Tag Archives: politics

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.

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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Security situation in J&K to remain volatile for foreseeable future over change in region’s status – India & Pakistan Analysis

Executive Summary

Following the Indian government’s decision to change the status of Jammu & Kashmir, violent protests were recorded in Srinagar and other parts of the region while Pakistan undertook a set of diplomatic measures to protest the developments.

Militant propaganda on the issue will likely see an uptick in the coming days, with an associated risk of sporadic, low-intensity plots. Levels of civil unrest in Kashmir Valley are also expected to rise in tandem.

The situation along the Line of Control and the International Border separating the two countries is likely to remain tense over the coming weeks amid increased ceasefire violations and militant intrusions into Indian territory.

We advise against all travel to Jammu and Kashmir State, with the exception of Jammu and Srinagar cities. Avoid nonessential travel to Jammu and Srinagar at present due to the high tensions over the change in J&K’s status.

Current Situation

On August 5, the Bharatiya Janata Party (BJP)-led government initiated a legislation to change the special status of Jammu and Kashmir (J&K), while a Presidential Order was signed that effectively nullified Article 370 and Article 35A of the Constitution which provided the basis for these status privileges. Communication conduits, including internet access, were restricted over the next few days, resulting in an information blackout in the area.

The Jammu and Kashmir Reorganization Bill was passed in both Upper and Lower Houses of Parliament between August 5-6. Pakistan protested the perceived “illegal move” and downgraded diplomatic ties with India on August 7, while suspending all bilateral trade. It further vowed to seek the intervention of the UN Security Council (UNSC) and take the matter to the International Court of Justice. It also expelled the Indian High Commissioner from Islamabad and closed one corridor of its airspace near its eastern border with India.

Key Constitutional & Legilative Issues in J&K Status Change

Bolstered security protocols have been reported since August 5 in J&K, particularly in Srinagar and the Kashmir Valley region. Violent protests over the changed status of the region have been intermittently recorded, most notably in Srinagar’s Soura area on August 9, when tear gas and pellet guns were allegedly used against approximately 10,000 protesters. Similar violent protests were also reported on August 23.

On August 27, Pakistani security forces reportedly targeted Indian positions in J&K’s Poonch sector, representing the most recent set of ceasefire violations which saw an overall uptick since the end of July.

Assessments & Forecast

Political Aspects of Change in Status of J&K

The BJP-led government’s introduction of the Jammu and Kashmir Reorganization Bill, as well as its cancelation of the applicability of Article 370, is a culmination of longstanding calls for the measure within the party as well as other political groups with similar right-wing nationalist leanings. Its smooth facilitation points to the BJP’s strong floor management in the Upper House of Parliament, where the party is in the minority. The passage of similar legislations prior to the J&K bill, such as the RTI Amendment Bill, the Muslim Women (Protection of Rights on Marriage) Bill, and the National Investigation Agency (NIA) Amendment Bill, served to improve the party’s harmonization with likeminded allies outside of its National Democratic Alliance (NDA). Parties such as the YSR Congress from Andhra Pradesh and the Biju Janata Dal (BJD) appear to be increasingly in step with the BJP’s recent moves, thus bolstering the party’s legislative sway.

The palpable but limited response from opposition parties is likely to due to multiple factors. To begin with, there is a seeming lack of unity among vocally anti-BJP opposition parties on the issue, and this has resulted in multiple, contradicting voices. Examples of this include the Aam Aadmi Party, Bahujan Samaj Party and Telugu Desam Party, which supported the change in J&K’s status, while others such as the Indian National Congress (INC), Dravida Munnetra Kazhagam, and All India Trinamool Congress criticized the move. An effective response has been diminished by post-electoral disarray within some of the major opposition parties, such as the INC. The party has opposed the nature of security measures in the state, with former party president Rahul Gandhi and his colleagues in the opposition being turned back from Srinagar when attempting to visit the state. However, the party’s opposition to the manner in which the status changed occurred, and not against the change itself, will be viewed as politically-motivated and is unlikely to elicit significant support. A similar anti-incumbent stance from the Janata Dal United (JDU) is liable to strain relations between the party and its occasional ally, the BJP, ahead of the 2020 Bihar elections.

