A Rocky Start

Israel, Lebanon, Ukraine and China point to a year of instability

We had a balmy start to the new year here on the west coast with little if any snow. And while I tried to take some sort of a break from the news it was very hard to do, the news consumption in ‘October 7th mode’ continued unabated. Many discussions with family and friends about the state of the world took place at parties and over the dinner table. What struck me was how incredibly dumbstruck people often are once these events are discussed, even the smartest minds often roll their eyes in disbelief as they witness the increasing chaos around the globe. And it is not so much the conflicts and wars on their own, it is rather the realization that Western democracies are losing the plot and lack the leadership and resolve to direct and help structure the world in a way that we were used to. Every discussion over Israel/Gaza, Ukraine and China ended with the painful awareness that the initiative now somehow rests with other powers and that we are diving into a deep hole of uncertainty. Reactive has taken the place of pro-active. Let’s do a quick recap:

Israel

Where to start? The campaign in Gaza has now entered the ‘third stage’ which means that after the initial aerial bombardments and subsequent invasion we are witnessing the phase of mopping up the remaining Hamas strongholds. This does not mean things are over, far from it and it could take many more months of heavy fighting. It is just that now less resources are required and it so happens that the troop withdrawals may be required in the north where the conflict with Hezbollah in Lebanon has been escalating steadily. Israel successfully targeted and killed one of the Hamas top leaders in Beirut - by drone - and this may prompt a fierce reaction from the group’s Lebanese partners.

In Israel itself the pressure on Nethanyahu is gaining momentum, no less than 85% of Israelis want to see him go after the conclusion of the war. And herein lies the crux: the longer the war goes on the better it is for Bibi as it postpones his likely forced retirement. That fact may cloud his judgement in the way he is executing the war, although the day-to-day operations are actually managed by war cabinet members Yoav Gallant, Benny Gantz and Gadi Eisenkot. What is key to understand here is that this is not to be construed as Nethanyahu’s war: Israelis are more than ever unified in their support for the war against Hamas and any other group that is attacking the nation. Israelis will fight as long and hard as they will have to, but they rather do it without the man who has led the nation for some sixteen years. The embattled prime minister this week also faced a major setback as Israel’ Supreme Court rejected his government’s controversial law attempting to overhaul the judiciary. Yes, Bibi is toast, but not just yet.

Ukraine

It has become routine almost to refer the war as a stalemate, but underneath it all is a an emerging train of thought that is pointing at Russia to be slowly winning. With support for the war waning in the West absent any Ukrainian progress, the Russian war economy has ramped up to a point where it is steadily re-supplying its forces and gaining a level of output that clearly dwarfs Ukraine’s. If support for the latter dwindles it will be deeply exposed. To compound this is the fact that many in Europe have taken their eyes off the war and returned to taking an inward look at the world, also known as complacency. Now that the crises around energy prices and war refugees have stabilized the war is no longer a concern or headline news. Not good and just before the holidays the top Dutch armed forces commander tried to wake up everybody by giving a stark warning that his country should be preparing for a war with Russia. The key rationale for this is exactly the strength Russia is gaining without the presence of a clear European deterrent.

And the Russians are far from done. Over the past week it send some stark reminders by launching multiple aerial attacks on civilian targets in Kyiv and Kharkiv, but also on a number of other cities causing many casualties and damage. Needless to say these are all war crimes with Putin’s name printed on them. One of Ukraine’s most vocal voices, members of parliament Kira Rudik, also got hit in her apartment and she called out the extreme danger facing every single person in Ukraine while underlining the need for more support. And that, given the political state of affairs in both Europe and North America, may not be forthcoming the way it used to.

China

So Russia is ramping up to be a war economy and China is doing the same thing pretty much. That is according to Garrie van Pinxteren, a Dutch journalist who is concluding her forty year stay in China and she is witnessing a country where all ‘the oxygen has disappeared’. She essentially describes that today’s China under Xi is reverting to the same extreme control and paranoia that ruled the Mao and early Deng years. It is stifling the dynamic and entrepreneurial growth that characterized the 1990s and early 2000s. Taken together with a focus on acquiring and controlling natural resources and ramping up weapons production there is less and less doubt that Xi is prepping the Middle Kingdom for a potential military conflict with the United States.

Even Xi himself has admitted that China’s economy is in a tough spot in his New Year’s speech wherein he made it clear that a reunification with Taiwan is only a matter of time. The island republic has elections later this month so expect more rhetoric from the mainland in order to interfere and try and turn events in its favour.

So?

The first few days of 2024 are giving us some clear pointers of where we may be headed in the months ahead and with US elections in the mix expect a lot shifts and positioning by all parties involved. I will be with you through it all, that’s the plan.