MS Risk Blog

Elections in Israel: Domestic and Foreign Policy Implications

On 29 December 2022, Benjamin Netanyahu was sworn in as Israel’s prime minister for a sixth time after he and his allies won a parliamentary majority in the November 2022 elections.  Netanyahu’s bloc, which includes his right-wing party Likud and far-right and Ultra-Orthodox parties Otzma Yehudit, Religious Zionism, Noam, Shas, and United Torah Judaism, secured 64 out of the Knesset’s 120 seats. Having appointed ultranationalist politicians to key government positions, such as Itamar Ben-Gvir as National Security Minister and Bezalel Smotrich as Finance Minister along with a post that oversees settlements in the West Bank, Netanyahu’s latest government is considered the most right-wing in Israel’s history. This will very likely have a significant impact on the domestic political situation and the peace process with the Palestinians, and will also affect Israel’s foreign policy and relations with its major partners, particularly the US and Arab states that have opted for normalization with Tel Aviv.

Regarding domestic politics, the new government’s strongly conservative and nationalist character will likely increase polarization within Israeli society. To seal cooperation between Netanyahu and his partners, the parliament approved significant legislative amendments on 27 December 2022. These changes included allowing individuals convicted of offenses but spared jail time to serve as ministers, clearing the way for Shas leader Aryeh Deri to serve as minister despite being convicted of tax fraud, and expanding National Security Minister Ben-Gvir’s control over the police. In early January, the government also put forward a plan that would allow a simple majority in the Knesset to overturn Supreme Court rulings and give the government control over the appointment of judges. The government’s members have accused the judiciary of pushing a leftwing agenda and have framed these changes as necessary for restoring the “proper balance between the legislature, the executive, and the judiciary”. But critics have asserted that they are aimed at strengthening the executive’s role at the expense of democratic institutions and enabling Netanyahu to clear himself of corruption charges against him. Furthermore, members of the coalition parties support a religious conservative agenda that is at odds with the values of more liberal Israelis. These plans have already caused sharp reactions, as around 80,000 held anti-government protests in Tel Aviv, Jerusalem, and other cities on 14 January, and around 100,000 protested again on 21 January, with opposition parties vowing more actions. Although Netanyahu made a concession on 22 January by removing Deri from his posts as Health and Interior Minister following a Supreme Court decision against his appointment, increased polarization and tension are likely in Israel this year, as the government will continue attempts to reform the judiciary and push its conservative agenda.

On the Israeli-Palestinian front, prospects for a two-state solution, already bleak, will likely deteriorate further. Both Netanyahu and his partners staunchly oppose the creation of a Palestinian state and support the expansion of Israeli settlements in the West Bank. Ben-Gvir has previously been convicted of racist incitement against Palestinians, while Smotrich, a supporter of the settler movement, now has control over parts of the Civil Administration Agency within the Defense Ministry that administers Israeli and Palestinian affairs in the West Bank, giving him authority over the expansion of Israeli settlements in the occupied region. The government coalition’s guiding principles state that the government will support the expansion of settlements in “all parts of the Land of Israel” including the West Bank, “strengthen” the status of Jerusalem, and preserve the “Jewish character” of the Israeli state. In what was probably a sign of things to come, on 3 January Ben-Gvir visited the Temple Mount/Haram al-Sharif, despite protests by the Palestinian Authority (PA) and other Arab states. In the past, Ben-Gvir has supported changing the status quo on the holy site, which bans non-Muslims from praying there. Such a move would risk a significant escalation with the Palestinians. In addition, on 6 January, the government approved a series of sanctions against the PA in retaliation for its anti-Israel campaign at the United Nations, including withholding tax revenues from the PA and freezing Palestinian construction in much of the West Bank. With violent clashes between Israeli forces and Palestinian militants continuing in the West Bank, the Netanyahu government’s hardline stance will likely further undermine prospects for a two-state solution and increase the risk of a new major confrontation breaking out between Israel and Palestinian armed groups, such as Hamas.

