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26 May 22. Democratic Republic Of Congo (DRC): Attack Threat Minimal.
EVENT
On 25 May, the M23 rebel group launched simultaneous attacks on multiple villages and towns in the Rutshuru and Nyiragongo districts north of Goma, the capital of the Democratic Republic of Congo’s eastern North Kivu province. The M23 also assaulted the town of Rumangabo, the region’s largest military base for the Congolese army (FARDC), and temporarily cut off the N2 road between Goma and Rutshuru. Following joint operations by the UN peace keeping force (MONUSCO) and the FARDC, many of these villages and the N2 road has subsequently been re-secured.
SIGNIFICANCE
- The M23 rebellion has been active since 2012, however fighting re-escalated in March 2022 when the group claimed that the government had not honoured previous peace agreements concerning disarmament and reintegration of fighters. Following a brief ceasefire in April, heavy fighting resumed on 24 April after the M23 were expelled from peace talks hosted by the East African Community (EAC) in Nairobi, Kenya, for allegedly relaunching attacks in the Rutshuru district.
- The M23 are primarily concentrated around Mount Sabyinyo and the heavily forested hills around Tshanzu in the tri-border area between the DRC and Rwanda and Uganda. From here the group have largely focused on pushing north and west into the Rutshuru and Nyiragongo districts, with territory frequently changing hands in the face of frequent FARDC and MONUSCO counter offensives.
- The group has previously demonstrated elevated levels of capability in part due to support from Rwanda and Uganda, and successfully captured Goma in 2012. This was a major embarrassment for the international community which through MONUSCO had invested significantly into providing security in the eastern DRC. This prompted the formation of the Force Intervention Brigade an offensive UN military unit, which was initially dedicated to combating the M23. (Source: Sibylline)
26 May 22. Israel – Palestinian Territories: US embassy warning underscores volatile security environment ahead of Jerusalem Day events. On 25 May, the US Embassy in Israel issued a warning prohibiting its employees from travelling to the Old City, located in Jerusalem, on Sunday 29 May ahead of the Flag March event. Moreover, the statement added that government employees are not able to visit the Damascus, Herod’s or Lions’ Gates and cannot enter the Old City on Fridays or after dark, with restrictions to remain in place until at least 30 May. The warnings highlight the threat of violent clashes in disputed areas over the weekend, particularly surrounding Jerusalem Day events such as the controversial Flag Day March where Jewish nationalists are scheduled to march through the Old City’s Damascus Gate and Muslim Quarters towards the Western Wall. Moreover, movement restrictions on Palestinians, combined with the heightened security presence of Israeli police, will increase the likelihood of escalatory confrontations with Palestinian resistance movements in the coming days. (Source: Sibylline)
26 May 22. Pakistan: Six-day ultimatum for elections by Imran Khan will sustain threat of violent unrest. On 25 May, former prime minister and Tehreek-e-Insaf (PTI) Chairman Imran Khan gave the Shehbaz Sharif government six days to call for elections, saying he expects a government response in early June at the latest. His announcement in Islamabad came after a night of violent unrest that resulted in the burning of telephone lines, damage to railway stations and the blocking of several roads as PTI supporters descended upon the capital causing the army to step in. This morning, the police began to remove road blockades on highways leading up to the capital and opened the red zone area housing government buildings and embassies. PTI supporters have also withdrawn from Islamabad, however, the risk of unrest on a similar scale is likely if Khan’s demand for elections is not adhered to. The government however is unlikely to concede, sustaining the threat to law and order through early June. (Source: Sibylline)
26 May 22. Democratic Republic of Congo: Escalation of rebel attacks poses only limited threat to regional capital. On 25 May, the M23 rebel group launched simultaneous attacks on multiple villages and towns in the Rutshuru and Nyiragongo districts north of Goma, the capital of the Democratic Republic of Congo’s eastern North Kivu province. The M23 also assaulted the town of Rumangabo, the region’s largest military base for the Congolese army (FARDC), and cut off the N2 road between Goma and Rutshuru. Representatives from the UN’s stabilisation mission in the DRC (MONUSCO) claim that the situation has subsequently improved and that MONUSCO and FARDC forces have retaken several villages and resumed control of the N2 road. Back and forth fighting in these districts, which has been ongoing since March despite a brief ceasefire in April, is likely to continue through the coming weeks, driving sporadic displacement and threatening overland movement north of Goma. However, unlike in 2012, a successful attack on Goma by the M23 is highly unlikely, in part due to enhanced MONUSCO capabilities, reducing threats to staff in the city. (Source: Sibylline)
