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Energy & Economics
Ukraine refugees map to neighbors countries. vector

The Economic impacts of the Ukraine war on Eastern European countries with a focus on inflation and GDP growth

by World & New World Journal Policy Team

I. Introduction Russia invaded Ukraine in February 2022. As the Russian invasion of Ukraine enters its fourth year, its most immediate and visible consequences have been loss of life and large numbers of refugees from Ukraine. However, given the interconnected structure of the international political, economic, and policy systems, the ramifications of the Ukraine conflict can be felt well beyond Ukraine and Russia. Much of the recent literature and commentaries have focused on the military and strategic lessons learned from the on-going Ukraine conflict (Biddle 2022; 2023; Dijkstra et al. 2023). However, there are not many quality analyses of economic effects of the Ukraine war on Eastern European countries, including Russia and Ukraine. This paper focuses on the economic effects of the Ukraine war on nine Eastern European countries, including Russia and Ukraine. This is because although Eastern European countries are neighbors of Russia and Ukraine and have had significant negative economic outcomes from the Ukraine war, these countries were mainly ignored by researchers. II. The Economic Effects of the Ukraine war The impacts of war are far-reaching and devastating. War causes immense destruction of property and loss of life. It also creates psychological trauma for those who have experienced it firsthand. War can also have long-term economic impacts, such as higher unemployment and increased poverty. War can also lead to the displacement of people, as we have seen the millions of refugees who had been forced to flee their homes due to conflicts. War can also have political effects, such as creating new states or weakening existing nations. It can also lead to the rise of authoritarian regimes in many post-war nations. War can also lead to increased militarization as nations seek to protect themselves from future conflicts. The Ukraine war might have broader economic consequences. The supply chains may be affected because of the destruction of infrastructures and resources. War mobilization may affect the workforce and economic production. Actors in the economy may also act strategically to deploy resources elsewhere or to support the war effort because the war has affected incentive structures of workers and business. These effects can be local to geographical areas engulfed in conflict but also cause ripple effects to a wider regional area and to the global economy. Trade, production, consumption, inflation, growth and employment patterns may all be influenced. Peterson .K. Ozili.(2022) claimed that the scale of the Ukraine war had its negative impact on the economies of almost all countries around the world. According to Ozili, the main effects of the Ukraine war on the global economy are several, but this paper focuses on two below: Rising Oil Gas Prices  and inflation – European countries import a quarter of their oil and 40% of their natural gas from the Russian Federation. The Russian Federation is the second largest oil producer in the world and the largest supplier of natural gas to Europe, and after the invasion, European oil companies will have problems getting these resources from the Russian Federation. Even before the Russian invasion, oil prices were rising because of growing tensions between countries, the COVID-19 pandemic, and other factors, but remained in the $80–95 per barrel range. After the invasion, this price reached the value of $100. Natural gas prices rose 20% since the war began. Rising gas & oil prices can drive high inflation and increase public utility bills. Decline in production and economic growth. Rising oil and gas prices lead to high inflation and, therefore, a decline in consumption, supply and demand, thereby causing decline in growth and production. This paper focuses on inflation and GDP growth of nine Eastern European countries regarding the economic effects of the Ukraine war. Ozili (2022) claimed that very high inflation was a perceived negative consequence of the Russian invasion of Ukraine. As Figure 1 shows, inflation in the EU jumped in the first month of the invasion, and the increasing trend continues. EU inflation in 2022 peaked in October and amounted to 11.5% that was a historical record. However, inflation has slowly declined as energy prices have gone down. This higher inflation in Europe basically resulted from energy price increase. As Figures 2, 3, and 4 show, energy prices in Europe skyrocketed in 2022. As Figure 2 shows, energy prices have been the most important component of high inflation in the EU.  Figure 1: Average inflation rate in the EU (%). Source: EurostatCreated with Datawrapper     Figure 2: Main components of inflation rate in the Euro areas.  Figure 3: Natural gas prices in Europe, January 2021- end 2024  Figure 4: Crude oil price, January 2020-January 2025 Source: Eurostat Created with Datawrapper Inflation skyrocketed not only in the EU member countries, including Eastern European countries, but also in Russia and Ukraine.  Figure 5: Inflation rate in Russia, 2021-2025 As Figure 5 shows, inflation rate in Russia averaged 8.16 % from 2003 until 2025, but it reached an all time high of 20.37 % in April of 2022 just after the Russian invasion of Ukraine. In 2022, Russia experienced high inflation, with the average annual rate reaching approximately 13.75%. This surge in inflation was largely attributed to the economic impact of Western sanctions and increased government spending related to the war in Ukraine. From end of 2022 and throughout 2023, however, inflation was brought under control, but in 2024 inflation started to climb again. The inflation rate in Russia has been moderately high in 2024 and 2025, reaching to 9.5% in 2024 and 9.9% in May 2025 and 9.4% in June 2025.   Figure 6: Inflation rate in Ukraine, 2021-2025 The Ukrainian economy has undergone harsh conditions with the onset of Russia’s full-scale invasion of Ukraine in 2022. Following the start of the invasion, inflation skyrocketed to 26.6% in October 2022 from 10.0% in 2021. Inflation in Ukraine started to slow down from the end of 2022 throughout 2023, reaching 5.1% in November 2023. However, inflation began to rise from early 2024 and then grew to 12% in December 2024. As Figure 5 & 6 shows, inflation rates in Russia and Ukraine do not follow the pattern of EU countries in which inflation skyrocketed in 2022 and then has slowly declined over time. Rather inflation in Russia and Ukraine skyrocketed in 2022 and then slowed down in 2023 and started to climb again in 2024 and 2025. As Figure 7 shows, inflation in Eastern European countries has been also very high just after Russia invaded Ukraine. Hungary’s annual inflation rate surged in 2022, reaching a peak of 26.2 % in January 2023. By mid-2023, it began to decline, and by 2024, it showed a gradual decline trend, reaching 3.7 % in 2024. And inflation in Hungary slightly increased in 2025, reaching 4.6% in June 2025 and 4.4% in May 2025.  The Czech Republic(Czechia) experienced a significant surge in inflation in 2022, with the average inflation rate reaching 15.1%. This marked the second-highest inflation rate since the Czech Republic’s independence in 1993.  Two factors mainly contributed to this surge: High energy prices:The global energy crisis, exacerbated by the war in Ukraine, significantly impacted energy prices in the Czech Republic.  Increased food prices: The rising energy costs also led to higher food prices, with some sectors experiencing inflation rates as high as 26%.  The inflation rate in the Czech Republic in 2023 was relatively high, reaching 10.7%. However, inflation significantly declined in 2024 and 2025. The average annual inflation rate in the Czech Republic for 2024 was 2.4%. The inflation rate in 2025 was also low, recording 2.7% in July 2025. Poland also experienced a significant increase in inflation in 2022, with the average inflation rate reaching 14.2%. The inflation was down to 11.47% in 2023, but it was still high. The rate continued to fall, reaching 3.72% in 2024. In July 2025, inflation dropped to 3.1%. Similarly, Bulgaria experienced a significant surge in inflation in 2022, reaching a peak of 18.7 % in September 2022. However, Bulgaria’s annual inflation rate continued to decline from 13.02% in 2022 to 8.6% in 2023 and 2.6% in 2024. The inflation in June 2025 was 3.1%.  Romania experienced a significant surge in inflation in 2022, reaching a peak of 14.6 in November 2022. However, the annual inflation rate in Romania declined from 13.8% in 2022, recording 10.4% in 2023 and 5.58% in 2024. The inflation rate reached a more moderate rate of 5.8% in June 2025.  Slovakia experienced a significant surge in inflation in 2022, reaching a peak of 15.4 % in November 2022. However, the annual inflation rate in Slovakia declined to 10.96% in 2023, and 3.15% in 2024. The inflation rate in Slovakia reached a more moderate rate of 4.3% in June 2025.  Slovenia had much lower inflation rate than other Eastern European countries. The annual inflation rate in Slovenia was 8.83% in 2022, 7.45% in 2023, and 1.97% in 2024. The inflation rate in Slovenia reached a relatively low rate of 2.2% in June 2025.  Unlike Russia and Ukraine, these Eastern European countries followed the pattern of EU countries in which inflation skyrocketed in 2022 and then has slowly declined over time.   Figure 7: Inflation rate in Eastern Europe during the Ukraine war Very high inflation in Europe during the early stage of Ukraine war basically resulted from energy price increase as Figures 2, 3, and 4 show. It is because European countries were heavily dependent on Russian energy. Figure 8 shows that a number of Eastern European countries were significantly dependent on Russian energy in 2020 before the Ukraine war. For example, Slovakia and Hungary depended on Russia for more than 50 % of their energy use. Moreover, Europe was the largest importer of natural gas in the world. Russia provided roughly 40% and 25% of EU’s imported gas and oil before the Russian invasion of Ukraine. As Figure 9 shows, major gas importers from Russia in 2021 were European countries.  Figure 8: EU member country’s dependence on Russia energy  Figure 9: Major EU importers from Russian Gas in 2021. However, since the Russian invasion of Ukraine in 2022, more than 9,119 new economic sanctions have been imposed on Russia, making it the most sanctioned country in the world. At least 46 countries or territories, including all 27 EU nations, have imposed sanctions on Russia. EU trade with Russia has been strongly affected by the sanctions, resulting in a 58% decline in exports to Russia and an 86% drop in imports from Russia between the first quarter of 2022 and the third quarter of 2024. In the response, as Figure 10 shows, Russia cut its gas exports to the EU by around 80% since the Russian invasion, resulting in higher gas price in Europe.  Figure 10: Monthly Russia-EU pipeline gas flows, 2022-2025 Nonetheless, Figure 11 show that Hungary, Slovakia, and Czech Republic have been major  importers of Russian gas and oil after Russia’s invasion of Ukraine, while Figure 12 shows that Hungary, Bulgaria, Slovenia, Slovakia, and Czech Republic have been major importers and consumers of Russian gas after the Ukraine war. Figure 11: Largest importers of Russian fossil fuels (January 1, 2023 to February 16, 2025)  Figure 12: Selected European countries’ imports of Russian natural gas as shares of total consumption. As energy prices in Europe skyrocketed, inflation, including food price also skyrocketed in Europe. As a result, consumption in Europe was down and GDP growth declined in Europe after the Russian invasion of Ukraine. As Ozili claimed, lower growth rate was also a perceived negative consequence of the Russian invasion of Ukraine. As Figure 13 shows, GDP in EU was down to 3.5 % in 2022 compared to 6.3% in 2021, and it was further down to 0.8 % in 2023 because of economic stagnation and high inflation caused by the Ukraine war.  Figure 13: Average annual GDP growth rate in EU, 1996-2025. Like EU countries, Russia, Ukraine and some Eastern European countries experienced negative growth rates in 2022 & 2023 after Russia’s invasion of Ukraine in February 2022. Russia’s economy has undergone significant transformation since its full-scale invasion of Ukraine in February 2022. As Figure 14 shows, Russia GDP growth rate for 2022 was -2.07%, a 7.68% decline from 2021. This decline in GDP was due to international sanctions, the withdrawal of foreign companies and overall economic uncertainty. However, the impact was largely offset by a favourable terms-of-trade from higher commodity prices and support from third countries – especially China, Turkey, the UAE and countries bordering Russia – which have served as conduits for sanctions evasion.  