Around the World with Academy Securities

Around the World with Academy Securities

May 22, 2024

In this month’s edition of Around the World with Academy Securities, our Geopolitical Intelligence Group (GIG) focuses on the following geopolitical tensions that we are monitoring:

  1. Israel Commences Operations in Rafah
  2. Russian Forces Advance on Kharkiv
  3. Xi Meets with Putin in China
  4. U.S. Reduces Number of Troops in Sahel Region

We kick off this month’s report with an update on Israeli operations in Rafah that are moving into their third week. Netanyahu and the IDF have announced their intention to “finish the job” of eliminating Hamas and its remaining combat brigades and key leadership. However, even with the U.S. aid pier officially open and being used to offload humanitarian assistance for the civilians in Gaza, international pressure will continue to build on Netanyahu to complete major combat operations in Rafah as quickly as possible. Next, we provide an update on Russia’s advance towards Kharkiv. While the Ukrainians continue to put up a good fight while they wait for the arrival of the new weapons from the recently passed U.S. aid package, Russia’s goal is to expand their buffer zone and it still has the momentum as Ukrainian forces remain dug into defensive positions. We also report on China and President Xi’s meetings in Europe and with President Putin in Beijing this month. Xi’s mission is to try to reinforce his relationships in Europe at a time when he is dealing with problems in the Chinese economy, while Putin seeks to build upon his partnership with Xi. Finally, we revisit Africa and the shrinking U.S. footprint in the Sahel region. The military junta in Niger recently ordered all U.S. troops to withdraw from the country, which the U.S. will complete by the middle of September. In addition, while discussions are ongoing, the U.S. will also be relocating its troops based in Chad. These developments will impact U.S. counter-terrorism operations in the region, and the concern is that Russian Wagner Group mercenaries will fill the security void.

Please reach out to your Academy coverage officer with any questions and we would be happy to engage.

Front and Center: Israel Commences Operations in Rafah

As we have addressed in our previous ATWs, SITREPs, and podcasts, the war in Gaza is now focused on Rafah and the expanding Israeli operations in the city. Netanyahu and the IDF are determined to “finish the job” and see destroying the remaining Hamas combat brigades and leadership there as critical to accomplishing that mission. However, it will be very difficult (if not impossible) to eradicate all of the remaining Hamas fighters. Even after major combat operations wind down in Rafah in the coming weeks/months, the insurgency will continue as pockets of resistance continue to pop up in areas already cleared by the IDF. While key U.S. representatives like the CIA Director continue to push for a hostage deal to pause the fighting, that window may be closing for the moment as the IDF expands the Rafah operation. Key questions still remain as to what the post-war period will look like in Gaza and the status of the negotiations to establish diplomatic relations between Saudi Arabia and Israel, but as we enter this final major phase of the war, we expect further details to emerge. In addition, the opening of the U.S. aid pier will greatly facilitate the flow of humanitarian assistance into Gaza, but the crisis will continue for the civilians there until there is a long-term end to the fighting.

“The talks surrounding a strategic deal between the U.S. and Saudi Arabia follow the path of the Abraham Accords. They are still being discussed even though the sides remain far apart. It is made up of three principles: the first is a defense pact between the U.S. and Saudi Arabia, the second normalizes relations between Saudi Arabia and Israel, and the third is the achievement of a Palestinian state. Saudi Arabia wants U.S. security, economic, and technology guarantees, and U.S. support in developing a civil nuclear program. Saudi Arabia sees no opportunity for a deal while Israel is fighting in Gaza, and Israel opposes a Palestinian state that the Saudis back. The U.S. agreement to defend and provide advanced weapons to the Saudis hinges on putting a stop to China’s influence in the kingdom. Key to the Saudis’ interest in a deal is their diversification objectives set forth in Vision 2030 that makes Riyadh a Middle East economic hub that is no longer solely dependent on oil. Crown Prince Mohammed bin Salman sees a relationship with Israel as a path to achieving his economic end-state. Peace in the Middle East is a requirement to a deal and is why the two sides remain far apart for now.” – General Robert Walsh