26 May 22. Gambia: Progress towards trial of former president will drive protests in Banjul. On 25 May, the government decided to prosecute the exiled former president Yahya Jammeh for killings and other suspected crimes during his time in office from 1994-2017. The independent Truth, Reconciliation and Reparations Commission’s (TRRC) report found that Jammeh was responsible for 44 specific crimes against political opponents, journalists and civilians. Attorney General Dawda Jallow has stated that a special prosecutor will oversee the cases, although he declined to establish a timeline. The trial is dependent on Equatorial Guinea, where the former president is in exile, extraditing Jammeh, as well as two-thirds of Gambia’s parliament approving the prosecution. In 2020, thousands of Gambians marched in Banjul in support of Jammeh’s return from exile. It is likely that developments towards Jammeh’s trial will act as flashpoints for protests in Banjul from his supporters, driving clashes with security forces which will elevate threats to the safety of bystanders. (Source: Sibylline)
26 May 22. Northeast Asia: US and allies increase military posture in response to Pyongyang’s provocation, sustaining regional tensions. On 25 May, Japan and the US held a joint military exercise involving eight fighter jets above the Sea of Japan, a day after North Korea’s latest missile launches, which included a suspected international continental ballistic missile (see Sibylline Alert – 25 May 2022). Japan’s Ministry of Defence confirmed that the drill was to test the two forces’ “readiness posture”. North Korea’s continued provocation with a string of missile tests have ratcheted up regional tensions, with the US and its allies – South Korea and Japan – also ramping up military activity. The US-Japan fighter drill could also be a response to China’s increasing assertiveness in the region. Chinese and Russian strategic bombers conducted a patrol near Japanese and South Korean air defence identification zones on 24 May, as US President Joe Biden departed from his first official trip to Asia. Though armed conflict remains highly unlikely, increased missile and naval activity will present modest threats to international shipping. (Source: Sibylline)
26 May 22. China-Vietnam: Scrutiny of containers to sustain uncertainty for exporters and supply disruptions. On 25 May, reports emerged in local Vietnamese news media that exporters of seafood to China were facing seven-day bans from Chinese authorities for each container found to be contaminated with Covid-19, leading to following containers being denied entry. China imported an estimated USD 578 m worth of seafood products from Vietnam last year, however the increasing regularity and suddenness of the bans is deterring Vietnamese exporters from making shipments for fear of lost income. China has been one of the only countries that has maintained that Covid transmission via imports of frozen food is a threat during the pandemic, and the recent outbreaks in Beijing and Shanghai are likely to have renewed scrutiny of food goods. As a result, supply chains of frozen food products to China can expect further potential disruptions while the level of vigilance is raised. (Source: Sibylline)
26 May 22. Mexico: Dispersion of permanent protest in Mexico City likely to increase domestic unrest. On 26 May, security forces dispersed a permanent protest staged by several local collectives of relatives of the disappeared in the Glorieta de la Palma on Paseo de la Reforma, in Mexico City. The protesters demand governmental action to prevent further disappearances amid record high levels as the official number of disappeared individuals since 2007 reached 100,000. Mexico City police officers surrounded the protest camp during the night and forced protesters to leave the area, potentially emboldening the group to organise further and more disruptive protests. While protests in Mexico City are very common and tend to take place between Paseo de la Reforma and the Zócalo (main square), significant disruptions or private property destruction remains uncommon. However, with insecurity being the primary public concern, increasing unrest related to this will likely take place in the capital, leading to further traffic disruption in the city centre and possibly causing some public property damage. (Source: Sibylline)
26 May 22. Ecuador: FUT calls nationwide protests, increasing risk of domestic travel and supply chain disruption. On 25 May, the Unitary Workers Front (FUT), Ecuador’s the largest labour union, called for a national mobilization against the economic policies of the government led by President Guillermo Lasso for 22 June, as well as a number of security and socio-economic concerns. The announcement comes a day after the Ecuadorian Confederation of Indigenous Nationalities (CONAIE) called for a nationwide indefinite protests from 13 June. However, the FUT has confirmed the two mobilizations are not linked. It is likely that nationwide protests will cause both travel and supply chain disruption. The protests will likely increase physical threats to staff and assets, as the government will likely attempt to repress and disperse protests, instead of engaging in dialogue, with clashes between security forces and protesters possible in the capital, Quito, and across the country. (Source: Sibylline)
