Ananta Insights | West Asia & North Africa Digest by Ambassador Mahesh Sachdev | January 2025

IA) Political Developments: Pan-Regional and Global Issues

Syria Conflict:

Military Campaign: The blitzkrieg (“Operation Repelling the Aggression”) launched by Hi’yat Tahrir al-Sham (HTS, or Syria Liberation Organisation) led rebel coalition from the Idlib exclusion zone on Nov 27 captured Damascus 11 days later on Dec 8, overthrowing al-Assad dynastic regime in power for 54 years. President Bashar al-Assad was forced to flee Syria and was given political asylum in Russia. 

(Comments:

1. The swift military denouement surprised most observers on both sides of the Syrian divide. They had come to believe that the government forces, with strong support by Russia, Iran and Hezbollah had permanently gained the upper hand on the ground since 2020, stabilising the bitter civil war that began with the Arab Spring in 2011. 

2. The counter-intuitive outcome was owed to several factors. On the rebel side, the HTS leader successfully converted a motley group of militants into an organised, well-equipped and disciplined force –with possible help from Turkey. He inducted a large number of foreign veteran Jihadi fighters ranging from Afghanistan to the Caucasus. The elaborate battle plans with intelligence inputs and follow-up choreography were in evidence. Lastly, the launch surprised the opponents and was shrewdly timed to coincide with all three powerful foreign backers having their serious military preoccupations, keeping them distracted from the Syrian battlefield.

3. On the government side, the political and military elite became complacent after their victory in 2020. They failed to shore up the morale and/or capabilities of their run-down and tired conscripted army and its corrupt officer corps. They also took no meaningful steps to broaden the popular support base and offered no tangible peace dividend to ease the mass economic hardships. Last, but not least, there were costly perceptional blunders – from intelligence failures to the battle intent of the foreign backers and from falsely savouring Syria’s “return to the Arab fold” to rejection of the Turkish President’s repeated pleas for reconciliation with the Ankara-backed rebels. En fin, Bashar al-Assad joined the well-populated cluster of former dictators in hubris ruing their inability to appreciate their fallibility.) 

(Further Reading: (i) “How Assad’s army collapsed in Syria: demoralised conscripts, absent allies” Reuters; Dec 12; (ii) “What the collapse of the Syrian regime says about the Arab region” Rami Khouri,  Al-Jazeera, Dec 8)  

Political Changes: HTS leader Abu Mohammed al-Golani (The nom de guerre taken fromal- Golan, the Golan Heights, annexed by Israel, which all Syrians believe to be theirs) reverted to his real name Ahmed al-Shara’a (– perhaps as the surname became a liability with Israel grabbing the remaining demilitarised part of Golan Heights soon after he took over!). Even otherwise, Ahmed al-Sharaa, 43, has shown an uncanny ability to reinvent himself from an al-Qaeda Jihadi in Iraq (2003-06) to an Emir of al-Qaeda allied Jabhat al-Nusra in Syria fighting against al-Assad (2011-16) morphing into Emir of HTS from 2016. The US designated him as a “Specially Designated Global Terrorist” in May 2013 and in 2017 announced a $10 mn reward for information leading to his capture – which was conveniently rescinded by Washington on Dec 20, the day he met an official US delegation in Damascus. Ahmed al-Sharaa swiftly took over as the new Syrian leader and formed a core cabinet, including Prime Minister, Foreign Minister and Defence Minister, comprising largely of his outfit. On Dec 24, Ahmed al-Sharaa announced an agreement with former rebel faction chiefs to dissolve all groups and consolidate them under the defence ministry. In his new Avatar, he continued to make plenty of conciliatory statements designed to reassure the non-Sunni Syrians and the foreign stakeholders including the Gulf monarchies and the Western powers. In a statement on Dec 29 to Saudi TV channel al-Arabiya, he laid down broad outlines of the future political process saying that the HTS would be dissolved at a “national dialogue conference” to be held soon at an unspecified date;  drafting a new constitution could take up to three years and the election could be held in 4 years. He added on to say that it would take about one year for Syrians to see drastic changes. His initial gestures included the release of the political prisoners held by the previous regime and meetings with community leaders of prominent minorities, such as Christians and Druze. An amnesty to the surrendering soldiers of al-Assad’s armed forces was also announced. Barring a few cases, there was no organised resistance to the new government and its forces. The Western and Arab news media were quite indulgent in approving the HTS and its leadership.  They even unquestioningly lumped the decision announced on Dec 30 to appoint 49 Jihadis as senior officers to the new Syrian army, including at least 7 foreign fighters.

Territorial Integrity: The new government in Damascus had to face two serious challenges to the territorial integrity of the new state. 

1. Within 48 hours of the takeover, Israel undertook concerted multipronged military action “to protect its national security interests”, although in violation of its international norms. Its army reoccupied the long-demilitarised part of the Golan Heights under a 1974 ceasefire agreement policed by UNDOF. Its airforce launched over 350 strikes on targets including anti-aircraft batteries, military airfields, weapons production sites, combat aircraft and missiles. In addition, the navy’s missile vessels struck the Syrian naval facilities of Al-Bayda and Latakia ports, where 15 Syrian naval vessels were docked. Israeli PM Benjamin Netanyahu said, “I authorized the air force to bomb strategic military capabilities left by the Syrian army so that they would not fall into the hands of the jihadists.” On his part, Ahmed al-Sharaa reacted to the Israeli aggression timidly, saying in a TV interview on Dec 14, “Syria’s war-weary condition, after years of conflict and war, does not allow for new confrontations. The priority at this stage is reconstruction and stability, not being drawn into disputes that could lead to further destruction.” The Israeli actions were denounced by the UN Secretary-General and several Arab countries.