“The military destruction of Hamas remains an elusive and exceedingly challenging target. By framing the entire operation through that lens, Israeli political leadership puts themselves in a bind. As we’ve discussed many times, it may have been a good impulse to immediately seek the destruction of Hamas before seeking a broader peace after the initial attack. However, that window has now closed, suggesting a different military approach. Now, the preservation of the relationships built among the Saudis, Emiratis, Israelis, Jordanians, Egyptians, and others seems like the most important task. The Hamas charter has a core element that vows retaliation against Middle Eastern states that coordinate with Israel. Every party in the region (including the Arab States and the Palestinians themselves) are threatened by Hamas in one way or another. The only approach that helps Hamas is an indiscriminate military campaign.” – General Michael Groen

“We are starting to see a public fraying of the relationship between the IDF/Netanyahu and his right wing coalition. The Chief of the IDF has been quoted as criticizing the Israeli government’s failure to plan for ‘the day after’ the end of hostilities. It is yet to be seen what the impact on operations and the Israeli government will be. A complex solution is for the Israelis to compromise on their maximalist conditions, but this is something that Netanyahu is unwilling to do at this time. The military campaign and lack of a political solution keep forward movement focused on broader relationships with the KSA and others behind closed doors, but I’m sure those conversations will continue. Regarding the operations, I’ll have to cite some of what General Petraeus spoke about regarding the lack of a ‘hold’ strategy. While Gaza is not Iraq, we’re seeing the ability of Hamas to reconstitute because there is no ‘hold behind the clear’ and much like squeezing a balloon, Hamas is shifting to other regions of Gaza under less pressure and resurfacing. As the IDF Commander has stated, as long as there is no political solution, the IDF will have to launch multiple campaigns to dismantle Hamas infrastructure.” – General Robert Ashley

“100% concur with General Ashley’s reference to Petraeus. It is impossible to win ‘whack a mole.’ Gaza is certainly different than Iraq, but there is no ability to defeat or to destroy Hamas without a ‘clear and hold’ concept. This of course is not a quick way to approach the problem set and it is very manpower intensive to ‘hold,’ which may well be a bridge too far for Israel given their northern flank challenges. I also concur that it is vital for Israel to maintain the current Saudi, Egyptian, and Jordanian relationships.” – General Mastin Robeson

“Israel has no desire to provide the necessary peacekeeping force that facilitates a rebuild of Gaza. Israel will not embrace the ‘if you break it, you own it’ scenario that by definition would require some occupation in Gaza. However, they have, with the construction of the Netzarim Corridor running east to west cutting Gaza in half, created an avenue for no-notice and facilitated tactical re-entry into Gaza. If Israeli intelligence indicates a resurgent Hamas, the IDF will not have to ‘fight’ its way into Gaza. Additionally, the corridor is probably a first step in creating a grid system for enhanced targeting. Israel has no desire to own Gaza, but it is also not abandoning it.

Relatedly, the death of Iranian President Raisi does not alter Israel’s strategy with respect to its ongoing operations in Gaza or its larger strategic efforts of normalization with other regional powers. Raisi’s replacement, Vice President Mohammad Mokhber, was announced simultaneously with the confirmation of Raisi’s death. Although there may be reason to expect some internal chaos with the death of the likely replacement for the aging Supreme Leader Khamenei, expect little difference in Iran’s external efforts to maintain its support of Russia’s war efforts or its burgeoning relationship with China.” – General Spider Marks

Russian Forces Advance on Kharkiv

As we have addressed in our previous ATWs, the war in Ukraine continues, but the hope now is that the delivery of additional weapons will accelerate following the passing of the $60B U.S. aid package to Ukraine. However, the concern is that the momentum (at the current time) is on the side of Russia as its forces advance on Kharkiv. The Russian forces were prevented from taking this key city early in the war, but this time, its forces are taking the initiative to claim as much territory as possible before the promised U.S. re-supply of weapons arrives. In fact, last week, Ukraine began to re-position some of its forces away from Lukyantsi and Vovchansk to avoid significant casualties. As Russia maintains the advantage, the additional weapons will help, especially as it relates to missile systems like the Patriot which can defend major cities like Kharkiv as well as key infrastructure and power generation facilities. Ukraine continues to fight and has successfully attacked oil storage facilities deep inside of Russia, but it is critical that their forces continue to focus on defending the territory that it holds and not cede additional territory to the Russian forces.

