July 30, 2018

In-Depth Issues:

Iran's Rial Is in a Death Spiral, Again - Steve Hanke (Forbes)
    Iran's rial plunged from 98,000/$ on Saturday to 112,000/$ on Sunday in Tehran, a stunning 12.5% one-day plunge.
    The last time the rial was in the grip of such a death spiral was in September 2012.
    With the collapse of the rial's value against the U.S. dollar, Iran's implied annual inflation rate has surged to 203%.
    The writer is a professor of applied economics at Johns Hopkins University and senior fellow at the Cato Institute.

The New Explosive Drone Threat from Gaza - Alex Fishman (Ynet News)
    The IDF believes Hamas has the capability to operate explosive-carrying drones.
    According to the Israel Defense Ministry, in 2016, 110 complete drones and 51 drone parts were seized before entering Gaza. In 2017, 70 complete drones and 301 drone parts were seized. And in 2018 so far, 60 complete drones and 400 drone parts have been seized.
    Most of the equipment was purchased online from companies like AliExpress.
    The question is how many drones weren't captured and were able to get into Gaza.

Israeli Navy Intercepts Activists' Boat Heading toward Gaza - Anna Ahronheim (Jerusalem Post)
    The Israel Navy intercepted a boat carrying international activists on Sunday after it disobeyed commands to stop sailing toward Gaza.
    The Norwegian-flagged Al Awda was intercepted less than 60 nautical miles from Gaza.

Photos: Israeli UN Exhibition Shows Gaza Arson Damage - Itamar Eichner (Ynet News)
    Israel opened an exhibition at UN headquarters in New York to show the damage caused in Israeli communities near the Gaza border by fires from the incendiary balloons and kites sent by Palestinians, including "before" and "after" photos.
    See also 7 Fires Break Out in Gaza Border Region Due to Incendiary Balloons Sunday - Ilana Curie (Ynet News)
    See also Incendiary Balloons from Gaza Cause 6 Fires in Israel Saturday - Ilana Curiel (Ynet News)
    See also Incendiary Balloons from Gaza Cause 10 Fires in Israel Friday (Times of Israel)

Two Palestinian Terrorists Killed in Gaza "Work Accident" Sunday - Jack Khoury (Ha'aretz)
    Two Popular Front for the Liberation of Palestine operatives who died in Gaza on Sunday were killed in an accidental explosion and not by Israeli fire as first claimed, the Gaza Health Ministry said Monday.
    Sources in Gaza said Ayman Angar and Mohand Hamouda, both 24, tried to fire a rocket at Israel and were killed when it exploded.

Palestinians Caught Sneaking into Israel with Guns - Jacob Magid (Times of Israel)
    Israeli Border Police caught two Palestinians from the West Bank on Saturday after they had managed to sneak several hundred feet into Israel with a pair of home-made machine guns near the Israeli community of Oranit.

Arab Woman Appointed Dean at Hebrew University - Greer Fay Cashman (Jerusalem Post)
    Prof. Mona Khoury-Kassabri has been appointed dean of the Hebrew University of Jerusalem's School of Social Work, the first Arab woman to be appointed dean at the university.