2. The Self Defence Force, a US-backed Kurdish militia occupying a large tract of territory in north-eastern Syria, decided to stay out of the HTS-led coalition. This situation created a piquant situation as Turkey, the mentor of the new regime in Syria, was deadest against SDF, calling them a terrorist outfit with PKK cadres in their ranks. On November 30, Turkey-supported Syrian National Army (SNA) launched Operation Dawn of Freedom against the SDF in Tel Rifaat and Manbij areas. The fighting continued till Dec12 when the US was able to effect an uneasy ceasefire. The politico-military situation continued to be in flux with SDF insisting on keeping its territorial hold as SNA and HTS wanted it to be disarmed and/or brought under Damascus control. SDF also pointed out that it was in control of camps holding ISIS Jihadis and their families numbering nearly 10,000 who could escape and pose a threat to Syria’s stability.

Foreign Affairs: Given Syria’s geo-political centrality to the region, the regime change created a cataclysm with various foreign stakeholders quick to react. Although neighbouring Turkey feigned non-involvement in the political upheaval, its protestations appeared contrived. Its politicians, intelligence and military set the agenda for the events and were first to react to the developments on the ground. Thus, its intelligence chief was in Damascus on Dec 12 and by Dec 14 its embassy in Damascus was operational. Further, the Turkish Foreign Minister visited Damascus on Dec 22 to meet Ahmed al-Sharaa (AS). Other prominent visitors to Damascus, in chronological order, were: UN Special Envoy to Syria (Dec 16, received by AS); Jordanian Foreign Minister and Qatari MOS (FA) met AS on 23/12; Ukrainian FM met with AS on 30/12 and delivered a food consignment; Kuwaiti FM met AS on 30/12. A US official delegation led by the State Department’s head of the Middle East visited Damascus on 20/12 and had a very “good discussion” with AS focusing largely on the progressive lifting of economic sanctions. On the other hand, reacting to an offensive Iranian statement, the Syrian Foreign Minister asked Iran on Dec 24 not to spread chaos in Syria and respect the popular will and sovereignty. Separately, there were indications about the new government’s flexibility on the Russian military presence in Syria, specific to the Hmeimim airbase in Latakia and the Tartous naval facility. On Dec 14, a TV interview quoted AS as saying cryptically that Russia’s relations with Syria should serve common interests. On Dec 14, Jordan hosted a foreign ministers’ conference at Aqaba to discuss the regime change in Syria. It was attended by delegations from Saudi Arabia, Iraq, Lebanon, Egypt, the UAE, Bahrain, Turkey, Qatar, the US, the EU and the UN and issued a Joint Statement affirming respect for the sovereignty of Syria and its unity, and territorial integrity and cession of hostilities in Syria. It also sought to put guardrails on the transition of Syria to normalcy. (Further Reading: “Joint Statement on Syria”, State Department, Dec 14)

Humanitarian Situation: The new government was saddled with nearly 90% of Syrians living below the poverty line. Some UN estimates have put the humanitarian costs of the 13-year-long civil war as the following: 500,000 deaths, 7 mn internally displaced, 6.4 mn refugees abroad and material damage of $500 bn. It would take the country many years to get back on its feet.

Gaza Conflict

Despite sporadic efforts for a ceasefire (particularly in Doha from Dec 18 onwards), there was no tangible movement towards peace in Gaza and the bloodletting continued with both Hamas and Israel blaming each other for the stalemate. Donald Trump, the US President-elect, waded into the situation with a social media post on Dec 2: “[If] the hostages are not released prior to January 20, 2025, the date that I proudly assume Office as President of the United States, there will be ALL HELL TO PAY in the Middle East.” Trump also appointed Steve Witkoff, an American real estate tycoon of Lebanese extraction, as his Middle East envoy, who joined in the US ceasefire efforts.  

There was no let up in the dismal humanitarian situation in Gaza in general and in northern Gaza in particular where the Israeli Defence Force (IDF) continued to impose a siege throughout the month. Whatever little food aid got into the territory faced looting by the gangs. IDF ignored various expressions of concern, including from the WHO Chief, to force an evacuation of Kamal Adwan Hospital, one of the three in northern Gaza, claiming that it was being misused by Hamas militants. On Dec 28, IDF claimed to have detained 240 Palestinians from the hospital including its director, accusing them of being Hamas operatives. (Comment: Continued siege and push towards depopulation of northern Gaza led to speculation about Israel planning to create a buffer zone in the area.)

For developments in the West Bank: Please see PalestineAuthority and West Bank.

For details on the flare-up between Iran and Israel: Please see Iran.

For details on the Israel-Hezbollah tensions: Please see Lebanon.

For the Houthi missile attacks on Israel and the Red Sea area: Please see Yemen. 

WANA and Multilateral Diplomacy:

Several WANA regional developments evoked multilateral diplomacy during the month, including the following:

1. On Dec 19, the UN General Assembly voted overwhelmingly (137-12: 22) to ask the International Court of Justice for an opinion on Israel’s obligations to facilitate aid to Palestinians that is delivered by states and international groups including the UN. Earlier on Dec 11, the UNGA adopted two resolutions with an overwhelming majority. The first demanded an immediate, unconditional and permanent ceasefire between Israel and Palestinian militants Hamas in the Gaza Strip and the immediate release of all hostages. The second resolution supported the UN Palestinian Relief and Works Agency (UNRWA) and deplored a new Israeli law banning its operations in Israel from late January.

2. On Dec 20, the UN Security Council unanimously adopted resolution  2766 extending the term of the UNDOF for another six months. It also simultaneously expressed concern that the military activities in the area could escalate tensions and emphasised the need for the status quo to be maintained. (Comment: Taking advantage of the force vacuum on the Syrian side, Israel has reoccupied the demilitarised zone hitherto petroled by the UNDOF.)

