Plus: Gaza invasion imminent?
Hi there Intriguer. Brits love a bit of tradition, don’t they? Authorities there have hung bundles of straw from a bridge to honour an ancient tradition (and local by-law), aimed at warning oncoming river traffic about a maintenance-related drop in headroom.
Today’s briefing is a 5 min read:
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👓 Why Western intel chiefs are warning about China.
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🚨 The latest on Israel and the Middle East.
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➕ Plus: Why $500M just got stranded in an Argentine airport, a Truss-iversary in the UK, and the biggest central bank heist in history.
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🇰🇿 Kazakhstan: Kazakh authorities have reportedly blocked the export of 106 military products to Russia. Astana has previously been accused of helping Moscow circumvent Western sanctions.
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🇪🇺 EU: 50,000 companies will have to start reporting their environmental impact from January after the new measure overcame resistance in the European Parliament this week. The new directive aims to crack down on corporate green-washing.
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🇮🇳 India: Google will start partly manufacturing its smartphones in India. Apple has made similar announcements over the last few years and is now producing 7% of its iPhones in India.
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🇹🇹 Trinidad and Tobago: Prime Minister Keith Rowley has urged Canada to offer more security assistance to the Caribbean. Speaking at the Canada-Caricom summit, Rowley stated “there are few diseases killing as many in Caricom as arms and ammunition.”
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🇮🇷 Iran: The US has imposed fresh sanctions on Iran aimed at curbing the country’s drone and missile program. This comes after several related UN restrictions lapsed on Wednesday.
👓 Five Eyes | Security & Intelligence
The Five Eyes talk tech and China
The heads of US, UK, Canada, Australia, and New Zealand security agencies (the ‘Five Eyes’ intelligence alliance) have met in Silicon Valley this week.
And the venue wasn’t coincidental: the spy chiefs say they’re focussed on the “unprecedented threat” China’s espionage poses to the tech world, like:
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seeking to obtain intel and IP in the advanced tech sector, and
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targeting state infrastructure as well as private enterprises.
It’s the first time the Five Eyes chiefs have appeared together in public, but it’s not the first time they’ve identified China’s hacking as a threat.
And this time around, they really didn’t mince their words:
Intrigue's take: Why are Western spy chiefs increasingly coming out of the shadows like this? Four main reasons:
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To maintain their social licence (damaged after various leaks)
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To put adversaries on notice (i.e., “we see you, back off”)
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To shape the global conversation (who’s provoking who?), and
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To prepare the public for volatile times ahead (a former NSA chief just said cyber attacks are edging towards warfare territory).
📰 How newspapers covered…
The withdrawal of Canadian diplomats from India
London, UK |
“Canada removes 41 diplomats from India after New Delhi threatens to revoke their immunity” |
Bangalore, India
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“41 Canadian Diplomats Removed from India After Revocation of Immunity” |
Toronto, Canada |
“Majority of Canadian diplomats leave India after ultimatum from New Delhi” |
Israel – Hamas War
Gaza invasion imminent?
Israel’s defence minister has told his troops they’ll soon see Gaza “from the inside”. The operation will likely be Israel’s largest since it invaded Lebanon in 2006 to rescue hostages and degrade the Iranian-backed Hezbollah there.
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That conflict lasted a little over a month and ended, per an Israeli government inquiry, “without a clear military victory”.
Meanwhile, UN officials said 20 trucks of humanitarian aid were waiting on the Egyptian side of the Rafah border crossing, ready to enter Gaza.
“We are the essential nation”
President Biden delivered an address from the White House last night, his third major speech since the 7 October Hamas attacks on Israel.
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His main goal was to link US military support for Israel (a broadly bipartisan position) with US military support for Ukraine (an increasingly polarising issue) in America’s public debate.
Biden also pushed back against isolationist critics, arguing:
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“History has taught us that when terrorists don’t pay a price for their terror, when dictators don’t pay a price for their aggression, they cause more chaos and death and more destruction. And the cost and the threats to America and the world keep rising.”
Biden will reportedly today ask Congress to approve military aid for Israel ($14B) and Ukraine ($60B). By fusing both requests into a single bill, he hopes to avoid Congress backing Israel without also sending aid to Ukraine.
Other notable global reactions:
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In his first public comments on the issue, China’s President Xi Jinping called for a ceasefire, while the foreign ministry criticised the US for vetoing Wednesday’s UN Security Council resolution on Gaza.
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UK Prime Minister Rishi Sunak touched down in Israel for a two day visit yesterday (Thursday), telling Netanyahu that Britain “will stand with your people and we also want you to win”.
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And regional governments aren’t addressing the US corroboration of Israel’s assessment that a Palestinian group caused Tuesday’s Gaza hospital blast, beyond Jordan saying “nobody is buying that narrative”.
What we’re monitoring this weekend
Regional protests that could turn inwards
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Egypt and Jordan have had broadly stable relations with Israel for decades, while Morocco and Bahrain were both party to the 2020 Abraham Accords which normalised their relations with Israel.
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All four have seen large, government-encouraged anti-Israel protests in recent days. Their security services will know there’s a risk this fury can turn back on their own ‘Israel-tolerating’ governments.
Iran-backed groups in Lebanon, Yemen, and beyond
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The fact Israel has waited two weeks (and counting) before invading Gaza has bought critical time to deter Hezbollah (to Israel’s north). But there’s speculation Hezbollah will attack once Israel enters Gaza.
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And all Five Eyes countries are now urging their citizens to leave Lebanon, a possible indicator (per the ‘Lockerbie rule’) that they have intel on Hezbollah’s operational planning.
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In parallel, a US destroyer in the Red Sea shot down three land-attack cruise missiles and eight drones launched by Iranian-backed Houthis in Yemen, potentially headed towards Israel.
Final thought: It feels like the US has now played all its cards to deter a wider war: hard deterrence in the form of two carrier groups off Israel, active diplomacy in the form of a presidential visit, and public signalling that it’s in this for the long haul.
It really now depends on how Israel conducts its ground operation in Gaza, and how the rest of the region reacts.
🇦🇷 Argentina | Geo-economics
Argentina’s bank system is overwhelmed
$500M in cash was left stranded in Argentina’s main airport last week.
Folks often seek out safe assets like US dollars during turbulent times. And with Argentina just days out from a high-stakes election, the dollar rush has accelerated.
In practice, this means:
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💵 Banks literally have to fly in US cash to meet that demand, and
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📉 The associated money-changing makes Argentina’s volatile peso even more volatile, accelerating the dollar rush further.
So local authorities tried to break the cycle by shutting down the airport’s cargo terminal last week, just as planes were literally hauling in piles of cash. Authorities then backtracked once banks got spooked.
Intrigue’s take: Take a look at the peso-to-dollar exchange rate chart over the past decade. It only goes in one direction.
That might be why the election front-runner, Javier Milei, wants to ditch the peso for the dollar. But these past few weeks are a glimpse into how complicated and chaotic that process will be.
➕ Extra Intrigue
1) Which country has the world's largest gold reserves? |
2) How much money was taken in the world's biggest central bank heist? |
Where is the world's oldest operating bank based? |
📸 Photo of the day
Liz Truss resigned as British prime minister a year ago today, just 45 days into her term. After The Economist likened her durability to the shelf life of a lettuce, a British tabloid famously kicked off a livestream of a lettuce next to a photo of Truss. The lettuce won. It’s hard to believe this was only a year ago.