Israeli Prime Minister Benjamin Netanyahu addresses a joint meeting of Congress at the US Capitol in Washington. Getty Images
Israeli Prime Minister Benjamin Netanyahu addresses a joint meeting of Congress at the US Capitol in Washington. Getty Images
Israeli Prime Minister Benjamin Netanyahu addresses a joint meeting of Congress at the US Capitol in Washington. Getty Images
Israeli Prime Minister Benjamin Netanyahu addresses a joint meeting of Congress at the US Capitol in Washington. Getty Images


Netanyahu's speech in the US Congress points to a divided electorate


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July 29, 2024

Benjamin Netanyahu’s recent visit to the US to address a joint session of Congress on July 24 provided observers with a lot to digest. It was the Israeli Prime Minister's fourth such invitation – more than any other world leader in history (surpassing the UK’s Winston Churchill who made the trans-Atlantic trek to address Congress on three occasions).

As was the case on the three earlier visits, Mr Netanyahu and the Republican Speaker of the House who had extended the invitation, each used the other to serve their own purposes. This time, Speaker Mike Johnson sought to exploit Mr Netanyahu’s address both to embarrass US President Joe Biden and to further Republican efforts to make support for Israel a “wedge issue” in the upcoming election.

Mr Netanyahu was only too willing to play along with Mr Johnson’s game as he has long viewed sections of the Republican Party as a more reliable partner for Israel than the more liberal-leaning Jewish-American community.

This is why for the past several decades he has courted Republican leaders and accepted three other Republican invitations to challenge Democratic presidents – Bill Clinton (over the Oslo Process) in 1995 and Barack Obama in 2011 (over the prevailing Israel borders before the 1967 Arab-Israeli war) and in 2015 (over the Iran nuclear deal).

Another factor in Mr Netanyahu’s eagerness to speak to Congress could have been to demonstrate his mastery over US politics to an Israeli public that has turned against his governance.

Mr Johnson may have scored a point towards his goal, but it may prove to be a Pyrrhic victory. The Republicans came out in force and gave the Israeli PM scores of standing ovations during his one-hour speech. But it was boycotted by more than a quarter of Democrats, with many of those in attendance sitting silently, refusing to stand or applaud.

Mr Netanyahu’s speech itself was a startling mix of colonialism and neoconservative Manichaeism. Echoing the racist rhetoric of Theodor Herzl, the founder of political Zionism, Mr Netanyahu opened his remarks calling the conflict “a clash between barbarism and civilisation”, and “between those who glorify death and those who sanctify life”. And, like Herzl, he described Israel as both the West’s agent defending its interests in the Middle East and the civilising agent that would transform the region from being a “backwater of oppression, poverty, and war into a thriving oasis of dignity, prosperity and peace”.

Workers attempt to remove graffiti at Union Station on July 25 in Washington. Getty Images via AFP
Workers attempt to remove graffiti at Union Station on July 25 in Washington. Getty Images via AFP

The neoconservative thread in Mr Netanyahu’s remarks were also striking. That political ideology which came to power during Ronald's Reagan administration is a secularised version of a peculiar version of Christian evangelical thought. Both share characteristics of Manichaeism: there are forces of absolute good and absolute evil in the world; not only is there no possibility of compromise between them, in fact, conflict is inevitable and necessary; and if fought with total commitment, good will always triumph, with evil ultimately eradicated.

It’s not a matter of Israel being rejected; rather it is the idea of unquestioning support for Israel, no matter what they do, that has been rejected

During the Reagan era, the evil was defined as the Soviet Union and its allies. In Mr Netanyahu’s view, the source of all evil is Iran and its allies. No compromise is possible, and diplomacy is seen as weakness. And so his appeal to his allies in the West and the Arab world is to join him in this cosmic battle against evil – with the assurance that with determination, victory can be won and evil eradicated.

Mr Netanyahu felt he had an ally in the US President as from his earliest days in the Senate, Mr Biden had been mentored by one of the architects of American neoconservativism.