News Resources - North America, Europe, and Asia:
  • U.S. Looking at Options to Protect Shipping Lanes from Iranian Threats - Barbara Starr
    The U.S. is looking at what military options may be needed to keep vital waterways in the Middle East open in the wake of attacks on Saudi oil tankers by Iranian-backed Houthi rebels on July 25, according to two administration officials. Both officials emphasize that any military action would be carried out by U.S. allies in the region, such as the Saudis, and not by U.S. forces.
        Concerns have been growing as Iranian officials have increased threats against shipping in the Persian Gulf and through the chokepoint at the Strait of Hormuz. Defense Secretary James Mattis said Friday, "Iran has threatened to close the Strait of Hormuz." If the Iranians do move to shut down oil shipping directly, "it would have obviously an international response to reopen the shipping lanes with whatever that took because the world's economy depends on that energy, those energy supplies flowing out of there."  (CNN)
        See also Mattis Denies Report U.S. Is Planning Missile Strike Against Iran - Jacqueline Thomsen (The Hill)
  • Israel to Build New Homes in Israeli Community after Deadly Palestinian Attack
    On Thursday evening, a Palestinian terrorist snuck into the Israeli community of Adam, north of Jerusalem in the West Bank, and stabbed three people at random, killing father-of-two Yotam Ovadia, 31, before being shot dead. In response, Defense Minister Avigdor Lieberman on Friday announced the expansion of the community with 400 new housing units, calling the move "the best answer to terrorism."
        U.S. special envoy Jason Greenblatt wrote on Twitter, "Yet another barbaric attack tonight. When will President Abbas and Palestinian leaders condemn the violence?"  (AFP-Guardian-UK)
News Resources - Israel and the Mideast:
  • Netanyahu: The Nation-State Law Does No Harm to the Equal Rights of Minorities in Israel
    Prime Minister Benjamin Netanyahu told the Israeli Cabinet on Sunday: The State of Israel is the nation-state of the Jewish people, with full equal rights for all of its citizens. This is the meaning of the words "a Jewish and democratic state." We have determined the personal equal rights of Israeli citizens in a series of laws including Basic Law: Human Dignity and Liberty, laws that ensure full equality before the law.
        However, we have never determined the national rights of the Jewish People in its land in a basic law - until now, when we passed the Nation-State Law. One of the basic goals of the state is the ingathering of exiles of our people and their absorption here in the Land of Israel. This is the meaning of the Zionist vision. Does determining that our flag bears the Star of David somehow abrogate the individual right of anyone among Israel's citizens? Nonsense. Does determining that Hatikvah is our national anthem detract from the personal rights of any person in Israel? Nonsense.
        The feelings of our Druze brothers and sisters touch my heart. I want to tell them: There is nothing in this law that infringes on your rights as equal citizens of the State of Israel, and there is nothing in it that harms the special status of the Druze community in Israel. (Prime Minister's Office)
  • 7,000 Palestinians Riot along Gaza Border Friday - Anna Ahronheim
    7,000 Palestinians took part in riots in several locations along the Gaza border on Friday, burning tires, and hurling rocks and explosive devices, including pipe bombs, a Molotov cocktail and a grenade, toward troops. Troops responded with crowd dispersal measures, as well as live fire, in accordance with IDF rules of engagement. Two Palestinians were killed during the violent demonstrations. (Jerusalem Post)
Global Commentary and Think-Tank Analysis:
  • Game Theory and Peace - Prof. Yisrael Aumann interviewed by Steve Linde
    Prof. Yisrael Aumann, 88, who won the Nobel Prize in Economics in 2005 for his original work on conflict and cooperation via game theory analysis, said in an interview: "Shouting 'Peace, peace' may actually push peace away....It's very important to give the right signals to the other side or sides. The signals that you give to them are going to determine how the future unfolds."
        "Let's say you want to buy an apartment, OK? You don't want to spend too much money for it....So when you go and look at apartments and start negotiating a price, you don't necessarily want to tell the seller, 'This is a great apartment' and 'What a view!'...It might not be such a good idea, right, if you don't want to pay a lot of money for it. You don't want to start the negotiation over the price that way. So if you keep saying, 'We want peace, we want peace, we want peace,' you're not necessarily going to get it that way. Because the price keeps going up."
        "You have to say you're interested in it, but you can also say to the other side, 'You want peace? Fine. Let's make a deal. You don't want peace? That's fine too. It's up to you.' Then you get peace....If you want peace, you have to demonstrate a certain amount of toughness. Otherwise, you are giving incentive to the other side to be aggressive. You're motivating them to be aggressive. And you can't do that....The whole world is about incentives. That's it. That's the essence of game theory."  (Jerusalem Report)
  • Reasons to Affirm Israel's Jewish Character - Shoshanna Keats Jaskoll
    To fully understand the creation of Israel's new nation-state law, one must go back to 2006-2007, when major Arab-Israeli NGOs released three significant publications: The Future Vision of the Arab Palestinians in Israel, the Democratic Constitution, and the Haifa Declaration. They sought veto power on national issues, the right of return for Palestinian refugees, and, critically, the annulment of Israel's Jewish character. They recommended two states - not one Jewish and one Palestinian, but one, a secular bi-national state of Jews and Arabs, and one exclusively Palestinian.
        These publications put Israel's Jewish character at risk, since the nature of the Jewish state had no legal definition in court. Israel does not have a constitution, but it does have 12 Basic Laws, ten of which deal with its democratic nature and civil liberties. Not one affirms Israel's Jewish character. Until last week.
        The question is whether a democratic Jewish state is a legitimate thing, or whether a homeland for Jews where all Jews are welcome and all citizens are guaranteed rights, yet where Jewish tradition, holidays and symbols are celebrated nationally, and Jews are in charge of their destiny, should be replaced by a state of all its citizens devoid of Jewish majority, symbolism and authority and where Jewish people are not automatically welcomed home. (Jewish Chronicle-UK)