25 May 22. North Korea: ICBM Launch And Nuclear Test.
EVENT
On 25 May, South Korea’s Joint Chiefs of Staff (JCS) claimed that North Korea launched a “likely” intercontinental ballistic missile (ICBM) and at least two other suspected ballistic missiles from Sunan, Pyongyang, toward the East Sea (also known as the Sea of Japan).
SIGNIFICANCE
- This incident constitutes North Korea’s 17th missile launch event this year and the second ICBM test since the reclusive regime tested one on 24 March (see Sibylline Alert – 24 March 2022). The ICBM is believed by South Korean intelligence to have flown a distance of 360 km and achieved a maximum altitude of 540 km. The other two projectiles, one unspecified ballistic missile and an alleged short-range ballistic missile (SRBM), only reached an altitude of 20 km and 60 km, respectively.
- North Korea’s latest missile salvo occurred after the completion of US President Joe Biden’s trip to South Korea and Japan, which ended with a meeting between the members of the Quad Security Dialogue (QSD) – Australia, India, Japan, and the US – in Tokyo on 24 May. During this trip, President Biden met with South Korea’s new President Yoon Suk-yeol and “agreed to consider” expanding the scope and scale of the joint US-South Korean military exercises in response to North Korea’s increasingly provocative missile testing activity. While the two leaders also outlined that additional strategic US military assets could be deployed to South Korea, Yoon reiterated that his administration remains open to negotiation with Pyongyang. However, Pyongyang has long maintained that the withdrawal of US forces from the Korean Peninsula was a prerequisite for it to resume peace negotiations with Seoul.
- Despite Washington and Seoul’s calls for “open dialogue”, both parties jointly fired two missiles into the East Sea in response to Pyongyang’s suspected ICBM and SRBM launches. Additionally, the South Korean air force conducted a rapid reaction exercise, with Yoon warning that North Korea’s provocative activities will “inevitably result in stronger and faster deterrence of the South Korea-US alliance”. Such statements underscore the Yoon administration’s more hawkish approach toward inter-Korean relations than his predecessor Moon Jae-in. Further highlighting this new stance, Yoon ordered South Korean officials during his first National Security Council (NSC) meeting earlier today to “closely coordinate with relevant countries” to implement sanctions on North Korea and further strengthen the combined South Korea-US defence capabilities.
FORECAST
Both Biden and Yoon have continued to claim that they remain open to resuming negotiations with Pyongyang as a way to resolve the growing tensions. However, Yoon’s statements and actions following today’s missile launch and his desire to further deepen South Korea’s security cooperation with the US indicate that any significant breakthroughs in inter-Korean ties are highly unlikely for the foreseeable future. Nevertheless, Seoul is expected to continue pushing for renewed negotiations between the two sides, especially amid reports that the reclusive regime is experiencing its first confirmed outbreak of Covid-19.