Benjamin Netanyahu and US Vice President Kamala Harris meet in the Vice President's Ceremonial Office in Washington, on July 25. The New York Times / Bloomberg
Benjamin Netanyahu and US Vice President Kamala Harris meet in the Vice President's Ceremonial Office in Washington, on July 25. The New York Times / Bloomberg

But with Mr Biden stepping aside as the Democrat’s nominee for president in favour of Vice President Kamala Harris, Mr Netanyahu’s visit to Washington was to end on a sour note. In place of the warm embrace he was used to receiving from Mr Biden, Ms Harris’s reception was more restrained.

After their meeting, instead of a joint appearance, Ms Harris addressed the press alone. While affirming Israel’s right to defend itself, she added that it was how Israel went about defending itself that mattered. She then went to great lengths to describe the horrible cost to human life and suffering resulting from the war in Gaza. She made it clear that the conflict had to end, and Palestinians needed a future that ensured them freedom and self-determination.

With this Ms Harris implicitly rejected Mr Netanyahu’s call for “total victory”, while also directly indicating that she was not afraid of the Republican challenge to make support for Mr Netanyahu’s Israel a “wedge issue” in this election.

The visit exposed the reality that the American electorate is deeply divided over this issue. It’s not a matter of Israel being rejected; rather it is the idea of unquestioning support for Israel, no matter what it does, that has been rejected.

As Ms Harris put it in her post-meeting remarks, it’s no longer correct to see this conflict as a “binary choice”. There are needs on both sides that must be met and they can best be met through peace and diplomacy.

With that, Mr Netanyahu left Washington and made a pilgrimage to Mar-a-Lago to meet the one presidential candidate who shares his belief in “total victory”, Donald Trump.

Four reasons global stock markets are falling right now

There are many factors worrying investors right now and triggering a rush out of stock markets. Here are four of the biggest:

1. Rising US interest rates

The US Federal Reserve has increased interest rates three times this year in a bid to prevent its buoyant economy from overheating. They now stand at between 2 and 2.25 per cent and markets are pencilling in three more rises next year.

Kim Catechis, manager of the Legg Mason Martin Currie Global Emerging Markets Fund, says US inflation is rising and the Fed will continue to raise rates in 2019. “With inflationary pressures growing, an increasing number of corporates are guiding profitability expectations downwards for 2018 and 2019, citing the negative impact of rising costs.”

At the same time as rates are rising, central bankers in the US and Europe have been ending quantitative easing, bringing the era of cheap money to an end.

2. Stronger dollar

High US rates have driven up the value of the dollar and bond yields, and this is putting pressure on emerging market countries that took advantage of low interest rates to run up trillions in dollar-denominated debt. They have also suffered capital outflows as international investors have switched to the US, driving markets lower. Omar Negyal, portfolio manager of the JP Morgan Global Emerging Markets Income Trust, says this looks like a buying opportunity. “Despite short-term volatility we remain positive about long-term prospects and profitability for emerging markets.” 

3. Global trade war

Ritu Vohora, investment director at fund manager M&G, says markets fear that US President Donald Trump’s spat with China will escalate into a full-blown global trade war, with both sides suffering. “The US economy is robust enough to absorb higher input costs now, but this may not be the case as tariffs escalate. However, with a host of factors hitting investor sentiment, this is becoming a stock picker’s market.”

4. Eurozone uncertainty

Europe faces two challenges right now in the shape of Brexit and the new populist government in eurozone member Italy.

Chris Beauchamp, chief market analyst at IG, which has offices in Dubai, says the stand-off between between Rome and Brussels threatens to become much more serious. "As with Brexit, neither side appears willing to step back from the edge, threatening more trouble down the line.”

The European economy may also be slowing, Mr Beauchamp warns. “A four-year low in eurozone manufacturing confidence highlights the fact that producers see a bumpy road ahead, with US-EU trade talks remaining a major question-mark for exporters.”

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