With Focus on Blinken in Davos
World Economic Forum Davos, Switzerland government, business, civil society
Blinken Soil Speech
Secretary Blinken made remarks today at the World Economic Forum, saying, soil is at the root of pressing national security challenges, “without good soil, crops fail, prices rise, people go hungry, eroding soil also worsens the impacts of droughts, floods, of other climate-driven extreme weather. 700 million people do not know if they will have enough food tomorrow.” Blinken spoke about the instability of hunger causing migrations, straining ethnic tensions, as competition grows for limited resources. He implicated Russia in contributing to world hunger with its attacks on Ukraine’s “fields, granaries, on ports in Ukraine.”, Russian attacks on ukraine disrupt food making it expensive and destroying productivity. Since 2021, Blinken said, the US has devoted $17.5 billion to provide for global sustenance, funding over 1/3rd of the World Food Programme’s budget.
(Blinken’s Davos Speech https://youtu.be/oSzJS8OI8XY?si=X9NJ2bAoXBxrjolm)
Blinken on Taiwan
In Blinken’s first interview since the Taiwan elections, and joint attacks on the Houthis, he appeared on CNBC and was interviewed by Andrew Sorkin. Blinken said, we congratulated the president-elect and the people of Taiwan for their “robust democracy.” Cross strait relations we are intently focused on peace, stability and no change to the status quo. With 50% of the world’s commerce coming through the strait and the vital semiconductors made on Taiwan, any disruption is a problem for everyone. He called China’s one China policy approach counterproductive to their interests. He reiterated the long held status quo US policy position that “we do not support independence’ for Taiwan, while we support democracy and do not support China absorbing Taiwan. Blinken also spoke of addressing the fundamental issues and a future with a Palestinian state and the normalization of Israel. He spoke on Ukraine “we need to make sure that with Congress we get the supplemental funding” and without it we have a real problem for Ukraine. $50 billion of which would be sent to procure defense items in the United States. Russia continues to suffer strategic failure in Ukraine.” Without our continued support Russia will go after other countries and if NATO, we will be assisting them. (Blinken CNBC Interview https://youtu.be/WOynZ0tG26k?si=ly5RQs8T_Isb86Xc)
Intel, Semiconductors
Chip makers, Intel, Qualcomm and many others had representatives in Davos today. Intel’s Chief Executive Officer, Pat Gelsinger spoke to Bloomberg Surveillance from Davos this morning. Gelsinger, saying it is 30-40% cheaper to build in Asia than in Europe or the United States due to supply chain fragility and labor market differences, the US and the European Chips act is addressing this to close the competitive gap and build resilient supply chains in Europe and the US. Intel is building in Germany and they are talking to major firms about supplying them. He said while it is not industry practice to say who they are working with, they have three major companies in conversation and their test chips will be in the factory within a few months.
(Gelsinger’s Interview https://www.bloomberg.com/news/videos/2024-01-16/intel-ceo-says-chips-act-is-critical-for-the-future-video)
Red Sea
Today in the Red Sea, Greek ship, Zografia, was hit by a Houthi missile while traveling 76 miles northwest of Al-Saleef, Yemen (source: Ambrey Analytics.) US says it hit 4 Houthi sites yesterday.
The US, UK, and the coalition as well as Iran want deescalation, but also want influence. The Houthis, if they continue to a greater extent, could risk loss of a ceasefire with Saudi Arabia that has been informal and is in talks to formalize.
So this attack is in itself not significant and remains in line with expectations and the number of attacks remain small versus the quantity of Red Sea shipping activity. Even while risks remain small, majorUS and European carriers have shifted over for insurance and reputation reasons, but remaining shipping is robust and the calculus is the cost to divert and low risk of attack make continuing worthwhile. The cost of rerouting is harder on some than others. The US and europeans are more able to pivot and to get better contracts without price gauging. The ships you will see getting attacked will have less and less impact on markets as time wears on. It will be smaller guys in the supply chain simply won’t withdraw or impact at scale.
The Houthis, are unlike Hezbollah, and act independently, while being backed by Iran which shares intelligence and provides weapons. They are not a proxy like Hezbollah. Iran has in its playbook the formula to fund the monster, and let the monster loose do do the damaging things one might expect, the most recent example the Hamas attacks on Israel.
“The US said on Tuesday that analysis from the weapons it seized from a ship near the Yemen coast suggested the Houthis had been using the same kind of weapons in their Red Sea attacks.
The seizure took place on 11 January near the coast of Somalia – the same day as the first US-UK airstrikes.
Cruise and ballistic missile components were among the items found on a ship, as well as parts for air defence equipment.
“This is the first seizure of lethal, Iranian-supplied advanced conventional weapons (ACW) to the Houthis since the beginning of Houthi attacks against merchant ships in November 2023,” US Central Command said in a statement.
Iran Ballistic Missile Strike on Iraq
At the same time we have an Iranian guard ballistic missile attack near US consulate in Erbil targeting “Israeli spies.” Iraq has reacted by recalling its ambassador from Iran and by denying Iranian claim as nonsense. Baghdad is so Shia so…
This will be nominal. There will be gestures.
Additional Davos meetings for Blinken
Secretary Blinken met with European Commission President Ursula von der Leyen, discussing the importance to continue to support Ukraine. Humanitarian assistance to Palestinians in Gaza, prevention of spreading conflict, release of hostages held by Hamas, and a path to a Palestinian state. von Der Leyen emphasized importance of freedom of navigation in the Red Sea.
Secretary Blinken and National Security Advisor, Jake Sullivan, met with Ukrainian leader Volodymyr Zelensky in Davos Switzerland. They discussed the economy of Ukraine, private sector investment, corruption reform, and heading toward future integration into EU and NATO.
Secretary Blinken met with Rwandan President Kagame and discussed how they might work together to ease tension and resolve conflicts with all parties in the Eastern Democratic Republic of the Congo.
US Elections
Bitter weather brought poor turnout in Iowa for the caucuses, except for Trump’s base which came out with strong loyal supporters facing zero temps to show him wining 51% of the votes cast. DeSantis came in second with 21% of the votes. Nikki Haley took 19% of the vote, and Vivek ramiswarmy suspended his campaign after coming in 4th. Upcoming primaries in New hampshire could have a strong second for Haley with voters of both parties permitted to vote.
