Tag Archives: government

Israel’s March 23rd election results likely to prolong political stagnation; may pose challenges to strategic business operations – Israel Analysis

Executive Summary:

  • On March 23, Israel held its fourth round of parliamentary elections in the past two years, which produced another stalemate. Rather than the left and right, the political fault lines in Israel are currently divided along the pro-Prime Minister (PM) Benjamin Netanyahu bloc and the anti-Netanyahu bloc. At present, neither has been able to form a viable coalition.
  • Even if either bloc succeeds in forming a coalition through complex political maneuvering, any potential government’s longevity will likely be limited in time. Therefore, the years-long period of political deadlock in Israel is likely to persist due to the lack of a conclusive outcome.
  • The political stagnation will hinder the implementation of a long-term budget and comprehensive government planning, which will disrupt proper governance, cause some economic damage, limit the ability for strategic long-term security planning, and hamper Israel’s foreign relations with key allies.
  • This is liable to pose challenges for long-term strategic business operations in Israel, especially those requiring high-level government collaboration. However, regardless of the political situation, essential services and infrastructure remain operational and the country is largely functioning as normal. The highly successful COVID-19 vaccine campaign has significantly reduced restrictions on business and commercial activities, with domestic and foreign companies and organizations able to operate without major hindrance.
  • Those operating or residing in Israel are advised to remain abreast of the ongoing political situation, which is liable to result in some challenges to long-term business operations requiring state collaboration. Consult with us at [email protected] or +44-20-3540-0434 for more information.

Result of Israel's general elections (seats)


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Implications of the political deadlock

As well as leading to an unprecedented situation in which four elections have been held in the past two years, the political stalemate has had, and will continue to have, an impact on the functioning and governance of Israel in various fields. These range from budgetary and economic issues to foreign relations and long-term security doctrines. Below are the primary areas in which the political deadlock is liable to impact until a conclusive outcome is reached and a stable government is formed.

Economy, budget, and domestic governance

  1. The political situation in Israel has had an impact on the country’s economic functioning and ability to strategically plan ahead. As a result of the political stalemate, the Knesset has not passed an annual budget or comprehensive spending plans since March 2018, which has hindered the capacity of ministries and other government-funded organizations to operate effectively. This concern has been shared by Israel’s economic leadership, as evidenced by comments on April 9 by Bank of Israel Governor, Amir Yaron, who reiterated that “without a stable government that operates long-term” Israel will not be able to implement a multi-year economic plan to effectively emerge from the COVID-19 health and economic crises. This view highlights the importance of both the formation of a stable and cohesive government as well as its longevity for proper governance and economic growth. This is particularly in light of the pandemic, which had a severe impact on the Israeli workforce, with unemployment reaching a high of 27 percent early on in the health crisis and falling to 9.8 percent by March amid the opening up of the economy. Prior to the pandemic, unemployment had reached a record low of 3.8 percent.
  2. FORECAST: Payments to furloughed workers in Israel are set to expire at the end of June. Many furloughed workers have preferred to continue receiving state payments instead of returning to the workforce and will thus likely be compelled to return to part-time unemployment when these payments end in June. That said, parts of the population will likely remain indefinitely unemployed. This will require government-funded training programs and investment, potentially in cooperation with the private sector, to assist these individuals to reenter the workforce. This is especially because several sectors, particularly those depending on tourism, continue to operate at lower than pre-pandemic capacity and there are therefore fewer jobs in these fields. In the absence of a stable government able to strategically implement such initiatives, hundreds of thousands of people are liable to be in a precarious final situation, which will place strain on the government and the wider economy as their consumption will be reduced.
  3. The political situation has partly impaired Israel’s ability to respond to pressing needs in a timely manner. This is most saliently evidenced by a reported delay in Israeli payments to vaccine production companies as the Israeli cabinet has not convened to pass this budget due to political infighting in the current Likud-Blue & White caretaker coalition. This is due to the cancellation of a cabinet meeting by Defense Minister Gantz as a result of Netanyahu’s alleged refusal to permit the appointment of a Justice Minister, which also hinders the Knesset’s ability to pass key legislation. The void in the Justice Ministry is one of multiple senior roles, including in the security and defense sectors, that have not been filled due to government infighting. The fact that this led to Gantz’s cancellation of the cabinet meeting underscores the potential for multiple other issues of an important and strategic nature to be hindered or delayed due to political stagnation. The ministers were slated to vote on a 2.1 billion USD procurement of new vaccine doses, which is essential for Israel to sustainably combat the COVID-19 pandemic over the long-term and keep the economy open and thus provide crucial income for individuals and revenue for the state. FORECAST: Although the government will likely find a solution to this specific issue, the development highlights multiple aspects of the current political impasse on proper governance.
  4. The failure to pass a budget has impacted the government’s capacity to fund infrastructure projects and major national initiatives. This has affected multiple sectors and fields. For instance, the lack of a budget hindered the start of the academic year as the Knesset was forced to pass a special budget in order for schools to open while other state-funded educational services were impacted. More generally, the lack of a long-term budget poses challenges in terms of structural economic reforms and for ministries to provide essential services, including physical and mental healthcare, social provision, and education, which require increased investment in order to meet rising inflation and demand.
  5. FORECAST: Although the government has managed to pass a series of short-term spending plans and special budgets to cover specific needs, the longer the political deadlock continues, the more that certain services and infrastructure plans will be impacted. Furthermore, even if a coalition is formed, if its primary components lack a shared vision beyond replacing the current Netanyahu-led government, this will also hinder state funding and the passing of a viable long-term budget due to disagreement over policy and economic priorities. Taken as a whole, the political situation will continue to have a relative impact on the functioning of the state over the coming months at least. It may also reduce the desire of international firms to commit to invest and set up offices in Israel until a stable government is in place that can facilitate such operations and work in collaboration. This is also evidenced by a warning by an international credit ratings agency from March 31 indicating that while the present situation does not pose immediate risks to Israel’s economic rating, shown by the fact it kept Israel’s credit rating at AA-, if the political situation persists, it will elevate the fiscal risks due to the difficulty in reducing the deficit. Bank of Israel governor Yaron reinforced this concern, stating that “credit ratings companies are worried by the government’s instability and the failure to pass a budget.”
  6. Regardless of the political situation, essential services and infrastructure remain operational and the country is largely functioning as normal. The highly successful COVID-19 vaccine campaign has significantly reduced restrictions on business and commercial activities, with domestic and foreign companies and organizations able to operate without a major hindrance. FORECAST: The political stagnation in the country is more likely to pose a challenge to foreign companies potentially seeking to initiate major investments or launch large-scale projects within Israel. This is because government ministries face both budgetary issues and obstacles in the decision-making process. This may also affect collaboration with ministries or state-funded organizations, but routine operations of existing companies within Israel will continue regardless, albeit delays can be expected when receiving permits, regulatory approvals, or other activities that depend on legislation.