3. On Dec 19, Dec 19 UN Secretary-General said(Reuters) that Israeli airstrikes on Syria are violations of the country’s sovereignty and territorial integrity and “must stop.” 

4. D-8 organisation for economic cooperation among 8 Muslim countries held its summit in Cairo on Dec 19. (Comment:The members of D-8 are: Bangladesh, Iran, Indonesia, Malaysia, Nigeria, Pakistan, Turkey and Egypt. The organisation was established in 1997 to foster economic cooperation among Muslim countries but has conspicuously produced more heat than light – probably because the affluent Gulf Arabs have stayed out of it, preferring bilateral deals. D-8 Cairo Summit allowed the newly installed Iranian President to pay a rare visit to Egypt.)

5. Ignoring an Israeli minister’s criticism of his previous statement lamenting the inhumane situation in Gaza, Pope Francis on Dec 21 reiterated his criticism calling airstrikes bombing the children  not war, but a “cruelty”, because “it touches the heart.” 

WANA and the United States:

While the US seemed to have been taken by surprise at the swift collapse of al-Assad regime in Syria, it quickly acted to manage the situation both strategically and diplomatically. As HTS-led Rebels captured Damascus on Dec 8, President Biden was quick to say that the US will work with “our partners and the stakeholders in Syria to help them seize an opportunity to manage the risk.” On the same day, its airforce hit over 75 ISIS targets in Syria to thwart any attempts by the extremist militia to exploit strategic instability in the country. Further on Dec 12, the US NSA and Secretary of State were dispatched to the WANA region to manage the ceasefire negotiations and the Syrian transition respectively. While the NSA visited Egypt, Israel and Qatar, the Secretary of State met with President Erdogan to avert building up clashes between US-supported Kurdish Self-Defence Forces and Turkey’s Syrian proxies led by the Syrian National Army, particularly in the Manbij area. At the US prodding, Turkey also pressed Hamas leadership factions having relocated from Doha to Istanbul, to show greater flexibility in ceasefire negotiations in Gaza. Blinken also met with Jordan’s King Abdullah II and Iraqi PM Mohammed al-Sudani – two of Syria’s neighbours. On Dec 19, a Pentagon spokesman admitted that the US had 2000 troops in Syria, twice the number previously reported. On Dec 20, the first US official team, led by the head of the Middle East section in the State Department landed in Damascus and had “very productive” talks with HTS leader Ahmed al-Sharaa (aka Abu Mohammed al-Golani), on whom the US still had $10 mn bounty (scrapped on the same day!)  Separately, on Dec 12 US NSA Jake Sullivan said that Israel was acting in Syria for its defence as it launched attacks to destroy Syria’s strategic hardware and occupied the demilitarised zone. Donald Trump, the US President-elect said on Dec 16 that Turkey, which had had an unfriendly takeover of Syria, held the key to the future of that country.  

On Dec 21, the State Department approved $5 bn worth of arms sales to Egypt.

On Dec 22, a US F-22 jet was shot down in the Red Sea area in a friendly fire accident, both pilots were rescued alive. 

Pro-Israeli publication Axios reported on Dec 7 that the US had cleared the export of the advanced AI chips to the UAE under MicroSoft’s deal with the G42 group of Abu Dhabi. 

On Dec 20, the US added nine vessels and eight companies involved in Iranian oil exports to the sanctions list.

During the third week of December, the US Central Command Chief visited Israel, Jordan, Lebanon and US posts in Syria largely to discuss the change of regime in Syria.   

WANA and the European Union: 

European Commission President Ursula van Derleyen visited Ankara and was received by Turkish President Erdogan on Dec 17. She said the EU would increase humanitarian aid to Syria. But she also warned of the risk of a resurgence by hardline Islamic State militants urging against this possibility.

According to official EU statistics, 57,700 migrants managed to cross illegally across the sea to the EU between the beginning of the year and Dec 15 – an increase of 12% y/y. 10,457 of others perished. 

WANA and Russia:

Speaking at his annual end-of-the-year news conference on Dec 20, President Vladimir Putin denied claims of Russia’s loss with the fall of the Bashar Al-Assad regime in Syria. “You want to present what is happening in Syria as a defeat for Russia,” Putin asserted. “I assure you it is not … we have achieved our goals.” He also said that Russia had offered to maintain bases there “for humanitarian purposes.” He also admitted to having evacuated 4,000 Iranian fighters during the regime change. Earlier on Dec 16, Russian Foreign Minister Sergei Lavrov said that it was up to the Syrians to determine their future.

On Dec 23 two Russian Deputy Premiers visited Tehran to invite Iranian President Masoud Pezeshkian to visit Russia in early 2025 to sign a comprehensive cooperation agreement with Eurasian Economic Union.

On Nov 18, Russia vetoed a resolution calling for a ceasefire in Sudan accusing the sponsors of double standards with the Gaza conflict.

IB) Political Developments 

Israel:

Prime Minister Benyamin Netanyahu clawed back into the headlines this month, mostly for good reasons. Buoyed by strategic gains in Lebanon and Syria as well as wresting the initiative vis a vis Hamas in Gaza, al-Houthis in Yemen and Iran marked a dramatic revival in his popularity at home. Moreover, the election of Donald Trump, an avid supporter of Netanyahu, was also a strong reassurance. He sought to overlay his policy deficiencies with the later gains and project himself as a confident leader capable of steering the ship of Israel through regional turbulence and domestic political disarray. He lost no time in announcing several measures to build upon these gains, including the military occupation of the demilitarised zone with Syria (citing lack of government on the other side) and destroying its strategic arsenal (to prevent it from falling into the hands of Islamic rebels) and unveiling plans to double the Israeli population on the Golan Heights (where currently 31,000 Israelis are living among 24,000 Druze). His long-delayed trial for three charges involving corruption and breach of trust commenced on Dec 10, with Netanyahu pleading not guilty and assailing the media for bias against him. On Dec 29, Netanyahu underwent a prostate surgery. 

