SYRIA
In a major development in the cleanup operation against ISIS in Deir Ezzor province, Syrian Democratic Forces fighters have reportedly broken through ISIS defenses into Hajin, the largest Syrian town still under ISIS control. The SDF now controls part of the town, though you can probably expect a major ISIS counterattack to be forthcoming. The United Nations says it’s receiving reports of ISIS executing people accused of aiding the SDF, and said there are about 7000 civilians still at risk in the pocket of territory ISIS controls.
YEMEN
Yemeni peace talks began on Thursday in Sweden, and while there’s little reason to expect a major breakthrough at this point, the Houthis and the Yemeni government were able to quickly agree on a prisoner exchange involving at least 5000 people. UN Yemen envoy Martin Griffiths is focusing on relatively minor steps to build confidence, including the prisoner swap, the internationalization of Hudaydah’s seaport, and possibly the reopening of Sanaa’s international airport. The best case scenario for this round of talks would be a general, UN-backed ceasefire, but both the Houthis and the Saudi-led coalition have put several conditions on such a thing. One party to the conflict–your view on just how big a part will probably correspond with your desire to bomb Tehran–is Iran, but the Iranians won’t be participating in peace talks. The Trump administration has made sure they’re being excluded.
The situation in Yemen, meanwhile, continues to worsen. The World Food Program has declared a famine in part of the area controlled by the Houthis, covering eight cities/towns and some 73,000 people.
TURKEY
Istanbul’s chief prosecutor issued arrest warrants on Wednesday for Ahmad al-Assiri and Saud el-Qahtani, the two close aides to Saudi Crown Prince Mohammad bin Salman who are believed to have led the operation to murder journalist Jamal Khashoggi. Both have allegedly been stripped of their responsibilities in the Saudi government, but it’s not clear they’ve actually been punished (Qahtani, for example, may simply have been shuffled into another job). The Turks issued the warrants after concluding that neither man is going to actually be punished by the Saudi government.
There’s an old saying that goes “wish in one hand, shit in the other, and see which comes first.” It applies here.
IRAQ
A senior commander of Muqtada al-Sadr’s militia was shot and killed by an unknown assailant in northern Baghdad on Tuesday.
LEBANON
The Israeli military is continuing its operation to destroy tunnels it claims Hezbollah has dug from southern Lebanon into northern Israel, and now it appears to be giving the Lebanese government and the UN mission in southern Lebanon an ultimatum. The Israelis are demanding that Beirut and the UN destroy the alleged tunnels from the Lebanese side or else, maybe, they’ll do it. Israeli officials say they’ve shown the tunnels to the UN, though Lebanese parliament speaker Nabih Berri said on Wednesday that they’ve offered no proof that the tunnels exist.
ISRAEL-PALESTINE
The UN General Assembly handed Israel and the US an embarrassment on Thursday, failing to pass a resolution condemning Hamas for its rocket attacks against Israeli targets. The measure won a plurality of UNGA votes, but failed to clear the two-thirds hurdle that the body set up for it in an earlier vote over US objections. Meaning that the US actually lost two votes on the same resolution. Whatever else the vote means, it represents a parting “fuck you” to US ambassador Nikki Haley, who might have gotten a better outcome here had she not spent her entire two-year tenure at the UN trashing the institution and most of its members.
Benjamin Netanyahu is settling into his role as defense minister, and it’s perhaps no coincidence that the Israeli military began that Hezbollah tunnel operation under his direction. Indeed, anything the Israeli military does while he’s in charge is going to need to be extra-scrutinized for its political motives:
Netanyahu is only eight months away from surpassing David Ben-Gurion’s record as Israel’s longest-serving prime minister. In the nearly thirteen years in total during which he has led Israel, however, he never showed much inclination for adding the defense brief to his portfolio. Until now.
It shouldn’t be a surprise that the role suddenly appeals. It allows the embattled prime minister to pose alongside the most popular figures in Israeli public life. Netanyahu has always wanted to convert Israel’s parliamentary system to a more presidential-style administration. This is his chance to construct an image of himself as commander in chief.
GULF STATES
Writer David Klion argues that the Jamal Khashoggi murder should have, but hasn’t opened up a conversation about the role that foreign money plays in shaping public discussions in Washington:
The wave of detailed coverage Saudi influence has received in mainstream outlets like the Post and the New York Times is insufficient not only because it seems designed to go away, but because it doesn’t tell anything close to the full story. Saudi Arabia is only the largest and most prominent of the Gulf monarchies, and it has plenty of ways to make its will felt through neighbors and allies like the UAE, Kuwait, Qatar, and Israel. The incident at AJAM was, if anything, too obvious an example. The Center for American Progress, the most powerful Democratic Party-aligned think tank, still lists a donation of at least half a million dollars from the embassy of the UAE on its website. The UAE’s hedonistic ambassador, Yousef Al Otaiba, continues to be one of the most influential players in Washington, socializing with everyone from Jared Kushner to General David Petraeus and at least until recently championing MBS as a reformer. Otaiba has played an active role in steering analysis from DC think tanks, including the Middle East Institute (which received roughly $20 million from the UAE over the course of 2016 and 2017), the Atlantic Council, and the Center for a New American Security.