Foreign Relations

  1. The political situation is also somewhat affecting Israel’s ability to forge relations and gain international influence. As a result of political infighting, the current caretaker government, even when it managed to convene on a fairly regular basis, struggled to project a united message to the international community regarding Israel’s policies as senior members of the Likud and Blue and White parties frequently undermined each other. This is particularly the case in sensitive issues of foreign and defense policy, with the latter portfolios being held by Blue and White’s Gabi Ashkenazi and Benny Gantz, respectively, but many diplomatic and security matters being directed by Netanyahu. These competing points of authority have likely posed problems for various states when dealing with Israel. FORECAST: The failure to establish a viable and stable government led by ministers appointed for the long-term will likely pose a challenge for Israel’s efforts to forge relations in essential sectors such as trade and commerce. Foreign governments may be reluctant to commit to such agreements with caretaker officials, while the latter may be restricted by legal obstacles placed upon an interim government.
  2. The current impasse has resulted in a situation wherein 36 new ambassadorial appointees, which have been approved by Israel’s Ministry of Foreign Affairs (MFA) appointments committee are not yet fulfilling their roles. This situation has been ongoing since November 2020 and many of the ambassadors are reportedly ready and set to be posted on diplomatic missions on an immediate basis. Reports state that this delay is due to a refusal by Netanyahu to bring their approval to the cabinet for its consent. The absence of new ambassadors is a significant issue that is liable to harm Israel’s diplomatic, trade, and security interests. This situation can hinder Israel’s ability to conduct diplomatic campaigns and strategic discourse with other international actors as well as to advance visits of economic delegations to other countries.
  3. Most importantly for Israel, the lack of government can undermine the country’s relations with key strategic allies such as the US. Continued political paralysis within Israel has likely somewhat hindered its ability to build strategies and coordinate with its allies on matters of essential policy and national security. This is because these allies may be reluctant to engage in long-term planning in the absence of a stable government, especially one that may be perceived as volatile and potentially liable to fall as soon as a political crisis emerges. This may impact Israel’s positions on the Iranian nuclear agreement, especially amid international efforts to revive the Joint Comprehensive Plan of Action (JCPOA); and any US engagement with the Palestinians.
  4. Another area that the political situation can impact in terms of foreign policy is the pre-election, US-brokered normalization trend that was recorded, consisting of diplomatic agreements between Israel and four Arab states (the UAEBahrain, Sudan, and Morocco). These deals are extremely important and strategic for Israel’s diplomatic, security, and economic interests as they enable Jerusalem to garner additional international support against its adversaries and forge trade and investment relations. FORECAST: This trend is likely to slow down or be suspended altogether in the absence of a stable Israel government that other potential Arab states perceive to be a long-term partner. The regional actors that are most likely to reach a normalization agreement with Israel tend to be relatively risk-averse and attach great importance to stability. Thus, if the political deadlock continues or an unstable government is formed, further normalization agreements are unlikely.

Security

  1. In terms of security, the political deadlock will have an impact on the procurement of military hardware and weaponry. It may also impact the development of advanced security doctrines based on these weapon systems and long-term, large-scale organizational planning. This is due to various budgetary obstacles and challenges posed to the decision-making process. However, over the past two years, despite the political stalemate, Israel has continued to act to safeguard its security interests across multiple arenas. Military activity, both overt and covert, has been reported in various theaters of operation throughout the Middle East region. That said, although these operations are informed by a guiding strategy that has been formulated by previous governments and continues to be updated by Israel’s security agencies, especially vis-a-vis the regional threat posed by Iran and its proxies, the lack of a cohesive government is liable to affect proper governance and the decision-making process. This is shown for instance by the Israeli government’s apparent lack of strategy regarding the best way to manage the threat of militant groups based in the Gaza Strip, which is an issue that periodically emerges with a potentially decisive operation indefinitely put on hold until a stable government is formed. Taken as a whole, despite the political situation dictate, Israel can continue to respond to any threats to its national security and continue to formulate a military strategy to defend these interests.
  2. FORECAST: This situation will impact Israel’s security in the strategic realm and possibly lead to long-term damage as Israel’s adversaries can gain an edge on delays to procure and develop weaponry due to budgetary and decision-making challenges. However, the ability of Israel’s security apparatus to mitigate and thwart security within Israel itself will remain intact over the coming period. The Israeli security agencies have proven during this period of relative political instability and throughout periods of far greater security volatility that the vast majority of local and regional threats, namely along its northern borders and vis-a-vis Palestinian militants in the West Bank and Gaza, are manageable. Thus, the political situation will not lead to a fundamental destabilizing of the security environment within Israel over the coming period.