Israeli Knesset passed the first reading of the 2025 draft budget on Dec 16 with a 59-57 vote. Total budget spending in 2025 is projected to be 756 bn shekels ($210 bn), with a deficit target set at 4.4% of the GDP instead of ~8% in 2024. The budget includes spending cuts and tax increases of 37 bn shekels, which are needed to keep the deficit under control as war costs have soared. Defence Spending will be 108 bn shekels. All three rating agencies have cut Israel’s credit rating this year due to war expenses. The budget next goes to the Knesset committees, where it could face changes. (Comment: The budget is not expected to be fully approved until at least January. Failure to approve the budget by March 31 would trigger new elections.)

On Dec 15, Israel decided to shut its embassy in Dublin to protest against Irish policies against it. 

Official statistics released on Dec 31 revealed that emigration from the country more than doubled to 827,000 in 2024 plummeting the population growth to 1.1%, the lowest in a decade. (Comment: For a country and society built on the immigration of Jews, this was bad news, caused mostly by the war and economic hardships caused by it.) 

Palestine Authority and West Bank:

The security situation in the northern West Bank got further complicated during the month with Palestine Authority security forces launching a concerted lethal sweep on Dec 5 against Hamas and Palestinian Islamic Jihad militants in Jenin. This led to intra-Palestinian clashes ratcheting up the violence already high due to IDF’s iron-fisted campaign against hotbeds of militancy in the area. In a related move, PA banned Al-Jazeera from reporting from the Jenin governorate. (Comment: The PA security clampdown was no coincidence: it seemed opportunistically motivated by the beginning of the endgame in Gaza, the election of Pro-Israel Donald Trump, the decimation of Hezbollah and the ouster of al-Assad regime in Syria.  These developments have not only encouraged Pro-West PA to weed out militancy in the West Bank but also revived its ambitions to re-govern Gaza.)

On its part, IDF continued with its proactivity to curb militancy in the West Bank. It claimed to have killed 6 and 8 Palestinians on Dec 19 and 24 respectively and detained a further 18 on Dec 24.

Lebanon:

French Foreign Minister visited Lebanon on Dec 31. Apart from meeting the Lebanese leadership, he also visited the UNIFIL forces deployed in the southern part of the country bordering Israel.

While the IDF-Hezbollah ceasefire that went into effect on Nov 27 continued to hold, both sides accused each other of violations. On Dec 11, IDF withdrew from Khaim, the first Lebanese town to be handed over to the Lebanese army after the ceasefire. At the same time, the Israeli airforce attacked 7 points on the Lebanon-Syria border on Dec 27 to stop arm-smuggling by Hezbollah. Earlier on Dec 14, Hezbollah Chief Naim Qassem admitted publically that the regime change in Syria had resulted in the loss of the supply route through that country.   

On Dec 4, the Lebanese authorities put their human losses at 4047 persons killed and 16,638 wounded. On the Israeli side, at least 73 soldiers and 45 civilians had died during the conflict with Hezbollah.

Hezbollah Chief Naim Qassem said on Dec 5 that Hezbollah has paid out more than $50 mn in cash gifts to families affected by war with Israel. While thanking Iran for the humanitarian help provided, he called on “Arab brothers” and the international community to participate in reconstruction stating that Hezbollah would work hand in hand with the Lebanese government.

On Dec 31, Lebanon returned 70 officers and soldiers of the Syrian army loyal to the former regime who had taken refuge in that country. 

Iran:

The stiff upper lipping continued in Tehran over the purported loss of proxies in the “Axis of Resistance” as well as Trump Presidency 2.0. Thus, Supreme Leader Ali Khamenei asserted on Dec 21, “The Axis of Resistance is not a hardware that can be destroyed, rather it is faith and commitment that only grows stronger under pressure and will succeed in expelling the US from the region.” 

Foreign Minister Araqchi visited Beijing on Dec 28 where he was quoted as saying that 2025 is going to be an important year for the nuclear issue. On the same issue, the US NSA told CNN on Dec 22 that a weakened Iran could pursue nuclear weapons. E3 countries (Germany, France and the UK) signatories of the JCPOA informed the UN Security Council on Dec 11 that “if needed” they were ready to “snap back” the economic sanctions on Iran. The IAEA selective media leaks about Iranian nuclear Armageddon also continued unabated. On Dec 6, Reuters reported citing unnamed IAEA sources that Iran had dramatically accelerated uranium enrichment and had enough U235 to produce 4 nuclear bombs. On Dec 12, it reported Iran having allegedly accepted tougher oversight norms at its Fordow enrichment plant. (Comment: JCPOA is set to expire in Oct 2025 on completion of its 10-year term.)

Reuters also reported on Dec 3 that a fuel oil smuggling network under Iraqi Shi’ite group Asaib Ahl al-Haq (AAH), a Shia paramilitary force and political party generated at least $1 bn a year for Iran in Iraq since Prime MinisterMohammed Shia al-Sudani took office in 2022. Ironically, such fuel oil smuggling continues even as Iran suffered frequent power shutdowns in December due to fuel shortages and sub-zero temperatures.

On Dec 6, Iran successfully launched an advanced module to deploy satellites at higher orbits.  

Bloomberg reported on Dec 24 that Hossein Shamkhani, a Dubai-based Iranian oil tycoon was among a cadre of businessmen handling weapons deliveries across the Caspian Seato Russia, helping Moscow in its war in Ukraine.