Video: How the U.S. Can Pressure Iran to Dismantle Its Nuclear Facilities - Yuval Steinitz (Jerusalem Center for Public Affairs)
  • I served as Israel's chief "non-negotiator" during the P5+1 negotiations with Iran during 2013-15. I was the chief "non-negotiator" because we were not part of the P5+1, but we were very active and we know we had a very serious impact. We were trying to influence the outcome of this bad agreement, with some success. Without our intervention, the agreement would have been much worse. Almost all the positive elements in the agreement were put there due to our pressure.
  • Just to give one example, in the Iran nuclear deal there is a limitation that Iran will not be allowed to enrich uranium above 3.5%. In the past, Iran had already enriched uranium to 20-25%, which is already more than halfway to highly-enriched uranium that is enough for nuclear weapons. Prior to the interim agreement we asked the Americans to reduce the enrichment level. They said it was too late.
  • But at the last moment I spoke with the French Foreign Minister and he agreed to give the Iranians an ultimatum to reduce the enrichment level. The Iranians walked out, the Americans were furious, but one month later they returned to Vienna and signed the agreement with this restriction, which was also included in the final agreement which was signed two years later.
  • We demanded complete, comprehensive dismantling of the Iranian nuclear infrastructure, like in Libya in 2003. But instead of complete dismantling, we got partial dismantling and for a limited time, only 10 years. So it's very clear what should be fixed - complete dismantling forever. But what are the chances that Iran will agree to dismantle its nuclear facilities for good? There are three elements that will dictate the final result.
  • The first is economic pressure. What are the chances that the U.S. alone will be able to resume the same level of economic pressure on Iran that was so effective in 2011-12 and that led to Iranian concessions? My answer is that the U.S. alone can produce greater economic pressure than the heavy economic pressure in 2011-12. The U.S. actually doesn't need the rest of the world in order to squeeze the Iranian economy and bring it to the verge of collapse. This is because of the power of the secondary sanctions that force international companies to choose between doing business with Iran or the U.S. I assume that in half a year or a year, the situation in Iran will be extremely grave and they will consider coming back to the negotiating table.
  • The second element involves the U.S. readiness to take military action against Iran if suddenly the Iranians start enriching uranium and put thousands of centrifuges back into operation. It should be crystal clear to the Iranians that if they make such sudden moves, their military infrastructure will be destroyed. No military infrastructure can be immune from air attacks and the U.S. can destroy any nuclear facility in the world, even if some of it is buried underground and even if they have very good air defense systems. Nobody is speaking about this but the Iranians understand this.
  • The third element involves North Korea. If President Trump's attempt to dismantle the North Korean nuclear arsenal and facilities will succeed, the pressure on Iran and the pressure within Iran to give up these capabilities will be enormous. If, on the other hand, North Korea will be able to preserve its nuclear arsenal, then the determination within Iran will be totally different. If the U.S. fails in North Korea, the chances of pressuring Iran are going to be very slim.

    The speaker, Israel's Minister of Energy, served as Minister of Strategic Affairs in 2013-15, the period leading up to the Iran nuclear deal. This is from his presentation at the Jerusalem Center on July 11, 2018.