Election Results and Political Blocs

  • On March 23, Israel held its fourth round of elections for its parliament (the Knesset) in the past two years.
  • During this two-year political deadlock, a government was formed in May 2020, which was led by Prime Minister (PM) Benjamin Netanyahu and the Likud party alongside Benny Gantz, his political rival from the“Blue and White” party. The government’s functioning was hindered by in-fighting and discord between the rival political factions, which eventually led to the dispersal of the Knesset in December 2020, resulting in the March election.
  • The results of the election can be seen below. The political fault lines within Israel since the first election in March 2019 have revolved around the parties’ willingness to join or rejection of a government led by PM Netanyahu, who is on trial having been officially indicted in November 2019 for breach of trust, bribery, and fraud.
  • The debate on Netanyahu’s political and legal status has transcended the traditional left-right discourse within the Israeli political landscape. In this context, parties that are part of the right-wing political camp in Israel, such as former Likud member Gidon Saar’s “New Hope”, have formally declared themselves to be part of the “anti-Netanyahu” or “change” bloc. Other parties, such as Naftali Bennett’s right-wing “Yamina” and Mansour Abbas’ Islamist “Raam”, remain unaffiliated with either of the pro- or anti-Netanyahu blocs.
  • This has resulted in a situation that neither the pro-Netanyahu bloc, primarily made up of right-wing and religious/ultra-Orthodox parties nor the ideologically diverse anti-Netanyahu bloc has been able to form a coalition, which requires a 61-seat majority in the Knesset.
  • On April 6, Netanyahu was given a four-week mandate to form a government by President Reuven Rivlin. He has until May 4 to try to assemble a viable coalition and can thereafter request a 14-day extension at the discretion of the president. If he fails, Rivlin can ask a second person or return the mandate to the Knesset. If these alternatives fail to yield a government, the Knesset will automatically dissolve and another election will be held.

Affiliations of political parties

These are the various political parties and their affiliations and policies.

Pro-Netanyahu blog: Parties, leaders, policies

Anti-Netanyahu bloc: Parties, leaders, policies

Unaffiliated Parties: Leaders, policies


Main options for government coalitions – likelihood and longevity

Option 1: Pro-Netanyahu bloc & Yamina government plus Raam external support in Knesset

  • Prime Minister: Benjamin Netanyahu
  • Coalition Components: Likud, United Torah Judaism, Shas, “Religious Zionism”, and Yamina (59 seats)
  • External support for government votes: Raam (4 seats)

Netanyahu-Led government, Raam supporting from outside

Analysis:

This option is somewhat feasible as it includes various political parties with broadly similar ideological agendas and worldviews in government. Although the Raam party would likely not be a formal part of the government, but an external support bloc, its inclusion poses the greatest challenge to the formation of the government. The “Religious Zionism” party has explicitly stated and reiterated that it will not be part of a government that depends on Raam’s support and this is likely to hinder any progress on this option. This is compounded by major concessions that Netanyahu may have to make to Bennett for the latter to join a government led by the former. In terms of longevity, the Raam party’s leadership is able to cooperate with the religious factions in this potential government, particularly over social policy and support for religious institutions. However, its overall Islamist agenda and links to the Palestinian cause are liable to create complications for the government’s functioning, which would be exacerbated during periods of escalation or religious sensitivities.

Option 2: Pro-Netanyahu bloc & Yamina government plus defectors from the anti-Netanyahu bloc

  • Prime Minister: Benjamin Netanyahu
  • Coalition Components: Likud, United Torah Judaism, Shas, “Religious Zionism”, Yamina + 2 members of anti-Netanyahu bloc shift allegiances (61 seats)

Pro-Netanyahu bloc, Yamina, Defectors from anti-Netanyahu bloc

Analysis:

This government is unlikely due to the reluctance of members of the center or center-right parties to renege on their pledges not to join a government led by Netanyahu amid his indictment on corruption charges. The “Blue and White” party has insisted it will not join a Netanyahu-led government following its previous power-sharing experience with the incumbent prime minister while “New Hope” members, more likely to defect, have so far insisted they will not join the pro-Netanyahu bloc. Although individual members of these parties may choose to join Netanyahu under the pretext of preventing another round of elections, the parties themselves are unlikely to do so due to the potential for a fifth vote and the impact this would have on voters who will perceive this as the violation of election pledges. In terms of longevity, a government made up of the Netanyahu bloc, Yamina, and two defectors from the anti-Netanyahu bloc would likely be more stable on key policies than a Raam-backed coalition. However, with legislation pertaining to Netanyahu’s legal complications, this government would likely face substantial hurdles as several members of Yamina and most potential defectors are unlikely to support any perceived efforts by Netanyahu or his supporters to release him from or evade the legal process.

Option 3: Anti-Netanyahu bloc plus external support from Raam

  • Prime Minister: Naftali Bennett/Yair Lapid (Rotation)
  • Coalition Components: Yesh Atid, Blue & White, Yisrael Beitenu, Labor, Meretz, Yamina, New Hope (58 seats)
  • External support for government votes: Raam (4 seats)

Anti-Netanyahu bloc with support from Raam

Analysis:

In terms of the likelihood of formation, this government faces multiple challenges due to the ideological diversity of the parties it would include and the pressure within both the left-leaning (Yesh Atid, Labor, Meretz) and right-leaning factions of the potential coalition (Yamina, New Hope) to extract concessions from the other. The former parties seek to ensure Yesh Atid’s Labor is the prime minister (PM) or first in any rotation, while the latter right-leaning bloc insists on Bennett as PM and first in the rotation. The right-leaning parties will also aim to block the left-leaning parties from holding key cabinet posts and thus advancing a left-wing agenda as well as blocking their entry to the security cabinet. Even if this government does materialize, it would likely be hindered by major in-fighting and its longevity is thus very low.

Option 4: Netanyahu chooses/forced to sit aside; right-wing government formed

  • Prime Minister: Consensus among right-wing parties
  • Coalition components: Likud, Shas, United Torah Judaism, Yamina, New Hope, Religious Zionism (65 seats)

Right-wing government without Netanyahu

Analysis:

This option is extremely unlikely due to Netanyahu’s widespread popularity among the Likud party and the Ultra-Orthodox parties that support the Likud. Members and voters of these parties would consider any attempt to coerce Netanyahu to step down as anti-democratic, which would create major tensions within Israeli society. Netanyahu also continues to hold significant support among parliamentarians in his and other supporting parties, while even some of his detractors may oppose legislation that prevents him from being prime minister due to its targeted nature. This is evidenced by the failure of anti-Netanyahu parties to pass such legislation over the past years despite their overall opposition to his continued premiership. Taken as a whole, this option is highly unlikely and its longevity is thus negligible.