Yemen:  

Triangular hostilities between al-Houthis on one side and Israel-US-UK as well as Red Sea maritime activity continued during the month. With the ceasefire in Lebanon and Hamas on the ropes, Israel intensified air attacks on al-Houthi targets. Two such attacks were launched on Dec 19 and 25 respectively aimed at ports, power plants as well as Sana’a airport itself. These were in retaliation to Yemeni missile attacks on Israeli targets made on Dec 1, 9, 16, 21 and 25. Both sides appeared to be economical with the truth, Israel admitted only the Dec 21 missile having hit the Tel Aviv area, “lightly injuring 14 persons.” All other Yemeni missiles were claimed to have been intercepted. Both sides kept up their jingoist rhetoric.

The US conducted air raids on al-Houthi targets, mostly in Sana’a and Hodeidah on Dec 21, 30 and 31. On Dec 9-10, US Navy destroyers prevented al-Houthi missile and drone attacks on 3 merchant ships in the Gulf of Aden.

WHO disclosed on Dec 23 that Yemen continued to suffer severely from the Cholera epidemic during 2024: As of  Dec 1, the country witnessed 249,900 cases (35% of the global burden) leading to 861 deaths (18% of the global burden).      

Turkey: 

During the month, Ankara unveiled a multi-pronged strategy to resolve its long-festering Kurdish minority conundrum, seeking to leverage its success in installing a proxy regime in Syria. On Dec 29, it unveiled a $14 bn, 198 projects development plan for 2025-28 for the Kurdish region in the south-east. On Dec 26, two MPs from DEM, a party popular with Kurds, were allowed to meet long emprisoned Kurdish Workers’ Party (PKK) leader Abdullah Oclan who was quoted as having declared “I am ready to take the necessary positive step and make the call” for militants to lay down arms.  At the same time, President Recep Tayyip Erdogan continued with his bloodcurdling rhetoric against Syrian Kurdish outfits such as YPG and SDF saying that Kurdish militants in Syria will either lay down their weapons or “be buried.” The same day, the Turkish military claimed to have eliminated 21 Kurdish militants in northern Syria and Iraq. Earlier on Dec 21, Erdogan said following a change in the Syrian regime, there was no longer any reason for outsiders to back Kurdish YPG fighters. (Comment: Abdullah Ocelan, PKK’s founder, has been in a Turkish prison for 25 years. Under his tutelage, PKK waged a bloody insurgency for Kurdish independence causing nearly 40,000 deaths. Although Kurds are estimated to constitute nearly 30% of Turkey’s total population, Ankara has largely denied them any identity. Kurds spread across Turkey, Syria, Iraq and Iran are often cited as the largest ethnic group without a country of their own.) 

Following a pro-Turkish government coming to power in Syria, Turkey extended strong support to the new regime with ministers of defence and energy making offers for cooperation. On Dec 27, Turkey officially claimed that 30663 Syrian refugees had returned to their homeland. (Comment: Nearly 3.5 mn Syrians are estimated to have taken refuge in Turkey during the 13 years of civil war.)  

In outreaching peacemaking diplomacy, President Erdogan separately hosted the PM of Ethiopia and President of Somalia on Dec 10-11 to mediate an end to their dispute arising out of Addis Ababa’s bid to acquire access to the Indian Ocean through Berbera port in Somaliland, a breakaway republic of Somalia. Two previous rounds of similar talks have been unproductive. 

Sudan:

There were several reports this month about foreign military support to the two antagonists in 20 months old Sudan’s civil war in violation of the arms embargo imposed by UNSCR 2750 (2024). A Reuters report on Dec 12 implied that at least  86  flights from the UAE have headed for an airstrip at Amdjarass in eastern Chad since the war began in April 2023. Moreover, three-quarters of these flights were operated by carriers accused earlier by the UN of ferrying Emirati weapons to a warlord in Libya. This raised the suspicion that despite Abu Dhabi’s stout denials, the Emirati arms were being supplied to the Rapid Support Force (RSF) fighters in Sudan. On the other hand, Bloomberg revealed on Dec 18 that arms from Russia, China and Iran were reaching Sudan Armed Forces. (Comment: Those supplying weapons had several motives ranging from love of the lucre – Sudan having large gold deposits-  selling old weapons for profit, fighting “political Islam” and acquiring bases along Sudan’s Red Sea coast. Meanwhile, the plight of civilian war victims and those seeking democratic rule were largely ignored. Further Reading:  (i)  “Dozens of UAE flights head to airstrip UN says supplies arms to Sudan rebels”, Reuters, Dec 12; (ii) Sudan Civil War Fueled by Russia Guns, Iran Drones” Bloomberg, Dec 18) 

Saudi Arabia:

Crown Prince and PM Mohammed bin Salman (MbS) visited Abu Dhabi on Dec 1 to meet the UAE President Mohammed bin Zayed Al-Nahyan (MbZ). (Comment: This Summit, the first in nearly three years, raised some eyebrows as the two are thought to have had a rocky relationship underlying ill-concealed economic competition among the two regional frenemies. It was unclear if the visit marked a thaw in the bilateral ties.)

French President Emmanuel Macron paid a State visit to Riyadh on Dec 2, during which he met MbS.

On Dec 2, direct civil flights resumed between Dammam and Mashhad after a hiatus of 9 years. (Comment: The resumption of flights between the Shia pilgrimage city in Iran and the capital of Saudi Arabia’s Eastern Province, with a significant Shia minority, indicated continuing improvement in ties between Tehran and Riyadh.) 

On Dec 11, FIFA awarded Saudi Arabia the honour of hosting the Football World Cup in 2034. (Comment: The cup is to be played with a 48-team format and is therefore likely to take a longer time frame. Saudi Arabia was the only country offering to host the Cup. Many of the matches are likely to be held in Neom City being built northwest of the country along the Red Sea coast. The ambitious infrastructure projects associated with the Cup would not only add to the cost of Vision 2030 projects but would also keep focus on the Kingdom’s record on human rights and labour standards.)