Figure 14: Russia GDP Growth Rate By 2023, the Russian economy had increasingly shifted to a war footing. As Figure 15 shows, military spending significantly increased after the Russian invasion of Ukraine. Surge in government spending such as military spending, counter-sanctions measures and credit growth boosted investment, construction and overall economic activity in Russia. The military-industrial sector benefitted the most, as did private consumption driven by war-related payments and high real wage growth resulting from the tight labor market. Meanwhile, sectors reliant on Western markets or foreign companies continued to struggle. As a result, Russia’s GDP grew by 3.6 percent in 2023 and 4.3 percent in 2024. Economic expansion resulted from rising government expenditure and investment in its military as it continues its war against Ukraine.  Figure 15: Russia military spending By the end of 2024 and in early 2025, however, signs of economic stagnation had become evident. Even the military-industrial sector began to stagnate. The economy had butted up against its supply-side constraints. In the first quarter of 2025, annual growth slowed to an estimated 1.4 % (from 4.5 % in the last quarter of 2024. Economic contraction was driven by falling activity in trade, mining, real estate and leisure, which growth in agriculture, manufacturing and public administration were not able to offset.  Figure 16: Ukraine GDP growth rate Russian invasion of Ukraine in February 2022 significantly affected Ukraine economy. As Figure 16 shows, Ukraine’s GDP growth rate for 2022 was -28.76%, a 32.08% decline from 2021. GDP growth rate in Ukraine averaged 1.33% from 2000 until 2025, reaching a record low of -36.60 % in the second quarter of 2022. Ukraine’s economy started to bounce back in 2023 and the GDP growth rate in Ukraine for 2023 was 5.32 %, a 34.08 increase in 2022. GDP growth rate reached an all time high of 19.30% in the second quarter of 2023. The GDP growth for 2024 was down to 2.9%. In the first quarter of 2025, Ukraine’s GDP grew 0.9%. However, the Ukrainian economy has been propped up by financial support from Western countries, including military and humanitarian aid, as well as loans from frozen Russian assets. Financing from abroad has been essential in sustaining Ukraine’s ability to survive. Ukraine’s 2024 public sector deficit rose to a record 1.832 trillion hryvnia, or almost 24 % of GDP. Over 60 % of spending went to defense and domestic security. Ukraine’s foreign partner countries provided approximately $42 billion in direct budget support in 2024, of which a large chunk ($17.5 billion) was provided via the EU’s Ukraine Facility. In 2025, Ukraine’s financing situation looks brighter compared to the beginning of 2024, when the EU’s 50-billion-euro Ukraine Facility and America’s over-60-million-dollar Ukraine aid package were blocked due to legislative intransigence. The structure of 2025 deficit financing in Ukraine represents a big change from 2024 as a substantial part of the deficit will be covered out of the yield on Russia’s frozen assets. Last summer, G-7 leaders agreed on an Extraordinary Revenue Acceleration (ERA) arrangement allowing for the use of 183 billion Euro of frozen Russian assets (end-2024) in the EU area to help Ukraine. The ERA program does not draw on the Russian assets directly but uses its proceeds to finance payments and costs of a $50 billion loan. As Figure 17 shows, ERA disbursements allocated to Ukraine will come to nearly $22 billion in 2025 and $11 billion in 2026. The new Trump administration has yet to withdraw from the ERA program, even if substantial cuts have already been made in e.g. USAID financing to Ukraine. The US remains the ERA program’s largest supporter, accounting for a total disbursement commitment of $20 billion. Figure 17: ERA program for Ukraine from Western countries, 2023-2026 Moreover, according to the Ukraine Support Tracker from Kiel University, Ukraine has received 267 billion euros in aid over the past three years. Half of this has been in weapons and military assistance, with 118 billion euros in financial support and 19 billion euros for humanitarian aid. European countries contributed more than the US: 62 billion euros in arms and 70 billion euros in other aid from Europe, compared with 64 billion euros in arms and 50 billion euros in other aid from the US. On the other hand, the Ukraine war caused a massive refugee crisis to Eastern European countries. The Ukraine war made millions of Ukraine people cross the border into neighboring countries in Eastern countries, affecting the economy of each nation. Table 1 shows the number of Ukraine refugees settled in Europe. Most of the Ukraine refugees settled in Poland and the Czech Republic, followed by Romania, Slovakia, and Moldova. These Ukraine refugees had significant impacts on Eastern European economy, in particular on Poland and Czech Republic. Table 1: Number of refugees from Ukraine settled in EuropeSource: UNHCR Operational Data The Ukraine war affected Poland’s economy in several ways, creating both difficulties and opportunities. First, there were problems with energy supplies that could threaten Poland’s access to power. The conflict in Ukraine has shaken up Poland’s energy market quite a bit, affecting its gas and oil supplies and leading to a spike in prices. Right after the conflict began, gasoline prices in Poland jumped by more than 40% as Figure 18 shows. This is mainly because Poland used to get a lot of its energy from Russia, and now, because of the Ukraine war and the sanctions that followed, there’s been a big disruption. As Figure 19 shows, food prices also skyrocketed just after the Ukraine war.  Figure 18: Gasoline price in Poland Figure 19: Food inflation in Poland Food inflation in Poland averaged 4.11 % from 1999 until 2025, reaching an all time high of 24.00 % in February of 2023. Moreover, there has been the arrival of more than 1 million Ukraine refugees, which put pressure on jobs and public services in Poland. The Polish government has had to increase its public spending significantly to provide housing, healthcare, and social services for the newcomers. This sudden increase in spending seemed overwhelming at first, but it also brought potential economic benefits in the long run. For example, the influx of Ukraine refugees boosted demand for local goods and services, which in turn stimulated the Polish economy. Despite both difficulties and opportunities that the Ukraine war brought to Poland, Poland’s GDP growth rate in 2022 was 5.3%. This indicates a strong economic performance, although it was slightly lower than the 6.9% growth rate in 2021. However, Poland's GDP growth rate in 2023 was down to 0.2%. This signifies a significant slowdown compared to the 5.3% growth in 2022. The slowdown was attributed to factors like energy inflation-induced decline in household spending and stagnant consumption. Poland’s real GDP grew by 2.9% in 2024, exceeding initial expectations, which were set at 2.8%. As inflation was down, it allowed for consumer spending and contributed to economic expansion. The Polish economy continues to grow by 3.2% in the first quarter of 2025. Figure 20: annual GDP growth rate in Poland, 2016-2024 The Czech economy has experienced significant impacts from the Ukraine war due to supply chain disruptions and rising energy & food prices. As Figure 21 and 22 show, gasoline and food prices in Czech Republic skyrocketed just after the Russian invasion of Ukraine. Gasoline prices in Czech Republic skyrocketed in June 2022 at 2.05 USD/Liter from 1.12 USD/Liter in May2020. Gasoline prices in Czech Republic averaged 1.48 USD/Liter from 1995 until 2025, reaching a high of 2.05 USD/Liter in June of 2022 and a record low of 0.72 USD/Liter in December of 1998. Figure 21: Gasoline price in the Czech Republic  Figure 22: Food inflation in the Czech Republic As a result, after a solid recovery from Covid-19 pandemic in 2021 with 4.0% growth rate, economic activity slowed down in 2022-2023 as a result of the consequences of the war in Ukraine, including EU sanctions on Russia and rising energy & food prices. Nonetheless, the Czech achieved a moderate growth in 2022 with a growth rate of 2.8% but the Czech economy contracted by -0.1% in 2023 and has been weak with a growth rate of 1.1% in 2024 and 0.7 % in the first quarter of 2025. Figure 23: annual GDP growth rate in Czech Republic, 2016-2024 Hungary’s economy has faced significant challenges due to the war in Ukraine, including increased energy costs, inflation, and disruptions to trade and supply chains. Hungary economy grew by 4.6 % in 2022, but declined to -0.91% in 2023 due to the extremely high inflation and weak consumptions. The consumer price in Hungary rose to a peak of 25.7% in January 2023, the highest rate in the EU. High inflation was driven by surging energy and food prices as Figures 24 and 25 show. The Hungary economy has been weak with the growth rate of 0.5 % in 2024. The GDP expanded by 0.1% in the second quarter of 2025. Figure 24: Gasoline price in Hungary Figure 25: Food inflation in Hungary  Figure 26: annual GDP growth rate in Hungary, 2016-2024 Bulgaria’s economy has faced challenges from the Ukraine ware, due to increased energy prices and disruptions in trade. As Figure 27 shows, the initial economic recovery was stronger than anticipated, with a 4.0% GDP growth in 2022, but the Ukraine war’s impact, coupled with inflation and global economic headwinds, led to a slowdown. Bulgaria’s economy expanded by 1.89 % in 2023. Then Bulgaria GDP bounced back to 2.8 % in 2024 and by 3.1% in the first quarter of 2025. Figure 27: annual GDP growth rate in Bulgaria, 2016-2024 Romania’s economy has experienced both positive and negative impacts from the Ukraine war. As Figure 28 shows, the Romanian economy displayed unexpected strength in 2022, with a 4.8% growth rate thanks to strong private consumption and investment. However, the Ukraine war’s effects, particularly on energy prices and supply chains, dampened Romanian growth. Romanian growth rate for 2023 was 2.2%, but it moderately rebound in 2024 with a 2.8% growth rate. The Romanian GDP increased by 0.3% in the first quarter of 2025. Romania faced challenges related to fiscal deficits, public debt, and inflation. Romania’s ability to navigate these challenges and capitalize on opportunities, such as EU support and its strategic geographic location, will be crucial for its long-term economic prosperity.  Figure 28: annual GDP growth rate in Romania, 2016-2024 Slovakia’s economy has faced significant challenges due to the war in Ukraine, mainly through energy & food price shocks and disruptions to trade and supply chains. As Figure 29 and 30 show, gasoline and food price in Slovakia significantly increased. Slovakia’s economy grew by 0.45% in 2022, a 5.28% decline from 2021. GDP growth rate for 2023 was 1.38 %. GDP growth in Slovakia moderately bounced back in 2024 with a growth rate of 2.0. In the first quarter of 2025, Slovakia economy grew by 0.2 %.  Figure 29: Gasoline price in Slovakia Figure 30: food inflation in Slovakia Figure 31: annual GDP growth rate in Slovakia, 2016-2024 In 2022, Slovenia experienced a slow economic growth with 2.7%, a 5.69% decline from 2021. due to the Ukraine war and subsequent energy price hikes and supply chain disruptions. Slovenia’s economy has been hurt by the Ukraine war and subsequent flooding in 2023 and 2024 with a 2.1 % and 1.5 % growth rate, respectively. Slovenia’s GDP growth was down to -0.7 % in the first quarter of 2025.   Figure 32: annual GDP growth rate in Slovenia, 2016-2024 III. Conclusion  This paper analyzed the economic effects of the Ukraine war on Russia, Ukraine, and Eastern European countries with a focus on inflation and GDP growth. The paper showed that after the Russian invasion of Ukraine in February 2022, inflation skyrocketed not only in the EU member countries, including Eastern European countries, but also in Russia and Ukraine. However, the pattern of inflation was different. Inflation in Russia and Ukraine did not follow the inflation pattern of EU member countries in which inflation skyrocketed in 2022 and then has slowly declined over time. Rather inflation in Russia and Ukraine skyrocketed in 2022 and then slowed down in 2023 and started to climb again in 2024 and 2025. Inflation in Eastern European countries followed the pattern of EU member countries in which inflation skyrocketed in 2022 and has then slowly declined over time. On the other hand, the pattern of GDP growth was different, depending on the individual conditions of each nation, although most countries experienced economic decline in 2022 relative to 2021. Some countries such as Ukraine and Russia experienced negative growth in 2022 and then recovered from 2023. Other countries such as Hungary, Romania, Bulgaria, and Czech Republic experienced moderate growth in 2022 and then slowed down over time. Still other countries like Slovakia and Slovenia experienced very low GDP growth over the period of 2022-2025.  References Biddle, Stephen D. 2022. “Ukraine and the Future of Offensive Maneuver.” War on the Rocks. November 22. https://warontherocks.com/2022/11/ukraine-and-the-future-of-offensive-maneuver/.Biddle, Stephen D. 2023. “Back in the Trenches: Why New Technology Hasn’t Revolutionized Warfare in Ukraine.” Foreign Affairs 102 (5): 153–164.Dijkstra, Hyllke, Myriam Dunn Cavelty, Nicole Jenne, and Yf Reykers. 2023. “What We GotWrong: The War Against Ukraine and Security Studies.” Contemporary Security Policy 44(4): 494–496. https://doi.org/10.1080/13523260.2023.2261298Ozili, P.K., 2022, Global Economic Consequence of Russian Invasion of Ukraine. Available online at: https://ssrn.com/abstract=4064770(open in a new window)

