Plus: Egypt's Sisi wins re-election
Hi Intriguer. Risk-averse diplomats often avoid pulling at threads in their work, lest they end up unravelling something far bigger.
But today’s briefing leads with a group that seems to relish risk: Yemen’s Houthis. Their attacks on shipping through the Red Sea have now led the world’s largest carriers to declare this key global trade route unsafe.
And the potential threads here are just endless: the Houthis are using missiles from Iran, based on old tech from China, to object to Israel’s actions in Gaza. And in the process, they’re raising gas prices in Europe, while thwarting Korean carmakers trying to get sedans from Turkey to India.
Don’t let anyone tell you that world events won’t hit home.
– Jeremy Dicker, Managing Editor
PS – Friday will be our last briefing for the year, but we’ll be back in your inbox from 8 January (plus a special 2024 look-ahead beforehand).
Six more years. Egyptian President Abdel Fattah El-Sisi has (unsurprisingly) won a third term with 89.6% of the vote, according to the country’s electoral authority. This next six-year term should be El-Sisi’s last according to the constitution, but he’s no stranger to constitutional amendments.
Delayed. The UN Security Council has reportedly postponed a vote on an Israel-Gaza resolution to allow more time for diplomats to accommodate US objections to parts of the draft text. According to media reports, the US wouldn’t support reference to a “cessation of hostilities” but might accept a call for a “suspension of hostilities”.
Deadly quake in China. At least 126 people have died after a 6.2 magnitude earthquake hit northern China overnight. President Xi Jinping has called for an “all-out” search and rescue effort in the hard-hit Gansu province, one of the country’s poorest regions.
More sanctions. The EU has adopted its 12th sanctions package against Russian entities, including a ban on the import, purchase or transfer of diamonds from Russia. Belgium, which has a flourishing gemstone trade, had previously managed to exclude the industry from G7 sanctions.
How do you like them Apples. Apple will stop selling some of its latest smartwatches in the US due to a patent dispute concerning its blood oxygen sensor. Washington is currently reviewing the ban, while Apple says it’s working on software updates to work around it.
TOP STORY
US announces multinational response to Houthi attacks in the Red Sea
The US has announced it’s leading a coalition of 10 navies to secure the Red Sea, following a spate of Houthi attacks on civilian ships using drones, armed boardings, and missiles.
The Iran-backed Houthis describe their continued actions as a “victory for the oppression of the Palestinian people”, and say they’ll “continue to prevent all ships heading to Israeli ports” until food and medicine is delivered to Gaza.
We covered this situation last month, but the attacks have since become both more frequent (the most recent one dates all the way back to yesterday) and more destructive (a ballistic missile struck a Norwegian-flagged tanker last week).
In response, US and UK warships have continued to shoot down Houthi drones over the weekend, but things in the area have still been trending towards chaos.
Oil and gas giant BP, plus major shipping companies like Maersk, MSC and Hapag-Lloyd, have announced they’re pausing shipments through the Red Sea. And maritime traffic is bunching up as other companies play wait and see.
Considering the Red Sea is one of the world’s busiest trade routes, the impacts here are real:
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Shipping – Having to go the long way around Africa adds a couple of weeks to each ship’s journey, plus hundreds of thousands of dollars to each journey’s costs, while insurance premiums spike
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Energy – Oil prices jumped 1% and European gas prices were up as much as 7% yesterday as markets digested the link between shipping and energy costs, though supplies are broadly pretty robust right now
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Egypt – The companies now saying they’ll pause shipments account for 70% of total capacity through Egypt’s adjacent Suez Canal, putting billions in fees at risk for a country already in economic crisis, and
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Yemen – The Houthi-dominated country’s impoverished people rely on shipping for continued access to aid and basic supplies.
So what are the world’s options?
According to commodities expert Javier Blas, the world can now either “bomb or bribe” the Houthis to stop.
But the Houthis don’t seem too bribe-able, vowing their stance on Israel is “non-negotiable”, while Israel says any end to its operation in Gaza is still months off.
And the Houthis aren’t so easily bombable either, already enduring a brutal war with the Saudis, who are now pressuring the Iranians to intercede to help avoid another escalation.
