The Press Roundup

 

January 18, 2024 (Thursday)

Curated Summary

Geopolitical risks overshadow economic optimism in Davos (Financial Times)

• US strikes against Houthi military assets may not stop their acts of war, but it could reduce their ability to continue the assault.
• A rebound in financial markets, economic growth better than forecast, the strongest inflation in decades defeated - the economic backdrop to the Davos meetings is far more promising than many expected a year ago. But judging by the tone of the discussions, no one is celebrating. 
• Even as the leading economies, led by the US, move towards a soft landing after a tough interest rate hike, this good story is being drowned out by growing anxiety about a host of geopolitical risks looming in 2024 that are closing the economic outlook with a fog of uncertainty.
• Wars are raging in Europe and the Middle East, with the latter conflict already leading to a massive diversion of shipping around southern Africa, adding to rising input costs for companies and the risk of potential inflation.
• "Economic sentiment should be improving now because, if you look around, the US is performing better than expected and China seems to be stabilising," says Eswar Prasad, a Cornell University professor and former senior IMF official. Instead, he said, "a pervasive sense of doom seems to have settled in on the geopolitical front."
• European Commission President Ursula von der Leyen did not fail to set a pessimistic tone, saying the world had entered an era of "conflict and confrontation, fragmentation and fear." "Without a doubt, we face the greatest risk to global order in the post-war era," von der Leyen said.
• The Russia-Ukraine conflict remains the top topic for many, and the possibility of escalation in the Gaza Strip and the Red Sea is also actively discussed, which could lead to new price shocks and disruptions. "The whole subject [of geopolitical turmoil] is becoming very complex," said Beat Simon, commercial director of logistics at DP World, one of the largest container terminal operators. He believes rising shipping costs, combined with potentially higher oil prices, could push up inflation.
• At the same time, the shift away from the long post-war period of steadily increasing globalisation continues. Countries are beginning to prioritise national security and sustainability over economic efficiency, and traditional ways and methods of cooperation are breaking down.
• A survey of 30 chief economists conducted by the World Economic Forum ahead of the meeting found - nearly 70% fear that the pace of geo-economic fragmentation will accelerate this year. 

Pepe Escobar: How the West was defeated (Sputnik)

• Pepe Escobar: Russia to emerge as ‘ultimate winner against all of NATO’. Moscow will be “dictating all terms, leaving the Western ‘Hegemon’ desperate” and “spinning”, Sputnik contributor Pepe Escobar wrote in his latest op-ed.
• The geopolitical analyst was drawing on a “hand grenade of a book” published by French historian and political analyst, Professor Emmanuel Todd. Escobar credited the author of “The Defeat of the West” for using verified facts to “blow up the Russophobia edifice erected” by the West over the Ukraine conflict. 
• The author’s merit, according to Escobar, lies in how he lays bare “Western society’s false consciousness,” while explaining reality “in a way that totally escapes the brainwashed collective West masses lingering under turbo-neoliberalism.”
• Escobar seized upon several key reasons offered up by the author that led to the West’s downfall:
• Russia withstood the West’s sanctions while reducing “dominant notions of the ‘neoliberal political economy’ (GDP rates) to shambles.”
• The West displayed “ideological solitude and ideological narcissism,” and “supremacy of an imperial nihilism expressed by the obsession with Forever Wars.”
• “The end of the nation-state” in the US, while Russia is “focused on sovereignty, [that is], the capacity of a state to independently define its internal and external policies.”
• “Implosion of White Anglo-Saxon Protestant (WASP) culture” resulting in an “essentially military organism” managed by US neocons. 
• De-industrialization, with a “post-imperial” US no more than “a shell of military machinery deprived of an intelligence-driven culture.”
• Transgenderism and the ‘Cult of the Fake’ as “one of the flags of this nihilism that now defines the West, this drive to destroy, not just things and humans but reality.”

In Davos, Israel's president calls ties with Saudia Arabia key to ending war in Gaza (AP)

• Normalizing ties between Israel and Saudi Arabia is a key element of ending the war with Hamas and a gamechanger for the entire Middle East, Israeli President Isaac Herzog said Thursday at the World Economic Forum’s annual meeting in the Swiss town of Davos.
• It comes days after Saudi Arabia’s foreign minister, Prince Faisal bin Farhan, said on a Davos panel that the kingdom agreed “regional peace includes peace for Israel.” He said Saudi Arabia “certainly” would recognize Israel as part of a larger political agreement.
• “But that can only happen through peace for the Palestinians, through a Palestinian state,” he said.
• U.S. Secretary Antony Blinken also reiterated in a talk at Davos that a pathway to statehood for Palestinians could help improve Israel’s security and its relations with other countries in the region.
• Israeli Prime Minister Benjamin Netanyahu and his right-wing government, however, are opposed to the concept of a two-state resolution to the Israeli-Palestinian conflict. Herzog, whose ceremonial role is meant to serve as a national unifier, said public support for it is low because traumatized Israelis are focused on their own safety following Hamas’ deadly Oct. 7 rampage. 
• “When nations come forward and say ‘two-state solution,’ they have to first deal with a preliminary question, which is a core question for human beings: Are we offered real safety?” Herzog said. “Israelis lost trust in the peace process because they could see that terror is glorified by our neighbors.”

Blinken calls a pathway to a Palestinian state a necessity for Israel security (PBS)

• U.S. Secretary of State Antony Blinken stated that Israel cannot achieve "genuine security" without a pathway to a Palestinian state, and that such a move could help unify the Middle East and isolate Iran.
• Iran's foreign minister, Hossein Amirabdollahian, warned that fighting could intensify in the region if Israel does not end its campaign, and acknowledged missile strikes on Pakistan and Israeli sites in Iraq.
• Saudi Arabia says it will recognize Israel as part of a regional peace deal that includes a Palestinian state.
• Netanyahu rejects Palestinian statehood, claims he prevented it.