FORECAST: Over the coming weeks and months, activist groups and political parties will increasingly seek to challenge the change in the status of J&K through legal means, especially by seeking court orders against bans on their travel to the state. Protests in major cities are liable to continue at their current sporadic levels, largely carried out by left-wing parties such as the Communist Party of India – Marxist Leninist (CPI-ML) as well as Kashmir solidarity campaign lobbies. There continues to be an elevated risk of counter-protests by right-wing nationalist groups and an associated risk of violence. Law enforcement is also liable to be less accommodative of mass protests over the issue, especially if taking place near major government buildings or sensitive installations of this nature. General activism over the issue can be expected to rise closer to the Supreme Court hearing in October on pending petitions regarding Kashmir.

Civil Unrest in J&K

FORECAST: In the immediate term, there is a high threat of civil unrest in the Kashmir Valley, particularly in Srinagar. As restrictions on internet and telecommunications are gradually being rolled back, the capability for mobilization both among separatist parties as well as disaffected locals has increased. As indicated by protests on August 23, security force responses will include stringent dispersals, with a greater likelihood of mass rallies after Friday prayers. At-risk areas in Srinagar include Jamia Masjid and the general Nowhatta area, Rainawari, Bemina, Batamaloo, and particularly Soura, where residents have intermittently mobilized in large numbers in recent weeks.

Jammu also remains a hotspot for inter-religious tensions, as was witnessed earlier this year during riots in February over the suicide vehicle-borne IED attack against a security convoy in Pulwama area of south Kashmir. Areas in the old city such as Gujjar Nagar, Kharika Talav, Jewel Chowk, Bathindi, and Shaheedi Chowk are particularly sensitive, with a propensity for clashes between Hindu and Muslim communities, as well as attacks on Kashmiri-owned businesses. Meanwhile, Ladakh has seen far fewer tensions over the bifurcation, largely due to agreement with the move among its Buddhist-majority demographic. That said, Shiite organizations in Kargil have caused shutdown protests in recent weeks, with the lack of a state legislature in the newly-formed Ladakh to be an added point of contention. While the situation is not as volatile as the unrest in Kashmir Valley, rallies can be expected to continue in Kargil, Drass, and Sankoo, with a risk of forcible police dispersals and clashes.

Potential Hopspots of Unrest in Srinagar

Militancy in Kashmir Valley

Overall, militant activity has been limited in scope since the imposition of high-security measures and restrictions on communications in the state.  FORECAST: However, statements by militant leaders such as Riyaz Naikoo of Hizbul Mujahideen (HM) and Masood Azhar of the Pakistan-based Jaish-e-Mohammad (JeM) presage a growing long-term operational focus on stepping up plots in Kashmir Valley. Such plots will likely be constrained in the immediate term due to the additional troop deployments and generally enhanced security vigilance, but isolated shootings and grenade-lobbing incidents against security forces and government functionaries remain likely over the coming weeks and months.

A more pronounced propaganda push can be expected by the United Jihad Council (UJC), the umbrella group of separatist militant outfits in Kashmir, in order to increase recruitment on the back of widespread local disaffection. This is particularly expected in south Kashmir hotspots such as Pulwama, Anantnag, and Shopian. Transnational jihadist interests such as the al-Qaeda-affiliated Ansar Ghazwatul Hind (AGH) will also seek to tap into discontent among youth sections at this critical juncture. These groups will likely paint the bifurcation of J&K as a result of the Kashmiri political movement’s failure and will present mobilization on sectarian and Islamist lines as an alternative. Given that the government’s decision has polarized the narrative surrounding Kashmir, this tactic is liable to bear fruit for more radical entities like Islamic State Hind Province (ISHP), with recruitment numbers likely to go up. This is likely given that many see jihadist ideals and the separatist militancy as related constituents of broader resistance movements against Delhi’s perceived encroachment.