Given the state of the world, the US is backing that more measured Saudi approach for now, while bolstering Red Sea defences via this new coalition.
INTRIGUE’S TAKE
The standing US Navy was itself created in 1794 after pirates in the Mediterranean had threatened US merchant shipping.
230 years later and a few hundred miles away, very little of the shipping now under threat in the Red Sea is actually US-flagged (many ships use flags of convenience). And the last thing the US wants is to get drawn into Yemen.
But this doesn’t mean US interests aren’t at stake. To the contrary, keeping sea lanes open has always been a core interest for major trading nations.
So Washington’s approach seeks to defend that core interest, but share both the burden and risk with other mostly trading nations like Bahrain, Canada, France, Italy, Netherlands, Norway, Seychelles, Spain and the UK.
Also worth noting:
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In parallel, India has reportedly stationed two destroyers off the nearby Gulf of Aden.
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Iran has previously denied involvement in the Houthi attacks, insisting the “resistance groups are not taking orders from Tehran”.
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MEANWHILE, ELSEWHERE…
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🇯🇵 Japan: Leaders from Japan and the Association of Southeast Asian Nations (ASEAN) agreed to deepen ties during a weekend summit. Japan-ASEAN ties have taken on more of a security focus as China pursues its expansive claims in the East and South China Sea.
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🇷🇺 Russia: President Vladimir Putin says Russia has ”no interest” in attacking a NATO member state, dismissing comments from US President Biden as “complete nonsense”. However, he also warns that new “problems” have emerged with Finland after it joined NATO.
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🇮🇳 India: The Congress Party, India’s main opposition, has launched a crowdfunding initiative to raise much-needed funds before general elections next year. According to one estimate, India’s ruling party received six times as many donations as the Congress Party during 2017-2022.
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🇧🇷 Brazil: The legislature has passed a long-awaited reform to simplify what some refer to as the most complicated tax code in the world. It’s a central pillar of Lula's plans to boost productivity, but its effectiveness hinges on subsequent bills and a lengthy transition period.
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🇲🇬 Madagascar: Andry Rajoelina was sworn in for a third term as Madagascan President on Sunday after winning a disputed vote last month. Rajoelina has had a controversial rise to power: he first became president in a 2009 coup before later returning to win elections in 2018.
EXTRA INTRIGUE
Here’s what folks around the world have been tweeting about
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🇮🇪 The Irish were tweeting about "Iceland" to their north, after a volcano erupted 42km from the capital city of Reykjavik.
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🇰🇷 South Koreans were talking about “Gyeongbokgung”, a historic and beloved palace in Seoul that was vandalised two nights in a row over the weekend.
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🇱🇹 And Lithuanians were tweeting about #Top100 after their capital Vilnius was included in Euromonitor International’s Top 100 City Destinations list for the first time.
MAP OF THE DAY
Credits: Signal
We’re not breaking any news when we say that India is big… real big.
Its most populous state, Uttar Pradesh, has as many people as Brazil, and even its least populous state, Sikkim, could fit the entire population of Macau (~680,000). And if you feel like escaping to Tamil Nadu on India’s beautiful southeast coast, you could bring all the people of Thailand with you.
DAILY POLL
How do you think the international community should respond to these Red Sea attacks? |
Yesterday’s poll: What do you think Jimmy Lai's trial means for Hong Kong?
⬜️⬜️⬜️⬜️⬜️⬜️ 🔥 It ends the turmoil of 2019, enabling the city to retain its finance hub status (3%)
🟩🟩🟩🟩🟩🟩 ⚖️ It ends the rights and freedoms that enabled the city to prosper in the first place (96%)
⬜️⬜️⬜️⬜️⬜️⬜️ ✍️ Other (write in!) (1%)
Your two cents:
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⚖️ M.G: “Beijing's plan from the 1997 handover was to bring Hong Kong into line with its policies. The only surprise is that it took this long, which is a reminder to Taiwan that Beijing plays the long game.”
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⚖️ D.G: “I was there too. The crackdown and subsequent national security law became the last resort for Beijing to stop the protestors and gain complete control. There IS no going back.”
Yesterday’s result was our biggest ever, and today’s might’ve been our most lopsided poll result ever…!