With Yoon unlikely to agree to Pyongyang’s demanded concession of reducing the US military’s presence on the Korean Peninsula, Pyongyang is highly likely to engage in further provocative activities in the coming weeks to express its political grievances with both Seoul and Washington. Indeed, First Deputy Director of South Korea’s National Security Office Kim Tae-hyo warned earlier today that “operation tests of a nuclear detonation device [by North Korea], which are to prepare for the seventh nuclear test at Punggye-ri, are being detected […] the possibility of an imminent nuclear test in the next day or two is low, but after that, there is certainly a possibility”. While there remains uncertainty over the scale of North Korea’s next nuclear test given the current limitations of the Punggye-ri testing facilities, (see Sibylline Situation Update Brief – 19 May 2022), Yoon will likely utilise any such tests as further justification to strengthen South Korea’s military capabilities and to engage in more prominent retaliatory actions, similar to today’s joint US-South Korea missile activity.
To this end, Yoon’s unwillingness to concede to Pyongyang’s request regarding US military presence will likely prompt further responses in the form of either politically motivated cyber attacks against South Korean based businesses or critical infrastructure, further ICBM launches, and/or nuclear tests. Such actions will likely coincide with either important geopolitical or strategic events related to North Korea, such as the National Liberation Day of Korea on 15 August, or diplomatic meetings between regional stakeholders such as the US, Japan, and South Korea. While such activities are unlikely to lead to armed conflict or directly impact business operations in the Asia Pacific, they are expected to remain a long-term security concern for the region. (Source: Sibylline)
25 May 22. Pakistan: Roadblocks to prevent the Long March to Islamabad will stifle supply chains. On 25 May, a protest march to Islamabad by Imran Khan’s PTI supporters turned violent at Lahore. Further, the police are cracking down on PTI leaders and workers, arresting 12 protesters so far. Security officers are on high alert imposing section 144 – prohibiting public gatherings – in Lahore, Karachi, Islamabad, and Rawalpindi. Several roads and motorways leading up to the capital from these cities have been blocked with heavy shipping containers, mud, and boulders, while a heavy police presence has been deployed in the capital where public transport has ceased. As for the main Red Zone in Islamabad that houses parliament buildings and embassies, only the Margalla road entrance is operational. Large scale disruption to transport and supply chains will persist over the next few days as Khan plans to continue his march from the Wali interchange in Khyber Pakhtunkhwa province. Moreover, concerns the government may detain Khan will drive tensions sustaining the threat of more violent clashes. (Source: Sibylline)
25 May 22. China: Stringent Covid elimination policy may limit the effectiveness of new stimulus package. The Chinese government has unveiled a new round of stimulus measures in a bid to tackle the economic slowdown caused largely by the strict zero-Covid strategy. According to state media reports on 24 May, the State Council agreed a 33-point policy package covering six areas of the economy, including fiscal, finance, public investment, supply chains, energy security and consumption. Policymakers have pledged to broaden tax credit rebates to more industries and increase tax cuts by USD 21 bn this year. The package also includes measures to boost spending, such as purchasing tax reduction on some new cars, as well as targeted support for hard-hit sectors such as civil aviation, construction and haulage. However, with China maintaining its stringent virus elimination policy of mass shutdowns it remains difficult for businesses to plan future operations which may be disrupted by Covid outbreaks. This factor will weigh on investors’ confidence and undermine the effectiveness of the stimulus measures. (Source: Sibylline)
25 May 22. India: Sugar export restrictions highlights increasing protectionist responses to secure food supplies. On 24 May, the Union Department of Food and Public Distribution announced they will cap national sugar exports at 10 m tonnes for this season to ensure that there is enough supply to prevent an increase in domestic prices. After 9 m tonnes have been exported, the final 1 m tonnes will require a permit to be obtained in order to export. India is the world’s second largest sugar exporter after Brazil, and the move comes despite India expecting to have a significant surplus of sugar according to figures from the Indian Sugar Mills Association. The protectionist move also comes after India banned wheat exports earlier this month, Malaysia banned chicken exports this week, and Indonesia recently lifted a month-long palm oil export ban. These protectionist policies, often implemented with short notice, are likely to increase in regularity as anxiety over food security issues continues to grow. (Source: Sibylline)