BOTTOM LINE

Overall, given that all of the above-mentioned options pose considerable challenges to political actors in terms of both the formation of a viable coalition and the longevity of any government, the most likely scenario is either a fifth election with a similar outcome along pro- and anti-Netanyahu lines or an unstable government that fails to complete its term and thus elections are again called.


Recommendations:

In light of the current situation:

  1. Those operating or residing in Israel, or seeking to do so, are advised to remain abreast of the ongoing political situation, which is liable to have an impact on business continuity.
  2. It is advised to allot for obstacles to cooperation with public sector bodies and ministries as well as other state-funded organizations.
  3. Allot for disruptions to processes that require government permits, regulatory approvals, or other activities that are liable to depend on legislation.
  4. More generally, allot for continued restrictions on entry to Israel due to the COVID-19 pandemic. Consult with us at [email protected] or +44-20-3540-0434 for guidance on entry to Israel amid the current limitations.

General Recommendations:

  1. Travel to Israel may continue at this time while adhering to security precautions regarding militant attacks, while avoiding the immediate vicinity of the Syrian, Lebanese, and Egyptian borders, due to the persistent risk for cross-border violence.
  2. Those traveling in the 40 km area surrounding the Gaza Strip should continue adhering to all safety precautions regarding early warning sirens for incoming rockets. Remain cognizant of the situation along with the Lebanese and Syrian border areas, as minor hostilities between various groups can escalate into a broader conflict. In case you hear a siren, seek shelter in a protected area and remain inside for at least 10 minutes.
  3. In major Israeli cities, remain vigilant in crowded commercial areas or public transport hubs, as these locations have been targeted by militant groups in the past. Alert authorities to suspicious, unattended packages in these areas.
  4. As a general precaution, avoid nonessential travel to the vicinity of Jerusalem’s Old City, particularly in the vicinity of Damascus Gate, due to the increased potential for acts of militancy and civil unrest. For those seeking to travel to the Old City, it is advised to contact us for a security-oriented travel guide.

Dutch PM Rutte likely to form new four-party coalition, with policy possibly taking lean towards left – Netherlands Analysis

Executive Summary

  • The center-right VVD led by Prime Minister Mark Rutte emerged as the largest party in the March 2021 Dutch national elections, followed by center-progressive-liberal D66, right-wing populist PVV, and centrist CDA.
  • Due to the significant fragmentation of both the right- and left-wing, even by Dutch standards, various coalition formations are possible.
  • Nonetheless, the results indicate that VVD and D66 will likely form the core of the next governing coalition, with one or multiple smaller parties.
  • D66’s gains could lead to a slight policy shift to the left within a continuation of a center-right government or lead to the inclusion of left-wing parties in a coalition.
  • Travel to the Netherlands may continue while remaining cognizant of COVID-19 regulations and maintaining vigilance for related unrest.

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Current Situation

  • In the March 2021 Dutch national elections, Prime Minister Mark Rutte’s center-right Volkspartij voor Vrijheid en Democratie (VVD) retained its place as the largest party with 34 seats in the 150-seat House of Representatives, gaining one. The centrist-progressive-liberal Democraten 66 (D66) came in second with 24 seats; right-wing populist Partij voor de Vrijheid (PVV) came third with 17 seats and centrist Christen-Democratische Appel (CDA) was fourth with 15 seats.
  • With a five-seat increase, the socially-liberal and pro-EU D66 overtook its coalition ally CDA.
  • New parties entering parliament include right-wing populist Juiste Antwoord 2021 (JA21), social-liberal Volt Nederland (Volt), agrarian BoerBurgerBeweging (BBB), and anti-racist and anti-capitalist Bij1.
  • Specific issues, such as the climate crisis and post-COVID socioeconomic recovery, remained unheeded in the campaign, being dominated by the theme of “trusted leadership” concerning the handling of COVID-19 instead.

 

Background

  • Under the Dutch system, parliament is elected by proportional representation. Fourteen parties sat in the former parliament. A record 37 contested in the 2021 election, with 17 gaining seats.
  • On January 15, 2021, Prime Minister Rutte’s government resigned amid a subsidies scandal. The resignation followed a failed attempt by Rutte to win the backing of coalition allies, signaling the start of political hostilities before the election.
  • Rutte remains as caretaker PM until a new government is formed post-election.
  • Between January 23-25, police reportedly detained over 500 demonstrators nationwide as mass anti-COVID-19-related protests against a nightly curfew turned violent. Rioters conducted widespread vandalism. Journalists and camera crews were also targeted. Over a dozen officers were injured while utilizing forceful dispersal measures. Rutte denounced the events as “criminal violence.”
  • Over 16,000 people are confirmed to have died of COVID-19 in the Netherlands, with over 1.2 million cases. Less than four percent of the population have received both doses of a COVID-19 vaccine as of writing.

Assessments & Forecast

COVID-19 pandemic was the main influence on the election results, despite recent benefits scandal