“Russia’s military has opened a new smaller northern front that threatens Kharkiv in what appears to be a way to pull the outmanned Ukrainian forces away from the main effort in the eastern Donbas region. It is also a way to gain leverage for any potential ceasefire negotiations. As the Biden administration slowly provides increased weapons capability, Ukraine will pressure the U.S. to allow the weapons to be used inside of Russia which the U.S. has thus far restricted. This would allow Ukraine to take actions and slow the Russian offensive that is making territorial gains. The recently approved U.S. $60B in defense support that was delayed since September cannot come fast enough. In addition to the U.S. funded support, the Europeans earlier agreed to provide $54B and the EU also plans to generate an additional $3.5B from frozen Russian assets. U.S. Secretary of State Blinken recently visited Ukraine during this challenging time to demonstrate commitment that the weapons are coming, and they will make a difference. Much of it includes badly needed artillery rounds and air defense capabilities. Additionally, Ukraine (after an emotional debate), agreed to lower the conscription age and increase the force generation that is badly needed.” – General Robert Walsh

“The cabinet shuffling of Russian leadership tells a great deal. Russia recognizes that this is a system vs. system conflict…not a war of weapons or individuals. Russia’s recognition and reconfiguration of its capabilities to choke-out Ukraine’s systemic capabilities is obvious. The offensives are real, with the objective of holding ever greater pieces of the industrial heartland of Ukraine. Russia may not continue its costly advance in the near-term, but they are trying to communicate an inevitability that degrades the West’s willingness to sacrifice for a better settlement in Ukraine. The political decisions to restrict Ukraine’s long-range weapons supply and limit potential targets in Russia demonstrate a ‘systemic’ weakness that the Russians will exploit. It demonstrates weakness where a demonstration of cohesion and strength is necessary.” – General Michael Groen

“The pace of Russian operations has slowed. Putin is still playing the long game where he sees time on his side. Morale is suffering across the Ukrainian defense forces and fatigue is setting in, but they’ve got nowhere to go and remain resilient. The flow of supplies from the West will have a modest impact, but Ukraine can only fight a mobile defense for the remainder of this fighting season. What I continue to look for is NATO leaning forward and reconsidering the weapons’ limitations and perhaps putting NATO troops on the ground in some form of a training mission. However, such a move would bring more NATO assets into play to defend those training teams. Finally, the U.S. elections are just around the corner and Putin is watching the U.S. closely. For NATO there needs to be a clear demonstration that they are in this for the long haul even if the U.S. substantially reduces its commitment next year.” – General Robert Ashley

“Putin has stated his desire to achieve a ‘buffer zone’ in Ukraine. Connecting Kharkiv with the Donbas and holding onto it gives him that strategic victory. It will demand much of the Russian forces. They have demonstrated the inability to conduct operational maneuver to dislodge the Ukrainians, and their offensive efforts will culminate. It is precisely at that point that Russian forces are the most vulnerable. Ukraine must exploit the inevitable Russian loss of momentum. If Russian forces falter, Putin may be prepared to discuss a negotiated ceasefire. There is little reason to believe that Russia can create sufficient disorder to open a corridor to Kyiv. That simply will not happen. Ukraine must be ready to hold and force Russia to decide if a continuation of a stalled offensive is worth the cost in manpower and resources. North Korea is an unreliable partner in Russia’s insatiable appetite for weaponry and ammunition, and increasingly Beijing is suspect of that relationship of convenience.” – General Spider Marks