As for foreign policy, continuity with previous governments is expected, although the new government’s composition will likely complicate relations with some of Israel’s partners, such as the US and Arab states that recently normalized ties with Tel Aviv, like the UAE, Bahrain, Morocco, and Sudan. The Biden administration, despite its signaled willingness to continue cooperation with Israel, has major disagreements with Netanyahu’s government regarding the Palestinian issue and Iran. For example, in its statement congratulating the new Israeli prime minister, the White House underlined its support for the two-state solution. It has also referred to Ben-Gvir’s Temple Mount/Haram al-Sharif visit as “unacceptable”. Moreover, some US legislators have expressed concerns about the inclusion of “extremists” in Netanyahu’s government. On Iran, despite the stall in talks over restoring the nuclear deal, the assertive policy against Tehran that Netanyahu has announced is unlikely to be fully backed by the administration, which is seeking to focus on challenges from Russia and China. As for the Arab states, the UAE and Bahrain reached out to the new government and indicated that they are committed to the normalization deals with Israel, which were signed under Netanyahu’s previous term as prime minister. Overall, the Iranian threat and other shared interests will likely allow Israel to keep working closely with the US and its Arab partners. But Netanyahu will likely have a hard time balancing between the maximalist demands of his nationalist allies towards the Palestinians on the one hand, and the need to avoid escalatory moves and preserve some semblance of a peace process on the other. The latter is particularly important for maintaining relations and expanding normalization agreements with the Arab states. The tension between these domestic and external priorities will likely be a major test for the new prime minister.

In conclusion, Netanyahu’s electoral win and the formation of a new conservative, nationalistic government will likely significantly affect Israel’s domestic political and security situation and have an impact on its foreign relations. The tensions between the government and the opposition will further polarize Israeli society, while prospects for a two-state solution will deteriorate as the new government will likely expand settlements and weaken the PA. Furthermore, the Israeli government will likely also seek to continue established foreign policy and strengthen ties with the US and its Arab partners. But Netanyahu’s need to preserve his coalition by satisfying his hardline partners’ demands will likely complicate foreign relations and test the prime minister’s ability to balance domestic and external priorities.

Global Business Reports Interview with MS Risk CEO, Liam Morrissey on mining industry security

Could you give us a sense of MS Risk’ main regions of activity in Africa?

In the western Sahel we have been assisting client projects for 14 years. In East Africa we have been active in places like Ethiopia where we evacuated several mining clients during the turbulence in Tigray, for example. In southern Africa the security situation has been more benign and so our work in places like Namibia and Botswana has been along the lines of due diligence, helping clients set up new projects and to ensure that end-client security and crisis plans are proportionate and fit for purpose.       

Do you think the mining industry is showing greater awareness of the issue of security?

The growing focus on ESG is pushing companies to pay more attention to security due diligence. The days of deploying contractors to a new country and not asking their client about security arrangements are closing. More companies operating in the Sahel region are insisting that their clients demonstrate security and crisis response plans exist and work. For producing mines we see new procedures becoming commonplace on convoy management, route selection and use of charter flights to move most personnel.  This signals that many companies are trying to raise their game to meet the shifting challenges.

How is the war in the Sahel evolving and what does this mean for mining companies?

The war is expanding geographically and in intensity. We now see terrorist violence in the northern regions of Togo and Benin. Pressure remains in northern Ivory Coast and it must also be building on the Ghanaian northern frontier, even if it is not yet visible. The political instability in West Africa is stimulating the war because these countries are not positioned to combat the insurgency. Despite their courage, the Burkinabé soldiers and gendarmerie take terrible casualties. To operate in the Sahel today, mining companies need to factor the direct and indirect impacts of the conflict including targeted attacks, murder, kidnapping and ambush, and with that, to have a scalable enterprise security framework ready for mitigation in such an environment. The real danger is that some companies may still want to trade off the old business model of six years ago. This example permeates across the West African theatre and is to be avoided if safety of people and protection of asset value is to be achieved.      

 West Africa has seen multiple governments toppled by military interventions. Are the new leaders gaining legitimacy after these coups?

We have seen a succession of military interventions in the last three years, including some that failed.  It is discouraging that the current political climate seems to give signals that this is the way forward.  Regional bodies such as ECOWAS have appeared inconsistent in how they approach each case. International donors such as the US and EU have severely restricted aid to new military juntas. This leads to regimes looking elsewhere for new friends and it may give encouragement to militants.           

Could you unpack the link between artisanal miners and insurgents?

Organized crime bandits and terrorists influence illegal miners and use them as a funding stream. Recent studies suggest the value of illicit gold production is between US$1.5 billion – US$5 billion annually. If warlords and terrorists can tax a percentage then we realise just how valuable this activity is to driving instability.

MS Risk has successfully supported large-scale displacements of artisanal miners from client properties many times and in different countries. These are sensitive operations with safety, legal and ethical considerations. When done inappropriately, like we have seen some untrained security forces using heavy-handed tactics that resulted in fatalities. The tensions between locals and miners grow because artisanals will not blame the army, but the western mining companies that were being protected.

Do you have a final message?

Just like the frog that does not realize it will boil while sitting in a gradually-heating pot, so is the Sahel war becoming so normalized that people do not realize the seriousness of it and think they are immune to it. A lot of people are still not confronting the reality on the ground and, because of that, are not resourcing correctly. MS Risk can help them understand the real risks, tactically, operationally, and strategically.