France launches artillery coalition to support Ukraine (AA)

• France has launched a coalition called 'Artillery for Ukraine' to provide military support to Ukraine in its war against Russia. The coalition aims to strengthen support for Ukraine in the short and long terms. France's Defense Minister, Sebastien Lecornu, launched the coalition with his Ukrainian counterpart, Rustem Umerov. France will also deliver six additional Caesar howitzers to Ukraine in the coming weeks.
• France plans to deliver 50 precision-guided missiles A2SM every month, starting from January, and increase the monthly delivery of shells to 3,000. They have successfully adapted these missiles to Soviet-type aircraft.
• France also plans to build and deliver 78 Caesar howitzers to Ukraine in 2024.

'Diplomacy and dialogue': Global powers, regional stakeholders react to Pakistan and Iran's tit-for-tat strikes (Dawn)

• Pakistan conducted strikes on terrorist hideouts in Iran's Sistan-Baluchestan province, responding to Iran's earlier violation of its airspace. Iran reported nine casualties, including children and women.
• Global reactions include:
• China calls for calm, restraint, and offers to mediate.
• The United States condemns Iranian strikes, citing violations of sovereign borders.
• India maintains neutrality, emphasizing the matter between Iran and Pakistan.
• Turkiye urges restraint and common sense, emphasizing resolution through friendship.
• The Taliban advocates resolving disputes through diplomacy.
• Russia calls for maximum restraint, warning against destabilization in the region.
• The European Union expresses deep concern over the spiral of violence, citing sovereignty violations.

Russia's foreign minister rejects a US proposal to resume talks on nuclear arms control (Tronto Star)

• Russia's Foreign Minister Sergey Lavrov said that talks are impossible while the US is providing military support to Ukraine.
• Lavrov accused the West of fueling global security risks by encouraging Ukraine to ramp up strikes on Russian territory.
• He warned that Russia will achieve its goals in the conflict regardless of Western support for Ukraine.
• Lavrov said that the US push for restarting nuclear arms talks is rooted in a desire to control Russia's nuclear arsenal and minimize nuclear risks for the US.
• He accused the West of blocking any talks on ending the conflict and inciting Ukraine to ramp up attacks on Russia.
• Lavrov reaffirmed that Russia will continue its "special military operation" in Ukraine regardless of Western pressure.

Japanese defence ministry signs contract to purchase 400 US-made long-range Tomahwak missiles (Fox News)

• Japan's defence minister has signed a contract that allows its military to buy Tomahawk missiles from the United States. The contract is for 400 long-range American missiles. The deal comes amid Japan's drive to build up its military capabilities to counter regional security threats, including from China, North Korea and Russia.

Narendra Modi's illiberalism may imperil India's economic progress (The Economist)

• India's Supreme Court ruled in 1994 that politics and religion cannot be mixed, but the consecration of a controversial Hindu temple by Narendra Modi suggests otherwise. This event marks the informal launch of Modi's campaign for a third term as prime minister and is part of a Hindu-nationalist project to dominate India, causing concern among Muslims and secular-minded Indians.
• Modi's vision of national greatness includes both wealth and religion, as he aims to be India's most consequential leader since Jawaharlal Nehru. However, there is a danger that a hubristic Hindu chauvinism could undermine his economic ambitions.
• The symbolism of Ayodhya is significant in understanding the context. The Bharatiya Janata Party (BJP), Modi's party, gained prominence by campaigning over the status of a mosque in Ayodhya. The destruction of the mosque in 1992 led to Hindu-Muslim riots across South Asia.

Germany seeks to buy PAC-3, rumors are for a triple-digit quantity (Bulgarian Military)

• Germany's Ministry of Defense, the Bundeswehr, is planning to procure American PAC-3 interceptors to enhance their Patriot anti-aircraft missile systems.
• The formal request for the PAC-3 interceptors was likely sent at the end of the previous year.
• This procurement is separate from Berlin's acquisition of 500 GEM-T missiles for Germany's Patriots.
• The PAC-3 SME (Patriot Advanced Capability-3 Seeker Missile Eradicator) is a surface-to-air missile system designed to intercept incoming aircraft and ballistic missiles. It is an upgrade from the previous PAC-2 system, with improvements in range, accuracy, and overall performance.
• The PAC-3 SME uses a hit-to-kill strategy, directly striking the target to destroy it, increasing the chances of a successful interception.

U.S. conducts fourth attack on Houthi rebels in Yemen (UPI)

• The United States conducted its fourth attack on Iran-backed Houthi rebels in Yemen, targeting missiles and launchers that posed a threat to vessels in the Red Sea and the Gulf of Aden. This was in response to the rebels' attack on a U.S. shipping vessel in the Gulf of Aden using a one-way drone system.
• The U.S. Central Command described the attack as a defense of its vessels and exercised its right to protect itself. The strikes aimed to degrade the Houthi's capabilities to continue attacking international and commercial shipping in the region.
• The attacks by the Houthis have endangered international mariners and disrupted commercial shipping lanes in the Southern Red Sea and adjacent waterways. The United Nations Security Council has condemned these attacks, and the United States has designated the Houthis as a terrorist organization.
• As a result of the attacks, shipping companies have rerouted their vessels around South Africa, adding time and costs to their journeys. The United States has formed a coalition of over 20 countries to protect vessels in the Red Sea.