Inter-State Armed Conflict & Ceasefire Violations

FORECAST: Over the coming weeks, localized escalations will continue along the Line of Control (LoC) and International Border (IB), as has been witnessed in recent weeks. From Pakistan, shallow raids into Indian territory by members of Border Action Teams (BATs), comprising special operations forces and mujahideen, are foreseeable. This was witnessed in a foiled attack by a BAT team in Keran sector of India’s Kupwara District in early August. This is likely driven by a strategy of depleting the morale of Indian security forces by targeting isolated posts, despite the broader positional advantage held by Indian forces in areas north of the Pir Panjal Range like Keran, Tithwal, and Tangdhar.

Such efforts may also aid infiltration attempts into Indian territory by groups such as the Lashkar-e-Taiba (LeT), especially in areas such as Gurez sector inBandipora, Machil sector in Kupwara, and Uri sector in Baramulla. As of writing, sources indicate that the Pakistan Army has deployed over 100 Special Services Group (SSG) commandos along the LoC. Considering BAT teams are generally led by SSG elements, this speaks to the threat of skirmishes in the forward areas over the coming days.

FORECAST: The current pace of ceasefire violations is also likely to be sustained, particularly in areas south of the Pir Panjal range, including the Krishna Ghati sector in Poonch. This will likely be motivated by a desire to inflict casualties on Indian forces through small-sized tactical escalations, while also providing cover fire for infiltrating sub-groups of militants, although infiltrations south of the Pir Panjal remain a rare occurrence. Similar violations are also likely at locations situated north of the Pir Panjal including Baramulla. Escalations will likely be defined by small-arms and mortar fire, as well as the occasional use of anti-tank guided missiles (ATGMs) and artillery guns. These altercations may spike closer to October 31, when J&K will be officially bifurcated into two distinct territories.

In the context of the reported repopulation of militant launchpads and deployment of SSG commandos, there is also a latent possibility of more assertive actions from the Indian military in the near future, especially in order to check the movement of militants across the LoC and IB. This may take the form of cross-border raids on suspected militant launchpads in known hotspots like Leepa Valley. However, such engagements will be limited in scope and carefully calibrated to avoid a major escalation of armed conflict as was witnessed in late February after the airstrikes in Balakot, Pakistan. Specifically, cross-border actions may include raids on launchpads by Ghatak commandos, or crack teams representing each infantry battalion. This is given that these units have a better sense of the terrain and loopholes in Pakistani defenses due to their extended deployment in their respective operational areas. These elements, alongside special forces teams, are also expected to undertake counter-actions against BAT teams in mined areas along the LoC.

Locations of Reported Border Security Incidents Along LOC

Outlook for Diplomatic Actions & Geopolitical Impact of Move

Pakistan’s response is largely representative of its attempts to control the narrative surrounding J&K while showing solidarity with disaffected sections of Kashmiri society. The cutting of diplomatic ties is particularly significant given that the last expulsion of envoys from either nation was in 2002 after a militant attack on the Indian Parliament by Pakistan-based groups. Islamabad has attempted to keep the Kashmir issue alive in multilateral forums like the UN, including by calling for an emergency UN Security Council meeting on August 16 and by petitioning the UN Human Rights Council on August 27.

This is likely an attempt to turn international opinion against India on matters such as alleged abuses by the security forces in Kashmir. This appears to be informed by concerns that its claim on disputed parts of the territory will be even less credible in the event that Delhi’s control on Kashmir is made permanent and separatist voices are rejected. Despite its attempts to draw multilateral diplomatic intervention in the issue, Pakistan’s campaign is unlikely to develop the requisite support within the international community to force India to roll back its current moves on J&K.

Islamabad likely sees the US as a trusted neutral party, especially following Pakistan Prime Minister Imran Khan’s visit to the US in July and President Donald Trump’s offer to intercede in the conflict with India. However, Washington will be wary of overextending itself in this currently tense scenario, as it seeks to balance its relations with both countries. This is particularly given the US’ broader geopolitical considerations, including growing economic engagement with India. Meanwhile, Russia’s August 28 declaration affirming Kashmir to be India’s internal matter may be seen as another blow to Pakistan’s prospects.