  1. Despite the recent benefits scandal, the handling of the COVID-19 pandemic was the largest influencer of the election results, with the limiting of the electoral campaign to social media, advertising, and televised debates due to the COVID-19 pandemic restrictions likely also being a factor.
  2. The increase of the number of parties to 17 highlights further fragmentation and the reduction of mainstream parties’ dominance. That said, VVD’s success despite the subsidies scandal is likely owing to Rutte’s “herd immunity policy,” appearing as the leading “statesman” to deal with the crisis, emphasizing another required term to get the country through the pandemic. Additionally, VVD’s one-seat gain is likely mainly due to first-time voters and a shift in votes away from CDA and the 50PLUS (50+) party.
  3. D66 emerged as the primary beneficiary of the elections. Its gains are likely attributable to posing itself as the left-leaning party with the most chance of being able to have a significant impact on a potential government coalition. Additionally, its progressive stances offered an alternative to Dutch far-right populism for those looking for another option to Rutte. Further, it likely won GroenLinks (GL) votes by holding similar positions on issues such as climate and immigration policies.
  4. This position as an “acceptable alternative” option to Rutte for centrists is likely to have also played a part in diminishing the CDA’s votes, with Rutte and the more right-wing parties also eating into the party’s votes from both wings.
  5. That Partij van de Arbeid (PvdA) finished unchanged and left-leaning parties Socialistische Partij (SP) and GL, lost almost half their seats, indicates a further decline of the Dutch center-left and progressive wing, jointly amassing only 33 seats. Meanwhile, the SP’s regression is likely influenced by its right-wing basis campaigning and its recorded membership slump.
  6. On the other side of the political spectrum, the election generated a radical reorganization of the populist right-wing, which achieved its best-combined result with an overall total of 28 seats but became more fragmented in the process, with PVV losing seats to JA21 and Forum voor Democratie (FVD). This is liable to be partially due to the alleged ineffectiveness of PVV leader Geert Wilders from various sections of the right-wing, with others claiming he has tried to pursue non-far-right positions to gain votes. The right-wing likely gained ground by capitalizing on riots and protests organized against COVID-19 measures, seizing on the growing anger towards the regulations and resulting economic hardships.

 

Although coalition building will be challenged by a shift in power of current partners, a VVD-led four-party government remains the most likely outcome

  1. The Dutch coalition-making process typically takes months, although, in 2017, it took a record 225 days. Despite Rutte’s calls for swift negotiations amid the COVID-19 crisis and weakened economy, D66 leader Sigrid Kaag reiterated her desire to include more left-wing parties to form a more progressive coalition that could prolong the process.
  2. Nonetheless, the most likely coalition includes a continuation of the former four-party coalition between the VVD, CDA, D66, and the ChristenUnie (CU), and primarily agreeing on principal policy issues. However, a significant bone of contention could be around social issues, such as abortion and euthanasia, given the differences between D66 and the CU. Further, the existing disparity on immigration, asylum, climate, and extensive agricultural and nitrogen policies may prove obstacles to reforming this grouping.
  3. Judging by these contentions, VVD, CDA, and D66 may seek an alternative partner to CU, likely to include one of the parties on the left, namely PvdA, SP, GL, Partij voor de Dieren (PvdD), Volt, Staatkundig Gereformeerde Partij (SGP), or DENK. Rutte’s proven willingness to be flexible makes such a coalition possible, as long as the smaller partner’s demands for joining are not deemed to be too radically to the left. Additionally, D66 has stated that it is reluctant to work with either GL or PvdA, due to irreconcilable differences, further limiting the options for partners on the left.
  4. As such, given that no parties have ruled out cooperating with right-wing populist JA21, and the party holds eight seats in the Senate, providing a government majority in both chambers, Rutte could consider inviting them to discussions. However, this would likely be met with resistance from D66 due to disagreements on climate change, EU integration, and immigration policies.
  5. While Volt would likely be D66’s preferred choice for a fourth coalition partner amid its pro-EU stance, Rutte is unlikely to support this due to VVD’s reluctance to further European integration, support of a stricter asylum policy, and investment in defense instead of healthcare.
  6. Despite his apparent support, multiple extensive parliamentary inquiries are likely to weigh on Rutte in the coming years and potentially cause political instability amid accountability debates. These include the child benefit scandal, damage to houses amid earthquakes from natural gas extraction, and the government’s unpreparedness for the health crisis. As such, even if the VVD is able to reach a coalition agreement, the stability of any government is liable to be tested, with a possible Rutte departure likely to lead to a swift collapse.
  7. If a four-party coalition of VVD, D66, CDA, and a smaller partner fails, then a center-left coalition with VDD’s support becomes a possibility, a development the D66 as a center-progressive party likely prefers, potentially trying to secure the PM role as the largest party. However, the significant differences between the party and the various left-wing parties will make discussions difficult, if irreconcilable. Furthermore, that left-wing parties GL, PvdA, and SP went from a combined 37 seats to 26 would mean a left-wing coalition would require seven parties, which is highly unlikely to reach an agreement.
  8. A coalition including the PVV and FVD is implausible, as most mainstream parties have ruled out working with these parties amid their relatively extreme right-wing and racist, xenophobic, and conspiratorial rhetoric and anti-Islam policies. This rules out a right-wing alliance between VVD, CDA, and PVV, which had a coalition agreement between 2010 and 2012.

 

Despite a possible new fourth party in most likely coalition option, if Rutte remains PM, policy changes are likely to be limited

  1. If Rutte remains Prime Minister, as is most likely at this point, the various four-party coalition outcomes would likely see policies remain largely in line with the previous government, with less focus on fiscal consolidation, given the severe COVID-19-generated impact on the economy. However, D66’s gains could lead to a slight policy shift to the left, including an increased focus on combating climate change, equality of opportunity, and European cooperation. Nonetheless, fiscal responsibility would remain a key pillar of government policy. As none of these parties advocated a rapid reduction of the public deficit, unlike in the aftermath of the 2007-2008 global financial crisis, long-term debt sustainability rather than short-term consolidation is likely. Further, as both VVD and D66 agreed-upon pension policy change, the next government will likely introduce related legislation.
  2. The Netherlands’ place within the EU would likely be raised in such a coalition, with Rutte having led a number of countries opposing a more abundant COVID-19 financial recovery package, while D66 has called for greater cooperation within the bloc. Considering German Chancellor Angela Merkel stepping down in September, the UK’s exit in January, and the mixed response to French President Emmanuel Macron’s attempts to steer the EU, regional leaders are liable to look to Rutte as the ‘senior statesman’ within the bloc, having been in power for over 10 years. As such, should the D66 be able to sway Rutte towards a more cooperative view, the impact on the wider EU could be significant.
  3. Although appearing to be unlikely at this stage, a center-left, non-VVD led coalition, would entail a shift to the center-left on some policies, including climate change and socioeconomic issues. While the competing parties were divided on various issues, sustainable development and climate policies were part of all platforms, albeit at varying levels. As such, any COVID-19 response plan would likely have some leaning towards these considerations.