Energy & Economics
Global business connection concept. Double exposure world map on capital financial city and trading graph background. Elements of this image furnished by NASA

Liaison countries as foreign trade bridge builders in the geo-economic turnaround

by Eva Willer

Introduction Geopolitical tensions are making global trade increasingly difficult. In order to reduce the associated risk of default, companies are shifting their trade relations to trading partners that are politically similar to them. In the course of the beginnings of geo-economic fragmentation, politically and economically like-minded countries are also gaining in importance for German and European decision-makers. Liaison countries1 in particular can form a counterforce to the trend towards polarization in foreign trade - especially between the USA and China: they are characterized by a pronounced economic and trade policy openness that overrides differences between geopolitical or ideological camps. Consequently, the question arises: How can relevant connecting countries for Germany and Europe be identified? What opportunities and risks do closer trade relations with these countries offer in order to strengthen foreign trade resilience in geopolitically uncertain times?  With a high degree of openness - defined as the sum of imports and exports in relation to gross domestic product - of over 80 percent2 , the German economy is strongly integrated into global trade. Accordingly, the disruptive effect of geo-economic fragmentation on the German economy would be above average. The defensive strategy to strengthen Germany's economic security by pushing for trade policy independence would only reinforce geo-economic fragmentation. Against the backdrop of comparatively high economic vulnerability, it is necessary to focus on those potential partner countries with which German and European foreign trade could be developed and expanded even under the condition of increasing fragmentation.  Geoeconomic Fragmentation  The term "geo-economic fragmentation" is used to describe the politically motivated reorganization of global goods and financial flows, in which strategic, economic and political interests primarily determine the choice of countries of origin and destination for trade flows.3 In the scenario of geo-economic fragmentation, the result would be the formation of a bloc within the global community of states, which would fundamentally change the regulatory structure of global economic networking. In this case, trade and investment would probably concentrate from a previously diverse range of economic partner countries - prior to the formation of the bloc - on those countries that now - since the formation of the bloc - belong to the same bloc.  The likelihood of this scenario occurring and leading to an increased fragmentation of the global economic order has increased again in the recent past. For example, Donald Trump's second term as US president is causing increasing geopolitical uncertainty worldwide.  Statements on the concrete form of a possible demarcation of potential blocs are subject to a great deal of uncertainty. However, the division of a large part of the global economy into a "US bloc" and a "China bloc" is a conceivable scenario for which German politics and business should prepare.  Data already shows that, at a global level, foreign trade openness has decreased in the recent past. Data from the World Trade Organization (WTO) illustrates the increasing hurdles in global trade in goods. While 3.1% of global imports were still affected by tariff or non-tariff barriers to trade in 2016 - including under WTO rules - this figure rose to 11.8% in 2024 over the following years.4 This development goes hand in hand with a noticeable loss of importance and enforcement of the WTO since the 2010s, which previously played a central role as the guardian of the rules-based global economic order.  Studies by the International Monetary Fund (IMF) have already found indications of an incipient geo-economic fragmentation along potential bloc borders. It shows that trade in goods and foreign direct investment between countries that would belong to the opposing camp in the event of a bloc formation declined on average in 2022 and 2023 - in contrast to foreign trade between countries that are geopolitically close.5  In this initial phase of geo-economic fragmentation, liaison countries are beginning to establish themselves as a counterforce, holding the fragmenting global community of states together with new trade and investment routes.  Identification of liaison countries Specifically, liaison countries have the following characteristics: a pronounced openness to foreign trade in the form of a high foreign trade quota and low tariff and non-tariff trade barriers, as well as pronounced economic relations with partner countries from different geopolitical camps. The geopolitical orientation of countries can be examined using data on voting behavior within the United Nations.6 This involves analyzing whether a country can be assigned to the US or Chinese camp - or whether there is no pronounced proximity and therefore political neutrality or "non-alignment" in the sense of ideological independence. The data-based identification of connecting countries is relatively new. Empirical analyses are also limited to connecting countries in the context of US-Chinese foreign trade - specifically US imports from China. In this case, the characteristics of a connecting country can be broken down into (1) "non-alignment" - i.e. a geopolitical distance to both a Western and an Eastern bloc - as well as (2) an increase in imports and foreign investment from China and (3) a simultaneous increase in exports to the United States. In a narrower sense, this is an evasive reaction to trade restrictions, i.e. circumventing trade. If the foreign trade indicators - specifically the trade and investment data relating to the US and China - of "non-aligned" countries for the period from 2017 to 2020 show corresponding characteristic-related changes compared to previous years, these can be identified as countries connecting the US and China.  The analysis of trade data shows that the value of direct exports from China to the USA fell during Donald Trump's first term in office. At the same time, both Chinese exports to some of the "non-aligned" countries and exports from these countries to the USA have increased significantly. These countries have presumably stepped in as a link on the export route from China to the US after the previously direct trade flow was interrupted by trade barriers and had to find a new route. Companies producing in China are therefore likely to have sought new, indirect ways to maintain access to the US sales market.  A certain statistical inaccuracy in the foreign trade data makes it difficult to draw a definitive conclusion in this context. It should be noted: No single commodity can be tracked across national borders in trade data collection. Whether the additional goods imported from China actually found their way to the United States can only be assumed approximately. However, if the trade flows are aggregated, a clearer picture emerges and the circumvention trade via selected connecting countries - including Vietnam and Mexico - becomes visible.  Data on foreign direct investment rounds off the analysis.7 "Non-aligned" countries in which an increase in Chinese investment can be seen between 2016 and 2020 in addition to trade flows can be identified as connecting countries. Here, too, available data suggests that the companies concerned either exported their goods to the United States via a stopover or even outsourced parts of their production destined for the US market to connecting countries. Five connecting countries between the US and China Based on the 2017-2020 study period, various connecting countries can be empirically identified that were used to indirectly maintain access to the US market. In terms of foreign trade volume, the economically most important connecting countries include Mexico, Vietnam, Poland, Morocco and Indonesia.8 All five countries are characterized by the fact that both their exports of goods to the US and their imports of goods from China increased significantly between 2017 and 2020. In addition, greenfield investments (foreign direct investment to set up a new production facility) have risen significantly compared to the period before 2017.  However, the five countries show different priorities in their development, which differentiate them in their role as connecting countries between the USA and China. In Vietnam, exports to the USA in particular have risen sharply. China has been the most important procurement market for Vietnamese companies for years. Poland, Mexico and Indonesia are characterized as connecting countries primarily by the significant increase in imports from China. Morocco, in turn, was able to attract more Chinese foreign investment in particular. Greenfield investments have almost tripled here since 2017. However, Poland - a rather surprising candidate for the role of liaison country, as it is intuitively assigned to the US-oriented bloc - is positioned fairly centrally between the US and China according to the analysis of voting behavior within the United Nations9. In addition, Poland qualifies primarily due to the sharp rise in greenfield investments from China, primarily in the expansion of domestic battery production.10  It cannot be concluded from the previous studies on the USA and China whether German companies are also circumventing trade barriers from the USA via the countries identified. As the trade policy conflicts between the US and China differ significantly from those between the EU and China, there has been a lack of comparable empirical data to analyze connecting countries in the EU context. Opportunities and challenges As the German economy is strongly oriented towards foreign trade and is closely networked with both the USA and China, German companies play a particularly exposed role in the area of tension between the USA and China. Increased economic exchange with potential connecting countries would offer German companies an opportunity to mitigate the expected shock of a geopolitical bloc. They could at least maintain international trade to a certain extent and thus secure some of the endangered sales and procurement markets. On the other hand, there are also costs associated with expanding foreign trade relations with potential connecting countries. The greater complexity also increases the risk in the value chains. Companies that position themselves wisely within this trade-off buy themselves valuable time in the event of a shock to reorganize themselves against the backdrop of changed foreign trade conditions.  From the perspective of foreign trade policy, it is also possible to examine the extent to which stronger foreign trade cooperation with (potential) connecting countries could have advantages. The trade-off between resilience and complexity must then be assessed at a macroeconomic level, beyond individual company interests. In order to make it easier for companies to connect to potential connecting countries and to create appropriate framework conditions, German and European policy can build on existing comprehensive strategies at national and European level. Both the China Strategy11 and the National Security Strategy12 focus foreign policy on connecting countries as part of a stronger economic and political risk diversification. There is also a similar framework at European level with the EU's Strategic Compass13 . Following on from this, the German government could create targeted incentives to open up new markets in liaison countries, which would diversify critical supply chains and reduce one-sided dependencies.  At the same time, connecting countries pose a challenge. These can be used to circumvent foreign trade measures such as sanctions if flows of goods can find alternative routes via connecting countries more easily than before.  In order to realize opportunities and overcome challenges, close cooperation between science, politics and companies is required. This first requires the identification of a selection of potential connecting countries through scientifically sound analysis. This creates the basis for the subsequent steps in which European and German policymakers work closely with companies to create attractive framework conditions for trade with potential connecting countries - for example through bilateral trade agreements.  Attractive foreign trade framework conditions can create the necessary incentive to actually expand trade relations with potential connecting countries. Companies need to weigh up individual cases and make forward-looking decisions: To what extent is there a risk of a loss of production triggered by geopolitical conflicts? And how much would the complexity of the value chain increase if more potential connecting countries were included? Ultimately, the actual choice of preferred sales and procurement markets lies with the individual companies. LicenseThis work is licensed under CC BY 4.0 References1. Verbindungsländer werden im Sinne von Connectors verstanden, vgl. Gita Gopinath/Pierre-Olivier Gourinchas/Andrea F Presbitero/Petia Topalova, Changing Global Linkages: A New Cold War?, Washington, D.C.: IMF, April 2024 (IMF Working Paper) <https://www.imf.org/en/Publications/WP/Issues/2024/04/05/Changing-Global-Linkages-A-New-ColdWar-547357/>. 2. Statistisches Bundesamt (Destatis), Außenwirtschaft. 2025, <https://www.destatis.de/DE/Themen/Wirtschaft/Globalisierungsindikatoren/aussenwirtschaft.html#246 078/>.  3. Shekahar Aiyar/Franziska Ohnsorge, Geoeconomic Fragmentation and ‚Connector’ Countries, Online verfügbar unter:  <https://mpra.ub.uni-muenchen.de/121726/1/MPRA_paper_121726.pdf>.4. WTO, WTO Trade Monitoring Report, Genf, November 2024, <https://www.wto.org/english/tratop_e/tpr_e/factsheet_dec24_e.pdf/>. 5. Gita Gopinath/Pierre-Olivier Gourinchas/Andrea F Presbitero/Petia Topalova, Changing Global Linkages: A New Cold War?, Washington, D.C.: IMF, April 2024 (IMF Working Paper) <https://www.imf.org/en/Publications/WP/Issues/2024/04/05/Changing-Global-Linkages-A-New-ColdWar-547357/>.  6. Michael A. Bailey/Anton Strezhnev/Erik Voeten, »Estimating Dynamic State Preferences from United Nations Voting Data«, Journal of Conflict Resolution, 61 (2017) 2, S. 430-456, <https://journals.sagepub.com/doi/10.1177/0022002715595700/>.7. Gita Gopinath/Pierre-Olivier Gourinchas/Andrea F Presbitero/Petia Topalova, Changing Global Linkages: A New Cold War?, Washington, D.C.: IMF, April 2024 (IMF Working Paper) <https://www.imf.org/en/Publications/WP/Issues/2024/04/05/Changing-Global-Linkages-A-New-ColdWar-547357/>. War-547357. 8. Enda Curran/Shawn Donnan/Maeva Cousin, »These Five Countries are Key Economic ‚Connectors‘ in a Fragmenting World«, in Bloomberg (online), 1.11.2023, <https://www.bloomberg.com/news/articles/2023-1102/vietnam-poland-mexico-morocco-benefit-from-us-china-tensions/>.9. Michael A. Bailey/Anton Strezhnev/Erik Voeten, »Estimating Dynamic State Preferences from United Nations Voting Data«, Journal of Conflict Resolution, 61 (2017) 2, S. 430-456, <https://journals.sagepub.com/doi/10.1177/0022002715595700/>.  10. Enda Curran/Shawn Donnan/Maeva Cousin, »These Five Countries are Key Economic ‚Connectors‘ in a Fragmenting World«, in Bloomberg (online), 1.11.2023, <https://www.bloomberg.com/news/articles/202311-02/vietnam-poland-mexico-morocco-benefit-from-us-china-tensions/>.11. Auswärtiges Amt, China‐Strategie der Bundesregierung, Berlin, Juli 2023, <https://www.auswaertigesamt.de/resource/blob/2608578/810fdade376b1467f20bdb697b2acd58/china-strategie-data.pdf/>.  12. Auswärtiges Amt, Integrierte Sicherheit für Deutschland: Nationale Sicherheitsstrategie, Berlin, Juni 2023, <https://www.bmvg.de/resource/blob/5636374/38287252c5442b786ac5d0036ebb237b/nationalesicherheitsstrategie-data.pdf/>.  13. Rat der Europäischen Union, Ein Strategischer Kompass für Sicherheit und Verteidigung, Brüssel, März 2022, <https://data.consilium.europa.eu/doc/document/ST-7371-2022-INIT/de/pdf/>.

Diplomacy
Indian Arctic Himadri station

Leveraging India’s Arctic Observer Status: Scientific Diplomacy as a Lever for Climate, Resource and Security Advancement

