What We’re Watching

What our analysts are watching and key events they are keeping an eye on
24th January 20227 min

Ukraine tensions continue to heat up. It has been another busy week in the battle between the West and Russia over Ukraine. According to a US embassy source, the US government made its first shipment of the $200m security support package to Ukraine. The arms delivery followed US Secretary of State Antony Blinken’s visit to Kyiv amid concerns from Ukraine and its Western allies over tens of thousands of Russian troops amassed at the border with Ukraine. Ukraine’s defence minister thanked the US for the aid. In an already tense stand-off Britain has also begun supplying Ukraine with new light anti-tank weapons in response to “the increasingly threatening behaviour from Russia”, the defence secretary, Ben Wallace, has announced.

At a press conference on 19 January 2022, US president Joe Biden predicted Russia would “move in” to Ukraine and suggested a “minor incursion” by Moscow could lead to Western countries “having to fight about what to do and not do.” Biden appeared to confirm there was a grey area regarding the precise threshold for the trigger for a US response. Immediately following the conference, the White House issued a statement clarifying Biden’s comments, noting “any Russian military forces mov[ing] across the Ukrainian border” would constitute “a renewed invasion” and would “be met with a swift, severe, and united response from the US and our allies.” The US president’s remarks stirred controversy, with Ukrainian officials reportedly accusing Biden of giving Russian President Vladimir Putin “the green light [to] enter Ukraine at his pleasure.” Biden’s comments indicate that the West would treat a “minor incursion” differently than a full-scale invasion.

Following the 21st January 2022 meeting between US Secretary of State Antony Blinken and Russian Foreign Minister Sergei Lavrov, the Russian foreign minister said the US has committed to provide a written response to Russia’s proposal on security guarantees in Europe by the end of January. Additional talks are unlikely until a response is received and its likely tensions will continue to rise until then. 

It’s unlikely US-Russia talks will result in breakthroughs for the moment and this will mean matters will remain tense for the moment. We will be watching for any incursions by Russia into Ukraine.

Houthis launch attacks on Abu Dhabi. There has been a sharp escalation in the conflict in Yemen this week with deadly Saudi air raids against Houthi targets in Yemen. The raids are seen as a response to Monday’s rare missile and drone attacks suspected by the Houthis on the UAE, which is a Saudi ally and member of the Saudi-led coalition fighting the Houthis. The drone attack that targeted a key oil facility in Abu Dhabi killed three people and started a separate fire at Abu Dhabi’s international airport. The dead were identified as two Indian and one Pakistani national. The attack marks a strategic shift by the Iranian-allied rebel group that had so far avoided targeting the gulf country. The US condemned the “terrorist attack in Abu Dhabi in the United Arab Emirates, which killed three innocent civilians”, adding that “Our commitment to the security of the UAE is unwavering and we stand beside our Emirati partners against all threats to their territory,”. Yemen’s Houthi rebel group warned it could target more facilities in the UAE warning foreign companies, citizens and residents of the UAE to stay away from vital sites.

The tensions in Yemen began during the Arab spring when the oppressed Houthis worked to topple the regime in Sana that had long oppressed them. But over the decade both regional and global powers have interfered in the country which has complicate the original goals of the Houthis 

Unrest in Tunisia. President Kais Saied’s power grab has fermented protests in Tunisia. This is in addition to his moves to change the constitution. Many see this as a move to concentrate authority and prolong his stay in power. Prior to this, the president had dissolved parliament and seized governing powers on the 25th July 2021. More than 1,200 demonstrators marched on the 4th January in protests against Saied, defying a ban on public gatherings imposed by the government that was ostensibly designed to counter COVID-19’s spread. Tunisia is a fertile ground for an uprising. The Arab Spring got life from its streets, which led to the downfall of Zine el-Abidine Ben Ali. We will keep a watchful eye to see if this could lead to Kais’ end.

For further analysis see Is Tunisia Turning into a Failed State? and Tunisia’s Old Guard Maintain Status Quo

Iran President visits Moscow. Iranian president Ebrahim Raisi made his first visit to Russia on the 19th January, the first by an Iranian president in almost five years. In the Russian capital, both Raisi and his Russian counterpart, Vladimir Putin, supported improving bilateral ties during a three-hour meeting in which they also discussed regional and international issues. For their part, Iran’s petroleum and economy ministers who accompanied Raisi said their talks with their counterparts exceeded expectations. Without disclosing many details, the ministers said agreements were made in trade, energy, transportation and banking sectors. Whilst much has been made of Iran-Russia relations, Russia has consistently led Iran down on key issues from UN resolutions against Iran and when the US has placed sanctions on the Middle East nation. 

For further analysis see Iran’s New President Faces Major Challenges

Over 100 millionaires call for wealth taxes on the richest. A group of over 100 millionaires and billionaires from nine countries published an open letter to government and business leaders, calling for permanent annual wealth taxes on the very richest to help reduce extreme inequality and raise revenue for sustained, long-term increases in public services like healthcare. These super-rich signatories are joining a growing chorus of voices around the world calling for greater taxation of the richest in light of record COVID-19 wealth gains at the top of society —gains that have seen the ten richest men more than double their fortunes to a staggering $1.5 trillion dollars. The worlds’ 2,660 billionaires now have wealth around the same size as the Chinese economy. The letter said that while the world has gone through an immense amount of suffering in the last two years, the richest have seen their wealth rise during the pandemic and very few —if any— are paying their fair share in taxes. The group urges governments to “tax us, the rich, and tax us now.” The group published their letter during the World Economic Forum’s weeklong Davos Agenda, during which participants are expected to discuss critical global challenges and solutions. It says unless heads of state and government and CEOs acknowledge the “simple, effective solution staring them in the face —taxing the rich,” people around the world “will continue to see their so-called dedication to fixing the world’s problems as little more than a performance.” Prominent signatories include American film producer and heiress Abigail Disney, Danish-Iranian entrepreneur Djaffar Shalchi, American entrepreneur and venture capitalist Nick Hanauer, and Austrian student and heiress Marlene Engelhorn.


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