 

Both right- and left-wing parties likely to seek to attract voters from more centrist parties, as possible coalition will force governing partners to compromise

  1. The right-wing-to-far-right parties are likely to continue to build their electoral prospects in opposition, attempting to attract potential disaffected VVD voters, especially if the government does swing more to the left. Such considerations may influence Rutte to withstand drifting too far to the left, potentially increasing instability in a coalition that could contain progressive or left-wing parties.
  2. If the GL, PvdA, and SP fail to join the new coalition, they could potentially form a left-wing pact in the opposition as a counterweight to a center-right ruling block and a prominent right-wing opposition. As long as socio-cultural issues continue to dominate Dutch politics, left parties, including Volt, PvdD, DENK, and BIJ1, will likely continue to face competition from non-socialism-based parties near-term and remain a marginal force in an ever rightward-shifting political landscape. As with VVD, however, should D66 be deemed to be straying too far to the right or “giving in” to too many right-wing demands, they may similarly lose support to the left.
  3. In the short term, protests against the ongoing regulations are likely, with both right- and left-wing groups participating and political parties taking part in order to solidify support. As such, a repeat of the earlier violence is possible. Additionally, should radical parties continue to support, either overtly or tacitly, various conspiracy theories linked to the vaccine, the risk of further attacks on related sites and personnel can be expected.

Recommendations

  1. Travel to the Netherlands may continue as per government directives concerning the ongoing COVID-19 restrictions.
  2. Those operating or residing in the Netherlands are advised to remain cognizant of the ongoing political developments and the latent risk of civil unrest in the coming months.
  3. For more information on the security situation, please contact [email protected].

New unified interim government to face challenges, security situation in country to remain largely static over coming months – Libya Analysis

Executive Summary

  • A new unified interim government for Libya, known as the Government of National Unity (GNU), was voted in on February 5, approved by the House of Representatives (HoR) on March 10, and officially sworn in on March 16. The GNU’s main prerogative is the organization of national elections in Libya on December 24. Its mandate will end on this date.
  • This development is a strategic gamechanger for the political landscape of Libya as this is the first time that the country has had a unified government since 2014. It represents a major breakthrough in the political deadlock that has characterized Libya over recent years.
  • However, there are several challenges that lie ahead for the GNU, which will hinder its ability to effectively dispense its duties over the coming months. This includes challenges arising from local skepticism surrounding the GNU’s legitimacy, political infighting within and between various state institutions, and the proliferation of local militias across the country.
  • Therefore, while the formation of the GNU will at least partly stabilize the country in the coming months, the security situation of Libya will remain largely static due to the prevalence of militant groups and militias as well as the lack of a unified security apparatus under the GNU’s command.
  • It is advised to defer all travel to Tripoli at this time due to the current political instability and the risk of a broad deterioration of security conditions. Travel to Benghazi, Misrata, and Tobruk should be for essential purposes only, while adhering to all security precautions. Contact us at [email protected] or +44 20-3540-0434 for itinerary and contingency support plans.

Read more about the on-ground implications of this development for Libya

Download full report - New unified interim government to face challenges, security situation in country to remain largely static over coming months - Libya Analysis


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Organized crime to remain primary security threat in Sweden throughout 2021 – Sweden Analysis

EXECUTIVE SUMMARY

  • Gang violence in Sweden continues to proliferate, acting as the primary security threat and undermining the country’s otherwise relatively safe security landscape.
  • Authorities estimate that there are 40 family-based criminal “clans” operating in Sweden’s so-called vulnerable areas, attempting to consolidate their influence by recruiting youths and increasing their targeting of both business and local politics.
  • The government has introduced a number of reforms providing police with more tools in addressing gang violence, including the target of increasing the national police force by 10,000 officers by 2024.
  • Travel to Sweden may continue while practicing standard safety procedures and avoiding nonessential travel to police-designated high-risk areas.

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Current Situation

  • In February 2021, the Swedish Police confirmed that the government is on course to meet its target of adding 10,000 officers to the national police force by 2024. The measure is part of a 34-point program introduced by the government to combat gang violence.
  • An estimated 40 family-based criminal “clans” are operating in Sweden. These clans are increasing their influence in Sweden’s so-called “vulnerable areas,” disadvantaged neighborhoods that are increasingly segregated. Police estimate there are 12,000 people active in such organized criminal groups.
  • Sweden has witnessed a significant increase in gun violence in recent years, with authorities recording a total of 366 shootings in 2020, compared to 334 in 2019.
  • Criminal gangs continue to utilize explosives in order to intimidate rival gangs, as well as extort businesses. In 2020, 107 detonations were recorded, in addition to 89 attempted explosions, compared to 133 detonations and 82 attempted explosions in 2019.

 

Gang members & Police officers numbers Sweden 2021

 

Notable Incidents

  • In August 2020, a twelve-year-old girl was killed after being caught in a crossfire of a gang shootout in Botkyrka, outside of Stockholm, while two teenage boys were tortured, raped, and buried alive in a cemetery in Solna, also outside of Stockholm, in a so-called humiliation crime. The incidents received widespread public attention and incited calls for a government response.
  • Also in August 2020, members of a criminal organization set up roadblocks in the suburbs of Gothenburg in order to catch members of a rival gang, as part of an ongoing gang rivalry between four different criminal organizations operating in the area. The gangs eventually negotiated a truce at a hotel in Gothenburg, without any police interference.

Vulnerable areas 

  • Police have identified 60 vulnerable areas in Sweden, characterized by low socioeconomic development, which makes them prone to influence by organized crime. Of the 60 areas, 22 have been classified as high risk, or so-called “no go zones”, where police are greatly hindered or unable to carry out operations due to high levels of violence and a general reluctance to cooperate in investigations and the judiciary system. The majority of these areas are located in the suburbs of major cities.
  • These areas typically have large immigrant communities, in which unemployment is high, compounded by restrictive labor laws, which make it difficult for migrants to gain employment. Additionally, vulnerable areas have a considerably higher proportion of children, as well as high school dropout rates. As such, youth in these areas are prime targets for criminal organizations, who tend to target young men seeking a sense of belonging and purpose.
  • An estimated 50 percent of all gang members are foreign-born and 85 percent have an immigrant background.
  • According to Deputy Police Chief Mats Lofving, criminal groups are increasing their presence in business and politics in such areas in order to wield more formal influence.