by Sneh Kotak

Introduction The Arctic region, located above 66.5° N latitude and spanning approximately 14.5 million square kilometers, includes the Arctic Ocean, surrounding seas, and the northern territories of eight Arctic states -Canada, Denmark (via Greenland), Finland, Iceland, Norway, Russia, Sweden, and the United States.1 With melting ice opening critical maritime routes like the Northern Sea Route (NSR) and unlocking access to vital resources, global interest in the region has intensified. Governance remains limited to Arctic states within the Arctic Council, while non-Arctic countries like India hold observer status without voting rights. India, despite its geographical distance, holds a strategic interest in the Arctic for scientific collaboration, climate research, and access to critical minerals. As a permanent observer since 2013, it has established the Himadri Research Station in Svalbard (78°55′N, 11°56′E) and the IndARC observatory in the Kongsfjorden fjord. Yet its influence is constrained by structural limitations and increasing competition from China, which actively seeks Arctic access through its Polar Silk Road. This paper argues that scientific diplomacy can serve as a key lever for India to deepen engagement, enhance its strategic presence, and align Arctic access with its broader energy and climate security goals. Strategic Importance The Arctic is no longer a distant, frozen periphery of global landmass, it has become a contention of resource politics, climate urgency and military escalation. Once defined by remoteness, the region today hosts an intensifying convergence of climate disruption, mineral access and geostrategic rivalry. As Arctic ice recedes at unprecedented rates, the region is unlocking new navigational routes and exposing valuable reserves of critical minerals such as lithium, cobalt, rare earth elements and copper2 which are resources crucial to the global green energy transition. Indian Involvement and Presence India’s official interest in the Arctic began with its first expedition in 2007 and has since matured with the establishment of the Himadri research station (2008),3 IndARC Observatory (2014)4  and a series of bilateral research collaborations. India’s Arctic Policy, released in 2022, formalized its intent to participate in scientific, economic and environmental cooperation across six thematic pillars: research, environmental protection, resource exploration, logistics, governance and capacity building. Despite these efforts, India’s observer status in the Arctic Council grants no voting rights and limited influence over policy formation. This structural limitation is exacerbated by the growing strategic assertiveness of China and Russia. Both nations have expanded dual-use infrastructure in the Arctic, including China’s self-declared “Near- Arctic State”5 status and Russia’s militarization of its northern flank. For India, this presents both challenges and opportunities. The Arctic’s emerging importance intersects with India’s national priorities in vital areas, such as:a) Securing climate-relevant data to understand and mitigate monsoon and GLOF (Glacial Lake Outburst Floods) patterns.b) Accessing critical minerals for its 2070 net-zero emissions goal and green industrialization.6 Strategic Importance of the Arctic for India The Arctic’s geo-environmental dynamics have profound consequences for India. The increased melting of the Greenland and Arctic ice sheets contributes to the rise in sea levels and fluctuations in monsoon variability through changing planetary wave patterns.7 The Himadri station in Ny-Alesund and IndArc mooring offer India unique insight into these processes, feeding long-range weather forecasting models via NCPOR-ISRO pipelines. On the diplomatic front, as the only Global South climate observer, India’s data-sharing from Arctic observatories strengthens its credibility within forums such as the Arctic Council’s Environment Protection Working Group and the Sustaining Arctic Observing Networks (SAON). Unlocking shipping corridors like NSR and CVMC could reduce Europe’s shipping time from Asia by approx. 40-50%, generating economic dividends. India’s Navy and Merchant Marine benefit from Arctic route familiarity, while India’s global positioning is enhanced through maritime cooperation. This demonstrates the importance of the Arctic for climate, economy and diplomacy. Navigating the shifting maritime architecture may redefine global trade through corridors like NSR and the Chennai-Vladivostok Maritime Corridor (CVMC).8 Indian Policy and Strategic Gaps India’s Arctic engagement is still relatively nascent in terms of international literature but is growing in strategic significance. The most foundational contributions include policy reviews by India’s Ministry of Earth Sciences (2022), Arctic Council science reports and multilateral white papers by think tanks and scholars. a) Scientific Infrastructure and Diplomacy – India’s Arctic science program, anchored by Himadri and IndARC, has contributed valuable data on atmospheric variability, Arctic monsoon linkages and glacial melting. According to Krishnan et al (2021)9 India’s participation in the Ny-Alesund Science Managers Committee has facilitated cross-national collaboration with Norway, Germany and the UK. The use of ISRO satellites to monitor climate interactions also reflects a techno-diplomatic layer of soft power. b) Policy and Strategic Gaps – India’s 2022 Arctic Policy was a milestone, but scholars critique its technocratic tone and lack of geopolitical urgency. Verma (2023)10 notes that the policy’s six pillars are too operational and overlook the need for a dedicated strategic or security component. With rising militarization of the Arctic by Russia and China, and NATO’s increased surveillance operations, India risks being a passive observer if strategy remains science-focused only. c) Moreover, India’s Arctic policy has yet to align with its Act East or Indo-Pacific strategies, thereby missing synergies in maritime infrastructure and regional partnerships Chaudhury (2025)11  d) Critical Minerals and Strategic Supply Chains – India’s net-zero targets by 2070 and the Green Hydrogen Mission depend on sustainable access to lithium, cobalt and REEs. However, nearly 90% of India’s lithium and cobalt are sourced via Chinese refineries (ICWA 2024).12 The Arctic, particularly Greenland, Canada and Russia holds untapped reserves. India’s MoUs with Chile and Australia represent important steps, but lack continuity in Arctic-focused supply diplomacy. e) Rising Security Competition – Russia’s reactivation of Soviet-era bases, introduction of hypersonic missile systems and increasing joint exercises with China in Arctic waters have altered the balance of power. According to the CSIS (2023), this militarization, while defensive in tone, is designed to deter NATO and non-Arctic encroachments. China, on the other hand, has institutionalized its Arctic ambitions via the Polar Silk Road, icebreaker fleets and joint resource ventures with Russia. Since India lacks comparable Arctic military presence or deep water capacity, a militarized response is not deemed appropriate.13 Instead, turning to diplomacy offers a non-threatening influential strategy, especially among neutral Arctic actors like Norway and Iceland. f) Moreover, India’s GLOF technology can be showcased in forums such as the Arctic Climate Change Forum and NATO’s emerging climate nodes, blending humanitarian outreach with scientific cooperation. This positions India as an active partner in Arctic climate resilience. Mineral Diplomacy and Green-Energy Autonomy India’s green energy ambitions hinge on reliable supplies of lithium, cobalt, nickel and rare-earth elements critical to battery-electric vehicles (BEVs) and renewable storage solutions. The 2023 National Critical Mineral Mission diagnoses India’s near total dependence on Chinese supply chains. To break this dependency, strategic focus has shifted to geologically stable Arctic reserves in Greenland, Canada and Siberia. However, access to these mineral reserves demands more than diplomatic prowess, it requires project level cooperation built on scientific triads. India-Greenland MoUs should exist to propose joint surveys for these minerals with the Greenland Institute of Natural Resources.14 SWOT Analysis An integrated SWOT analysis allows for a realistic assessment of India’s Arctic trajectory:   Recommendations Based on the preceding analysis, the following recommendations integrate scientific diplomacy, climate technology and strategic logistics to boost India’s Arctic influence. 1. Establish an Indian Arctic-Earth Diplomacy Corps: Hosted jointly by the MEA and the MoES, IAEDC should comprise scientists, diplomats, oceanographers and military linguists specialized in Arctic affairs. They will lead institutional relations and field missions. 2. Expand Scientific Infrastructure: Upgrade Himadri Station into a multilateral research hub by inviting partner scientists and enabling joint projects. Additionally, post a mobile Arctic-Himalaya GLOF Expedition Team, designed by IIT Roorkee-NCPOR, 16 to Arctic communities for pilot data assimilation. India could also launch open-access Arctic climate data portal harmonized with ISRO satellites to promote transparency and scientific collaboration. 3. Launch the Green Minerals Research Alliance: With NITI Aayog approval, form an R&D network with Greenland Institute of Natural Resources and Norwegian or Canadian universities to explore joint technology solutions for sustainable mineral extraction. 4. Develop Maritime-Climate Corridors: Repurpose CVMC agreements to include climate-monitoring science hubs and shared logistics facilities across Arctic ports during summer navigation seasons. 5. Engage in Climate Security Exercises: Participate in or lead Arctic humanitarian assistance and disaster relief (HADR) exercises, deploying India’s unique Himalayan HADR expertise to Arctic conditions. 6. Strengthen institutional capacity: Add an Arctic Mandate Cell to NITI Aayog/DMEO for integrated policy planning across relevant ministries. Additionally, begin an Annual India-Arctic Science Summit, facilitating policy dialogue, mineral-science collaboration, sharing climate technology and youth and student fellowships based mostly on Arctic research and education.  Conclusion and Scope for Further Research India’s Arctic observer status offers a unique but limited opening. By wielding scientific diplomacy as a central instrument, India can convert passive Arctic presence into strategic influence without seeking voting rights or military buildup. The science-driven strategy empowers India to: 1. Conduct climate resilient modeling and synchronization for both Himalayan and Arctic regions.2. Secure mineral access gradually through transparent and partner-driven resource diplomacy.3. Enrich maritime connectivity via CVMC/NSR corridors supported by joint data sharing.4. Preserve strategic autonomy while aligning climate and development objectives with global governance standards. Through case studies of GLOF modeling, joint mineral exploration and maritime climate corridors, India can operationalize sustainable soft power influence. These initiatives reinforce India’s green ambitions and help disconnect critical and military-driven inputs from dominant actors like China.Future research could examine legal frameworks underpinning India’s non-Arctic science based rights, economic evaluations of Indian-built ice class vessels and evaluation systems for policy success metrics in Arctic diplomacy. Overall, by framing Arctic engagement as an extension of climate-resilient and demilitarized diplomacy, India emerges as a critical stakeholder in polar governance which is determined by climate science, research, data exchange, transparency as well as mutually beneficial diplomatic relations with Arctic council members and observer members. References 1.    Arctic Portal. “Arctic Circle.” Arctic Portal Maps. https://arcticportal.org/maps/download/arctic-definitions/2418-arctic-circle 2.    Ollila, Mirkka Elisa. “The Triangle of Extraction in the Kola Peninsula.” The Arctic Institute, October 1, 2024. Accessed June 18, 2025. https://www.thearcticinstitute.org/triangle-extraction-kola-peninsula/ 3.    National Centre for Polar and Ocean Research. “Himadri Station.” NCPOR – Ministry of Earth Sciences, Government of India. Accessed June 18, 2025. https://ncpor.res.in/app/webroot/pages/view/340-himadri-station 4.    National Centre for Polar and Ocean Research. “IndARC.” NCPOR – Ministry of Earth Sciences, Government of India. https://ncpor.res.in/arctics/display/398-indarc 5.    Merkle, David. “The Self‑Proclaimed Near‑Arctic State.” International Reports (Auslandsinformationen),Konrad‑Adenauer‑Stiftung. https://www.kas.de/en/web/auslandsinformationen/artikel/detail/-/content/der‑selbsternannte‑fast‑arktisstaa 6.    Ministry of Science & Technology, Government of India. “India Is Committed to Achieve the Net Zero Emissions Target by 2070 as Announced by PM Modi, Says Dr. Jitendra Singh.” Press Information Bureau, Government of India, September 28, 2023.  https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID=1961797 7.    Association of American Universities. “Ice Sheet Surface Melt Is Accelerating in Greenland and Slowing in Antarctica.” Featured Research Topics, Association of American Universities, May 26,  2025. https://www.aau.edu/research-scholarship/featured-research-topics/ice-sheet-surface-melt-accelerating-greenland-and 8. Korea Centre (Mahatma Gandhi University). “The Arctic and Northern Sea Route: A New Frontier for India–South Korea Cooperation.” Korea Centre, April 7, 2025. https://koreacentre.org/2025/04/07/the-arctic-and-northern-sea-route-a-new-frontier-for-india-south-korea-cooperation/ 9.    Krishnan, K.P., and S. Venkatachalam. “Chapter 2 – India’s Scientific Endeavors in the Arctic with Special Reference to Climate Change: The Past Decade and Future Perspectives.” In Understanding Present and Past Arctic Environments: An Integrated Approach from Climate Change Perspectives, 15–29. 2021. https://www.sciencedirect.com/science/article/abs/pii/B9780128228692000062 10. Kumar, Ashish, and Sudheer Singh Verma. “The Arctic Region: National Interests and Policies of India and China.” January 2023. PDF. https://www.researchgate.net/profile/Ashish-Kumar-591/publication/388222280_The_Arctic_Region_National_Interests_and_Policies  of_India_and_China/links/678fca07ec3ae3435a733a47/The-Arctic-Region-National-Interests-and-Policies-of-India-and-China.pdf 11. Observatory of Regional Transformations (ORF). “From Look East to Act East: Mapping India’s Southeast Asia Engagement.” Observer Research Foundation, 2025. Accessed June 19, 2025. https://www.orfonline.org/research/from-look-east-to-act-east-mapping-india-s-southeast-asian-engagement 12. Indian Council of World Affairs. “From Look East to Act East: Mapping India’s Southeast Asia Engagement.” ICWA. https://www.icwa.in/show_content.php?lang=1&level=3&ls_id=10458&lid=6669 13. Osho, Zerin, and Eoin Jackson. “The Polar Tiger: Why India Must Be Included in the New U.S. Arctic Defense Strategy.” High North News, November 28, 2023. https://www.highnorthnews.com/en/polar-tiger-why-india-must-be-included-new-us-arctic-defense-strategy 14. Greenland Institute of Natural Resources. Frontpage. Nuuk, Greenland. https://natur.gl/ 15. ThePrint, What Are Indian Researchers Doing in the Arctic Circle? YouTube video, 2:26, published https://youtu.be/WsZO0ZCTSyI?si=ysLbBnkAiqYzIlMp 16. Centre of Excellence in Disaster Mitigation & Management, Indian Institute of Technology Roorkee. Home. https://iitr.ac.in/Centres/Centre%20of%20Excellence%20in%20Disaster%20Mitigation%20and%20Management/Home.html 

Diplomacy
Trump, Putin Alaska Arrival (9260680)

Why Peace in Ukraine Remains Elusive

by Nicholas Morieson , Ihsan Yilmaz

Donald Trump declared his Alaska summit with Vladimir Putin a success, despite contrasting evidence suggesting otherwise. On Truth Social, he said a peace agreement over Ukraine, not a mere ceasefire, was the right path, claims he echoed during follow-up talks in Washington with Volodymyr Zelensky and European leaders. “Potentially, millions of people’s lives will be saved,” Trump said. That optimism looks misplaced. For Putin, Ukraine is not merely a bargaining chip but a territory he views as part of a Russian “civilization-state.” When he meets with Western leaders, he is not negotiating over land; he frames the war as a defense of Russian civilization and its values. As a result, Putin cannot easily “make a deal” involving land swaps to end the conflict.  Russia’s civilisational project  In addition to civilisational rhetoric, other factors contribute to Putin’s intransigence. Strategic concerns about NATO, fears for regime security, and the material importance of Crimea and the Black Sea all shape Moscow’s stance. Yet the language of civilisation turns these into matters of identity and survival. It fuses practical interests with existential claims, making retreat even harder. Even if compromises were possible on security or economics, the civilisational frame casts them as betrayals of Russia’s destiny.  Some American policymakers have tended to read Russia as a state with interests that can be traded. However, Putin accounts for Russia not simply as a nation-state, but as a civilization rooted in Orthodoxy, empire, and the memory of Soviet power. Viewed through this prism, Ukraine is not a foreign neighbour, but an inseparable part of Russian history and identity, which must be defended against Western encroachment.  In his 2021 essay On the Historical Unity of Russians and Ukrainians, Putin claimed that Russians and Ukrainians are “one people,” and that Ukraine is “an inalienable part of our own history, culture, and spiritual space.” Whatever his private convictions, the function of this language is clear. It justifies annexation and occupation, and it raises the political cost of retreat by treating territorial issues as matters of civilisational survival.   Putin himself insists that “the West” does not understand that “the Ukraine crisis is not a territorial conflict … and not an attempt to establish regional geopolitical balance.” Instead, he says, it is rooted in “the principles underlying the new international order” he is building. Peace, in this new order, is possible only “when everyone feels safe and secure, understands that their opinions are respected” and when “no one can unilaterally force …others to live or behave as a hegemon pleases even when it contradicts the sovereignty …traditions, or customs of peoples and countries.”    This framing lets the Kremlin portray the West as the aggressor imposing alien norms on unwilling Ukrainians. Russia, by contrast, is said to be fighting for itself on behalf of all nations who wish to see western hegemony end and the birth of a new multipolar world. Moreover, it portrays Ukraine’s status as a civilisational question tied to identity and resistance to Western liberal norms. As a result, only a settlement that Putin present domestically as recognition of Russia’s civilisational standing is acceptable, which complicates compromise beyond what standard diplomatic formulas suggest.  Challenges to Trump’s pursuit of peace  Trump has made no secret of his desire to be remembered as a peacemaker. However, he also admires strong leaders and has shown sympathy for post-liberal arguments that liberal democracy is exhausted. These affinities bring him closer, at least rhetorically, to elements of Putin’s stance.  Admiration and aspiration alone are insufficient in bridging the gap between Putin and Trump’s positions on Ukraine’s independence. Putin frames the conflict as existential, defending Russian civilisation against Western encroachment. This  makes compromise especially difficult. If the war is understood in these terms, how can Moscow return occupied territories without undermining its own civilisational claim? How can it accept a Ukraine that leans towards the European Union, or tolerate an American presence on its soil?  Trump may want peace, but Putin has tied his legitimacy to a narrative that resists it. Unless that framing is abandoned, or radically reinterpreted, any settlement will remain elusive.  A wider trend  “Russia’s approach is part of a wider pattern in which civilisational claims have become central to how leaders justify power and resist compromise. Xi Jinping frames China as a five-thousand-year-old civilisation whose territory includes Taiwan and the South China Sea. He presents the Communist Party as the guardian of a civilisational tradition stretching back to Confucius, giving contemporary disputes an aura of timeless legitimacy. Narendra Modi portrays India as an ancient Hindu civilisation restoring its rightful place after centuries of foreign domination. Each case is distinct, but the message is similar: our civilisation is exceptional, our sovereignty absolute, and our values not up for negotiation.    A troubled summit  Against this backdrop, the Alaska meeting was never likely to produce more than gestures. Trump may genuinely want peace and to be remembered as the leader who ended the war. Yet he is dealing with a counterpart who has justified the invasion of Ukraine in civilisational and existential terms. For Putin, Ukraine is not only territory but a symbol of Russia’s identity and sovereignty, cast as a bulwark against Western encroachment. Within this frame, Russia would view restoring Ukraine’s borders, accepting its European orientation, or tolerating a long-term American presence in the region as defeats of principle rather than concessions of interest.  Trump’s ambition to end the war faces an almost insoluble dilemma. Europe will reject a settlement that rewards aggression, while Putin refuses to surrender territory he has cast as integral to Russian civilisation. Land swaps seem practical but please neither side. If the conflict were to remains frozen, Ukraine will be fractured and the deeper issues unresolved. Peace demands compromise, but compromise undermines the very narratives on which Moscow has built its legitimacy. As a result, unless Putin retreats from his civilisational framing of the war, any settlement will remain elusive and Ukraine’s future uncertain.  Dr Nicholas Morieson is a Research Fellow at the Deakin Institute for Citizenship and Globalisation, Deakin University, Melbourne. He is the author of three books, including Weaponizing Civilizationalism for Authoritarianism: How Turkey, India, Russia, and China Challenge Liberal Democracy (Palgrave 2025).  This article is published under a Creative Commons License and may be republished with attribution.

Energy & Economics
Countries within the Arctic Circle, political map. Countries within about 66 degrees north the Equator and North Pole. Alaska (U.S.), Canada, Finland, Greenland (Denmark), Norway, Sweden and Russia.