FORECAST: Failure to achieve concrete results on the international front may spur greater frustration domestically with the Pakistan Tehreek-e-Insaf (PTI) government, prompting protest campaigns from hardliner religious parties such as the Jamaat-e-Islami (JeI). Opposition groups such as the Pakistan Peoples Party (PPP) and Pakistan Muslim League-Nawaz (PML-N) may also stage protests to undermine Prime Minister Imran Khan’s ability to manage the current conflict. Local perceptions that the UN or the US have failed to intervene substantially may also result in a slightly elevated anti-Western sentiment during such protests.

On the other hand, China is likely to continue backing Pakistan’s claim regarding the perceived illegality of the change in the status of J&K, as suggested by its lobbying in diplomatic circles. This is driven by the fact that 6,000 square km of the broader Kashmir region lies in its territory, with pending disputes existing over several other areas in parts like Ladakh. Beijing’s focus on Kashmir was recently illustrated by joint air force exercises with Pakistan at a location 300 km north of Leh in the Ladakh region. That said, the on-ground impact of China’s support for Pakistan on Kashmir will likely be minimal and is unlikely to affect the security situation. While the UK seemed to back China’s request for meetings on the issue, this does not necessarily reflect its definitive stance on Kashmir and may be viewed as an attempt to placate its sizable domestic constituency of individuals of Pakistani descent. This may also have been a bid to bridge prevailing differences between China and the UK on the ongoing protests in Hong Kong.

Recommendations:

Travel to Delhi and other major Indian cities can continue, while travelers are advised to maintain vigilance for security risks associated with frequent, large demonstrations as well as potential militant threats targeting government buildings, security installations, large crowded public places, or religious sites.

We advise against all travel to Jammu and Kashmir, with the exception of Jammu and Srinagar cities. Avoid all travel to border areas along the LoC due to the risk of conflict and armed exchanges.

Avoid nonessential travel to Jammu and Srinagar at present due to the high tensions over the change in J&K’s status. Travel to Ladakh can continue, while maintaining heightened vigilance in Kargil and reconfirming authorities’ updates on travel conditions.

Avoid the vicinity of all protests over the J&K issue in major cities across India due to the latent risk of police action or counter-protests.

 

BJP, PM Modi elected back to power after May 23 vote count; no imminent threat to political stability – India Analysis

Executive Summary

The National Democratic Alliance returned to power for a second consecutive term after the Bharatiya Janata Party secured the single-party majority.

The conflicting opposition strategies on political alliances appear to have weakened the challenge posed to the BJP-led NDA.

The largely personality-driven political campaigning by the ruling alliance also appears to have played a significant role in shaping voting patterns.

The election results are reflective of a consolidation of the national mandate when compared to the 2014 elections, and is unlikely to result in a significant, negative shift as far as the business and security environments are concerned in the immediate term.

Travel to Delhi and other major Indian cities can continue, while travelers are advised to maintain vigilance for security risks associated with frequent, large demonstrations as well as potential militant threats targeting government buildings, security installations, large crowded public places, or religious sites.

Current Situation

The National Democratic Alliance (NDA) led by the Bharatiya Janata Party (BJP) was voted back into power for a second consecutive five-year term following the announcement of the 2019 general assembly elections held across 543 constituencies across 29 states. According to the Election Commission of India (ECI), the BJP won 303 seats while the NDA secured a total of 353 seats.

The NDA won all seats it contested in the states of Gujarat and Rajasthan, while also securing the majority of seats in Madhya Pradesh and Jharkhand. The BJP also secured a landslide win in the southern state of Karnataka where it secured 25 out of a total of 28 seats. The center-ruling party also made considerable inroads into West Bengal and Odisha, while nevertheless ending up in second place in both states.

The Mahagathbandhan (MGB), or Grand Alliance, formed by the Samajwadi Party (SP), the Bahujan Samaj Party (BSP), and the Rashtriya Lok Dal (RLD), failed to defeat the BJP in the electorally significant state of Uttar Pradesh. The BJP appears to have won in 62 constituencies out of a total of 80 in the state.

The Indian National Congress (INC)-led United Progressive Alliance (UPA) won a total of 90 seats.

