March 12 - 18
Hello, and welcome to the Dispatch for March 12-18!
The assassination of the head of a militant group in the Gaza Strip by the Israeli army sparked several days of rocket attacks and Israeli airstrikes. By mid-week, a cease-fire brokered by Hamas and Egypt had largely restored calm in the region, though sporadic attacks continued through the week.
A few notable facets to the story: First, Hamas was apparently instrumental in de-escalating the violence and bringing about a cease-fire - that’s quite a step for the organization. The negotiations were apparently conducted with the help of Egypt, which isn’t surprising, given the link between Hamas and the Muslim Brotherhood. I expect to see a bigger role for Egypt in the Israeli- Palestine peace process in the future. Second, Israel announced their “Iron Dome” rocket defense system successfully stopped the majority of the rockets which were heading towards civilian areas. The Iron Dome has the potential to take one of the few potent weapons militants in Gaza have from them. A successful deployment should reduce Israel’s safety concerns, but it tips the balance of power in the region even further towards Israel - it remains to be seen what impact that will have on the peace process.
The killing of 16 Afghani civilians by a US Army Sergeant has focused popular anger against the US and NATO. The Taliban announced a suspension of the peace talks in Qatar, and Afghani President Karzai demanded the US confine its troops to base until their departure.
SWIFT, the Society for World Interbank Financial Telecommunication, announced they would cut Iranian banks out of their system this week to comply with EU sanctions against the country.
Being cut out of SWIFT functionally cuts Iranian banks off from the rest of the world. This is the first time a country has been banned from SWIFT, and will make it very difficult for Iran to transact with other countries or acquire currencies other than its own. The sanctions against Iran were already extremely harsh, this will tighten the vise even more.
The Syrian opposition suffered both tactical and organizational setbacks this week. The Syrian military routed the opposition from Homs and Idlib, prompting several high-profile members of the Syrian National Council to resign from the group. The resigning members accused the SNC of being opaque, rigid, autocratic, and overly influenced by the Muslim Brotherhood, as well as of not supporting the armed uprisings.
The biggest problem the opposition has had so far is their lack of organization. There have been protests around the country and armed oppositions in various places, but they’ve been fractured, and because of that, they’ve had a very hard time holding territory or creating a more sustained rebellion. The resigning members, which include highly influential opposition leaders, have indicated they will form a new group; hopefully they can accomplish what the SNC hasn’t.
Citigroup added up all of Putin’s re-election promises and discovered that, for the Russian government to fulfill them all, oil would have to rise to $150 per barrel and stay there.
Obviously if oil hit $150 per barrel (a 25% rise), it would be a drag on the world economy, but it’s not there and it’s not likely to get there anytime soon. Putin made most of the new promises to get people off the streets. If he fails to deliver, it’ll add even more fuel to the opposition next cycle.
The North Korean government announced it would launch a satellite to commemorate the 100th birthday of Kim Il-Sung, the founder of North Korea. The announcement flies in the face of the recent agreement with the US, which explicitly forbade missile tests. The North Koreans have often used “satellite launches” to test new missile technology.
The new Greek bonds generated by last week’s deal began trading this week and are already selling at severely depressed levels. A European Commission report acquired by Reuters found the Greek government would likely have to implement even more austerity measures to meet the 2013 and 2014 goals set for the country by the EC.
All the good money’s on a Greek default: The deficit goals the Greeks need to meet to secure funding to avoid a default are set as a percentage of GDP, which has been falling like a stone, in no small part because of the austerity measures. The upshot now is that most Greek debt is held either by public institutions or the extremely adventurous: the net effect so far of the austerity and bailout deals has been to reduce the contagion from whatever Greece winds up doing as much as possible, so when the Greeks either default or leave the Eurozone, they shouldn’t drag half the world along with them.
Thanks for reading, and my best for the week ahead!