Reprinted from GBR.

Brazil’s Next President – Bolsonaro or Lula?

The first-round vote to elect Brazil’s new president will take place 2 October 2022. Though there are a number of contenders in the race, only either incumbent President Jair Bolsonaro or former president Luiz Inácio Lula da Silva have a realistic chance of winning. Brazilians face a stark ideological choice between right-wing leader Bolsonaro and leftist candidate Lula. Other South American countries have found themselves in similar situations in recent months as they each took their turn at going to the polls.

It still remains unclear whether Brazil will become part of the new “pink tide” sweeping the continent, as Peru and Chile did in 2021 with the elections of Pedro Castillo and Gabriel Boric, and then most recently Colombia did in 2022 when citizens elected the country’s first ever leftist president. It looks likely that Lula will be victorious, though this is not certain. A Genial/Quaest poll released on 7 September showed that Lula’s lead over Bolsonaro has narrowed from 12 percentage points to 10. Lula has always led in the opinion polls, though how significant his lead is has varied. It has been fairly consistently narrowing in recent months. Interestingly, according to The Economist, the 44% of Brazilians who get their political news from television back Lula by 52% to 25%, the 25% whose main source is social media prefer Bolsonaro over Lula by 47% to 37%.

Lula is a former union leader, who was sentenced to nearly 10 years for corruption in 2017. He was released in 2019 and his conviction was annulled on procedural grounds. He represents the Workers’ Party (PT). During his time as president, he oversaw a commodities boom and a period of significant economic growth. He implemented several big social changes, exemplified by his socioeconomic program Bolsa Familia. It was a stipend awarded to families in absolute poverty. According to the Fundação Getúlio Vargas, one sixth of Brazil’s strides in poverty reduction can be attributed to this program. Bolsonaro emphasises what he calls “traditional family values” and defends gun rights. His economic policies in the past have been geared towards reducing state intervention in the economy. However, in the lead-up to the election, Bolsonaro’s government have implemented a series of economic measures, most notably a 50 percent increase in welfare payments for Brazil’s poorest, that are seen as an attempt to win votes.

Lula’s past record shows what his likely actions in office would be. His senior advisors told Reuters that he will likely appoint Geraldo Alckmin, his centrist running mate, to run economic policy. A particularly important issue for Lula to address which impacts not only Brazil but also the rest of the world, is deforestation. He advocates that it is “imperative to defend the Amazon” and put a stop to the “policy of destruction” set out by Bolsonaro. Fires in the Amazon surged to the highest number since 2019 in August, as it is expected that Lula will be elected and then crack down on logging.

The presidential campaign has already been violent. In July, a PT official was shot dead at his birthday party by a policeman shouting that Lula was a crook and all PT supporters should die. According to the Federal University of Rio de Janeiro, political threats, assaults, kidnappings and homicides have risen 335% in the past three years. There are concerns that Bolsonaro will not accept the results of the election if he is defeated. The possibility of a coup taking place is being considered by observers. In August, police raided the homes of several businessmen who had allegedly been discussing the possibility of planning one. Overall, it is thought to be unlikely. Vinicius de Carvalho of King’s College London says that the armed forces have evolved since 1964 and will be prepared to work with a new government. It is more likely that Bolsonaro will encourage significant street protests, alleging that the election was fraudulent.

Najib Razak’s conviction: a political earthquake for Malaysia

Malaysia has experienced in the last month an unprecedented political turmoil. On 23 August the Malaysian Federal Court confirmed a sentence of twelve years in prison for corruption for former Prime Minister Najib Razak.  The 69-year-old former president was found guilty of the misappropriation of 42 million ringgit (US$9.421 million) from the state fund 1Malaysia Development Berhad (1MDB). Najib, who ruled the country from April 2009 to May 2018, faces four other trials for the 1MDB scandal, the country’s largest corruption case that came to light in 2015 thanks to a journalistic investigation into the diversion of funds to the accounts of the then president and founder of the fund. Moreover, Malaysia’s Federal Court sentenced Rosmah Mansor, wife of former Malaysian Prime Minister Najib Razak, to 10 years in prison for taking bribes, just days after her husband was jailed for corruption.