Russia’s Arctic Corridor: Between Ice and Isolation

by Manashjyoti Karjee

Russia’s Northern Sea Route (NSR) along its Arctic coastline has, for centuries, been as much a dream as a reality. The coastal corridor is a chance to cement Russia’s place as a polar energy superpower, and the presence of unexploited reserves of resources, the keeper of a possibly vital global artery. Yet the NSR’s story in the 21st century is not simply about ambition. It is about a paradox; two forces pushing in opposite directions. One force is geopolitical. A tightening of Western sanctions has cut Russia off from Western capital, technology, and partners that once underpinned its Arctic rise. The other is environmental: climate change. The melting of the sea ice at unprecedented rates is lengthening the navigable season and giving Russia a window of opportunity in the high north. Together they create a strange, almost theatrical tension – a stage where climate change is opening new Arctic pathways even as geopolitics seems to be closing them. This article traces how Moscow has adapted awkwardly at times and creatively at others to this paradox. The question is not whether Moscow still wants to realise the NSR’s promise. It does. The question is whether it can, and if so, at what cost. The answer lies in how Russia has substituted partners, improvised workarounds, looked inwards for domestic substitutions and leaned on risky logistics to keep its Arctic ambitions alive. The years after 2007 (to capture the pre-sanctions baseline and the waves of sanctions that followed), when Russia planted a titanium flag on the seabed at the North Pole, tell a story of Russia’s NSR adaptation, dependency, and resilience under constraint. The NSR’s economy runs on the same plumbing that moves everything from coffee to crude: finance, insurance, classification societies, maritime services, and high-end technology. When Western governments began sanctioning Russia over Crimea in 2014, the sanctions did not simply target individuals or issue symbolic bans. They went for the “nodes” in the global economy that Russia’s Arctic projects depended upon. This is a textbook case of weaponised interdependence. The theory explains how states that control critical financial and technological chokepoints in an interconnected global order can turn global connectivity into leverage. The effect was immediate. U.S. export controls banned Arctic offshore oil exploration technology, freezing ventures like ExxonMobil’s Kara Sea project. European and American banks withdrew. Insurers cancelled coverage for Russian vessels, and the International Association of Classification Societies expelled Russia’s maritime register. Without classification, many Russian-controlled ships lost their safety certificates and lost access to ports and insurance altogether. The 2022 invasion of Ukraine supercharged this process. Energy giants such as Exxon,  and Halliburton left Russia’s Arctic. Sanctions extended to almost every aspect of maritime trade. International Protection & Indemnity (P&I) clubs refused Russian risks, and the exodus of foreign expertise left Russia’s Arctic sector without many of the specialised tools it had once imported. In essence, sanctions acted as a structural stress test on Russia’s Arctic political economy, which raised financing costs, choking technology transfer, and narrowing partnership options for both upstream oil and gas exploration and midstream shipping and processing. Yet, the sanctions did not halt Arctic operations altogether. By 2023, the NSR cargo carried record volumes along the route. The moved cargo was roughly around 38 million tonnes of goods in 2024. This cargo was almost entirely Russian oil, gas, and minerals headed to Asia. The international shipping firms that had once dreamed of using the NSR as a global transit lane were seemingly gone. What remained was a “Russified” corridor: an export pipeline to friendly markets, sealed off from most of the world. Sanctions forced Russia to find replacements for Western finance, expertise, equipment, and markets. The most obvious substitute was China. The two countries already had growing energy ties, and after 2014, Beijing stepped in where the West stepped out. Chinese state banks provided roughly $12 billion in loans after Western financing dried up for Yamal LNG, the Arctic’s first LNG megaproject. China National Petroleum Corporation (CNPC) took a 20% stake in the project in 2013, and the Silk Road Fund took another 9.9% in 2016. Chinese shipyards supplied modular components, and by late 2017, the project was completed on schedule despite the constraints. This model, to replace Western inputs with Chinese ones, was carried over to Arctic LNG 2 on the Gydan Peninsula. CNPC and CNOOC each took 10% stakes by 2019, and Chinese yards again won construction contracts. A secondary interdependence formed: Chinese capital, shipbuilding, and market demand for LNG in exchange for Russian resources and Arctic access. But this substitution came with a catch. The relationship was asymmetric interdependence. Russia now relies far more on China than China does on Russia. For Moscow, the NSR and Arctic LNG capacity are strategic lifelines and Russia, under sanction, cannot so easily diversify its partners. But Beijing has other suppliers; the NSR is optional for Chinese trade. Beijing has used that leverage with a light but unmistakable touch by pressing for sanctions carve-outs and pausing when penalties threaten its global financial and commercial interests. When Washington sanctioned Arctic LNG 2 in late 2023, Chinese firms froze participation. CNPC and CNOOC invoked force majeure, and Wison (a Chinese manufacturer of LNG modules) recalled shipments and stopped work altogether. By 2023, roughly 95% of NSR transit cargo was bilateral Russia–China trade, mostly Russian oil moving east. When China pulled back, Moscow protested mildly; when Western firms did the same, the rhetoric was far harsher. The imbalance was clear. The NSR had become a lifeline for Russia, but only one option among many for China. Alongside external partnerships, Moscow sought to fill the gaps domestically. The flagship is the Zvezda shipyard in the Russian Far East, which was meant to deliver a homegrown fleet of Arctic-class tankers and LNG carriers. Initially a joint venture with South Korea’s Samsung Heavy Industries, Zvezda lost access to many suppliers after 2022. Building the specialised Arc7 LNG tankers proved harder than planned, and delays created a shipping shortfall. So, Moscow improvised at sea. The workaround was a fleet few had anticipated: the so-called “shadow fleet.” These are ageing, often 20-year-old tankers. Reflagged under flags of convenience to Panama, Liberia and the Marshall Islands, they sail without reputable insurance or up-to-date safety certification. After the EU banned Russian oil imports and the G7 imposed a price cap, Russia’s traders bought up and reactivated such ships. Some sail with AIS trackers off, earning them the nickname “floating time bombs” from former NATO commander James Stavridis. Regulators noticed. NATO began monitoring the dark fleet in 2023. The UK and Denmark tightened port inspections earlier; by mid-2025, Norway ordered inspections of all foreign tankers using its ports that had been involved in Russian Arctic trade. The cat-and-mouse is literal: AIS “spoofing,” loitering near transhipment points like Murmansk, and identity-masking tactics have all proliferated. The objective is simple – keep exports moving despite Western control over finance and insurance chokepoints. The method is naturally costly and risky. The environmental risks are also obvious, especially in Arctic waters. Yet by 2023, this shadow fleet had helped Russia stage a dramatic comeback on the NSR. Transit cargo, which had collapsed to around 41,000 tonnes in 2022,  hit a record 2.1 million tonnes in 2023, much of it oil to China. Of the 75 transit voyages (the most ever in a season) that year, 59 were in ships over 10 years old, and nearly 40% in vessels over 20. Three voyages were made by ships with no ice classification at all, possible only during the mildest late-summer window. This is resilience under constraint in action: maintaining volumes, but through seemingly riskier, costlier, and less sustainable logistics. The paradox deepens when nature itself becomes a player. The Arctic is warming roughly four times faster than the global average, a phenomenon known as Arctic amplification. This is thinning and shrinking its sea ice. Late-summer ice extent has declined by about 12% per decade, and the September ice volume is almost half of what it was in 1980. In a warm year like 2020, the NSR can see up to 88 ice-free days, extending the season well into October. The distance savings are tempting. After the 2021 Suez blockage, Moscow pitched the NSR as the more sustainable and safer,  with President Vladimir Putin setting targets of 80 million tonnes of cargo by 2024 and 130 million by 2035. Russia invested in infrastructure to shape the Arctic in its favour.  Chief among those investments is the series of nuclear icebreakers in the LK-60Ya class, intended to widen and lengthen the navigable seasonal window. Variability is the Arctic’s constant. In 2021, an early freeze trapped more than 20 ships in the Laptev Sea. A single harsh season or geopolitical flare-up could, according to one modelling study, cost up to $10 billion by closing the route for a year. Wind and currents can push ice into chokepoints, while storms and fog add further hazards. The message: averages entice; outliers punish. Major shipping companies remain unconvinced. The IMO’s Polar Code demands expensive safety upgrades, and giants like CMA CGM have sworn off the NSR, citing environmental and reliability concerns. Arctic shipping is feasible but rarely profitable for time-sensitive cargo under current conditions. In effect, climate change is lengthening the season but not guaranteeing it. Warm years can soften the impact of sanctions by enabling marginal ships to sail; cold years can erase those gains overnight. Moscow treats most of the route as water where it can write its rules with Russian regulations. The legal scaffolding rests on UNCLOS Article 234. The clause gives coastal states extra authority over ice-covered waters to protect the environment and, in places, on claims of historic usage through narrow straits. That interpretation has teeth. In 2019, Russia demanded advance notice from foreign warships before NSR transits. In 2023, Russia proposed stretching that notice to 90 days. The counter-view in Western capitals is blunt: key passages function as international straits with transit rights. Call it legal geopolitics. The idea that in contested spaces, law becomes an instrument of statecraft. With Western commercial presence all but gone since 2022, there have been few real-world tests of those competing claims. The ambiguity persists. So does the risk of friction if NATO navies decide to test freedom-of-navigation in the high north. The Arctic Council was built to keep geopolitics off the ice. War changed that. In early 2022, seven of eight members (everyone but Russia) paused participation, sidelining Russia’s chairmanship. Work resumed later that year without Russia; when Norway took the chair in 2023, that format stuck. The result: a governance gap where the Council once supplied common ground on search-and-rescue, spill response, and scientific cooperation. Into that gap have flowed unilateral and minilateral moves: EU sanctions to enforce oil price caps, national inspections of suspect tankers, NATO’s higher Arctic profile, and Russian military investments through the Northern Fleet. Moscow has doubled down on bilateralism, notably with China under a “Polar Silk Road” banner. Remove a pan-Arctic consensus, and states start to read the NSR less as a shared commercial asset and more as a strategic corridor. As long as the Council stays divided and the law stays fuzzy, the NSR looks less like a future global lane and more like a national project under duress. One under-appreciated dynamic is how weather and policy interact. A warm, low-ice year can partially offset sanctions by letting Russia move more cargo with sub-optimal ships and fewer partners. A harsh ice year can erase those workarounds; no amount of reflagging gets a thin hull through new ice without icebreakers. 2023 offered mild late-summer conditions and newly assembled logistics. Hence, the record season. 2021 offered an early freeze that embarrassed seasoned operators. Climate acts as the swing variable in Russia’s resilience equation. Targets mirror the tension. 80 million tonnes by 2024 proved aspirational as sanctions deepened and ice conditions fluctuated. The reset to 130 million by 2035 admits the need for a longer runway. More LK-60Ya icebreakers, more Arc7 hulls, more trans-shipment capacity, and, crucially, more reliable partners. The Zvezda bet may pay off, but replacing the full Western stack in the form of financing, kit, and specialised metallurgy takes time that geopolitics rarely grants. The shadow fleet moves oil, but at a cost. Older hulls, opaque ownership, weak insurance, and AIS dark zones each raise the chance of an incident. The high north does not forgive. A significant spill by an unclassed or uninsured vessel could slam shut political windows that the climate has opened. Every accident, real or narrowly avoided, argues for more scrutiny. For non-Russian shippers, reputational and compliance risk is decisive. The safety problem is moral, ecological and financial. Insurance premiums, capital costs, and compliance burdens spike when standards look variable and enforcement is vigilant. If the NSR is to attract rather than deter global carriers, four shifts stand out. The first is stable multilateralism. A thaw in Arctic Council politics that restores full eight-member cooperation on search-and-rescue, spill response, and scientific collaboration would reduce risk premiums. Without it, patchwork national rules and military signalling will continue to overshadow commercial priorities. The second is legal clarity. Narrowing the gap between Russia’s interpretation of Article 234 and Western views on straits rights, whether through litigation, negotiated guidelines, or pragmatic practice, would help calm the concerns of navies and insurers. Ambiguity, in this case, is costly. The third is infrastructure at scale. Expanding the fleet of LK-60Ya icebreakers, deepening the Arc7 fleet, ensuring reliable trans-shipment hubs from Murmansk outward, and building robust rescue and response capabilities would turn the Arctic’s volatile weather from a crippling hazard into a manageable variable. The fourth is safer logistics. Replacing dark fleet tonnage with transparent, classed, and adequately insured ships is unlikely under current sanctions, but any easing or targeted carve-outs could logically be traded for higher operational and environmental standards. Absent these shifts, the NSR will likely remain a niche corridor – reliable enough for Russia’s exports to a handful of partners – but not predictable or de-risked enough to attract the world’s container giants. In the end, the Route looks less like a global artery in waiting than a bespoke lane kept open by improvisation and political will. Russia has shown it can move volumes east without Western scaffolding. Still, the price is exposure: to China’s cautious leverage, to legal and governance ambiguity, to safety and insurance risk, and to a climate that can widen or snap shut the seasonal window with little warning. What emerges is resilience under constraint, capability sustained by workarounds rather than durable rules and partners. If geopolitics softens, the Arctic Council reactivates in full, and industrial bets from Zvezda to new icebreakers mature, the arc could still bend toward normalisation. Until then, this remains a sturdy yet narrow corridor; strategically vital to Moscow, serviceable for a few, and unlikely to host the time-sensitive traffic that defines a truly global route.

Diplomacy
People gather to receive meals from the Rafah charitable kitchen (Tekka) as Palestinians face famine, in Khan Yunis, in the southern Gaza Strip, on January 2, 2025.