Xi Meets with Putin in China

President Xi met with President Putin in Beijing last week and while the term “no-limits” partnership was not mentioned specifically this time around, it is clear that the relationship remains strong between the two leaders. While it still does not appear that Xi will provide weapons to Putin for use in the war in Ukraine, the “strategic ambiguity” of the relationship continues to be applied to keep the U.S. and NATO guessing when it comes to how much support China can or will provide to Russia. The trading relationship between the nations is strong with $240B in trade last year, and Russia continues to rely on China to buy significant quantities of oil and gas, a major source of revenue at a time when economic sanctions continue to hammer the Russian economy. However, it is clear that Russia needs China more than the other way around. In addition, China still needs to reinforce its relationships in Europe (as evidenced by Xi’s trip earlier this month) at a time when the state of economic competition with the U.S. ramps up with additional tariffs being put on China by the Biden administration. China also closely watched the inauguration of President Lai in Taiwan and continues to cause trouble for Philippine resupply ships near the Second Thomas Shoal, where the slightest miscalculation could lead to a much larger international incident.

“Chinese President Xi’s visit to Europe targeted three China-friendly countries in Hungary, Serbia, and France. Hungary and Serbia continue their economic and diplomatic relations with Beijing, while President Macron of France continues to challenge U.S.-led efforts to influence the Europeans. This was Xi’s first trip to Europe since 2019 as he initiates his plan to ‘divide and conquer’ the Europeans by starting with these three more friendly countries. His goal is to deal with Eastern and Central European countries in a bilateral way to slowly eat away at European consensus. Xi sees himself in an economic Cold War with the U.S. and wants to keep the Europeans from joining the U.S. in de-risking from China. The European wakeup call came with Beijing’s plan to dump cheap EVs on Europe while Xi employs his ‘over manufacturing’ campaign to increase market share and eliminate competition by de-industrializing the West. Meanwhile Russian President Putin and many of his key ministers visited China to ensure the two countries remain inextricably economically and militarily linked. The meeting was far more necessary for Putin than Xi as Putin tries to maintain his wartime economy. Without Xi’s support, Putin would be struggling to function with U.S. and EU sanctions taking a toll on his wartime production. The two sides communicated their continued resolve to deepen their military partnership to counter what they see as the U.S. containment strategy to control Chinese and Russian geopolitical influence.” – General Robert Walsh

“Other than a really exciting parade in Belgrade, it is not clear if Xi accomplished anything during his visit. Europe is clearly on the parapets looking for a wave of cheap goods that will disrupt their economies. Xi got an earful from Macron, but the ships are already sailing. Xi desperately needs open European (and global) markets to sell into with cheap industrial goods. China’s massive internal and external debt, the property development disasters, tanking demographics, and its massive internal migrant worker population all drag significantly on Xi’s ability to turn the China ship around quickly. The West has learned the dangers of a China that has treated it as a dumping ground for cheaply manufactured goods copied from someone else’s intellectual property. A ‘wag the dog’ scenario with Taiwan or the Philippines is not an insignificant threat.” – General Michael Groen

“Lai knows how the game with China is played and learned from his time as VP to remove the word independence from his vocabulary. Lai wants to preserve the status quo with China, protect Taiwan’s sovereignty, and focus on building and strengthening relationships with partner nations and the international community members who support Taiwan as a free and democratic country. His VP, Hsiao, is Taiwan’s first biracial VP (she has an American mother). She is a U.S. high school and college graduate with a master’s degree from Columbia University. At President Biden’s inauguration she said, ‘Democracy is our common language and freedom is our common objective,’ so expect her to continue to work with likeminded countries to maximize support for peace and stability as U.S.-Taiwan relations attained a new high during her tenure as Taiwan’s representative to the U.S. from 2020-23. It doesn’t matter what Lai said at his inauguration; China’s focus is already on the 2028 election and will work on exploiting the information domain to continue to divide the population and portray Lai as pushing Taiwan towards war with China.” – General KK Chinn