Assessments

Conflicting opposition strategies on political alliances weakened challenge to BJP-led NDA

As previously assessed, the BJP victory was a result of a lack of cohesion among the opposition parties, thus splitting anti-government votes in key states. The INC’s failure to unequivocally take on the leadership of an opposition front, such as the Mahagathbandhan, was due to prevailing considerations within the party leadership that it could capitalize on short-term anti-BJP sentiment to take the elections on its own merit. However, the final results indicate that the INC-led UPA has only gained 24 seats in comparison with 2014, which is a less-than-expected tally. Further, it continued to work with traditional regional allies, many of whom did not necessarily have adequate momentum going into these elections.

This is in contrast with the BJP – the party retained key allies in states where disaffection against them was building, such as in Maharashtra, where it restored ties with the Shiv Sena. Similar overtures were made to parties such as the Janata Dal-United (JDU), and coordination of strategy in terms of candidate allocation and seat sharing was also observed. On the other hand, the party retained strategic allies in states where it has not been conventionally strong. This includes the northeastern states, where the BJP-led Northeast Democratic Alliance (NEDA) weathered unrest over the Citizenship Amendment Bill to lead in states like Assam.

Policy issues overtaken by personality-driven campaigns, focus placed on national narratives

Despite the initial traction that policy issues such as demonetization, unemployment, and security gained during the pre-election discourse, the focus of campaigns by both the ruling and opposition sides have been personality-driven. This is not necessarily a novel concept, given that regional politics has long been dominated by strong figures, around whom campaigns are structured. However, the BJP’s utilization of this strategy at the national level, combining social media and targeted campaigns with demographics-rooted nuance, is highly notable and builds on early versions of such an approach from 2014. Given the large numbers of first-time voters, pegged at close to 15 million in the 18-19 age group, the use of candidates with targeted appeal and closely-managed social media campaigns likely factored in voting trends. In many cases, the families of career-politicians were passed over in favor of newer candidates. This was witnessed in Bangalore, where 28-year-old Tejaswi Surya was chosen instead of five-time MP Ananth Kumar’s wife, while actor Sunny Deol was favored over the wife of actor Rajesh Khanna.

Another notable trend that has strengthened since 2014 is the distinction that the electorate had made between national politics and state parties with regard to policy. While the BJP was voted out in legislative elections in Rajasthan, Madhya Pradesh, and Chhattisgarh in late 2018, the party won with a resounding margin in these states during the current parliamentary elections. Voters increasingly isolated factors such as unemployment and agrarian discontent to the perceived incompetence of state BJP governments, while preferring that the party nevertheless hold power at the center. Public sentiment surrounding PM Modi’s administration in these states appears to have concluded that poorly performing BJP state governments did not detract from the ruling party’s broader intent.

Platforms such as national security, which have emerged as a key factor since the Pulwama attack and skirmishes with Pakistan in February, have likely buttressed this trend. Further, opposition parties including the INC were positioned to the electorate as primarily anti-incumbent, but not necessarily presenting a clear policy platform of their own. INC tactics focussed on recent scandals such as the Rafale deal were seen as an extension of this campaign orientation. In contrast, INC policy platforms such as the Nyunatam Aay Yojana (Nyay) scheme, a minimum income guarantee scheme, were late inclusions in the campaigns and thus, did not pay significant electoral dividends.

Immediate-term impact on business interests, security to remain unchanged

In the immediate term, a BJP-led NDA victory will be seen as a generally positive development, given the government’s overall perceived business-friendly image.  This has been indicated by the recent rallying of stock market indices in the weeks prior to the elections, as exit polls indicated a BJP win. The rally was marked by notable but short-term gains on May 23, and the subsequent drops may be reflective of long-term structural economic concerns. However, the continuity associated with the BJP’s win will be seen as providing greater levels of stability in the immediate term. Coordination between the central and state governments, especially in the states where the BJP has significant political sway or a party-led government, can be expected on policy issues. Finally, the BJP’s majority position in the Lok Sabha will also reduce its reliance on coalition partners, granting greater stability to the incoming national government. Overall, the NDA’s return to power is unlikely to result in a significant, negative shift as far as the immediate business and security environment is concerned at the national level.