25 May 22. Nigeria: Interest rate hike will have short term impact with a continued rise in inflation probable. On 24 May, the Nigerian central bank raised interest rates by 150 basis points to 13 percent, marking the first increase since July 2016. Central Bank Governor Godwin Emefiele claimed that the move was necessary to curb inflation which reached its highest in eight months in April at 16.82 percent. However, while the move may temporarily stabilise the naira (NGN) it is unlikely to successfully counteract rising inflation as this is driven largely by supply chain challenges and high fuel prices rather than rising demand and economic activity. Additionally, as Nigeria’s election season gets underway through the rest of 2022, Nigerian politicians are likely to continue purchasing USD on the black market, further devaluing the value of the NGN and contributing to inflation. This may prompt the central bank to again raise interest rates later in the year, increasing costs for businesses operating in Nigeria, undermining growth and elevating unrest around polls in February 2023. (Source: Sibylline)
25 May 22. West Africa: Protest underlines rising regional anti-French sentiment, threatening businesses. On 24 May, Gabonese authorities banned an anti-French protest led by the opposition party Front Patriotique Gabonais, that was due to take place in the capital of Libreville the same day to denounce the defence accord with France and demand the departure of French troops. While anti-French sentiment in countries such as Mali and Burkina Faso has largely been driven by the failure to contain insurgencies, countries without such security challenges have also seen rising rates of anti-French sentiment. This reflects a growing association between France and domestic anti-government sentiment, amid claims, propagated widely on social media, that French geopolitical influence props up unpopular governments. Such claims have driven anti-French protests in Chad earlier this month and resulted in attacks on French businesses during violent anti-government protests in March 2021. As such, there is a rising threat that domestic unrest and political instability in Francophone West African states will prompt calls to adjust relations with France and vandalism of French businesses. (Source: Sibylline)
20 May 22. U.S., Colombia Plan Closer Military Ties. During a ceremony welcoming the Colombian defense minister to the Pentagon, Secretary of Defense Lloyd J. Austin III said Colombia’s recent designation as a major non-NATO ally reflects the depth and breadth of the nations’ security relationship and reinforces their defense partnership.
“And it lays the groundwork for us to work together even more closely to make our neighborhoods safer and more prosperous,” Austin told Colombian Defense Minister Diego Molano.
Molano said Colombia is proud to have been given the designation by President Joe Biden.
“Under this designation, we plan to deepen our ties and explore new cooperation areas, such as defense research and development,” he said.
This year marks the 200th anniversary of diplomatic relations between the U.S. and Colombia, and the defense leaders remarked on the important milestone.
Molano said both the U.S. and Colombia continue to share the values of defending democracy and respecting human rights.
He also said his nation will work closely with the U.S. to fight against narcotraffickers, who are a threat to democracy, the environment and the population.
The secretary also thanked Molano for Colombia’s condemnation of Russia’s unprovoked invasion of Ukraine and for the country’s offer to provide humanitarian support to the Ukrainian people.
Austin said the topics for today’s talks will include:
Looking for ways to strengthen the nations’ defense relationship to bolster regional and global security.
Understanding the impact of mass migration on regional stability.
Analyzing the impacts of climate change and environmental degradation.
Discussing Colombian security challenges, as well as the country’s efforts to prevent violence when voters go to the polls to elect a new president later this month.
“Our commitment to democracy and the rule of law, the protection of human rights and human dignity must remain steadfast. Mr. Minister, our two countries are bound, not just by geography and common interest but also by shared values,” Austin said. (Source: US DoD)
20 May 22. New Zealand increases 2022–23 defence budget by 4%. New Zealand has announced a defence budget of NZD6 bn (USD3.8 bn) for 2022–23. The figure represents a nominal increase of 4% over the final budget of NZD5.75 bn in 2021–22. New Zealand’s defence budget contains two appropriations: ‘Vote Defence Force’, which covers salaries, training costs, capital expenditures, and military preparedness, and ‘Vote Defence’, which is allocated for managing procurement and sustainment activity and policy advice.