On Dec 24, Reprieve, a human rights NGO, disclosed that Saudi Arabia executed 330 people in 2024, the highest number in decades. Those executions were mainly related to alleged drug smuggling. They also included people charged with non-lethal terrorism, a charge rights groups say is often used against those who have participated in anti-government protests. The total includes more than 100 foreigners. 

Qatar: 

On Dec 3, Emir Tamim bin Hamad Al-Thani began a State visit to the United Kingdom during which he was received by King Charles and PM Keir Starmer. 

In the FIFA Intercontinental Cup final played in Doha on Dec 18, Real Madrid of Spain defeated Pachuca of Mexico 3-0.

Libya:

The representatives of the two rival legislative bodies in Libya –based in Tripoli and Benghazi respectively – met in Morocco on Dec 18-19 to try to break a political deadlock and hold nationwide elections to re-unify the country and prevent frequent slide-backs into chaos. The talks concluded with the two sides agreeing, once again, to work together with a UN mission to pave the way for elections to end years of political deadlock. (Comment: The last UN-sponsored attempt to hold unified elections in 2021 was infructuous leading to the de facto partition of the country, even as they have somehow managed to keep the Central Bank and the National Oil Company unified.)

Somalia:

On Dec 31 Somali Security forces repulsed an attack by the Islamic State suicide bomber squad on a military base in the northeastern region of Puntland. The clash resulted in the death of 9 suicide bombers and injuries to several troops. (Comment: Although Somalia has had a serious insurgency and terrorism-related problem for several years from al-Qaeda affiliated al-Shabab militia in the south, the said attack in the north was the largest by IS so far and took place amidst a military campaign against it.)

II) Economic Developments

Oil & Gas Related Developments:

Global Issues:

The Brent for January delivery on Dec 31 was at $74.64/barrel having risen 2.3% during the month, but down 3% over 2024. This was the second year in a row that the oil prices have shown negative growth. During 2024 the global oil prices swung in a range of $22.40/barrel – the lowest since 2019. Its surge during the month was contributed by several factors of which the main were: (i) Tightening of the US sanctions on maritime infrastructure used by Russia and Iran to transport the crude to their buyers; (ii) Signs of recovery in oil demand from China, world’s largest consumer and importer; (iii) Enhanced geo-political instability in the WANA region as the regime change in Syria and continuation of conflict in Gaza; (iv) Sporadic al-Houthi action in the Red Sea to disrupt the maritime links through the Baab al-Mandeb. 

Most observers, nevertheless saw oil prices under bearish pressure during 2025. The following developments corroborated the negative sentiments: (i) On Dec 5, OPEC+ decided to delay progressive reversing its voluntary cuts of 2.2 mbpd by three months to April 2025 given the lacklustre global demand. This was the third such postponement and would now be phased over six months beginning April 1 2025. (ii) On Dec 11, the OPEC monthly report cut the growth in global oil consumption further by 210,000 bpd, for the fifth straight month. OPEC now expects the 2024 average daily demand to rise only by 1.6 mbpd, lower by 21% from its most optimistic projections. Oil prices have declined by 17% since July 2024. (iii) The next day, IEA published its monthly report which was even more pessimistic: It predicted that the world oil markets will be oversupplied by a hefty 1.4 mbpd if the group proceeds with plans to revive output starting in April. Even if OPEC+ cancels next year’s hikes entirely, there’ll still be an overhang of 950,000 barrels a day. (iv) Macquarie Analysts predicted that the Brent oil price is likely to average around $70.50/barrel in 2025 as compared to $79.64 in 2024.

Reuters estimated on Dec 1 that OPEC pumped on average 27.02 mbpd during November 2024, 120,000 bpd higher than the previous month as Libya’s higher production compensated for a decline in Iraqi output. Despite OPEC+ decision to extend the voluntary production cuts, Kazakistan still plans to raise its output significantly in 2025. However, the UAE planned a production cut of 230,000 bpd in 2025. Chinese company Sinopec predicted on Dec 19 that the oil demand in China, the world’s largest consumer and importer,  would peak in 2027.

Country Specific Developments: 

Saudi crude exports in October 2024 rose by 0.174 mbpd from the previous month to 5.925 mbpd. At the same time, Saudi’s production fell slightly to 8.972 mbpd from 8.975 mbpd in September.

On Dec 30, the Iraqi cabinet approved a $4.6 bn Basrah-Haditha oil pipeline project aimed at transporting crude oil to the country’s central and southern regions. Iraq is planning to cut the amount of gas flaring to about 20% in 2025 in an attempt to meet rising demand and reduce imports. The country currently captures about 67% of the gas that is produced from oil fields. On Dec 19, Bloomberg reported that BP and Iraqi oil authorities hope to conclude an agreement in early 2025 aimed at reviving the Kirkuk field,  one of Iraq’s most prolific oil and gas resources.

On Dec 18, Reuters published a report saying that Iran’s Islamic Revolutionary Guard Corps (IRGC) has tightened its grip on the country’s oil industry and controls up to half the exports estimated at more than $50 billion a year in oil revenue. The IRGC controlled up to 50% of Iran’s oil exports, a sharp increase from about 20% three years ago. It also quoted an Israeli expert as saying that around 70%-80% of Hezbollah’s annual budget of  $700 mn to $1 bn came directly from Iran.

On Dec 7, Qatar‘s Energy Minister said his country had no concerns about U.S. President-elect Donald Trump’s promise to lift a cap on LNG exports, adding his country would cope with any competition. In a separate vain, he criticised said the European Union should thoroughly review the Corporate Sustainability Due Diligence Directive, which will require larger companies operating in the bloc to check if their supply chains use forced labour or cause environmental damage and act to take action if they do. He said it could force Qatar Energy and other Qatari companies to avoid investing in the EU.