The genocide in Gaza divides the leaders of the 'Arab street'

by Ricard González

As the two-year mark of Israel’s invasion of Gaza approaches, many wonder why Arab countries are not pressuring Israel. The answer is often simple: they are prioritizing their strategic and economic interests. Since the beginning of Israel’s ruthless offensive in Gaza on October 7, 2023, images have repeatedly shown Palestinian civilians crying out desperately to the cameras for help: “Where are the Arabs? Why isn’t anyone stopping this?” Almost two years later, despite the fact that fewer voices doubt that what began as a war has turned into a genocide that has taken the lives of more than 60,000 Palestinians, Arab states have not shifted even an inch from their initial stance: harmless statements of condemnation, without any action to pressure Israel. “Where are the Arabs? Taking a nap… By Arabs, I mean their rulers, with their heads buried in the sand,” declared Fawaz Gerges, professor at the London School of Economics, in a recent interview with the U.S. network NBC. In fact, it has often been non-Arab countries, thousands of kilometers away from Gaza, that have tried to stand up. Such is the case of South Africa, the country that denounced the existence of genocide in the enclave before the International Court of Justice in The Hague. “In general, Arab regimes have not taken concrete measures in response to the ongoing genocide in Gaza. The main reason is the prioritization of their strategic and economic interests over popular sentiments of support for Palestinians in the face of the horror they are experiencing. This is not surprising given that most [of the regimes] rule based on growing authoritarianism,” asserts Yara Hawari, co-director of the Palestinian think tank Al Shabaka. The gap between the street and the palace This gap between the opinion of the so-called “Arab street” and its rulers is evident in every new survey. In one of the most comprehensive, conducted by the Doha Institute with the participation of around 8,000 people from 16 different Arab countries, 92% of respondents believe that the Palestinian cause concerns all Arabs and not only Palestinians. A similar percentage, 89%, opposes normalizing relations with Israel. For an overwhelming majority, 84%, the genocide in Gaza represents a source of “great psychological stress,” and for another 13% it also constitutes a source of stress, though to a lesser degree. “Although they are not democratic, Arab regimes cannot entirely ignore their respective public opinions, which are horrified by what is happening in Gaza. That is why they must strike a delicate balance. They fear that discontent over their positions on Gaza could converge with other grievances — of which there are many — and potentially trigger social unrest,” explains Haizam Amirah Fernández, executive director of the Center for Contemporary Arab Studies (CEARC). So far, this has translated into statements condemning the massacres of civilians perpetrated by Israel, others in support of creating a Palestinian state, and the delivery of humanitarian aid to Gazans when approved by Tel Aviv. Of the 22 states that make up the Arab League, a total of six have signed an agreement to establish diplomatic relations with Israel. The first to do so was Egypt (1979), followed by Jordan (1994), and then Morocco, the United Arab Emirates, Bahrain, and Sudan joined under the so-called Abraham Accords sponsored by Trump in 2020 — although Sudan, currently in civil war, has not implemented it. In addition, other states maintain varying degrees of economic relations or security cooperation with Israel, such as Saudi Arabia. Among all these countries, none has broken diplomatic relations with the Israeli state over Gaza, and only Jordan has withdrawn its ambassador. On the other side, among Arab countries with a more hostile stance toward Israel, are Algeria, Tunisia, and Houthi-controlled Yemen, the only one that has applied military pressure on Israel by launching missiles and harassing maritime traffic in the Suez Canal. Lebanon and Iraq represent particular cases, as both are highly fragmented politically and home to pro-Iranian militias that consider Israel an enemy, such as Hezbollah — an opinion not shared by the entire political class. The reasons behind the indifference of so many Arab states toward Gaza are varied. First, some leaders — especially those of the Gulf petro-monarchies — perceive Iran or the Muslim Brotherhood, an organization linked to Hamas, as a greater threat than Israel. Faced with this sense of insecurity, also shared by President el-Sisi in Cairo, many look toward the West. “The permanence in power of these leaders does not depend on the choice of their citizens or subjects, but on external support from the United States, and this shapes their position on Palestine,” asserts Amirah Fernández, who lists several actions these countries could have taken to pressure Israel: from breaking or suspending bilateral agreements, such as the Camp David Accords between Israel and Egypt, to applying serious pressure to break Israel’s blockade of Gaza and thus allow humanitarian aid to reach the enclave, whether by land or by sea. Egypt, for example, has dedicated itself to repressing activists who attempted to carry out such actions near the Gaza border. The “realpolitik” of the new generation of leaders Beyond their deference to the West, the positions of Arab states in some cases respond to a stark calculation of “realpolitik”: the benefits they can gain from their relationship with Israel — a technological and military power — outweigh what an occupied people like the Palestinians can offer. [...]  In an interview with El Salto, journalist Antony Loewenstein, author of the book “The Palestine Laboratory”, explained how the sale of weapons and cyber-espionage tools has become a kind of insurance policy for Israel against possible retaliatory actions. “Almost a quarter of Israel’s [arms] exports went to Arab dictatorships, such as the United Arab Emirates […]. No Arab state has cut ties with Israel, and they won’t,” Loewenstein said. Against this backdrop, for decades the only common denominator among Arab states regarding the Palestinian issue has been the mere signing of joint declarations in support of the “two-state solution” to resolve the conflict with Israel. At the end of July, within the framework of a United Nations-sponsored summit to promote that solution, the “Arab consensus” unexpectedly expanded with all Arab League countries signing a declaration urging Hamas to disarm and hand over control of Gaza to the Palestinian Authority. Thus, the only bold — and unprecedented — action taken during nearly two years of genocide in Gaza has been to pressure Hamas and not Israel. A very bleak record for pan-Arab solidarity. 

Diplomacy
bolivia flag election ballot

Bolivia: the end of the MAS cycle and a turn to the political center

by Franz Flores

Bolivia’s elections marked the collapse of MAS and the rise of Rodrigo Paz with a moderate and inclusive economic discourse, signaling a shift away from extremes toward the political center. Last Sunday, Bolivia went to the polls to elect a president, vice president, and 130 legislators, including senators and deputies. The results were surprising: Rodrigo Paz of the Christian Democratic Party (PDC) won with 32.1% of the vote, despite not being ranked as the frontrunner in any of the more than 18 polls conducted. The favorites, Tuto Quiroga and Samuel Doria Medina, received 26.8% and 19.8% of the vote, respectively. Meanwhile, although somewhat expected yet still shocking, the Movement for Socialism (MAS) suffered its most humiliating defeat: after nearly 20 years as a dominant party, it garnered just 3.2% of the vote and secured only one seat in the legislature. What happened? How did Rodrigo Paz manage to win the election? And how did the right-wing opposition end up losing? Throughout the campaign, Samuel Doria Medina of National Unity and Tuto Quiroga of LIBRE consistently led the polls as the main alternatives to MAS. Early this year, there was growing anticipation around a possible opposition alliance to “stand up to MAS.” That effort collapsed, however, and the public’s perception of both candidates deteriorated as their personal ambitions clashed—ironically creating an opening for MAS to potentially cling to power. Once the campaign was underway, Quiroga and Doria Medina, convinced by the polls that they would make it to a runoff, turned against each other. On social media, a smear war erupted with false news and mutual slander. While these two candidates weakened each other, Rodrigo Paz stayed above the fray, managing to deliver his message with little turbulence. Paz offered a platform he described as “capitalism for everyone,” or platita para todos (“money for all”), promising more subsidies, as well as lower taxes and tariffs. This placed him closer to the statist left than to the liberal market-oriented stance of Tuto and Samuel. Amid an ongoing economic crisis, many Bolivians felt that policies were needed to reactivate the economy and stabilize the exchange rate. A significant portion of the middle and lower classes feared that the proposed economic shock measures would worsen their already precarious situation. Both Quiroga and Doria Medina openly embraced the radical proposals of Argentina’s president Javier Milei as their model. Paz, by contrast, offered a more moderate alternative, attracting much of the electorate. Another key dimension of this election was the projection of political renewal. On the left, figures such as Eduardo del Castillo and Andrónico Rodríguez—both under 40 and emerging from the MAS ranks—sought to embody generational change. But del Castillo was weighed down by his association with Arce’s unpopular government, while Rodríguez faced criticism from the right for his ties to Morales, even as Morales himself accused him of betrayal. On the right, renewal was nonexistent: both Quiroga and Doria Medina were veterans of the pre-Evo Morales party system, recycling old formulas such as privatization and free-market economics. In this context, the PDC ticket of Rodrigo Paz and Edman Lara was well positioned. While Paz is a seasoned politician with 26 years of experience, mostly as a subnational leader, Lara—a former police captain—was a classic outsider. With an active presence on social media, he had built a reputation as a crusader against corruption, after denouncing fellow police officers for misconduct. In August 2024, he was permanently dismissed from the Bolivian police force. Looking at the results by region reveals the territorial fault lines in Bolivian politics. The PDC, like MAS before it, secured victories in departments such as Oruro, Potosí, and La Paz, along with the populous city of El Alto, where it won over 45% of the vote. By contrast, Quiroga and Doria Medina performed strongly in Santa Cruz, Beni, Pando, and Tarija—the so-called media luna—a region traditionally resistant to candidates from western Bolivia. Rodrigo Paz and Tuto Quiroga will now face each other in a runoff on October 19. Paz’s challenge will be to expand his support in Santa Cruz and wealthier urban areas, while Quiroga must convince middle- and lower-income sectors that market-oriented reforms can serve as a viable alternative to MAS without undermining the poor. After nearly two decades, Bolivians have chosen to close the MAS chapter in power and begin a new one—not defined by extremes, but by a turn toward the political center. This is a positive sign at a moment of deep national crisis. *Machine translation, proofread by Ricardo Aceves at Latinoamérica21 (L21)

Diplomacy
18th National Congress of the Communist Party of China

Leadership, Thought, and Succession in the CCP

by Jonathan Ping , Anna Hayes

As Xi Jinping tightens his grip on power amid economic headwinds and political uncertainty, questions of succession loom large. The path beyond Xi, marked by purges, rivalries, and competing visions for China’s future, remains shrouded in secrecy but carries global consequences. In October, the Chinese Communist Party (CCP) is scheduled to hold its annual plenary session where the Central Committee will meet to determine policy and the country’s general direction, including leadership. In China, the CCP and the leader hold immense, omnipotent power. The single-party state controls its population through SkyNet, a real-time urban surveillance system enforcing compliance; through the Great Firewall and Great Canon, which restrict information, encourage self-censorship, and spread disinformation; and through brutal oppression, particularly in remote regions such as Tibet and Xinjiang. At the top of the Party, the General Secretary imposes a narrative—leadership thought—often expressed as an aphorism. The leader’s thought guides behaviour and justifies sacrifices made for socialism. Mao Zedong’s anti-imperialist rhetoric and recasting of Marxism-Leninism devolved into a leadership cult, which ultimately resulted in the chaos of disrupted education and the madness of the Cultural Revolution. Subsequently, the Party attempted to limit the power of leaders by setting two-term limits. As leader, Deng Xiaoping prioritised economic reforms, famously asserting that the colour of a cat—its ideology—was irrelevant, so long as it could catch mice and function effectively in economic terms. While urging caution abroad under his “Hide and Bide” strategy (hide your strength, bide your time, never take the lead), he promoted bravery in domestic reform. His approach, expressed through the Chinese metaphor, “Cross the river by feeling for the stones,” was pragmatic, experimental, and gradualist. Jiang Zemin added his “Theory of Three Represents” to expand the Party’s base, while Hu Jintao emphasised a “Scientific Outlook for Development,” which aimed to reduce the widening inequalities within China to build a “Harmonious Socialist Society,” thereby lessening the chance for social conflicts to emerge. Within the leadership pantheon, the most consequential since Mao is Xi Jinping. Now 72 years old, Xi has enshrined his leadership role by removing the two-term limit and embedding his own thought— “Socialism with Chinese Characteristics for a New Era”—into the constitution. Xi’s thought is expansive and multifaceted, earning him the nickname “Chairman-of-Everything.” It is reinforced by the promise of fulfilling the “China Dream” of national rejuvenation: a long-held desire that China would reemerge as the global leader under a Sino-centric world order. Xi also side-stepped Deng’s “hide and bide” strategy, adopting a more assertive and aggressive foreign policy, believing China’s time had arrived. China’s economy is increasingly unstable, particularly in the property sector. Youth unemployment remains high, the Zero-Covid policy ended in failure, and the country is facing a demographic decline earlier than expected. More significantly, the leadership has retreated from consumption-led growth—a path that poses political risks Xi Jinping appears unwilling to confront. This shift has forced bankrupt provincial governments to sustain both real and superficial growth through the shadow economy and opaque financial instruments that merely circulate debt. These economic pressures are not just technical—they reflect deeper leadership challenges, raising questions about the resilience of Xi’s governance model, the fraying social contract between the Party and the people, and the viability of a fourth term for Xi amid growing internal and external scrutiny. At some point, China will have a new leader, but the path to that inevitable change is obscured and speculative. While Xi has not appointed a clear successor, discussions of potential replacements typically include Ding Xuexiang, Li Qiang, Cai Qi, Liu Jie, and, more recently, Wang Yang. Wang was Party Secretary of Guangdong and served as a member of the Politburo Standing Committee between 2017 and 2022. At 70 years old, he isn’t a young leader but has a reputation as a liberal reformer. Succession and the path to leadership in China can be difficult, if not horrific. Liu Shaoqi, who headed the PRC from 1959, was purged in 1968, publicly denounced, and beaten by Mao’s Red Guards before dying alone on a concrete floor. Xi was a member of the sent-down youth, experiencing the hardships of that time, and Deng was purged many times before his final rehabilitation, before becoming leader. Purge and renewal remain a Party tool for self-purification. For example, Bo Xilai was put on trial in 2011 shortly before his rival for power, Xi, took the leadership. Xi’s decades-long anti-corruption campaigns are widely viewed as purges of his political rivals, allowing him to cement his power. Of the more than 100 recently, Wang Renhua, Secretary of the Central Military Commission, Wang Chunning, Commander of the People’s Armed Police, and Zhang Jianchun, from the Central Propaganda Department, were caught up in Xi’s military purges. However, Xi’s Stalinist approach to purging, targeting allies and appointees alike, now leaves him in a precarious position. While the CCP leadership succession process has several negative elements, it does enable abrupt change and has built a leadership group with useful skill sets. China altered immensely from Mao to Deng and, subsequently, the world around it. Forty percent of new Politburo members since 2022 have a military-industrial background. These engineering skills and CCP dominance have shaped the Chinese domestic market, leading to global development prowess as the lead supplier of electric cars (70 percent of global production) and solar panels (exceeding 80 percent of global production). In comparison, most Ministers and Cabinet Members in the US and Australia have Law and Arts degrees. The question of what comes after Xi will have wide ranging implications. Given the trade war with the US, economic de-linking, and domestic turmoil, a Xi successor would attempt to quell and consolidate. The Party may seek short-term stability to consolidate Xi’s gains in the US conflict, awaiting the next US president, and focus on regional influence through soft power initiatives and structural power around the Nine-Dash Line and Taiwan. The new leader might echo the aphorism 固守阵地 (gù shǒu zhèn dì): “hold the fort” or “defend the position” as a basis for policy positions. Wang appears as likely a candidate as any. He holds a master’s in engineering, attended the Central Party School, and isn’t seen as a “rising star” but more of a seasoned politician.This article is published under a Creative Commons License and may be republished with attribution.

Diplomacy
5th August 2024. Dhaka, Bangladesh. The people of Bangladesh celebrate the resign of Prime Minister Sheikh Hasina and people honor the Bangladesh Army.

