Israel takes part in Middle-East Naval Exercises. Israel has taken part in a huge US-led naval exercise in the Middle East, for the first time publicly joining Saudi Arabia and Oman, two countries it has no diplomatic relations with despite its normalisation of ties with some Gulf states. The International Maritime Exercise 2022 (IMX 22) includes approximately 60 countries and comes amid heightened Gulf tensions after missile attacks on the UAE. A US Navy spokesperson described high levels of cooperation among the exercise participants, telling Reuters, “Here in the region we have had nothing but positive results in terms of planning efforts.” The deal of the century has seen former enemies move to normalise relations and ever since a flurry of activities, once considered unthinkable are all evolving in earnest.
For further analysis see the geopolitics of Israel
Erdogan visits Ukraine. On a visit to Ukraine, Turkish President Recep Tayyip Erdogan offered to hold a Ukraine-Russia summit as EU leaders stepped up outreach to the Kremlin to defuse fears Moscow could invade. During Erdogan’s visit Turkey and Ukraine signed a free-trade agreement and finalised a deal for Ukraine to manufacture Turkish armed drones, in a show of cooperation between the two countries as Russia continued to mass troops on Ukraine’s borders. Erdogan’s visit to Ukraine is a bid to assert his country’s role as an aspiring power as well as developing a significant relationship at Russia’s door who happens to be the historical rival of Turkey in the black sea region. Despite the cooperation between Russia and Turkey in recent years, Turkey has expanded relations with nations who are at odds with Russia which all indicates Turkey’s relationship is very much based on short term interests rather than any alliance.
Turkey and Israel to Export Gas to Europe. Turkey and Israel can work together to carry Israeli natural gas to Europe and the two countries will discuss energy cooperation during talks next month, Turkish President Recep Tayyip Erdoğan was quoted as saying on Friday the 4th February 2022. The discovery in recent years of huge natural gas reserves in the eastern Mediterranean has increased the interest of nearby countries but exacerbated geopolitical tensions between Turkey and its neighbours. Erdogan told reporters on a return flight from Kyiv that energy cooperation would be on the agenda during President Isaac Herzog’s visit to Turkey in mid-March, Reuters reported. As Russia-NATO stand-off over Ukraine, Europe’s energy dependence on Russia is becoming a major strategic issue. It would appear Erdogan is looking to take advantage of the opportunities from this situation by collaborating with Israel.
British government announces ‘levelling up’ agenda. UK Chancellor Rishi Sunak announced a series of measures to get a grip on a burgeoning cost-of-living crisis, with millions of Britons facing record increases in their energy bills. The Government has come under pressure to act as millions of households brace for a record hike in energy bills from April, and the prospect of rising mortgage rates and tax increases. “The government is going to step in to directly help people manage those extra costs,” Sunak said in the House of Commons on Thursday the 3rd February, saying his intervention was worth £9 billion. Sunak announced the package shortly after energy regulator Ofgem said it would raise a price cap on domestic gas and power bills by 54% for 22 million customers. This threatens to catapult the average home energy bill to almost £2,000 a year from April, from £1,277 over the winter, plunging millions into fuel poverty. The official inflation rate reached 5.4% in December, the highest level since March 1992, driven by soaring gas and electricity prices and the higher cost of food and clothes. Referral to food banks and advice on emergency one-off grants, reached its highest level on record last month.
IMF approves next disbursement of $6 billion loan to Pakistan. The International Monetary Fund on Wednesday the 2nd February approved a $1 billion loan to Pakistan, reviving a bailout package that had been suspended due to a delay in Islamabad’s compliance with the terms. The disbursement is part of a $6 billion bailout package secured by Pakistan in May 2019 after difficult negotiations. The latest tranche of what is called the EFF (Extended Fund Facility) comes after Islamabad carried out new measures aimed at fiscal tightening and raising more tax revenues to meet the Fund’s conditions. With this disbursement, Pakistan has been loaned $3 billion from the total $6 billion package so far. This development is seen as providing a temporary relief to Pakistan’s crumbling economy. “The Pakistani economy has continued to recover despite the challenges from the COVID-19 pandemic, but imbalances have widened, and risks remain elevated,” the IMF said in a statement. The executive board called for increased focus “on measures to strengthen economic productivity, investment, and private sector development, as well as to address the challenges posed by climate change.” Islamabad implemented tax hikes and introduced VAT on more goods in order to appease the IMF. However, the IMF program is unlikely to fix Pakistan’s deep economic problems as none of the IMF policies address the deep economic problems the country faces. We will be watching for the public reaction as the economic problems deepen.