The problem extends well beyond the Middle East; if the past few years have taught us anything, it’s that foreign governments ranging from China to Russia to Turkey see Washington as an open-air market for purchasing influence. Anyone who has followed the details of the Mueller investigation knows that Russia is just one country among many that laundered money through corrupt K Street lobbyists like Paul Manafort with impunity, at least until the 2016 election made it impossible to ignore. And while Mueller may claim a few scalps, most of the people engaged in Manafort’s line of work will live to shill another day. None of the post-Khashoggi reckoning has suggested any deep commitment to addressing the corrupting effects of foreign money on the national political debate. Any soul-searching has been superficial at best.
SAUDI ARABIA
Many senators have expressed a desire to do something next week to “punish” Saudi Arabia over Khashoggi, but they can’t seem to agree on how to go about it. The Senate will probably vote next week on a War Powers resolution that would end US involvement in Yemen if it had any chance of passing the House and/or being signed by Donald Trump, but it doesn’t so the vote would be purely symbolic. Even at that, it’s not clear that the measure can pass, because several members of the World’s Worst Legislative Body™ believe that just because the Saudis killed a well-known, urbane Arab that doesn’t mean the US should force them to stop killing all the deeply impoverished Arabs in Yemen. More likely the Senate will pass a strongly worded resolution criticizing the Saudis, or in other words, it will do nothing.
Hey, if you’re still trying to figure out why Trump loves the Saudis so much, this might help:
Lobbyists representing the Saudi government reserved blocks of rooms at President Trump’s Washington, D.C., hotel within a month of Trump’s election in 2016 — paying for an estimated 500 nights at the luxury hotel in just three months, according to organizers of the trips and documents obtained by The Washington Post.
At the time, these lobbyists were reserving large numbers of D.C.-area hotel rooms as part of an unorthodox campaign that offered U.S. military veterans a free trip to Washington — then sent them to Capitol Hill to lobby against a law the Saudis opposed, according to veterans and organizers.
At first, lobbyists for the Saudis put the veterans up in Northern Virginia. Then, in December 2016, they switched most of their business to the Trump International Hotel in downtown Washington. In all, the lobbyists spent more than $270,000 to house six groups of visiting veterans at the Trump hotel, which Trump still owns.
As the Khashoggi killing strains Turkish-Saudi ties there is a growing risk that the United States will be forced to choose between its two biggest Middle Eastern allies outside of Israel. I argue at LobeLog that the Trump administration has nobody to blame for this predicament but itself:
The Iran nuclear deal (Joint Comprehensive Plan of Action or JCPOA) was certainly not a panacea—though the Trump administration’s efforts to sabotage it prevent any reckoning of the benefits it might have ultimately generated. But the deal at least offered the potential for the United States to rebalance its role in the Middle East and to bring Iran into a regional diplomatic framework if not to totally rebuild Washington’s former regional alliance structure. Instead, the Trump administration has eschewed diplomacy and given the Saudis—and especially Mohammad bin Salman—carte blanche to run roughshod over the region, as the people of Yemen can attest. That indulgence is what led MbS to feel confident enough to order Khashoggi’s murder in the first place, leading to the diplomatic quandary Washington now faces.
IRAN
A suicide bombing in the city of Chabahar, Iran’s most important port, killed at least two police officers on Thursday. Iranian officials blamed the attack on Sunni insurgents, who are active in Sistan-Baluchistan province.
Iranian officials are touting the development of the European “special purpose vehicle” that’s intended to allow Iran to continue selling oil to European countries despite US sanctions. Don’t look now, but one aspect of that SPV may be dropping the dollar as the currency of bilateral commerce:
Ali Akbar Salehi, head of Iran’s Atomic Energy Organization and one of the top nuclear negotiators of the 2015 Joint Comprehensive Plan of Action (JCPOA) said Dec. 6 at the sidelines of a conference in Iran, “For some time, the Europeans have been committed to helping Iran compensate for the damages it has incurred as a result of the JCPOA and to create a mechanism so that Iran can benefit from the economic conditions of the JCPOA.”
“One of the plans recommended is an SPV [Special Purpose Vehicle], which, according to European officials, is being finalized,” Salehi said. “Given that creating a consensus between 27 members of the European Union is not an easy task, the Europeans have stated that they will put all of their efforts into completing this.” He added, “Based on the promises the Europeans have given, by the end of the current year, the European package will be operational.”
Salehi said that one of the ideas being discussed is for Europe to buy all of its oil in Euros rather than dollars. According to Salehi, Europe spends 300 billion euros to buy oil and was purchasing 85% of this figure in dollars.
The Foreign Exchanges Companion 