How Far Has Bangladesh Come One Year After Its 'Second Independence'?

by Tamanna Ashraf

Dr. Mohmmad Yunus, the Chief Advisor (CA) of Bangladesh’s interim government revealed the “July Declaration” on August 5th, 2025, to commemorate the 1-year anniversary of the student-led revolution that toppled former Prime Minister Sheikh Hasina’s 15-year Awami League (AL) regime. The essence of the July Declaration is to reflect the ambitions and goals of the Bangladeshi citizens for its future. The July Declaration highlights Bangladesh’s political struggles since its independence in 1971 and emphasizes how that struggle has culminated in the July Revolution and its vision for the future. More specifically, the Declaration outlines the suppression of Bangladeshi people’s political and human rights by Hasina’s regime, after 3 rigged elections, implicating the loss of the people’s mandate. The past year encapsulates a critical period in Bangladesh’s history and a stress-test of the Yunus administration. Although the July Declaration expresses the aspiration to build a country based on rule-of law, upholding human rights, and erasing corruption, the one-year tenure of Dr. Yunus reveals mixed levels of achievements. Since taking power, the interim government faced four crucial goals: to establish domestic security and stability, bring justice for the injured and deceased of the July Revolution, hold the corrupt members of the AL regime accountable, and to create a different economic and political vision for Bangladesh in the 21st century, especially for the young population. It is important to recall that the students, facing bleak job prospects, protested against the Hasina’s regime’s policy that allotted a disproportionate number of coveted government jobs to the descendants of freedom fighters of the 1971 war for independence. After more than a decade of corruption, mismanagement of government funds and bank reserves, Bangladesh was facing a dollar reserve crisis during the last years of the Hasina administration. From the beginning, the interim government’s challenge was to reverse the downward economic trajectory as part of new economic vision for Bangladesh. After Hasina’s fall, the former Governor of Bangladesh Bank also fled the country. The current governor’s policies, combined with increased remittance, have improved dollar reserves. External debts decreased in the fourth quarter of December 2024, compared to the third quarter as a result of the interim government’s cautious approach to foreign loans. The revival of the Chittagong Port and leasing part of the Port to a UAE-based company is intended to make Chittagong the economic heart of a new Bangladesh. The interim government’s initiatives to expand Bangladesh’s semiconductor industry also indicate an economic vision that is technology and youth centric. The underlying theme of the July Revolution was to reinvent the country and its engagement with global partners. There have been significant changes Bangladesh’s foreign policy since the 2024 revolution. One notable change is relationship with Western countries. The Biden administration , the European Union (EU), China, Pakistan, and India were prompt to congratulate Dr. Yunus. Such messages gave legitimacy to the interim government, the student’s revolution, while recognizing Hasina’s removal from power. UN Secretary General António Guterres’s visit during March 2025, brought renewed focus on the Rohingya refugee crisis, giving Bangladesh more agency on the issue. However, the UN (and therefore the U.S.) backed plan to establish a “humanitarian corridor” require tactful balancing between Chinese, American and Indian interests in the region. Admittedly, disagreements within the interim government, among the major political parties, and with the Bangladesh armed forces poses questions on whether the Yunus team can effectively carry out such a plan. Dr. Yunus’s engagement with Western and Asian partners centers on establishing Bangladesh’s autonomy. Meeting with 19 EU delegates, he pushed for moving the visa centers from New Delhi to Dhaka or another neighboring country. Signing a Memorandum of Understanding with China on the Teesta River crisis (after a 13-year stalemate with India) and creating medical facilities in China to treat Bangladeshi patients (after India curtailed medical visas) point to a deepening ties with China and to showcase a more assertive engagement with global partners. The previous examples also signal Bangladesh’s pivot away from India. The flood in August 2024 immediately after the revolution reinvigorated anti-India rhetoric and resurfaced frustration with perceived longstanding asymmetric hydro-diplomacy with India.  But, most importantly, Hasina’s continued presence in India remains a point of contention. Even after one year, India declines requests for Hasina’s extradition citing  safety concerns and whether she will receive a fair trial in Bangladesh. The current India-Bangladesh relationship presents a strategic challenge for India. Over the last few decades, India’s diplomatic relationship with Bangladesh has been limited to cooperative relationship with AL, neglecting maintaining diplomatic overtures with other political parties in Bangladesh. Consequently, significant portion of the Bangladeshi public perceived the AL party being overly friendly with India. Naturally, people’s dissatisfaction with Hasina’s policies were also transferred to grievances against India. The geographic reality implies that to address the persisting security concerns in the northeast Indian states (which includes Arunachal Pradesh, Assam, Manipur, Mizoram, Nagaland, Tripura, and Sikkim), the Indian government should pursue cooperative relationship with Bangladesh. In fact, Dr. Yunus connected the revival of the Chittagong Port and its significance for Indian northeastern states. Sheikh Hasina’s pro-India stance had allowed India to address security challenges in the northeastern states, without facing obstacles from Bangladesh. Political changes in Bangladesh necessitates the Indian government to realign its foreign policy and strive to form partnership with the people, instead of a singular political party. Domestic politics is one of the areas where the Yunus administration has shown weak progress. Since the onset, the administration faced frequent protests from garment workers, bureaucrats, and security forces. Even politically, reaching consensus on pressing issues is also becoming increasingly challenging. On the question of elections and electoral reforms, the divergence among the political parties and even splinters within the parties is becoming more visible. Pressure from leaders of the Bangladesh Nationalist Party (BNP) for earlier election raises doubts whether the interim government could accomplish its reform goals before the February 2026 general elections. Fifteen years of AL’s one-party rule has left BNP organizationally weak and divided. The newly created National Citizens Party (NCP) by the student leaders of the revolution is still consolidating its political base. Disagreements between the Chief of Army Staff General Waker-Uz-Zaman and the interim government point to a lack of partnership. General Waker’s insistence of the role of the Bangladesh Riffles (BDR) in the 2009 Pilkhana Massacre stands at odds with the families of the victims who demand justice and answering lingering questions about Awami League regime’s role. Such sentiments from families erode faith in the justice system. The interim government has taken steps to provide financial and medical support for the survivors of the July Revolution suffering from various injuries and permanent disabilities. Unfortunately, the July Declaration does not mention the continuing suffering of the survivors. The role of female students in the July Revolution is also not mentioned in the Declaration, despite being on the frontlines of the revolution. Such omissions do weaken the position of the domestic political reform agenda of the interim government and prevent it from giving these groups of people a sense of justice and inclusion in the new Bangladesh. Ensuring a safe and stable environment, while establishing the rule of law is the biggest shortcoming of the Yunus administration. Awami League has not expressed any remorse in its role in the violence of the revolution despite mounting evidence. The activities of Awami League and its student wing have been banned. Nonetheless, the disgraced political party continues to cast a large shadow. Hasina continues to make inflammatory statements from her exile in India that fuels new violence in Bangladesh. The arrest of Major Sadikul’s wife over allegations of plans to train AL ‘activists’ to destabilize the capital creates bleak prospects of the country’s security and the realization of the July Declaration. Furthermore, the alleged involvement of the spouse of an army major in such nefarious plans creates more questions about whether the armed forces are reliable partners to fulfill the promise of the 2024 revolution. At the one-year anniversary, the dream of the July Revolution remains unrealized. Dr. Yunus and his interim government have shown competence in addressing the economic challenges. Furthermore, changed engagement with Western and regional powers points to the desire to gain more agency over global and regional matters. Nonetheless, on the domestic political and security fronts, the interim government has shown problems with internal coordination and with other political stakeholders. Dr. Yunus has not proven himself to be a savvy politician. The utter corrosion of all institutions after 15-year corruption of Hasina’s regime requires mini revolutions within all political stakeholders. Political rhetoric must go beyond political disagreements for its own sake and making abstract ideological statements to rile up supporters. The political parties must discuss tangible problems faced by the people and offer feasible solutions. Otherwise, the promise of the July Revolution will remain unfulfilled.

