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📰 US warns Israel over aid

📰 US warns Israel over aid

and Global debt crisis looms

Ross Crabtree & Billy Robinson
October 18, 2024

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Hello and welcome back.

In the past 24 hours, the Middle East has dominated headlines as the U.S. conducted airstrikes on Houthi-controlled areas in Yemen, while also issuing a conditional warning to Israel regarding future arms sales.

High-profile multilateral diplomacy unfolded with the EU and GCC meeting in Brussels and the Shanghai Cooperation Organisation convening in Islamabad.

Meanwhile, the IMF has projected that global debt will surpass $100 trillion by the year's end.

Top 5 Stories

1️⃣ 🇶🇦 🇧🇪 🇪🇺 European Union-Gulf Cooperation Council summit issues calls for regional de-escalation: During the EU-GCC summit in Brussels, Qatar's emir called for ceasefires in Israel’s conflicts with Gaza and Lebanon, and emphasised the need for a Palestinian state. Addressing European leaders, Sheikh Tamim bin Hamad Al Thani highlighted the urgency of establishing a "sovereign and independent" Palestinian state alongside Israel, and condemned Israel's military actions as normalising war crimes. The summit, marking a renewed EU-GCC collaboration, aimed to address conflicts in the Middle East and Ukraine. Amid escalating violence, Al Thani's remarks followed over a year of intensified Israeli military actions in Gaza and clashes with Hizbollah in Lebanon. EU Commission President Ursula von der Leyen echoed the call for ceasefires, warning against further regional escalation. The presence of Saudi Crown Prince Mohammed bin Salman elevated hopes for progress on a two-state solution, aligning with the 2002 Arab Peace Initiative.

2️⃣ 🇺🇸 🇵🇭 U.S., Philippines, launch South China Sea military exercise: Thousands of U.S. and Filipino troops began joint exercises in northern and western Philippines this week, shortly after large-scale Chinese military drills around Taiwan and a collision between a Chinese vessel and a Filipino patrol boat. The Kamandag (Venom) exercises aim to bolster defence capabilities along the northern coast of Luzon, roughly 500 miles from Taiwan. The drills coincide with Taiwan's detection of a record 153 Chinese military aircraft near the island within 25 hours, the defence ministry reported. Beijing, which views Taiwan as its territory, labelled the exercises a "stern warning" against "separatist" forces, asserting its willingness to use force if necessary. Taiwan denounced China’s actions as "irrational and provocative," while the U.S. described them as "unwarranted." The joint military activities signal ongoing tensions in the region amidst heightened geopolitical challenges.

3️⃣ 🇮🇳 🇵🇰 Indian foreign minister in Pakistan for Shanghai Cooperation Organisation conclave: Indian Foreign Minister Subrahmanyam Jaishankar arrived in Pakistan on Tuesday, marking the first visit by an Indian foreign minister in nearly a decade, to attend an SCO summit. Held in Islamabad, the event has drawn nearly a dozen leaders, with heightened security measures in place. The summit's main sessions will occur on Wednesday. Despite strained relations, no bilateral meeting between India and Pakistan is planned. However, Pakistani Prime Minister Shehbaz Sharif and Jaishankar briefly interacted during a dinner hosted by Sharif for SCO leaders. The SCO, established in 2001 by China and Russia, focuses on Eurasian security and political issues, and this meeting is one of the highest-profile events hosted in Pakistan in recent years. Chinese Premier Li Qiang and Russia's Mikhail Mishustin are among the attendees, along with leaders from Iran, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan.

4️⃣ 🇺🇸 Global debt will exceed $100 trillion by end of year, says IMF: Global public debt is projected to exceed $100 trillion by the end of 2024, equivalent to about 93% of global GDP, and could approach 100% by 2030—a 10-point increase since 2019. The October 2024 Fiscal Monitor indicates that while debt levels may stabilise or decrease in two-thirds of countries, the actual figures could surpass expectations, demanding large fiscal adjustments for sustainable reduction. The outlook is challenged by rising expenditures on ageing, healthcare, climate initiatives, and defence, along with optimistic bias in debt forecasts and hidden liabilities. Historical trends reveal that actual debt-to-GDP ratios often exceed projections by 10 percentage points within five years. To address this, the newly released IMF report introduces a "debt-at-risk" framework, which links macro-financial and political factors to potential debt scenarios, providing a comprehensive approach to help policymakers manage risks and devise more effective strategies.

5️⃣ 🇲🇿 Mozambique’s Frelimo poised to win presidential election: Early results from Mozambique’s presidential election on Wednesday show ruling party candidate Daniel Chapo with a significant lead, while his main rival, Venancio Mondlane, rejects the outcome as fraudulent. Chapo, representing the Front for the Liberation of Mozambique (Frelimo), appears poised to succeed President Filipe Nyusi, who is stepping down after reaching the two-term limit. Frelimo has held power in the country since independence from Portugal, which it spearheaded in 1975. Mondlane, running as an independent, trails Chapo in the provisional count and maintains that the election was tainted by widespread fraud and manipulation by Frelimo. In response, he has called for a national strike on Monday to protest what he described as "shameful deceit" by the regime. The opposition's allegations raise concerns about electoral integrity in the southern African nation.

Major Story

🇺🇸 🇮🇱 UNITED STATES THREATENS ISRAEL WITH CONDITIONAL ARMS SALES

Background

The Biden administration has warned Israel of potential consequences—including a halt to U.S. military aid—if it doesn't allow more humanitarian assistance into Gaza. In a letter dated October 13, U.S. Secretary of State Antony Blinken and Defense Secretary Lloyd Austin urged Israel to ease restrictions within 30 days or face "policy implications." This correspondence, addressed to Israeli Defense Minister Yoav Gallant and Strategic Affairs Minister Ron Dermer, was confirmed as authentic by the State Department following a leak.

Declining Aid Amid Escalating Crisis

Humanitarian groups have raised alarms over declining aid to Gaza, with UN reports showing deliveries at a record low. While some shipments resumed following U.S.-Israel talks earlier this year, aid levels in September plummeted. The U.S. letter attributes this decline to Israeli policies that have accelerated the humanitarian crisis in the enclave.

Legislative Backdrop and Implications

The letter references NSM-20, a policy framework enabling U.S. military aid suspension if a recipient restricts humanitarian assistance. Potentially relevant legislation includes the Leahy Act and the Foreign Assistance Act, which limit arms sales to nations violating human rights or obstructing aid. Despite U.S. calls for increased access, Israel has cited security concerns, alleging dual-use risks for aid.

Strategic Implications

The U.S. administration is under pressure as concerns grow over how the Gaza conflict may affect the upcoming presidential election. Amid international outcry over civilian casualties and damaged infrastructure in Gaza, tensions between U.S. policy directives and Israeli military strategy may shape future diplomatic relations and defence agreements.

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1️⃣ 🇺🇸 🇾🇪 American B2 bombers target Yemen: The United States military conducted airstrikes on Houthi-controlled areas in Yemen, targeting underground weapons storage sites, according to Defense Secretary Lloyd Austin. The strikes, carried out by B-2 bombers, aimed at destroying "hardened" facilities storing components used in attacks on civilian and military vessels in the region. Austin highlighted the operation as a demonstration of the U.S. military's capacity to strike fortified targets, regardless of how deeply they are buried. The statement also suggested an indirect message to Iran, the Houthi movement’s preeminent ally.