Tom Arms’ World Review

Keep your eye on Israeli politician Benny Gantz. He is currently the bookies’ favourite to be Israel’s next Prime Minister.

More importantly, he has hinted at a willingness to discuss the two-state solution.

This has put him in direct conflict with Prime Minister Benjamin Netanyahu and the far-right coalition members of his government. They are totally opposed to the two-state solution which is being pushed by the US, Europe, the Arab world and virtually everyone except Netanyahu and Co.

Gantz’s political flexibility earned him an invitation to visit Washington where this week he met with Vice President Kamala Harris and Secretary of State Antony Blinken.

The visit was not cleared with Netanyahu who ordered Michael Herzog, Israel’s ambassador in Washington, to do everything possible to sabotage the Gantz visit.

And when the minister-without-portfolio returned he was told by Netanyahu that “Israel has only one prime minister.” That prime minister, it must be said, has yet to receive an invitation to visit the Biden White House.

Gantz is leader of the National Unity Party. Like so many Israeli politicians he came through the ranks of the military, eventually becoming army chief of staff in 2012. Then in 2018 he decided to turn his hand to politics and very quickly emerged as the main opposition figure to Netanyahu.

After the October 7 attack by Hamas, Netanyahu invited Gantz to join a national unity war cabinet, along with three other members of his party

Gantz accepted and is in full agreement with Netanyahu on the need for total victory over Hamas. But the two men part company over what happens next.

Netanyahu is adamant in his refusal to discuss a two-state solution or anything even remotely resembling a two=state solution.

But in 2020, Gantz told the Munich Security Conference: “Eventually we will find ourselves a two-entity solution in which we respect Palestinian sovereignty and governance but we will be respected for our security needs.”

Despite repeated questioning by journalists and others, Gantz refused to define “entity.” But position was clear enough to prompt far-right Finance Minister Bezalel Smotrich to describe Benny Gantz as the “weak link” in Israel’s war cabinet. This week Smotrich stood up in the Knesset and demanded that Gantz declare his opposition to the two-state solution. Gantz’s reply was a deafening silence.

Meanwhile the minister-without-portfolio continues to rise in the opinion polls and Netanyahu continues to fall. According to a poll this week by Israel’s Channel 10, voters believe that Netanyahu is prolonging the war for his own political ends. According to the poll, voters think that the prime minister knows that when the war ends he will unceremoniously be voted out of office and – without immunity from prosecution–face a series of long-standing corruption charges.

The Sudanese Civil War is a forgotten war. It shouldn’t be.

Not only is Sudan a major humanitarian crisis with upwards of ten million displaced people, but it is turning into a geopolitical battleground pulling in many of the world’s major powers.

At its core, the war is a power struggle between two men: the leader of the Sudanese army General Abdul Fattah al-Burhan and the head of Sudan’s feared paramilitary forces General Mohamed Hamdan Dagalo who goes by the nom de guerre of Hemedti.

Hemedti has one big advantage—he controls the country’s gold producing regions. Sudan is the third largest gold producer in Africa after Ghana and South Africa. It produces about $1.3 billion worth of gold a year.

Usually this money goes straight into government coffers. But at the moment it is going to pay for Putin’s war machine via the Wagner Group who is supplying weapons and men in return for illegal gold mining rights.

This has drawn Ukraine into the Sudanese civil war. They recently dispatched war-hardened commandos to the aid of General Burhan because they want to stop the flow of gold to Russia.

The United Arab Emirates have also become involved because they have a stake as middle men in the sale of the gold. They back Hemedti.

The US and Britain are being drawn in because they are concerned about Putin using the Wagner Group to establish a base on the Red Sea. Sudan borders both the Red Sea, the Sahel region and the Horn of Africa.

It also has the Nile running through it. This makes it of interest to Egypt, which is also supporting General Burhan. Ethiopia, who is in the middle of a dispute with Egypt over the Nile water rights, supports Hemedti.

Possibly because it doesn’t want be left out, Saudi Arabia is also involved. But it is hedging its bets by talking with both sides. In the meantime the ten million remain homeless.

Economists reckon that the Chinese economy needs to grow by eight percent a year. Less than that and the Chinese Communist Party will have difficulty in providing the social services needed to stave off political unrest.

Last year it grew at five percent. Next year, according to a speech this week by Premier Li Qiang to the rubber stamp National People’s Congress, the economy will grow another five percent.

In fact, most Western economists doubt even the five percent figure. But they can’t provide an accurate statistic because of lack of transparency on the part of the Chinese Communist Party.

There are lots of reasons for the Chinese slowdown. The sanctions and “de-risking” policies of the West are having an effect, especially as the Chinese economy requires large injections of foreign capital. The global cost-of-living crisis caused primarily by the Ukraine War, is also impacting on Chinese exports. Western households just don’t have the money to buy Chinese goods.

Then there is the property market. Seventy percent of Chinese household wealth is tied up in real estate and the real estate sector is crashing.

Related to property is government investment in infrastructure which has been paid for by borrowings. The Chinese government borrowings have increased six-fold since 2000 to 335 percent of the Chinese GDP.

The easy answer to the problems of the Chinese economy is to mobilise their 1.41 billion citizens to spend more. The CCP was hoping for just that when the covid emergency stopped. It didn’t happen. And the reason it didn’t happen is because the Chinese people are saving for what they fear will be a very rainy day.

Excitement in the South China Sea this week. The Philippines Coast Guard and their Chinese equivalent clashed with a couple of rammings and damage to a Filipino vessel by a Chinese water cannon.