Sweden High Risk Areas scaled

Assessments & Forecast

Criminal groups expected to continue embedding themselves in vulnerable areas, increasing the potential for spillover violence

  1. The increase in criminal-related violence is likely driven by ongoing inter-gang rivalries, as evidenced by the inter-gang-derived checkpoints in Gothenburg.
  2. As evidenced by the increase in shootings in recent years, including in 2020, gang-rivalries have led to the increased influx of illegal arms in Sweden, utilizing arms trafficking routes predominantly from the Balkans. Moreover, despite COVID-19-related border restrictions, authorities seized a record number of firearms and drugs in 2020, with a total of 147 firearms seized in customs compared to 58 in 2019. These figures suggest the actual number of illegal weapons circulating in Sweden is likely much higher.
  3. With this, weapon- and explosive-involved violence is expected to continue in the form of shootings, as well as grenades and explosive attacks. In more extreme cases, and especially during heightened inter-gang tensions, execution-style killings remain possible. As demonstrated by the August 2020 incidents, the threat of spillover violence is high, with shootouts liable to occur in public areas.
  4. Further, based on precedent, criminal gangs are liable to increase extortive tactics, targeting small and medium-sized enterprises (SMEs) in both their strongholds and more central areas in Stockholm and Gothenburg. Extortion is likely to take place in the form of grenade attacks targeting property, as well as potential attacks on vehicles or residences belonging to business owners.
  5. The use of grenades as an extortive tactic further increases the risk to bystanders, as undetonated grenades may be left in public spaces. This was illustrated by the 2018 death of a 60-year-old man in Stockholm, who was killed after picking up a grenade at a metro station mistaking it for a toy.
  6. While the vulnerable areas will remain the primary locations of criminal activity, the continued gang violence risks spilling over to other areas. This is supported by a November 2019 attack in Angelholm, an affluent municipality located north of Helsingborg. Unknown individuals threw an explosive device onto a balcony in a residential building, no injuries were reported.
  7. In addition to violent crime, the presence of criminal organizations increases the likelihood of petty crime, such as pickpocketing and home burglary, both in vulnerable areas, as well as urban centers. That 81,000 home burglaries were reported in 2020, an increase of eight percent from 2019, in contrast to other countries that witnessed a downturn during the COVID-19 pandemic, further supports this.
  8. Further, criminal activity, including armed robberies, has seen an uptick in and around central train stations, as well as main streets in urban areas, particularly during the nighttime hours, increasing the risk to the public. In Gothenburg, multiple armed robberies have been reported in recent weeks, with three teenagers reportedly robbed and beaten near Spantorget by a group of six young men on February 14, for example.
  9. Further, criminal organizations are likely to target police in response to recent security operations, including heightened security measures in vulnerable areas. This is supported by a March 2 investigation, which found that a criminal organization in Uppsala was attempting to carry out an attack against police in the city.

 

Crime In Sweden 2020

 

Government and authority bolstered response to gang violence reflects growing threat and public pressure

  1. Gang violence has become a central political issue in 2020, following a surge in violence and the death of the 12-year-old girl in Botkyrka.
  2. The government, currently led by the left-wing Social Democrats party, has introduced a number of reforms providing police with more tools in addressing gang violence, highlighting the pervasiveness of gang violence. These include permitting police to access encrypted information, juvenile surveillance (i.e. convicted juvenile offenders are to be monitored using ankle bracelets), increased use of camera surveillance, harsher punishments for possession of weapons, and increased resources for schools in vulnerable areas.
  3. Despite these measures, various parties have argued that the government’s response has proven ineffective. The center-right Moderate Party, the second largest in the Riksdag, has called for higher police wages, a paid police education program, doubling the punishment for crimes related to gang violence, removing shorter sentences for individuals aged 18-21, increased surveillance in vulnerable areas, and the introduction of witness protection.
  4. While the far-right Sweden Democrats party has voiced similar criticism of the government’s handling of crime, the party has repeatedly focused on the abovementioned links between organized crime and migration, stating that while the issue is partially due to socioeconomic difficulties, it is also due to sociocultural factors related to Islam. This narrative has been purported by alternative media sources, including Samhallsnytt and Nyheter Idag, both founded by the Sweden Democrats. This is likely to heighten anti-migrant sentiments, with the public support for deportation and stricter migration policies liable to increase.
  5. That multiple police operations targeting organized crime are ongoing reiterates the primacy of the threat posed by these groups. Such operations include the nationwide Operation Rimfrost, which began in 2019 following the public execution of a 15-year-old in Malmo. Local operations have also begun, such as Operation Solvind in Malmo. Further, police announced on March 2 that 58 people are currently being prosecuted for involvement in criminal networks in Uppsala. 17 of the suspects are in police custody. The arrests are part of an ongoing large-scale operation against criminal networks, which began in May 2020. Police have seized 100 kilograms of explosives along with illegal weapons, 17 kilograms of crystal, 200,000 benzodiazepines and amphetamines, cocaine, and doping substances.

 

Stockholm Risk Map

Recommendations

  1. Travel to Sweden may continue while practicing standard safety procedures.
  2. Avoid nonessential travel to the police designated high-risk areas (See map) due to increased criminal activity and the risk posed to the general public and bystanders.
  3. Maintain heightened vigilance in central stations and isolated areas in central Gothenburg, Malmo, and Stockholm during the nighttime hours due to the potential for crime, including muggings and armed robbery.
  4. Maintain vigilance in crowded areas in urban centers due to the potential for petty crime, such as pickpocketing.

