10 Geopolitical Issues for Businesses
1. Middle East Conflict: The crisis in some form will run into 2024. Regional war is improbable but instability will dog Israel and its immediate neighbours while the Gulf States focus on their development.
Israel will need some time to fulfil its immediate military objectives. A key question will be whether it maintains internal and external support for the campaign as the focus shifts to a more densely populated south Gaza that could see increased casualties. Israel will subsequently be left with the humanitarian fallout and the need to pursue Hamas long term. This, and an uncertain process to resolve internal differences and address strategic failure, will absorb its energy. A compact Arab position also leaves it in the lurch on future governance of Gaza. Neither regional players nor the UN are willing to manage the recovery in the strip, while the Palestinian Authority lacks the legitimacy to do so. Radical Israeli action to change the facts cannot be ruled out.
Hezbollah and Iran have been deterred from fuller military engagement, although their longstanding hybrid war with Israel goes on. Strikes by their proxies (i.e. the Houthis in Yemen) threaten navigation and create an unwelcome sense of instability on the Arabian Peninsula. The Gulf states appear disinclined to use energy or economic levers against Israel and instead have prioritised diplomacy; Saudi Arabia’s leadership of the Arab/Muslim world at a time when there is much anger against US support of Israel will emphasise its geopolitical importance. There may still be popular boycotts of brands associated with Israel, though online campaigns have yet to take off. Israel’s immediate neighbours will be most concerned by popular protests lest they turn to focus on dire domestic conditions. Conversations about a two-state solution will resume, both in Washington D.C., and globally.