The Failing Counter-Revolution Against Multipolarity
Israeli Economy and Conflict in the Middle East
A report by Yves Smith today in Naked Capitalism ( see Yves Smith), drawing on a longer report from Mondoweiss, concludes that Israel has “locked itself in a long-term, resource, credibility and morale draining conflict, and no willingness to climb down”.
Consider the list of Israel’s failures and likely failures (and I elaborate a little on some of these):
*Israel has failed to defeat Hamas;
*Congressional clapping in favor of Genocide perpetrator Netanyahu has further enraged at least half the globe against Israel and its sponsor, the USA, boosting the appeal of the BRICS;
*Israel has been unable to beat the Houthis who have inflicted considerable damage on Israeli trade through the Red Sea;
*Israeli threats to wage war in the Lebanon against Hezbollah (something that Israeli military leaders decry, even though Netanyahu was signalling this possibility in his Wednesday speech to Congress) are reckless;
*Even if Iran is compelled by Israeli war logic to directly enter the war in order to defend Hezbollah, and the USA is enticed into Israel’s trap of a regional war, then the USA itself, and, therefore, Israel, will very likely lose, and the USA will be even less equipped to pursue its counter-revolution - against multipolarity - elsewhere (mainly, for the moment, Ukraine and Taiwan).
Of significance was Blinken’s almost certainly false claim the other day that Iran was only one or two weeks’ away from reaching nuclear weapon capability through uranium enrichment. US intelligence agencies continue to assert that there is no evidence that Iran has or will soon acquire nuclear weapons. And even if it had, by the way, its nuclear capability would be dwarfed by Israel at least one hundred fold. Netanyahu has been pumping evidence-free, false claims of how Iran was just about to become a nuclear weapons power ever since the 1990s. So here was Blinken - just days before the disgraceful spectacle of Netanyahu’s harangue to Congress - helping Netanyahu to use Iran as Israel’s excuse for the Israeli genocide in both Gaza and the West Bank, for Israel’s threat against the Lebanon, while pushing, for good measure, the delusional fable that Iran was somehow behind the student protests in the USA against Israeli genocide.
As if ordinary, intelligent, moral people would somehow need Iranian money to express their anger with the horrific monster than the US-Israel incubus has become.
Any day now Russia, will consolidate what amounts to a mutual defense arrangement with Iran, and this week, President Assad has been visiting Moscow, their agenda doubtless encompassing options in the event of a regional conflict. Meanwhile, Smith observes, Israeli defense depends on short, fierce, air-power heavy conflicts, and not “slow, resource and will-sapping slogs”.
Israel’s “Atlantis,”scheme was to take out the Hamas tunnels by pumping in seawater at high intensity, failed not least, according to a Haaretz newspaper investigation, because Israeli forces underestimated the dimensions of the tunnels. Hamas had changed its tunnel structures over time to make it even more resistant to an IDF clearance operation.
135 Congressional members boycotted the Netanyahu speech on Wednesday - not nearly as many as one would want, but sufficient to indicate, says Smith, that it is becoming acceptable, even respectable, to criticize Israel’s genocide. On Tuesday, Japan imposed sanctions on four Israeli settlers for violence against West Bank Palestinians, and a fairly large number of settlers and far-right groups are already being sanctioned by Western powers. Other members of the Group of Seven countries have been doing the same since the United States announced its first set of sanctions against four violent settlers on February 1st.
“In terms of trade, Israel’s import and export statistics don’t indicate much US dependence but as Israel continues to suffer an exodus of skilled professionals, particularly of highly skilled, highly mobile professionals and experts the country will very likely become more dependent. Over 46,000 businesses have gone bankrupt, tourism has stopped, Israel’s credit rating was lowered, Israeli bonds are sold at the prices of almost “junk bonds” levels, and the foreign investments that have already dropped by 60% in the first quarter of 2023 (as a result of the policies of Israel’s far-right government before October 7) show no prospects of recovery. The majority of the money invested in Israeli investment funds was diverted to investments abroad because Israelis do not want their own pension funds and insurance funds or their own savings to be tied to the fate of the State of Israel. This has caused a surprising stability in the Israeli stock market because funds invested in foreign stocks and bonds generated profit in foreign currency, which was multiplied by the rise in the exchange rate between foreign currencies and the Israeli Shekel. But then Intel scuttled a $25 billion investment plan in Israel, the biggest BDS victory ever…”
Israel’s power grid, which has largely switched to natural gas, still depends on coal to supply demand. The biggest supplier of coal to Israel is Colombia, [which has recently] announced that it would suspend coal shipments to Israel as long as the genocide was ongoing. After Colombia, the next two biggest suppliers are South Africa and Russia, both members of the BRICS and highly antagonistic to apartheid. Without reliable and continuous electricity, Israel will no longer be able to pretend to be a developed economy. Server farms do not work without 24-hour power, and no one knows how many blackouts the Israeli high-tech sector could potentially survive. International tech companies have already started closing their branches in Israel”.
Sources cited suggest that 60,000 businesses are expected to have closed by the end of 2024. 50% of startups are on track to closing within six months. One economist, has argued that the Israeli economy is held together by 300,000 people (the senior staff in universities, tech companies, and hospitals) and that once these leave, Israel will in effect cease to exist. “The hype of Israel’s “startup nation” has turned into a #Shutdownnation”. Two senior Israeli economists have predicted that Israel will not survive to its 100th year.