The government of Bongbong Marcos is currently in the frontline opposing Chinese sovereignty claims over the South China Sea. His hand is strengthened by the recent return of US troops to the Philippines and the country’s long-standing Mutual Defense Treaty with America.

The Philippines is only one of several countries that dispute Beijing’s claim to all of the South China Sea. But it is the only one that has staked out a physical presence.

That presence is a rusty rat-infested World War Two ship the Sierra Madre. The Philippines ran the ship aground on the Second Thomas Shoal in the Spratly Islands. The government then based a small rotating detachment of marines on the ship.

This week’s clash came about because a small flotilla of Philippines Coast Guard vessels was attempting to re-supply the marines. They were blocked by up to 25 Chinese ships. One Filipino ship was rammed and another had its windows broken by a water cannon. CNN cameras caught the action.

One of the Philippines Coast Guard vessels managed to break through the blockade to bring food and fresh water to the Sierra Madre. It will be another 90 days before another supply attempt is made.

The Philippines are particularly concerned about the effect that the Chinese claim has on their fishing industry which employs 1.6 million people. The South China Sea is one of the world’s richest fishing grounds. Its 3,365 known species are estimated to represent 12 percent of the world’s fish.

The 1.3 million square miles of the South China is also the world’s busiest shipping lane. $3.4 trillion worth of trade passes through it every year. And underneath the seabed is reckoned to be 11 billion barrels of oil and 190 trillion cubic feet of natural gas.

The Philippines, Brunei, Vietnam, Taiwan and Malaysia all claim economic rights to a portion of the South China Sea. Each country’s slice is based on the UN-recognised 200-mile limit or median line. China claims it all. Its claim has been rejected by the International Court of Justice, but has the support of 66 other countries.

* Tom Arms is foreign editor of Liberal Democrat Voice. He also contributes to “The New World” magazine and lectures on world affairs. He is the author of “America Made in Britain,” two editions of “The Encyclopaedia of the Cold War” and “The Falklands Crisis.”

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9 Comments

  • The global cost-of-living crisis caused primarily by the Ukraine War,…

    It was primarily caused by excessive growth in the money supply during the pandemic. In the UK, for example, £400 billion of new money was created using Quantitive Easing. Money-supply economists, such as Professor Tim Congdon, correctly predicted the subsequent cost of lockdown crisis…

    ‘Reckless US faces a reckoning’ [June 2020]:
    https://thecritic.co.uk/issues/june-2020/reckless-us-faces-a-reckoning/

    Roughly speaking, those economists who believe in a monetary approach to price level movements — based ultimately on the quantity theory of money (or “monetarism”) — expect a rise in inflation. […]

    The argument here will be that the quantity theorists will prove right, and that 2021 and probably 2022 will see a nasty outbreak of inflation in most countries.

    ‘Tumbling Money Supply Alarms Economists Who Foresaw Inflation’ [April 2023]:
    https://www.tbsnews.net/worldbiz/global-economy/inflation/tumbling-money-supply-alarms-economists-who-foresaw-inflation

    Money supply growth is collapsing in the UK, eurozone and US, and they read that as a warning of recession and deflation. Central bankers have raised interest rates too far and, if the so-called monetarists are proved right again, they say there should be a “clear out” of officials.

  • Jeff,

    During the Covid crisis I pointed out that with lockdowns there would be a surplus of money and if it was all spent once lockdowns ended and the economy couldn’t produce the goods there would be inflation. Inflation rose from 2% in July 2021 to 6.2% in February 2022. This was likely caused by Covid. Inflation rose from 6.2% in February 2022 to 11.1% in October 2022 and this was caused by the Ukrainian War. 4.2% from Covid and 4.9% from the Ukrainian War. This is why some people say that the Bank of England should have increased interest rates before December 2021 when November inflation was 5.1%. With hindsight increasing them in October would have been better.

    However, my solution would have been to try to stop the surplus money caused by lockdown being spent into the economy so quickly.

  • @ John Waller re “Land for All” — Maybe, I think ask Benny Gantz rather than me.

    @ Jeff– Yes, covid and excessive growth in the money supply has contributed mightily to the cost of living crisis. But I think most economists agree that the even bigger triggers were the rapid increases in grain, fertiliser and energy prices. These were caused by the Ukraine War. If you like we can agree to differ or even agree that we are both right.

  • Peter Hirst 14th Mar '24 - 1:28pm

    Israel has a choice. Either it can maintain terratorial control of the Gaza Strip and accept responsibility for the welfare of its inhabitants. Or it can leave it and allow other entities to develop the land and its people i.e. the two state solution. It cannot have it both ways.

  • @Peter Hirst – Israel withdrew from the Gaza Strip in 2005. The result was Hamas – an openly anti-semitic terrorist organisation – destroying the main marginally more “moderate” Palestinian rival, and who then built a vast underground infrastructure precisely so it could launch an Oct 7 style campaign of mass rapes and kidnappings.

  • Peter Hirst 25th Mar '24 - 3:04pm

    Israel might have withdrawn @Paul R but it retained control of access and to a large extent the quality of life of its inhabitants. When I said “leave it” I intended to mean to also remove itself over any say in its governance. This would be easier if Gaza has a functioning port and there is free access to and from Egypt. I am presuming that a significant buffer zone would protect Israel’s security concerns. Free and fair elections would also be a necessity so it becomes a fledgling liberal democracy.

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