Following economy-related development took place in WANA countries:

Regional Economic Developments

The profound economic consequences of the various WANA conflicts including those in Gaza, Lebanon, Syria and  Yemen began to unfold in December. The war resulting in distructions and shift in alliances made the affected countries look for alternative sources for reconstruction and humanitarian assistance. The new Syrian government sought the lifting of the Western economic sanctions and looked for help from Turkey and the Gulf monarchies. Lebanon sought to loosen Hezbollah’s grip to be more appealing for the Saudi and Emirati assistance. Iran suffered economically as Hezbollah and al-Assads afforded it conduits for trade and finance in defiance of the Western sanctions. Further, the removal of al-Assads led to the loss of the Iranian credits already extended, although it also cut further financial manpower and material exposure in Syria. On the other hand, the cost of rebuilding Hezbollah’s military and civil infrastructure and supporting pro-Hezbollah war victims added to the Iranian financial exposure in Lebanon. Turkey hoped to encash its IOUs with new Syrian rulers granting Turkish companies huge opportunities in reconstruction and humanitarian goods supplies. (Further Reading: “Conflict is remaking the Middle East’s economic order”, The Economist, Dec 19)

In Bloomberg’s list of world’s 25 richest families published on Dec 12, there were several entries from the WANA region: Al-Nahyans (UAE Ruling dynasty was world’s second richest with total wealth put at $323.9 bn),  Al-Thanis (Qatar Ruling dynasty was ranked 3^rd;$172.9 bn); Al-Saud (5^th; $140 bn); Ofer (Israeli family-owned shipping group was 13^th worth $55.6 bn)  

On Dec 20, Jared Kushner’s Affinity Partners raised an additional $1.5 bn from the Qatar Investment Authority and Abu Dhabi-based asset manager Lunate and extended the investment period of its debut fund to 2029 to avoid any conflict of interest with his father-in-law’s US Presidency term.

On Dec 18, most GCC Central Banks followed the US Federal Reserve in lowering their bank rates by 25 bps.

Economic Developments in Individual WANA Countries: 

According to the official data released on Dec 30, Saudi Arabia’s FDI inflows in Q3/24 dropped 8% quarter-on-quarter to $4.8 bn. It was also down from a year ago. (Comment: Despite huge oil income and massive investments abroad, the Kingdom needs large FDI inflows, particularly in non-oil economic sectors, to meet its ambitious Vision 2030 targets. Its inability to garner higher FDI also exposes its relatively weak economic fundamentals.) 

On Dec 26, Turkey’s Central Bank cut its bank rate by 250 bps to 47.5% as inflation dipped to 47% in November 2024. Earlier on Dec 24, the government raised the monthly minimum wage by 30% to $630/- impacting around 9 mn workers. (Comment: Although the quantum of release was far lower than the inflation, the economists worried that this revision could stoke inflation.)

Bloomberg reported on Dec 16 that Companies as well as sovereign entities in the UAE issued $38.4 bn of dollar debt this year. That was 54% more than last year. The Dubai index posted a fourth consecutive annual gain, surging 27% in 2024, its biggest jump since 2021. Abu Dhabi and Riyadh indices, in contrast, elked out low single-digit gains. On Dec 11, the UAE and the Eurasia Economic Union (EAEU) financed their economic agreement aimed at increasing non-oil bilateral trade through the reduction of tariffs and elimination of trade barriers. The EAEU bloc is made up of Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia. (Comments: (a) Overleveraging of the debt and stocks surge contrasted with stagnancy and decline in major EM indices and indicated irrational exuberance, particularly in the context of regional turmoil and stagnant oil prices. (b) The UAE-EAEU CECA would formalise and geographically expand the UAE’s flourishing economic ties with Russia leveraging the Western economic sanctions on Moscow since the Ukraine conflict. Several Russian companies and oligarchs have made the UAE their base outside Russia to circumvent them.)

On Dec 24, Israel’s finance ministry revealed that despite multifront wars, the foreign investments in Israel picked up in the H1/2024 to stand at $11.8 bn. Excluding a one-off $15 bn investment by the US’s Intel Corporation, total deals in H1/2023 amounted to $7.3 bn by comparison. Although inflation in Israel declined further to 3.4% in November 2024, it was still above the Central Bank’s range of 1 to 3 per cent. 

On Dec 25, the IMF and Egypt reached a deal to unlock further funding of $1.2 bn needed to shore up the country’s strained public finance. As an implicit quid pro quo, Cairo agreed, inter alia,  to raise the tax-to-revenue ratio by 2% of the GDP over the next two years and accelerate the divestment of state-owned companies. On Dec 6, Egypt authorised an airforce-linked commercial agency to take over GASC, the state civilian monopoly engaged in the import of strategic food items. (Comment: With Egypt being often counted as as world’s largest importer of wheat, the move indicated further expansion of military-linked companies’ role in running profitable segments of the state economy.)

On Dec 14, the Iranian currency, the Rial fell to a new low of 756,000 to a US Dollar amid uncertainties about Trump 2.0, and tensions with the West over Tehran’s nuclear programme loss of the proxies. With an annual inflation of ~35%, Iranians seek safe havens in dollars suggesting further headwinds for the rial.

On Dec 31, Oman joined some other GCC countries in announcing that from January 2025 it would implement a minimum top-up tax (DMTT) of 15% on multinational enterprises with consolidated annual revenue of Euro 750 mn operating in the country.