USA in the Pacific Rim
In Consortium News today, Vijay Prashad (Pacific Rim) reports on US and Western militarization in the Pacific, beginning with further French suppression of indigenous protests against Macron’s high-handedness in New Caledonia (source of one fifth of global nickel deposits), and moving on to the current involvement of 25,000 military personnel from 29 countries (mainly northern or allies of northern countries; including Israel which, as astute geographers will discern, is nowhere near the Pacific) led by the USA, in the latest biennial Rim of the Pacific (RIMPAC) military exercises (these began in 1971).
Based in Hawaii, which Prashad describes as an island territory illegally occupied by the USA, the stated goal is interoperability against (unstated, but clearly implied) China. Other examples of US militarization of the area include the establishment of military bases (the US has negotiated use of Philippine army bases for maintaining US weapons depots and troops); use of navy vessels to provoke China through freedom of navigation exercises; the threat of positioning short-range nuclear-capable air “defense” systems in the region, and extending an existing airfield in Darwin to host nuclear-capable US jet fighters. I would add that this occurs in the context, above all, of (1) US incitement of independence movements in Taiwan; (2) the build-up of Japan, whose post-war political structure is largely a US imposition, as a US military ally against China; as is also (3) the case, with perhaps greater ambivalence, of South Korea. Not to mention (4) the long-established positon of Australia and New Zealand as US vassals to the south.
Fortress Europe Dishevelled
Ukraine, like the European Union, is keen to punish Hungary and Slovakia for their role as hold-outs against the extreme neocon ideology that is the root cause of the current NATO proxy war with Russia over the bodies of hundreds of thousands of Ukrainians. Ukraine is impeding the flow of Russian oil and gas through Russian pipelines to Hungary and Slovakia who, ironically, account for 60% of the electricity that Ukraine is today forced to import to help it cope, not very well, with the damage inflicted by Russian strikes on Ukranian energy facilities. Meanwhile there are reports from Poland that there will be no Polish agreement to Ukrainian membership of NATO without resolution or apology for the massacre of large numbers of Poles in Western Ukraine during World War Two. As the New York Times (NYT and Poland) has recently noted:
Polish officials and historians have expressed frustration at what they see as Ukraine’s refusal to fully acknowledge and atone for the sins of nationalist militants loyal to Mr. Bandera, who was assassinated by Soviet agents in 1959. He is revered by many Ukrainians today as a national hero — or blithely feted as a harmless folkloric curiosity. He is reviled in Poland, and also in Russia, as a fascist and Nazi collaborator.
Into this mix, in the context of a potentially collapsing Ukraine, may come German interests in the resolution of potential claims concerning Polish territory. NATO, of course, despite an enormous amount of rhetoric to the contrary, is nowhere near offering Ukraine membership of NATO. But the pretence that it is serious about this as a longer-term likelihood only incentivizes Russia to maintain the war, given that the central raison d’etre for the conflict is Russian determination that Ukraine remain neutral. And if it cannot be neutral it may as well not exist.
Further contradicting a recent claim by a number of the foreign ministers of smaller, northerly EU members that sanctions against Russia had worked. the IMF has elevated Russia to the status of a “high income country,” and in purchasing power parity terms Russia is now wealthier than any single European country. A Japanese economic group, as well as a BNE report (specializing in former easter european economies) agree that sanctions have failed and, instead, a virtuous economic circle has been established that may lead to a steady pattern of growth for many years to come. Even Janet Yellen, author of many of the sanctions on Russia and of the idea of a $60-a-barrell cap on the price of Russian oil, has recently conceded that sanctions have not worked. (Yet, miraculously this does not prompt any thought as to a change of policy).
Western analysts are very keen in their predictions of an “over-heating” economy for Russia, as a result, they say, of high wartime spending (constituting one third of the national budget). The rate of inflation will even out this year at around 7%, which is fairly high, admittedly. But the addition of two full percentage points to Russia’s central interest rate, bringing it to 18%, might better be read as an indication of the determination of the Russian central bank to keep control over inflation than of an over-heating that must inevitably destablize the Russian economy. In the meantime, Russia’s GDP, currently over 5%, will likely even out to 3% by year end. As I recently noted, Russia's budget deficit is an astonishingly modest 0.5% and overall there is a declining level of debt in the economy. Investment levels and manufacturing continue to surge.
The Battlefields
I shall provide an update in my next post as to the situation across the front lines. But the overall picture is one of Russian expansion of the territory that it controls, moving westwards at a pace hitherto not seen since 2022. With the exception of the clashes for territory in northern Kharkiv, around Vovchansk and also in Hlyboke and Starytsia, where Ukraine continues to put up a real resistance through counterattacks and offensives that have pushed Russian forces back in some places, Russia is elsewhere encountering much less, if any resistsance. It is within days or weeks of taking Pokrovsk in Donetsk which would position it very well for a push to the Dnieper, and even to the city of Dnipro itself. Russia has almost full control of Krasnohorivka, which was the main source of Ukrainian missile and drone strikes against the civilians of Donetsk city. To the south, Russian forces have entered Kostyantynivka, and have cut the important supply road between Kostyantynivka and the large settlement of Vuhledar and are taking important mines in this area. To the west, Russian forces are advancing north from Urozhaine. To the north, they are in sight of taking Chasiv Yar, Siversk and Kupyansk.