways not seen for decades. Israel is currently home to tens of thousands of Jewish people born in Iran or born to Iranian parents, including major public figures like Rita, one of Israel’s most famous singers, former President Moshe Katsav, or former heads of the Israel Defense Forces (IDF) Shaul Mofaz and Dan Halutz. From early October, dozens of Israelis have gathered in Jerusalem in support of the women of Iran. Protests have also spread across the Middle East and to Europe and North America, as well. This past weekend, in Tel Aviv, hundreds of Israelis gathered, waving Israeli and pre-1979 Iran flags while chanting, “From Tel Aviv to Tehran, we are standing together.” It’s not uncommon to see Israelis protesting against the theocratic regime in Iran. In fact, stoking fear in Israelis about Iran’s nefarious nuclear program is typically a cornerstone of any Israeli prime minister’s tenure, especially under Benjamin Netanyahu, who repeatedly said that the Islamic Republic was the single greatest existential threat to Israel. Still, an overzealous Israeli response to the protests in Iran could backfire and lend credibility to the narrative from Tehran that Israel is behind them, according to David Menashri, an Iran expert and professor emeritus at Tel Aviv University. “With the regime claiming that the protests are initiated by the U.S. and Israel, Israeli public support may be a double-edged sword for them,” Menashri explained. Relations between Iran and Israel haven’t always been so acrimonious. Prior to the Islamic Revolution of 1979, the two countries enjoyed 30 years of cooperation. In 1950, Iran even became the second Muslim-majority nation (after Turkey) to recognize the State of Israel. Iran fit neatly into the “Periphery Doctrine” espoused by Israel’s founding prime minister, David Ben-Gurion, which referred to his ambition to forge an alliance with non-Arab enemies of its enemies, including Iran and Turkey. But those days are over. Officials in Tehran are now very likely anticipating more Israeli efforts as part of what Iran considers to be a broader Israeli information war — a campaign that will seek to target the Iranian population and to keep them mobilized against the regime in Tehran to the extent possible. This campaign aims to stress two simple points of view to the Iranian population: First, that the common enemy of Israel and the Iranian people is the militant Islamist ideology of Ayatollah Ali Khamenei. And second, that a bright future awaits Iranian-Israeli relations as soon as the policy preferences of the Iranian people are reflected in Iran’s foreign policy. As Israel ratchets up its public diplomacy, the leadership in Tehran will be forced to respond. But it is hard to see what effective counter-arguments the Islamic Republic has left at its disposal that might put the brakes on this latest Israeli initiative and momentum.