On Dec 19 the IMF announced its readiness to assist Syria‘s reconstruction alongside the international community, but the situation on the ground remains fluid. The IMF has had no meaningful contact with Syrian authorities since an economic consultation in 2009. On Dec 11 Switzerland revealed that $ 112 mn worth of frozen Syrian assets existed in the country. Following regime change on Dec 8, the Syrian currency, Lira,  firmed up by nearly 20% trading between 12,500 and 10,0000 to a US dollar on Dec 14 as compared to the previous rate of 15,000.

III) Bilateral Developments 

• On the invitation of Emir Sheikh Meshal Al-Ahmad Al-Jaber Al-Sabah, Prime Minister Shri Narendra Modi paid a State visit to the State of Kuwait on Dec 21-22. This was the first such visit to that country after a gap of 41 years. During his meeting with the Emir, PM Modi was awarded with ‘The Order of Mubarak Al Kabeer’, the country’s highest honour. He also met Crown Prince Sheikh Sabah Al-Khaled Al-Sabah Al-Hamad Al-MubarakAl-Sabah and Kuwaiti PM Sheikh Ahmad Abdullah Al-Ahmad Al-Jaber Al-Mubarak Al-Sabah, Prime Minister of the State of Kuwait. The two sides signed four bilateral documents to foster cooperation in the fields of defence, cultural exchange, sports and Kuwaiti membership of the International Solar Alliance. The invitation to visit Kuwait was delivered earlier on Dec 4 during PM Modi’s meeting with visiting Kuwaiti foreign minister Abdullah Ali Al-Yahya. During his interaction with EAM Dr S. Jaishankar the two sides decided to create a Joint Commission on Cooperation (JCC) co-chaired by the two Foreign Ministers. In addition to the previous Joint Working Groups (JWG) on Health, Manpower and Hydrocarbons, the JCC is to also have the new JWGs in areas of trade, investments, education & skill development, science &technology, security & counter-terrorism, agriculture and culture. (Comment: While India’s ties with central Gulf states, viz. the UAE, Saudi Arabia and Qatar, have seen consolidation and mobility, the peripheral states including Kuwait, Iran, Iraq, Oman and Bahrain have been relatively dormant. This is most of the time due to factors intrinsic to these individual states or their specific context. In Kuwait’s case, the erstwhile regional pioneer did not fully recover from the Iraq-Iran war 1980-88, the Iraqi occupation 1990-91, the financial market crash in 1982, the internal dissension among Al-Jaber and Al-Salem factions of the Royal family and the perineal frictions between the National Assembly and the Royal Family. In the past five years, Kuwait has seen three Emirs and four parliamentary elections – keeping the country domestically preoccupied. Thus, PM Modi’s visit seem to have been an attempt to complete the circuit of the GCC states and hope that Kuwait would eventually be able to reciprocate the gesture. Further Reading: “Joint Statement: Official visit of Shri Narendra Modi, Prime Minister of India to Kuwait (December 21-22, 2024)”, PMO Press Release, Dec 22)

The fifteenth session of the Indo-UAE Joint Commission Meeting was held in New Delhi on Dec 14. It was co-chaired at the foreign minister’s level. The visiting Emirati FM Sheikh Abdullah bin Zayed Al-Nahyan also called on PM Modi. The JCM was preceded by the 4th Strategic Dialogue on December 12 in New Delhi also co-chaired by the EAM and the visiting dignitary. (Comment: While Indo-UAE economic ties have bloomed since the signing of CEPA in May 2022, the gains have not been shared equitably for several reasons. Firstly, the Emiratis have since signed similar agreements with a large number of countries, thereby eroding India’s advantage. Secondly, the UAE, a country of less than 10 mn persons, has an asymmetry with India in the size of the market and the fact that it is largely a trading trans-shipment hub with low tariffs. Lastly, the UAE businesses have been more aggressive, particularly in high-value items, in taking advantage of the CEPA than their Indian counterparts. Further Reading:  4th India-UAE Strategic Dialogue and 15th India-UAE JCM; MEA Press Release; Dec13)   

EAM Dr S. Jaishankar visited Qatar on Dec 7 to take part in Doha Dialogues

Israeli Minister for Industry and Economy Nir Barkat visited India and had a meeting on Dec 3 with Dr Jitendra Singh, Minister of Sc & Tech., Space and Atomic Energy to discuss bilateral cooperation.

On Dec 2, Shri Bhupender Yadav delivered India’s Statement during the Ministerial Dialogue on Drought Resilience, at CoP16 of the UN Convention to Combat Desertification, in Riyadh, Saudi Arabia.

On Dec 6, the Ministry of External Affairs issued an advisory to Indian nationals to leave Syria at the earliest possible, due to civil war conditions there. On Dec 11, India organised the evacuation of 75 Indian nationals from Syria via Lebanon.  

On Dec 16, Qatar Energy signed a deal with GAIL to supply a tanker of LNG every month for five years beginning April 2025.

India’s petrol and diesel consumption in November went up by 9.2% and 8.4% respectively y/y. India imported 1.52 mbpd of Russian crude, down 13% from the previous month but still about 32% of India’s overall intake. It imported 2.28 mbpd of Middle Eastern oil, an increase of 10.8% over October, accounting for about 48% of overall imports. Despite a sharp decline during the month, Russia continued to be the top oil supplier to India followed by Iraq and Saudi Arabia.  

Indian warship INS Tushil arrived in the Moroccan port of Casablanca on Dec 27 on a two-day goodwill visit.

On Dec 31, MEA promised all assistance to Nimisha Priya, an Indian nurse on death row in an al-Houthi administered jail in Sanaa. She has been sentenced to death for killing a Yemeni national, her Kafeel or sponsor, by giving him a lethal injection. The sentence was ratified by Yemeni President Rashad al-Alimi on Dec 30.

The previous issues of West Asia & North Africa Digest are available here: LINK