Israel’s success in bulldozing all attempts of international mediation in the Gaza conflict (thank you Uncle Sam) means bombs, bullets and white phosphorus will write the next chapter of Palestinian history with the blood of its innocent women and children.
Yet even as Israel’s relentless bombardment once again exposes a weak OIC, a confused (or clever?) GCC and a toothless UN – with or without the US veto – it will not be possible to keep the ground invasion isolated from the region’s fault lines or international financial markets as Netanyahu rubbishes ceasefire as cowardice and promises to wipe out Hamas forever, whatever the price.
Washington’s blind support is the only reason Israel’s apartheid regime is routinely able to mangle international humanitarian law just as brutally as its napalm bombs disfigure civilians in the occupied territories, of course. But even if the White House is not bothered by Unicef’s lament that “Gaza has become the graveyard of children”, it will not be able to keep its front door shut when Mr Market rings the bell.
The World Bank is already warning of a worst-case scenario spreading the war across the region and pushing oil up to $150 per barrel. Brent crude is down more than 3pc for the week so far, after dropping three out of the last four weeks, on high interest rates, a recession in Germany, a property sector/shadow banking system implosion in China, and expectation of another recession in America.
Yet short sellers that got their fingers burnt in the summer of 2008 will tell you how quickly stagnating production and/or compromised supply chains can push its price through the roof.
Investors, traders and the American treasury also listen when Jamie Dimon speaks. The CEO of the largest US bank by assets, and the longest serving head of any big Wall Street investment bank, has been warning for two weeks that “this may be the most dangerous time the world has seen in decades”.
The spillover from Gaza on top of the fallout of the Ukraine war and the largest ever peacetime fiscal deficits “may have far-reaching impacts on energy and food markets, global trade, and geopolitical relationships”, said Dimon, dubbed “king of wall street” for cunningly avoiding extreme drawdowns of some of the worst financial crises. Besides, quantitative tightening, the Fed’s attempt to reduce its bond holdings, “reduces liquidity in the system at a time when market-making capabilities are increasingly limited by regulations”.
Regionally, Arab states don’t have the appetite for anything even resembling the 1973 Opec embargo – even though Israeli aggression, US support for it, and the death toll are much larger than the Yom Kippur war – but continued Arab silence will derail the China-brokered Saudi-Iran rapprochement and plunge their client states right back into proxy wars, which nobody wants. Iran-backed Houthis are already claiming missile and drone strikes on Israeli interests in the region, with the war in Yemen a hair trigger away from blowing up again.
Amid rumours that GCC countries might even look forward to a Gaza without Hamas, just like Israel, they are under increasing pressure to withdraw recognition of Tel Aviv from Iran’s Ayatollah’s left-leaning friends in Latin America.
Bolivia “has made the determination to break diplomatic relations with Israel in repudiation and condemnation of the aggressive and disproportionate Israeli military offensive… in the Gaza strip and the threat to international peace and security”, its vice chancellor said on Tuesday.
Chile and Columbia have withdrawn their ambassadors “given the unacceptable violations of international humanitarian law that Israel has incurred”. And Venezuela has demanded “with one voice, an end to the genocide against the Palestinian people”.
Russia, too, has warned Israel against any further strikes in Syria, its ally, as Netanyahu himself spreads the war into neighbouring countries.
In the merciless, zero-sum game of Middle East politics, “you’re either at the table, doing the carving, or on it, getting carved”, Winston Churchill famously said. With Israel bent upon carving out a Hamas-free Gaza, conveniently blessed by the powerful west as it murders innocent civilians and international law, it’s not just the little children of Gaza that are on the table, getting carved, but also the last, faint hope of justice in the holy land.
Copyright Business Recorder, 2023
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