Najib is Malaysia’s first former Prime Minister to be convicted and imprisoned. Having used up all legal avenues, a royal pardon is Najib’s only hope to get out of jail. Najib officially submitted his pardon request to King Sultan Abdullah Sultan Ahmad Shah, but the royal pardon is unlikely because Najib still faces trials on other charges. Without the royal pardon Najib would not be able to contest the next general elections scheduled for September 2023. This situation has created a political turmoil that could lead to the early call of general elections. In fact, Malaysia’s Election Commission (MEC) confirmed that its state offices are ready to hold the next general election as soon as the parliament is dissolved. The MEC informed that the election is expected to cost around RM1 billion (about US$224 million). The political campaign is already taking place on social media and political leaders are visiting different states of the country to give speeches at social gatherings. Now that the political situation is so uncertain, every political party is by default in campaign mode trying to fish for political points. Two factors have to be taken into account to analyse this political turmoil: the dominant political party and the rejuvenated opposition parties.

First of all, the United Malays National Organisation (UMNO), the party to which Najib belongs and that has ruled the country for decades, has seen a dramatic decrease in its popularity for two reasons. Apart from the historic conviction of Najib, his current leader, Ahmad Zahid Hamidi, will probably be also convicted of Criminal Breach of Trust (CBT), money laundering and corruption in the following months. Ahmad himself called for elections to be held in the country as soon as possible during a briefing in Kuala Lumpur, ideally before he gets convicted too. Calling an early election is also beneficial for the UMNO right now because of the better-than-expected economy and a fractured opposition. The UMNO also wants to use its success in the regional elections in Johor (March 2022), Melaka (November 2021), and Sabah (September 2020) before its popular support decreases even further.

This means that UMNO’s traditional leader (Najib) and its current leader (Ahmad) are both accused of corruption, and the party is in a very weak position at the moment, compared to its dominant position decades ago. Now there is a third person trying to get control of the UMNO party: Ismail Sabri. Sabri is waiting for Ahmad to be convicted in order to get control of the United Malays National Organisation (UMNO) and start an immediate reorganization, regenerating UMNO’s branding into something acceptable to the Malay electorate. As it can be seen, the UMNO party is not at its best. To crown it all, Malaysian Prime Minister Ismail Sabri Yaakob, member of the UMNO, has come under pressure from his party to call for early elections, even though the UMNO denies this ultimatum. This political uncertainty translates into a golden opportunity for opposition parties.

Opposition parties in Malaysia have experienced a fresh push with Najib’s conviction. After all, the images of Najib being physically escorted to Kajang Prison made many Malaysians realize that the rule of law had prevailed. Ahead of the next general elections (regardless of their date), opposition parties must create an attractive candidate line-up to confront the -weakened but still popular- UMNO. One of the main challenges for the opposition will be to gain the vote of young people, as most of them have been influenced through the education system to defend a Malay-centric state, something they see as more important than opposition-pledged reforms. One of the main opposition groups, the Pakatan Harapan coalition (consisting of centre-left and centre-right parties) has already started a series of large-scale political rallies across the country.

Last but not least, Najib’s jail sentence has showed that the judiciary has remained a strong institution during the conviction process of Najib. The judiciary has traditionally been seen submissive vis-à-vis the corrupt elites, who have routinely acted with impunity. Many members of the United Malays National Organisation (UMNO) denounced that Najib had been subject of a politically motivated witch-hunt and had not received a fair trial. In this case, the judiciary managed to overcome political pressure, smear campaigns and mudslinging. The allegations of an unfair trial against Najib will likely become one of the main topics of the political campaign ahead of the general elections.

Unless there is a royal pardon, Najib’s conviction will be remembered in Malaysia’s history as a moment when corruption was not tolerated. Moreover, his conviction will also be remembered as an event that triggered political instability in the country. The most likely scenario in the next 12 months in Malaysia is thus a general election where a reformed UMNO party confronts a revised opposition.

ASEAN’S summit August 2022 – the beginning of a more cohesive organization?

The members of the Association of Southeast Asian Nations (ASEAN) met in a summit held in Cambodia from 3^rd-5^th August 2022. Cambodia is the chair of ASEAN for 2022, which groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. This summit, officially called the 55^th Meeting of Ministers of Foreign Affairs of ASEAN, was the first in-person meeting of the ASEAN since the start of the pandemic. This summit, marked by the tensions between China-US and the crisis in Myanmar, had three main takeaways.