FORECAST: An examination of the overall vote share of the BJP shows a rise since 2014, as the party is pegged to gain close to 40 percent of the total vote share alone, as opposed to the 31 percent share in 2014. This may be indicative of a more consolidated national mandate when compared to the last elections. However, as witnessed after the 2014 elections, continued polarization within the electorate is liable to manifest in localized socio-political and religious tensions, especially between the BJP and minority communities. Caste and inter-religious conflict may see a rise over the long term, based on the extent to which right-wing groups affiliated with the BJP are emboldened post elections. However, these conflicts will largely be localized, and are not expected to destabilize security at the broader national level. States where the BJP has seen increased vote share gains, such as West Bengal and some constituencies of Kerala, will be particular flashpoints of conflict. The party will seek to displace volatile INC-led state coalition governments, such as in Karnataka. In the immediate term, the BJP win is liable to have an impact on local disaffection in Kashmir, ahead of state elections in Jammu and Kashmir. There is a potential for an increase in militancy and separatist unrest, in reaction to the key gains the BJP made in the state during the general elections.

Recommendations

Travel to Delhi and other major Indian cities can continue, while travelers are advised to maintain vigilance for security risks associated with frequent, large demonstrations as well as potential militant threats targeting government buildings, security installations, large crowded public places, or religious sites.

Those operating or residing in India are advised to maintain general vigilance due to the risk of localized and isolated incidents of unrest in the aftermath of the election results.

Avoid discussing controversial issues regarding the elections with unfamiliar individuals, especially topics related to caste or religion due to the risk of eliciting confrontational behavior.

Avoid the vicinity of party offices and celebratory rallies due to the latent risk of violence. Allot for temporary disruptions to travel during these rallies, especially in major cities.

Remain cognizant of local laws and post-electoral sensitivities especially when posting on social media, due to the risk of legal action or state prosecution as a response to controversial content.

Widespread unrest reflects discontent with Rouhani’s economic policies, money spent in regional conflict; protests likely to subside – Iran Analysis

Current Situation

A reported leak of President Rouhani’s proposed government budget last month has triggered a wave of nationwide unrest in Iran which erupted on December 28. The budget leak exposed parts that were generally kept secret, and Iranians discovered that billions of USD were going to the military, hardline organizations, the Islamic Revolutionary Guard Corps (IRGC), and religious foundations. At the same time, the budget proposed an end to millions in subsidized and an increase in fuel prices.

Following the leaked budget, Iranians vented their frustration against the money going to the military and clerical establishment via a popular messaging app in Iran used by an estimated half of the country’s 80 million inhabitants.

On December 28, 2017, the hardliners, led by the prominent Ahmad Alamolhoda, started a demonstration in Mashhad, where hundreds shouted slogans against the weak economy and shouted “Death to the Dictator,” and “Death to Rouhani.” Videos of the event spread and triggered protests nationwide in the days that followed, despite attempts by authorities to block access to popular social media and messaging services used to organize and publicize the protests.

On January 2, Supreme Leader Ayatollah Ali Khamenei responded to the unrest stating that the blamed “outside enemies” for the week’s events, without specifying who. President Rouhani, meanwhile, appealed for calm and maintained that the protesters “had the right to be heard.”

At the time of writing, the unrest has reportedly led to at least 450 arrests and 21 deaths.

Widespread unrest reflects discontent with Rouhani’s economic policies, money spent in regional conflict; protests likely to subside - Iran Analysis | MAX Security

 Widespread unrest reflects discontent with Rouhani’s economic policies, money spent in regional conflict; protests likely to subside - Iran Analysis | MAX Security

Assessments & Forecast

The unrest recorded over the past week comes amidst small-scale protests witnessed across Iran over the past months surrounding topics of economy and employment. These include demonstrations of hundreds of oil workers and truck drivers protesting late payment of wages, workers at a large sugar cane plantation and mill complex, bus drivers, teachers, tractor workers in Tabriz against their factory’s closure, Tehran tyre workers at bonuses being delayed, and victims of failed financial institutions across the country. In this context, the leaked budget served as a catalyst for these latest protests, and underscores the frustration and anger among large segments of the population over social-economic problems among the disaffected young people in peripheral, rural areas who have largely driven the demonstrations, in stark contrast to the protests witnessed in 2009 during the so-called “Green Revolution”, which were largely led by the urban middle class.