The Vote Defence Force has been allocated NZD4.89 bn for 2022–23, a 6% increase over the estimated final budget of NZD4.63 bn from the previous year. The Vote Defence expenditure has been allocated NZD1.17 bn, a rise of 5% over the NZD1.11 bn final allocation from last year. The Vote Defence Force allocation provides a total capital expenditure of NZD1.56 bn for the New Zealand Defence Force (NZDF), an increase of 16% compared with the final allocation of NZD1.34 bn in 2021–22. (Source: Janes)
23 May 22. Israel: Future Elections.
Key Takeaways
- The return of left-wing Meretz party lawmaker, Ghaida Rinawie Zoabi, to the governing coalition on 22 May will reinstate the 60-60 coalition/opposition seat parity, mitigating concerns over an imminent snap election. However, polarising developments such as a deterioration in Israel’s domestic security environment will operate in tandem with waning coalition unity, threatening to trigger additional coalition defections in the coming weeks.
- In the unlikely event that snap elections take place in the coming weeks following strong support for a no-confidence vote or bill to dissolve the Knesset, forming an effective majority or establishing consensus over an alternative prime minister will prove challenging. Consequently, new elections are unlikely to resolve the institutional stalemate characteristic of Israeli politics.
- A prospective return to polls and change in government is likely to prompt limited domestic unrest, while terrorist actors will likely attempt to exploit an environment of heightened political uncertainty. Nevertheless, a strong Israeli security posture will limit their ability to launch successful attacks. While political developments in the coming weeks and months are unlikely to have a major impact on Israel’s long-term foreign policy or economic outlook.
Context
On 19 May, left-wing Meretz party lawmaker, Ghaida Rinawie Zoabi announced her withdrawal from the coalition, leaving Israel’s government with 59 Knesset seats out of 120. In Zoabi’s resignation letter, she cited that her motivation for leaving stemmed from the government’s rightward shift in the aftermath of violence at Temple Mount/ Haram al-Sharif, and during the funeral of Al Jazeera reporter, Shireen Abu Akleh.
As of 22 May, Zoabi re-joined the Israeli coalition, stating in a video conference joined by Israeli Foreign Minister Yair Lapid and Nazareth Mayor Ali Sallam, that she intends to “serve the local authorities” and avoid the establishment of a far-right majority. Zoabi’s decision to re-instate her position in the coalition eases concerns over an immediate snap election, though it remains unclear as to whether she will intend to side with opposition parties in future votes.
Recent events come only six weeks after the resignation of Idit Silman from the Yamina Party on 5 April, following an alleged failure of the government to abide by right-wing values, which led to Prime Minister Naftali Bennett losing an operational majority in the Knesset. Ultimately, the possibility of a no-confidence vote, spearheaded by Likud-led internal political opposition, would result in Israel holding its fifth general election in three years.
Israel’s protracted institutional stalemate will persist amid risk of further coalition resignations
Significant ideological and political divides remain a key feature of the eight-party coalition, despite Zoabi’s return. Since the formation of the coalition government in June 2021, Prime Minister Naftali Bennett has compromised on several issues to manage the diverse interests of Knesset members (MKs). Strong sentiments against former right-wing Prime Minister Benjamin Netanyahu and the approving of a 2021-2022 state budget, passed in November 2021, generated unity among coalition members. Despite this, recent months have witnessed significant legislative challenges in relation to more ideologically- and politically-divisive issues, including settlement policies and a controversial Citizenship Law, with anti-Netanyahu sentiment somewhat waning in its role as a unifying factor.
Predicated in part on the avoidance of a more right-wing government alternative, Zoabi’s return to government could strengthen the coalition’s left-wing bloc by highlighting the lack of political alternatives for left-wing MKs, as well as members of the Arab Ra’am Party. This could deter members of these groups from themselves withdrawing from the coalition in the coming weeks. However, further defections or resignations remain possible, particularly in the event of government responses to any further deteriorations in Israel’s domestic security environment being labelled as too right- or left-leaning by coalition members. Nevertheless, recent developments indicate that Zoabi is highly unlikely to support an opposition-led no confidence vote or a bill to dissolve the Knesset.
Prospective return to polls unlikely to impact Israel’s security, foreign policy, and economic outlook
Small-scale political unrest is likely to accompany a collapse or dissolution of the Knesset and a return to polls. However, broader ethno-religious issues will continue to represent the primary triggers for widespread unrest. Such triggers could emerge through perceptions of Ra’am party failures in delivering results to its Arab constituents, in addition to opposition towards Israel’s ongoing expansion of its settlement policy.