Defense & Security
Jerusalem - March 01, 2020: Campaign billboard for

Shutdown Nation: The Political Economy of Self-Destruction

by Shir Hever

Abstract This article examines that the shift in Israeli society and political economy from ethnic socialism to individualistic capitalism was accompanied by a shift from a strategic and collectivist liberal Zionism to a nonstrategic individualistic right-wing populism. It is a shift that made the State of Israel vulnerable to shock and crisis, and turned it “from a startup nation to a shutdown nation.” Unlike the crisis caused by the 1973 war, Israel lacks the tools to cope with the crisis of October 7 and embarks on a path of self-destruction.Keywordssettler colonialism, right-wing populism, Middle East economies 1. Introduction: Zionism’s Transition From Collectivist to Individualistic Settler Colonialism The State of Israel is a settler-colonial project (Robinson 2013), and as such has never been self-sufficient. Israel’s first prime minister David Ben-Gurion cultivated Israel’s alliance with Western imperialism as part of a strategy to keep the Israeli military supplied with modern weapons and trading partners. Meanwhile, some neighboring Arab states cultivated an alliance with the Soviet Union. The bane of colonial societies is always the same: arrogance, and in Israel’s arrogance the seeds of its downfall were planted. Israeli society, very much like the white population of apartheid South Africa, developed a culture on racist foundations, and the disdain of the Indigenous Palestinian population spread to a patronizing and racist attitude towards Israel’s non-white Jewish population (Mizrahim and black Jews; Ben-Eliezer 2007). The history of Israel’s political economy can be traced along the trajectory of this arrogant approach and the events that confirm, or undermine, Israel’s arrogance. I briefly mention two such seminal events before proceeding to the more contemporary developments. The first was the war of 1967, which has given rise to Israel’s messianic religious right wing, certain that God is on Israel’s side. Israel’s “miraculous” victory against three Arab armies in just six days, commemorated in Israel’s name for the war “The Six Day War,” confirmed every racist stereotype in Israel’s colonialist culture. Popular songs celebrating Israel’s victory hit the radios, and the project of building illegal settlements on occupied Palestinian land, deporting prominent Palestinian leaders, and using collective punishment, such as home demolitions, have put a strain on Israel’s alliance with the imperialist West. Israel’s military industry was transformed by these events. After France, Israel’s biggest arms supplier at the time, imposed a military embargo on Israel because of the occupation, a new school of thought emerged in Israel’s security elite, arguing that Israel does not need to rely on foreign suppliers and could potentially produce all of its weapons and ammunition locally. The victory also gave rise to what Israelis have later retroactively called “the Conception”—the arrogant belief that Arab states will never try to defeat Israel on the battlefield again—having been overwhelmed by Israel’s superiority. The second event worthy of note occurred just over six years later, the war of 1973, also known as the October War. On October 6, 1973, Syria and Egypt launched a surprise attack that shattered Israel’s “Conception.” Israeli forces suffered heavy casualties, lost battles, and were forced to withdraw until the United States intervened with large-scale arms shipments. Israel’s dependency on Western support became undeniable. Even though Israeli forces, with the help of US weapons, eventually pushed back the Syrian and Egyptian armies, Israel was bloodied and traumatized. Israeli economists referred to the following decade as the “lost decade”—in which public resources were diverted to the arms industry and a large section of the workforce was recruited for extended military service with the reserves. The generation who fought in the 1973 war became wary of the danger of colonial arrogance (Bar-Joseph 2003). It was the generation that called for moderation in politics, for strategic thinking. The self-sufficiency illusion was nixed. Instead, Israel worked hard to position itself within global politics as a “bastion” against communism (just like South Africa did), and after the fall of the Soviet Union as a bastion against Islamic terrorism. The Oslo Peace Process was supposed to be Israel’s alibi, a show of willingness to compromise over territory in exchange for Western political legitimacy and normalization with Arab neighbors. Instead of a self-sustaining economy, Israel developed its political economy as a niche economy, becoming the world capital of the homeland security sector, with hundreds of companies exporting Israel’s “security expertise” in the form of surveillance technology, culminating in the export of spyware (Loewenstein 2023: 207). 2. Rise of the Right-Wing Populism in Israel The liberal Zionist project to rationalize colonialism has gradually failed, because of arrogance. In his article in Hebrew “A factory for blind spots” Ran Heilbronn explained the collapse of Israel’s security “expertise” through the reliance on technology and the belief that reality exists in the data, rather than the data being a tool to describe reality (Heilbronn 2024). The Israeli security industry conceived of the occupation as a laboratory for developing tools of oppression and marketing them as “field-tested” (Loewenstein 2023: 49). It has failed to reflect that the identity of the self-appointed security experts as colonizers makes them predictable. This is especially the case in their tendency to repeatedly underestimate Palestinians, because respecting the ability of Palestinians to develop creative methods of resistance and outwit Israeli oppressive measures undermines the racist arrogance that is necessary to justify apartheid (Shlaim 2015: 133–180). The rise of the populist right wing in Israel can be explained through the intergenerational discourse among Jewish Israeli society. The generation that fought in the militias to expel the Indigenous Palestinian population and establish the State of Israel, as well as its children, were raised on the collectivist values and glorifying sacrifice (Feige 2002: v–xiv). As a popular 1948 song by Haim Gouri played on official state ceremonies states, “love consecrated in blood will blossom amongst us once again.” Subsequent generations, those born since 1967, the “euphoria” period (including the baby-boom generation after the 1973 war; Ozacky-Lazar 2018: 18–24) and their children, have been raised on the sense of entitlement to the spoils of war for which their parents and grandparents made great sacrifices. Calls for further expanding the borders, acquiring more land, and building more settlements, which were consistently made by the settler movement, have been perceived by the older elites as an ungrateful disrespect to their own sacrifices, and that Israel is at a risk of overextending itself and losing everything. This has become the main narrative of liberal Zionism (Ayyash 2023). The intergenerational shift from strategic, “rational” Zionism based on calculated sacrifice for the purpose of colonizing Palestine while maintaining both a Jewish majority and good relations with the West, toward a religious populist Zionism built on a sense of entitlement, dismissing threats and obstacles to the Zionist Project, is a shift dialectically inherent to the colonial process and inseparable from it (Sabbagh-Khoury 2022). Every colonial society has a “founders” generation that is honored for its commitment to the collective national project at great personal costs, which is followed by increasingly entitled generations who are born with privileges and do not feel the need to earn or defend them. The colonial mythology exaggerates the significance of the founders’ efforts who “gave their lives to ensure that this land will be ours for posterity.” The demand from younger generations to make efforts to secure the land and the privileges of the colonizers diminishes from the mythology and is therefore rejected. The younger generations simply expect to inherit their privileges (Veracini 2010: 40). The right-wing advocates of collectivist nationalism and sacrifice (following the path of Jabotinsky, who in his Iron Wall manifesto warned that Palestinians will never give up their struggle against colonial domination, and Zionism must engage in an eternal battle (Jabotinsky 1923), have all but disappeared, being replaced by the right-wing populists, led most prominently by Benjamin Netanyahu. The main attraction of the right-wing populism is the idea of impunity: Israel can have its cake and eat it too. Disregard international law and international pressure, underestimate the potential of Palestinian resistance, and not make any sacrifices (Shad 2015: 167–178). As the rate of conscription to the Israeli military plummeted since the 1990s (Arlosoroff 2019; Shalev 2004: 88–101), Israelis became accustomed to justifying military aggression against Palestinians from the comfort of their armchairs. While refusal to serve remains a marginal phenomenon, draft dodging had become the norm, rather than the exception (Perez 2018). Yagil Levy referred to this shift as a capital-intensive warfare, using technology and expensive weaponry to multiply the impact of a smaller number of soldiers, thereby also increasing the negotiating power of those soldiers who were able to make demands for material and nonmaterial rewards in exchange for their military service, which conscripts would normally not be able to make (Levy 2003: 222). The populist right wing conflates the State of Israel with the Jewish people, ignoring both the existence of non-Jewish Israelis and the existence of non-Israeli Jews. Instead of addressing criticism and planning strategic responses, populists use ad-hominem attacks to delegitimize criticism. Netanyahu dismisses critique against Israel’s apartheid and war crimes as “antisemitic” whether it’s the BDS movement (Boycott, Divestments, Sanctions; Black 2014), legal action from the International Court of Justice or from the International Criminal Court (Heller 2019), or even recognition of the State of Palestine (Landale 2024). Eventually this populist argument has become mainstream so that even opposition leaders from the liberal Zionist factions adopted it (TOI Staff 2022). The liberal Zionist forces found themselves at a disadvantage after the invasion of Lebanon in 2006, which was seen as a military failure, and was exploited by the far right to accuse the government of weakness (Erlanger 2006). The Israeli attack against Gaza just before the February 2009 elections claimed the lives of over 1,400 Palestinians, most of them civilians. The leader of the liberal-Zionist camp at the time, Tzipi Livni, served as minister of foreign affairs. Her position was (and remains) that the liberal Zionist camp is more strategic and has more tools to secure Jewish control over Palestine than the populist right wing (Livni 2018). This argument backfired because the populist right wing grew domestically stronger in the face of threats of international restrictions. The same process occurred in 2022 with the publication of four reports about Israeli apartheid (Abofoul 2022), leading to the collapse of the last liberal Zionist government, which could not come up with a strategy to defend Israel from the accusation of apartheid. Just like the brutal attack on Gaza in the winter of 2008, the government of liberal Zionist parties tried to demonstrate its brutality toward Palestinians accusing six Palestinian civil society organizations of terrorism without showing evidence (OHCHR 2022) and by granting impunity to the soldier who murdered Al-Jazeera journalist Shireen Abu Akleh on May 11, 2022, in the course of the military campaign in the Jenin refugee camp (Al Jazeera 2022). This tactic failed in the elections of November 2022 just as it failed in the February 2009 elections. In early 2023, with the most far-right government in Israel’s history embarking on the judicial overhaul project, the people who protested the government’s antiliberal policy were the very same who maintain and profit from Israel’s security sector (Goodfriend 2023). Protestors in Tel-Aviv have adopted the slogan of the BDS movement (Boycott, Divestments, Sanctions) “from startup nation to shutdown nation” and printed it on a huge banner that they carried through the streets (Ben-David 2023), warning that Israel’s economy will shut down because of the policies of the far-right government. The demonstrators holding the sign were likely unaware of the fact that the slogan was coined by BDS, which is another example of blind spots caused by an unsustainable colonial situation. The prediction was prophetic, but interestingly the very same people who argued that Israel’s military strength is directly connected to the economic strength of its security sector, who warned against the economic collapse, did not predict the simultaneous collapse of Israel’s military strength. The rise of right-wing populism in Israel is fueled by elements that are inherent to the Israeli case: the settler-colonial intergenerational conflict, the economic transformation of the social contract, and the shift in the military structure and the role of militarism in society. Nevertheless, a fourth factor cannot be ignored, which is the rise of the populist right wing in the whole world, with the polarization of politics after the dashed expectations following the nineties (Greven 2016). The model of the right-wing populist leader—racist, hedonist, and corrupt—was only known in two countries in the nineties: in Israel with Netanyahu’s first term and in Italy with Silvio Berlusconi, before becoming widespread in the rest of the world starting in 2016. 3. The Systemic Vulnerability A key difference between the crisis of the 1973 war, and the crisis that Israel is experiencing since October 7, 2023, is the change in the economic structure of Israel. In its first three and a half decades of existence, Israel had a corporatist economic structure (Shalev 1986: 362–386), in which the government, unions, and the private sector cooperated to bolster and maintain the apartheid economic system, until the neoliberal reforms of 1985 (Ben Basat 2002: 1–22). Israel’s federation of labor unions—the Histadrut—played a central role in keeping Palestinian workers from the occupied West Bank and Gaza as a cheap and exploited labor force both before and after the reforms (Hiltermann 1989: 83–91). The reforms, however, changed the social contract at the base of the settler-colonial state. From a nationalist project in which the privileges of the Jewish population are collectively protected and collectively enjoyed by the Jewish population at the expense of the Indigenous Palestinian population, the neoliberal reforms turned Israel into an individualistic society in which privileges are enjoyed individually and reproduced by market forces for profit (Shalev 1986). In parallel to the way that a neoliberal order restructures the social contract between state and citizen, it also restructures the contract between state and soldier. As Yagil Levy argues, the Israeli tech sector serves as a reward mechanism to attract recruits into prestigious units, such as the notorious unit 8200, for the prospect of future lucrative employment in the private sector. This “negotiation,” to borrow Levy’s term, creates a military vulnerability. The collapse of Israel’s tech sector impacts the motivation of soldiers to serve in Israel’s technological units (Levy 2012: 47). The capitalist structure is more vulnerable. In the absence of a strong social safety net, individuals are expected to make their own risk assessment (Swirski et al. 2020: 5). Modern finances are a system of management expectation. Jonathan Nitzan and Shimshon Bichler have shown that the depths of crisis in capital can be measured in a time perspective. Cyclical crisis is marked by short-term expectations coupled with a long-term expectation for recovery. Investors attempt to build predictive models based on their assessment of future developments. In a systemic crisis, however—what Kliman, Bichler, and Nitzan call “systemic fear”—the predictive models are built on historical data, and investors are making fewer references to the future (Kliman et al. 2011: 61–118). One of the first voices to herald that the State of Israel has reached a dead-end was Marwan Bishara, who focused on the aspect of Israel’s regional integration into the Middle East, which remains an essential strategic element in Israel’s sustainable existence, but which could not continue after Israel embarked on the onslaught against the Gaza Strip, intentionally targeting civilians (Bishara 2023). The oppressive structure of the State of Israel is vulnerable to the external pressure that is applied by Palestinian resistance, which takes the form of both armed and unarmed resistance. The armed resistance is much less relevant to the discussion here, because the capitalist vulnerability is suspended in times of “security crisis,” framed as a temporary time in which collective mobilization and sacrifice are necessary. The unarmed forms of Palestinian resistance such as BDS expose the vulnerability of Israel’s apartheid and challenge the sustainability of the oppressive structures (Awad 1984). The slogan “they oppress, we BDS” leaves Israelis with no choice but to consider whether the same methods used to crush the Palestinian resistance are in the end self-defeating (Barghouti 2020). Palestinian resistance has developed through stages, searching for means to overcome Israeli oppression. Collective leadership replaced individualistic leadership in order to survive assassinations (Baylouny 2009). Intersectional and progressive alliance building proved effective in creating solidarity in the heart of Israel’s Western support bases, especially North America and Western Europe (Salih et al. 2020). While liberal Zionism excelled in infiltrating Palestinian society and sabotaging its resistance (Cohen 2009), the populist right adopts the dehumanization of Palestinians as a fact, rather than a tool, and is therefore unable to infiltrate Palestinian society effectively. As Major General Amos Gilad said in 2011 “we don’t do Gandhi very well” (Dana 2011)—Palestinians found the weak point in Israel’s oppressive regime. Israel’s closest allies begin to contemplate the unthinkable—the end of the Zionist state. For Germany, whose unconditional support for Israel turned into a quasi-state religion due to an intentional conflation of Judaism and the State of Israel (Moses 2021), the notion that the State of Israel will cease to exist is more controversial than the speculations about the imminent demise of the GDR (German Democratic Republic, which was dismantled in 1990). Nevertheless, even German mainstream media cannot silence the shutdown nation voices when they come from Israeli Jews or former Israeli Jews (Tschemerinsky 2024). Two prominent Israeli economists, Eugene Kandel and Ron Tzur, wrote a scathing report in which they come to the conclusion that Israel will not survive to its 100th year and kept the document a secret, worried that it could become a self-fulfilling prophecy. Faced with lack of interest from the government, however, they gave interviews about the report (Arlosoroff 2024). Israeli billionaire Gil Schwed compared Israel to Afghanistan—a state that collapsed under an Indigenous insurgency and abandoned by its US ally, and which does not attract foreign investments (Cohen 2024). The Haaretz newspaper published its editorial on Israel’s Independence Day with the headline that Israel will not survive to celebrate its 100th Independence Day. In the English version of the newspaper, the headline was qualified with the extra text “unless we are rid of Netanyahu” (Haaretz 2024). The expected delayed collapse is meaningless in a capitalist economy. Investors who believe that the State of Israel is a time bomb with a twenty-year timer will not buy Israeli bonds, nor invest in the economy. Parents will not want to raise children into (what they perceive as) an inevitable catastrophe and will exhaust all available options for leaving with their family (Silverstein 2024). Three Israeli historians have also addressed the events of October 7 and their aftermath as the end of the Zionist projects. Moshe Zimmermann, a Zionist scholar of German history and German-Israeli relations, commented in an extended interview that the Zionist project set up to create a secure haven for Jews, but that the State of Israel, the result of the Zionist project, has failed to protect its Jewish citizens on October 7, to take responsibility for the failure, or to develop a strategy to create more security in the future (Aderet 2023). From the opposite perspective, Ilan Pappe, an anti-Zionist scholar of the history of Palestine, published an essay listing six indicators to the demise of the Zionist project (Pappé 2024). Although the State of Israel does not by definition share the same fate of the Zionist project, and can conceivably exist without a Zionist government, Israeli institutions have, nevertheless, in the moment of crisis after October 7, published statements attesting to the centrality of Zionism to Israel’s existence as a state. The strongest example of these statements is the letter written by the Hebrew University to Knesset member Saran Haskel justifying the suspension of Prof. Nadera Shalhouv Kevorkian over her criticism against Zionism, by stressing that the Hebrew University is a Zionist institution (rather than an academic institution in which a plurality of opinions is encouraged) (Odeh 2024). Such unanimous agreement among Zionists and anti-Zionists about the fate of the Zionist project and its significance to the future of the State of Israel is an unprecedented consensus. Six months into the war, a third Israeli historian, Yuval Noah Harari, wrote that Israel is entering an unsustainable phase of global isolation and military defeat, and that only a quick ceasefire and structural change of policy (i.e., a break from Zionism) could save the State of Israel from demise (Noah-Harari 2024). 4. Conclusion It is this vulnerability, a society built on individualism and privilege, which made the October 7 attack a much bigger trauma for Israelis than other disasters that claimed the lives of hundreds, or even thousands, such as the 1973 war. The Israeli discourse cannot imagine a scenario in which the State of Israel and the Zionist project will recover from the crisis. Despite obsessive discussions about recovery (Bachar 2024), the need for national unity (Shwartz 2024), waging war until the “total victory” (Tharoor 2024)—the public discourse is full of Cassandrian predictions of doom—and every failure of the public institutions, whether in education, housing, electricity production, or health care, is seen as the tip of a much bigger iceberg (Motsky 2024). A state, its political economy, and its political culture require more than just institutions de jure to function. It requires a collective belief in a sustainable political project with a perspective into the future. The future of the people living in historical Palestine, between the river and the sea, whether Palestinians or Israelis, is very uncertain, but one thing seems almost certain—the current political system will not stay in place for long—and the process of its collapse carries a tremendous economic significance. It is too early to say how exactly the political changes effect the economic changes. The threat of economic crisis is tremendous, just as economic efforts are needed to recover from the war, rebuild the Gaza Strip, and treat the physical and mental injuries suffered. It can lead to default on the debt, hyperinflation, and pauperization of thousands. But the potential for ending Palestine’s isolation in the Middle East and opening trade, the resources diverted from security and the military to civilian purposes, and a recovery of the tourism sector can paint a positive scenario as well. Liberal Zionism developed an effective, albeit highly immoral, strategy of settler colonialism. It cultivated a strong Jewish collective around a myth of individual sacrifices for the sake of the nation. This strategy contributed to Israel’s ability in its first decades to expand its territory through illegal occupations while maintaining good relations with the West. But in the long run, it contained the dialectic seeds of its own destruction. Younger generations were taught to accept the achievements of liberal Zionism as permanent, so why should they sacrifice anything? For decades, liberal Zionists warned that the populist right wing undermines the foundations of the Zionist project itself. But even though these warnings were accurate, liberal Zionists failed to acknowledge how the system of Jewish supremacy and apartheid that they have established eventually and unavoidably led to the takeover of the Zionist project by an entitled and unstrategic generation. An important caveat must accompany this article. The weakness of Israeli institutions is in their ability and their willingness to perceive reality. All three historians quoted here for their texts about the imminent end of the Zionist project share a common blind spot: they do not acknowledge the role of the Palestinian resistance in bringing down the Zionist project, and speak in terms of tragedy (the tragic hero bears responsibility for his own downfall). The caveat here is that I too, the author, may not necessarily be in a better position to perceive reality. Speaking the same mother tongue, coming from the same cultural background and education system as Pappé, Zimmermann, and Harari, I cannot help but wonder what is the missing element of the puzzle that I am unable to see in its entirety. Declaration of Conflicting InterestsThe author declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.FundingThe author received no financial support for the research, authorship, and/or publication of this article.ReferencesAbofoul Ahmed. 2022. Sound but insufficient: The mainstream discussion on the question of applicability of apartheid in the Occupied Palestinian Territory. Opinio Juris March. Accessed at: https://opiniojuris.org/2022/03/21/sound-but-insufficient-the-mainstream-discussion-on-the-question-of-the-applicability-of-apartheid-in-the-occupied-palestinian-territory/.Aderet Ofer. 2023. 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