“Expect Xi to increase his ‘trade parade’ with the EU. The ‘Made by China’ strategy includes exporting Chinese goods to reliable states like Russia and other nations transitioning from nascent experiments with democracy to authoritarian regimes (like Niger). Not surprisingly, China is courting nations, like some in the EU, to create more fulsome trade relations. Where the U.S. is moving to a more protectionist posture towards China in what can be described as an inflationary commodity war, the EU hopes to establish risk mitigation measures around IP protection and intrusive CCP spying, and may choose not to follow the U.S. lead. Again, not surprising. China does not have partners; it has clients, and over time, vassals.” – General Spider Marks

U.S. Reduces Number of Troops in Sahel Region

Following the military coup in Niger last July, the concern had been that the military junta there could at any time ask U.S. forces to leave the country. Niger had been a key ally in the war on terror and the U.S. had stationed 1,000 troops and supporting personnel at two key bases in the country. Last month, news started to emerge that the U.S. would be withdrawing from Niger and last week, the Pentagon announced that the departure would take place by mid-September in an “orderly and responsible manner.” In addition, following the recent elections in Chad, authorities there threatened to cancel the Status of Forces Agreement allowing the U.S. to station troops in the country. While these discussions are still ongoing, many of the 100 troops stationed there will be leaving the country. The loss of these two counter-terrorism allies will be a significant blow to U.S. operations on the continent and the search is on for other nations to potentially host a contingent of forces to continue the mission. What is potentially more concerning is that these nations, in addition to Mali and Burkina Faso, have called on the Russian Wagner Group to provide security. This allows Russian forces to establish a stronger foothold in a region where there are significant natural resources and critical minerals.

“The U.S. is losing influence in Africa to China and Russia. China sends the message that state-led development brings results. China is exporting an alternative economic development model to Africa, and they are willing to pay for it. China is Africa’s largest trading partner (though Chinese investment there has slowed over the last few years). China’s method of listening has helped them be more responsive to African governments while the U.S. nature is to use aid as an incentive (vice trade) while focusing on human rights. Beijing’s African strategy for over a decade has been to gain influence and extract resources needed for the world’s growing technology and green energy needs that they now dominate. Putin is trying to build lost Soviet Union relationships in Africa. Russia sells the message that they are helping to liberate African countries from colonial rule. Russia provides security through military support and mercenary fighters like the Wagner Group, and has signed over twenty security agreements in Sub-Saharan Africa. As the U.S. Special Forces are packing up to leave an operating base in Niger where they have operated for years and have kept watch over Al Qaeda and ISIS, the Wagner Group’s mercenary forces are on the other side of the base preparing to move in. The African nations see China and Russia bringing trade and security with fewer strings attached than with the U.S. Three decades of U.S. progress since the end of the Cold War are being reversed. Opportunity for the U.S. remains, since most African countries desire good relations with the U.S., China, and Russia and want to avoid a major power rivalry like the Cold War.” – General Robert Walsh

“Russian and Chinese Information and Influence campaigns in Africa have been extraordinarily effective (i.e., a core anti-America pitch even as we spend millions in military assistance.). It is something the entirety of the Global South is watching. The efficacy of military capacity building is clear when the host nations are truly interested in positive change. Across the continent, Africa is in a bad place with respect to governance, transparency, rule of law, and building security for their people. At this moment, American efforts may be like seeds scattered on stony ground.” – General Michael Groen

“I would highlight the added complication in Africa of tribal boundaries overlapping national boundaries, as well as the challenges that Western nations face in that part of the world. Russia and China will have the same challenges that we have experienced in managing these realities…keeping in mind that much of the current ‘terrorist’ activity is extremist-based (vice the socialist/communist influences in the past). In the end, African national leaders will continue to be most selfishly influenced by money/power, and the population will only support them as long as they see an economic way forward that benefits the people. Bottom line is that it mostly remains a collision course of values and ideals.” – General Mastin Robeson