While the unrest began over economic grievances, it has since taken on a political dimension as demonstrators have voiced anger over corruption and the perceived authoritarian political system as a whole. This is reflected particularly in the anger over Iran’s regional policies and how it spends billions of USD to extend its influence abroad, including in Iraq, Syria, and Lebanon, despite the high unemployment and economic woes at home, as highlighted by the slogans of “Let go of Syria, think about us” and “I give my life for Iran, not Gaza, not Lebanon”. Moreover, what makes these protests exceptionally notable is the extent of the radical and sometimes slogans used, as some have called for the death of the president and even unprecedented calls of “Death to Khamenei” and calling for the Supreme Leader to step down and demanding the exit of clerics from politics.

FORECAST: We assess that it’s unlikely that the protest movement will survive in the long-term and lead to a collapse of the system for several reasons. First, the fact that it has taken on a political dimension and the use of political slogans has been exploited by the authorities as a justification to crack down on protesters as “anti-social” and violent elements. Moreover, this government approach has been aided by the support protesters have received from abroad, particularly from the US, Israel, and Saudi Arabia. The Iranian authorities already perceive, or at the very least vocalize the perception that the unrest has been manufactured and manipulated by foreign governments. That these foreign governments are openly and publicly supporting the protests will thus only further serve to strengthen this perception and allow the government to increase its crackdowns under the guise of protecting Iran’s sovereignty from the interference of foreign states. With this in mind, should the Iranian authorities decide to implement their forces fully, including the IRGC and the Basij, in repressing the protests, it’s highly likely the demonstrations will be swiftly minimized.

Second, unlike the “Green Revolution” in 2009, these latest protests lack leadership, alternative, and a shared vision. Protesters are united in what they don’t want, rather than what they want, as indicated by the often contradictory slogans. Some want democracy, yet more nostalgic ones praise the former monarchy and the Shah. Demonstrators have called for the death of moderate Rouhani, yet also called for an end to the clerical establishment. Others still are invoking nationalistic ideals and racial slogans, such as “We are Aryans, we don’t worship Arabs.” Overall, given this lack of leadership and organization, the protests are likely to either peter out over time, particularly if the government shows a willingness to make concessions and reforms or will be quelled by an increased crackdown.

That said, we assess that the heightened unrest will continue for longer in the country’s peripheral regions where both civil unrest and militancy stemming from sectarian tensions have long been an issue. These include the southeastern Sistan-Baluchistan Province, a predominantly Arab-populated southwestern Iran, including primarily Khuzestan Province, and the majority-Kurdish-populated northwestern Iranian provinces of Kordestan, West Azerbaijan, Kermanshah, and Ilam. Over the past week, we have already witnessed a higher level of unrest and arrests in these areas, as local activists and militant groups are likely seeking to exploit the nationwide discontent to further their own separatist ambitions. Furthermore, the authorities have a history of severely cracking down on these regions, thus making it more likely for escalations between security forces and locals. Over the coming weeks and months, such escalation will likely lock these regions in a vicious cycle of arrests, which subsequently provoke the locals to further unrest and militant attacks, prompting a security crackdown in return.

Recommendations

Business travel to Tehran, Esfahan and other major cities may continue at this time while remaining cognizant of ongoing protests and avoiding the vicinity of such events.

Western nationals are advised to remain cognizant to prevailing negative sentiment toward the United States and other North American and Western European countries.

We advise against all travel to outlying border areas with Pakistan, Turkmenistan, Iraq, Azerbaijan, and Armenia due to ongoing militant activity.

Those traveling to Iran should anticipate prolonged questioning by customs officials. Refrain from traveling with sophisticated cameras or other features affiliated with journalists. Cooperate with all security officials and respond to questioning in a respectable and calm manner.

Refrain from discussing the current political situation, Iran’s nuclear program, or tensions with the United States and Israel with local residents as a basic precaution. Be advised that authorities may monitor communications from hotels and other facilities frequented by foreigners, while internet access may be limited.

In the event that embassy services are required, it is advised to check the operational status of pertinent embassies and consulates. Consular services for US citizens are provided through the auspices of the Swiss Embassy in Tehran.