Tatmadaw pledges to hold elections in one year as NLD calls on supporters to protest coup; avoid all travel – Myanmar Situation Update

Please be advised:

  • The Myanmar military (Tatmadaw) said it would hold elections at the end of the one-year state of emergency, which was imposed on February 1 after it seized power in a coup during the pre-dawn hours (local time) on the same day.
  • In a statement on behalf of State Counsellor Aung San Suu Kyi, the National League for Democracy (NLD) called on the public not to accept the February 1 coup and protest against the military’s actions.
  • Internet and TV channels continue to remain largely suspended, excluding the military-run Myawady TV, while some service providers have reportedly been able to continue some wireless connection services.
  • The Yangon Youth Network (YYN), Generation Wave, Students and Youth Congress of Burma (SYCB), Youth Response (YR), and other student unions condemned the military action, vowing that young people will stand against it.
  • Bangladesh called for peace and stability in Myanmar, further adding that it expects to move forward with the process of voluntary repatriation of Rohingya Muslim refugees, which officials in Dhaka expect to resume in June.
  • China’s Foreign Ministry stated that it has “noticed” the situation and that it “hopes the various parties in Myanmar will appropriately resolve their differences.”
  • The Association of Southeast Asian Nations (ASEAN) called for dialogue among the parties involved and the “return to normalcy.”
  • Large-scale protests against the Tatmadaw’s actions were recorded on February 1 in Bangkok, Thailand and Tokyo, Japan.

Assessments & Forecast:

Military’s call for elections unlikely to lead to reversion of civilian control    

  1. The recent comments by Suu Kyi and the NLD calling on citizens not to accept the current situation are likely to prolong ongoing military restrictions in the coming term. This is especially given the military’s concerns that protest calls and youth groups organizing online will spark widespread demonstrations. However, the military has seemingly refrained from deploying large numbers of soldiers in public areas, opting for control over communication channels and the defense of primary government installations rather than an on-ground show of force. FORECAST: That said, the Tatmadaw will be on high alert over the coming days and weeks until the situation stabilizes. It will likely continue to preemptively arrest youth leaders, civil society elements, NLD members, journalists, and ethnic group representatives in a bid to head-off nascent signs of unrest. Any large-scale rallies will likely be met with arrest sweeps and, to some extent, a violent crackdown.
  2. FORECAST: While the Tatmadaw has stated its intention to hold elections at the end of the one-year state of emergency, military officials are likely to use the coming period to reinforce its control over the country and its major government institutions. As such, while elections in some form may take place within the stated time frame, the country is unlikely to witness a return to high levels of civil control as has been the case since 2015. The return to military rule may also jeopardize the Nationwide Ceasefire Agreement (NCA), signed between the civilian government and ten ethnic armed organizations (EAOs) in 2015. While this agreement has been largely ineffective in constraining kinetic Tatmadaw-EAO conflicts in the country’s periphery, it was still a symbolic achievement. As such, the developments will exacerbate long-simmering tensions between the Tatmadaw and various EAOs, including the Arakan Army (AA), the Kachin Independence Army (KIA), and other members of the Northern Alliance.
  3. The status of Rohingya Muslim refugees in neighboring Bangladesh is also likely to impact the geopolitical landscape in the aftermath of the events. This is especially relevant given the uncertainties surrounding the UN-backed repatriation process, which is unlikely to witness progress given past military policies towards the group. As such, the developments may dissuade large swaths of already-wary Rohingya from returning to Myanmar. FORECAST: The repatriation issue is expected to be at the forefront of regional and international discussions once the domestic situation becomes clear in the coming days and weeks. However, international pressure is unlikely to dissuade continued military action against the minority group.

Potential Hotspots in Yangon, Myanmar (Burma) - Myanmar Situation Update

Potential Hotspots in Naypyidaw, Myanmar (Burma) - Myanmar Situation Update

China’s relatively neutral response reflects desire for stability to protect its investments, prevent cross-border refugee flows 

  1. Parts of the international community have been quick to condemn the coup, including the US, the UK, and the EU. The developments present a test to these and other countries and multilateral institutions that previously championed Suu Kyi and the country’s democratic transition beginning in 2008. This is especially the case for the Biden administration in Washington, which issued a statement that the US stands “with the people of Myanmar in their aspirations for freedom, democracy, and development.”
  2. FORECAST: The events will test US President Joe Biden’s ability to rally a unified stand against democratic backsliding, which is a central plank of his foreign policy. Over the coming days and weeks, should the Tatmadaw refuse to relent, Washington may impose additional targeted sanctions against top military figures and their business assets. It is also likely to lobby its partners that have vocally decried the events to follow suit. However, the US has already sanctioned top Tatmadaw figures for past actions against the Rohingya, including chief Min Aung Hlaing, who is now effectively the country’s leader. Thus, it is unclear what punitive actions it has at its disposal.
  3. Conversely, China has taken a different tack and is instead calling for a return to stability. This is likely because Beijing’s primary interests lie in a number of economic and infrastructure projects in Myanmar, rather than the make-up of the government. Any immediate pause in these entities is unlikely to concern China, given the deep impact COVID-19 has had on cross-border trade and other facets of the economy. Further, over recent years, China has formed warm relations with both the civilian government and the Tatmadaw, which also informs its relatively neutral stance regarding the developments.
  4. FORECAST: China will continue monitoring the events closely, with its primary focus being on a possible influx of refugees crossing the more than 2,000 km-long border between the two countries. It will also seek to ensure stability in the country to protect its investments, most of which fall under the China-Myanmar Economic Corridor (CMEC). Should Washington and other Western countries sanction the military, China will likely be eager to deepen ties with Naypyidaw to capitalize on the country’s waning favor with those calling for a restoration of the democratically-elected NLD to power.

Recommendations:

  1. Avoid all travel to Myanmar over the coming days due to the extreme risk of civil unrest and political instability.
  2. Those currently residing in Myanmar are advised to shelter-in-place, stock up on adequate supplies of food, water, medicine, and any other essential goods for at least a week, and immediately prepare evacuation procedures to leave the country, given the growing threat of violent civil unrest.
  3. Those operating in Myanmar are advised to consult with us at [email protected]
  4. Avoid all government buildings and protests due to the risks of violence by both anti-government protesters and security forces.