First of all, ASEAN’s members during this summit were in a difficult situation due to the increase of tensions in the region. This summit coincided with the controversial visit to Taiwan of Nancy Pelosi, the US Speaker of the House of Representatives. This was an especially prickly topic for this summit, since tensions with China are a matter of difficult consensus among the ten nations that make up ASEAN, with countries very close to Beijing, such as Cambodia and Laos, and others that maintain a more distant relationship despite strong economic ties (Indonesia, the Philippines). On top of that, during this summit top diplomats of both China and the US were invited (China’s Wang Yi and USA’s Antony Blinken), causing an increase in tension inside the summit. Surprisingly, at the end of the summit ASEAN members agreed on a statement that pointed out the possibility that these “recent events in an area close to the region could destabilize it and eventually lead to a miscalculation, a serious confrontation, open conflicts and unpredictable consequences.” This joint statement is surprising because then years ago, when Cambodia was the chair of ASEAN, the country was more reluctant to interfere in China’s domestic and regional moves. Apart from the issue of the Taiwan crisis, country members used this summit as an opportunity to assert their claims once again on the South China Sea. “Fed-up” maritime ASEAN states like Indonesia and the Philippines asserted their own maritime claims using the United Nations Convention on the Law of the Sea (UNCLOS) as a framework. To crown it all, at the end of this summit the final communique included these claims, arguing that these maritime disputes in the South China Sea have “eroded trust and confidence, increased tensions, and may undermine peace.” These statements thus prove that ASEAN leaders -regardless of their individual relations with China- have been able to reach a consensus on how to approach -or slightly confront- China, the most powerful country in Asia.

Secondly, this summit of ASEAN was interesting to follow due to the elephant in the room: Myanmar. The situation could be summarized with the words of Prak Sokhonn, the Cambodian foreign minister and host of this year’s summit, when he said that “not even Superman can solve Myanmar’s problems”. The country has been excluded from ASEAN summits in the last months, and the relations between Myanmar and the rest of the ASEAN members have been harmed by Myanmar’s lack of effort to enforce the Five Point Consensus plan (agreed in April 2021). Moreover, Hun Sen acknowledged during the opening of the summit that the situation in Myanmar has worsened as a result of the execution of four activists opposed to the military junta that had “disappointed and disturbed” the ASEAN member countries. Likewise, these executions have been seen as an offense to the efforts of the 2022 ASEAN Chair (Cambodia) and the ASEAN Special Envoy on Myanmar. These four executions -the first since 1976 in the country- have set a precedent in the junta’s rule and have triggered a more united response from ASEAN. Inside ASEAN, Indonesia, Malaysia and Brunei pressed for harder measures against the military junta of Myanmar, which could potentially include the freezing all relations with the junta, the recognition of the National Unity Government, (formed by supporters of the ousted leader Aung San Suu Kyi), and sanctions. Hun Sen, Cambodia’s Prime Minister, commented that ASEAN will be forced to reconsider the Five Point Consensus peace agreement if Myanmar’s current leaders continue their executions of prisoners. Myanmar is on notice while ASEAN considers its next move. Human Rights groups have asked ASEAN to rethink its approach and demand specific actions and timeframes to end violence in the country as soon as possible. Despite these criticisms, it could be said that ASEAN has shown an unprecedented unity and decision in the approach towards one of its member states.

Finally, ASEAN’s summit in Cambodia was especially relevant due to the presence of international diplomats like China’s Wang Yi; Russia’s Sergey Lavrov; USA’s Antony Blinken and the high representative of the Foreign Policy of the European Union, Josep Borrell. It could be said that this ASEAN summit was used by non-ASEAN leaders for two aims. The first one was that each non-ASEAN actor (China, Russia, Japan, US, EU or India) used this ASEAN summit to try promoting investment and development plans with ASEAN countries. Both China and the US promised ASEAN countries attractive partnerships and investment for development projects. Apart from this, these international actors used their time at the ASEAN summit for bilateral meetings. For example, Blinken (US) and Borrell (EU) held a bilateral meeting, where they discussed the importance of free and open maritime supply routes and supply chains in the region of South-East Asia, amongst other topics. Besides, the planned meeting between the Chinese and Japanese foreign ministers, Wang Yi and Yoshimasa Hayashi, was suspended due to comments made by the G7 ministers on the situation in Taiwan, who expressed their concern about what they consider “threatening words” from China. Finally, East Timor, which has enjoyed observer status in ASEAN since 2002, has expressed its willingness to join as a full member of the organization in 2023, when Indonesia will take over the presidency of ASEAN. This international presence and the possibility that ASEAN will include a new member means that the organization is in good health, and that ASEAN members are considered influential actors to take into account in the international area.

ASEAN’s position, despite the current situation of regional and international turmoil, has surprisingly remained intact. What is more, ASEAN has shown during this 55^th Meeting of Ministers of Foreign Affairs a level of unity and decisiveness rarely seen before. The members of the group have shown unity in the face of adversity and have managed to work together and establish a common approach to challenges inside their organization (Myanmar) and outside (China). ASEAN will probably have to make difficult decisions in the following months, especially ahead of the next ASEAN meeting in November.