The scheduling of a future election will have little impact on the trajectory of Israel’s foreign policy, as the country’s external strategic interests remain largely unaffected by domestic issues. For instance, in the aftermath of the Russian invasion of the Ukraine, Israeli leaders will continue to prioritise the country’s economic and military security, seeking to balance competing geopolitical tensions with Moscow whilst protecting relations with Washington. Despite maintaining a mediatory position since the beginning of the conflict at the end of February, elevated tensions between Israeli and Russian leaders in recent weeks have resulted in a pivot away from neutrality, towards overt support for Ukraine. This is illustrated by the shipping of approximately 2,000 helmets and 500 flak jackets directly to the Ukrainian Ministry of Defence, and support for civil society organisations.
Moreover, Israel’s political instability will have little immediate effect on the country’s overall economic outlook. Maintenance of the current status quo will see Bennett’s government retaining a minority until March 2023, when a majority will be required to pass the state budget. However, even in the event of elections or a change of Cabinet, there will most likely be broad policy continuity, with any government seeking to prioritise solid economic growth and the development of technology industries. Therefore, whilst another round of elections would highlight Israel’s ongoing political impasses, the country’s broader economic development will remain a key unifying priority despite ideologically divisive issues.
Heightened political instability and inflamed ethno-religious tensions between Palestinian and Israeli leaders has historically been the source of rising tensions with neighbouring Arab countries, primarily Jordan and Saudi Arabia. However, other Arab states such as Morocco, Bahrain, and the UAE have expanded the 2020 Abraham Accords to consolidate the normalisation of ties with Israel, despite the Palestinian question. Our analysis therefore suggests that Arab leaders will expand bilateral economic and security guarantees with Israel, regardless of the domestic political situation. Investments in renewable energy and agritech will remain amongst the leading sectors, with regional governments seeking to secure longer term strategic economic ambitions, and boost investor confidence amid heightened global supply chain concerns.
Forecast
Overall, the return of a 60-60 coalition/opposition seat parity in government following Zoabi’s return has highlighted the lack of a credible political alternative for left-wing or pro-Arab MKs in the Likud-led right-wing opposition. This is likely to alleviate some immediate concerns surrounding the possibility of an imminent collapse of the coalition. Nevertheless, further defections remain possible in the coming weeks against the backdrop of Israel’s volatile security environment and the varying interests among members of the partisan coalition.
In the unlikely event that an opposition-led no confidence vote or a bill to dissolve the Knesset gains the necessary 61 votes to trigger snap elections, forming a majority in the coming weeks will prove very difficult. Recent polling indicates that the Meretz party would likely not gain enough seats to meet the minimum threshold to re-enter parliament. Meanwhile, selecting an alternative prime minister would be challenging, as none of the possible frontrunners, including Bennett, Netanyahu, Yair Lapid and Benny Gantz, appear to have enough support to form a coalition government. As such, the institutional stalemate within Israel’s political system would likely persist ahead of, during, and following new elections, with partisan divisions likely continuing to impede legislative decision-making.
Finally, Israel’s domestic political environment is unlikely to have any major immediate impact on the country’s security, foreign policy or economic priorities. Militant groups are likely to look to exploit a climate of heightened political uncertainty. However, their limited capabilities following an intensification in Israeli security force operations in recent months, coupled with the likely maintenance of a strong Israeli security posture regardless of possible political upheaval, will mitigate the risk of violent escalations and the threat of attacks. Deteriorations in relations between Russia and Israel in recent weeks have reinforced the need to maintain and boost bilateral security and trade ties with regional and Western partners, regardless of which government is in place. Therefore, whilst renewed elections and heightened internal polarisation threatens to delay the passage of a state budget and address high levels of national debt, Israel’s continued boost in foreign investment and broader policy continuity will sustain a suitable business environment and mitigate long-term operational disruptions. (Source: Sibylline)
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