Tuesday, December 5
SHADOW WAR
Yemen conflict intensifies; long-time strongman dead
The UN has called for Yemen’s warring parties to observe a “humanitarian pause” from 0700 GMT today after a week of intense fighting killed more than 100.
Among the dead is former President Ali Abdullah Saleh, who ruled Yemen for 34 years before being forced to step down by protestors in 2011. A recent ally of the Iranian-linked Houthi rebels, it is this very group that’s reported to have killed Saleh yesterday. The assassination appears to be in response to the strongman’s overtures towards a deal with Saudi Arabia, resulting in the collapse of their coalition.
Riyadh is expected to react forcefully. Crown Prince Mohammad bin Salman, who launched the Yemen conflict in 2015, is preparing to ascend to the throne; a victory in Yemen will solidify his position as a trusted ruler. The Houthis have also shown themselves as a force to be reckoned with, firing a ballistic missile at Riyadh last month (which may or may not have been shot down by Saudi defence systems) and claiming to have fired on a $20 billion under-construction nuclear plant in Abu Dhabi on Sunday (this remains unverified).
Expect the Yemeni conflict to intensify in the coming months as the Saudi-led coalition scrambles to push back against Iranian influence. Regional tensions might lead to flare-ups in other proxy battlegrounds, such as Syria, Iraq or Lebanon.
FAMILY DIS-REUNION
GCC states hold first meeting since Qatar crisis
Today, leaders from the six member states of the Gulf Cooperation Council will gather in Kuwait for their annual summit. If Qatar attends, today’s meeting will be just the second time in six months that GCC representatives have agreed to be in the same room.
Regardless, the odds of any resolution to the crisis remain slim. Bahrain, which has recently escalated tension by questioning Qatari ownership of the long-disputed Hawar Islands, has vowed to boycott the summit if Doha attends.
Although the initial shock of the crisis slowed Qatari economic growth last quarter to a measly 0.6%, the economy has slowly begun to recover. The emirate has successfully rerouted trade and financial corridors through Turkey, Iran and Oman, circumventing much of the Saudi-led blockade and giving Doha less reason to submit to Riyadh’s demands/
Although Qatar will likely accept Kuwait’s invitation to the summit, expect a Bahraini boycott and little productive conversation between the opposing sides. The continued breakdown of the GCC is likely only to benefit Riyadh’s enemies as it scrambles to marshal an anti-Iranian coalition.
Delve deeper: Qatar’s Islamist ties targeted by Saudi-led demands
ARMING THE TAXMAN
EU states meet to blacklist foreign tax havens
Finance ministers from all 28 EU states meet today in Brussels to finalise a blacklist of countries found to engage in unfair and opaque tax practices.
Momentum for a crackdown on tax avoidance has built since last year’s leak of the Panama Papers; in January, 92 countries received letters from the EU, which demanded they reform tax measures or face sanction. With last month’s release of the Paradise Papers, the list has been cut down to 20 possible countries.
Still, the need for unanimous consent, including from Ireland—a tax haven itself—could lead to some of the most effective countermeasures, like financial tariffs, being left to the discretion of member states. This would allow blacklisted states to conduct business with non-compliant EU members, creating a financial backdoor and weakening the sanctions regime.
Expect the EU to levy only patchwork sanctions against at least a dozen of the worst offenders, like Panama or the Isle of Man. Regardless, the move presages a growing global consensus on cracking down on international tax avoidance.
POKER FACE
US and NATO foreign ministers to mull European security
Today, US Secretary of State Rex Tillerson will attend the NATO foreign ministers meeting in Brussels to discuss how the alliance can enhance transatlantic cooperation. In focus is the North Korea threat and the Russian intervention in Ukraine. However, speculation over the future of Mr Tillerson’s position may undermine his authority.
North Korea has successfully tested an intercontinental ballistic missile capable of hitting the US mainland and European capitals. Regardless, any talk of upgrading Europe’s missile defence shield would breach non-proliferation deals with Russia. On the Ukrainian front, Tillerson has reaffirmed America’s commitment to European security, affirming the need for a totally sovereign Kiev.
While cooperation here is expected, US-NATO relations have been strained over President Trump’s criticism of members failing to meet the defence spending target of 2% of GDP. Regardless, Europe’s recent capitulation to President Trump’s demand should appease Washington and work to promote a more constructive transatlantic dialogue in the future.
HAPPENING ELSEWHERE…
Arab League meets to confront Trump on Jerusalem declaration
A busy week for Arab leaders. Already preoccupied with the Qatar spat, Yemen flare up and Syria talks, Arab representatives will convene in Cairo today for an emergency Arab League sitting to discuss President Trump’s impending recognition of Jerusalem as Israel’s capital. Senior Palestinian figures say the move would result in the “complete destruction of the peace process” at a time when the two rival Palestinian factions, Hamas and Fatah, appear to have reconciled their differences.