BLOOMBERG - BALANCE OF POWER October 30, 2023 Israel has deepened a war with Hamas with a ground invasion of the Gaza Strip that has no end in sight.

 

BLOOMBERG - BALANCE OF POWER

October 30, 2023

Welcome to Balance of Power, bringing you the latest in global politics. If you haven’t yet, sign up here. Israel has deepened a war with Hamas with a ground invasion of the Gaza Strip that has no end in sight. Nearly 2,000 kilometers (1,200 miles) away, Qatar has spent weeks trying to negotiate the release of hostages held by Hamas in the besieged Palestinian enclave, placing itself at the center of uncomfortable diplomacy. Both moves carry huge risks. Israel has vowed to wipe out Hamas in a battle that will lead to even heavier casualties on both sides. Already the bombardment of Gaza has killed thousands of Palestinians, displaced 1.4 million and stoked ire across the Middle East and beyond. The US and its allies worry the violence will ignite a regional conflict. Qatar has been trying to help free hostages after Hamas attacked Israel on Oct. 7, killing 1,400 people and taking more than 200 captive. Four have been released, but Israel’s decision to send troops and tanks into northern Gaza this weekend will complicate those efforts. For the small but wealthy and influential Gulf state, casting itself as the Middle East’s indispensable go-between is also a political gamble. It’s been criticized by its neighbors for housing leaders of Hamas, which is designated a terrorist group by the US and European Union, and needs to deliver. Back in Israel, some officials saw Hamas using the negotiations to buy time, aiming to release just a couple of people a week while demanding an extensive cease-fire and prisoner exchange. That assessment meant the focus shifted to a long-expected ground incursion in a campaign that could last anywhere from six weeks to six months. That’s putting Israel’s long-resilient economy to the test, making its stocks the worst performers since fighting erupted. At the same time, Prime Minister Benjamin Netanyahu is under growing internal pressure to resign because of the security failure and his unwillingness to accept personal responsibility. But there’s little evidence so far he will. —  Sylvia Westall People search through buildings destroyed by Israeli bombardments yesterday ​​​​​in southern Gaza. Photographer: Ahmad Hasaballah/Getty Images Europe

Global Must Reads

President Xi Jinping is set to tighten his control of China’s $61 trillion financial industry as he gathers state leaders and top bankers to set the direction for the next five years this week in Beijing. China’s most powerful leader since Mao Zedong is expected to place the Communist Party’s “centralized and unified” leadership and increased scrutiny over the sector above all other policy objectives. US special representative for North Korea Sung Kim and his Chinese counterpart held talks over Washington’s concerns that Pyongyang is supplying arms to Russia and Beijing may be forcibly returning North Koreans in its territory. The discussion in a videoconference today could portend areas of discussion ahead of an expected summit next month between US President Joe Biden and Xi. North Korean leader Kim Jong Un and Russian Defense Minister Sergei Shoigu inspect warplanes in Vladivostok on Sept. 16.  Source: Russian Defense Ministry Press Service  Allies of Colombian President Gustavo Petro lost control of all of the nation’s major cities in regional elections yesterday, signaling potential paralysis as new mayors clash with the government. The popularity of Petro, Colombia’s first leftist leader, has plummeted as he struggles to keep his political coalition together in congress. Australia’s Deputy Prime Minister Richard Marles will visit the US and the UK in the coming week to push for faster progress on the AUKUS security partnership that would lead to Canberra buying nuclear-powered submarines from the US within a decade. The trip comes less than a week after Prime Minister Anthony Albanese visited the US and urged lawmakers to pass legislation needed for the deal to proceed. The number of new fathers taking childcare leave has jumped a year after revisions to Japan’s paternity leave system, with one survey showing a doubling in the number of days taken off compared with last year. The program, which allows up to 52 weeks of paid time off, is the second-most generous among countries in the Organisation for Economic Co-operation and Development. The US said cease-fire talks in Sudan have reconvened between the army and the Rapid Support Forces militia in a bid to resolve a months-long battle for control of the African nation.  A federal judge has denied former US President Donald Trump’s request to keep on hold a partial gag order barring him from publicly criticizing prosecutors, potential witnesses, and court staff involved in the federal election prosecution against him.

Washington Dispatch

Biden today will take his first major step to confront the emerging risks of artificial intelligence by issuing a broad executive order regarding government agencies’ use of it. His directive is intended to promote the safe deployment of AI with a government-wide strategy. The executive order’s release occurs as countries around the world have struggled to grasp the new technology’s potential benefits — and perils. Lawmakers on Capitol Hill have been trying to establish a framework that would provide safety without stifling innovation. Even as many executives plead for guidance from Washington, corporate America, particularly Silicon Valley, has been rushing into AI. Last week, Alphabet’s Google committed to invest $2 billion in the artificial intelligence company Anthropic. The deal is structured as a convertible note, a type of debt that will switch to equity at the startup’s next funding round. It follows another large convertible note investment into Anthropic from Amazon.com for as much as $4 billion. One person to watch today: Representative Mike Johnson begins his first full week as speaker of the US House. Sign up for the Washington Edition newsletter for more from the US capital and watch Balance of Power at 5pm ET weekdays on Bloomberg Television.

Chart of the Day

South African Finance Minister Enoch Godongwana has no good options in this week’s mid-term budget, stuck between lower-than-expected tax revenue and pressure from the ruling party to bolster government services ahead of next year’s crunch elections. To balance the books, he will need to trim spending and raise borrowing and may signal higher taxes — all unpopular decisions.

And Finally

A new book by two Bengaluru-based ecologists argues that a series of flood disasters in India this year is a wake-up call for people to rethink their relationship with water, and the key to doing so lies in looking at the country’s ancient history and religions. Shades of Blue: Connecting the Drops in India’s Cities, by Harini Nagendra and Seema Mundoli comes at a time of heightened concern over the impact of climate change on weather patterns in South Asia. Residents with their belongings and livestock evacuate a flooded residential area in New Delhi in July. Photographer: Anindito Mukherjee/Bloomberg Thanks to everyone who answered our Friday quiz and congratulations to Cathy Ko, who was the first to name San Francisco as the city that’s cracking down on unlicensed hot dog vendors and urging people living on the street to seek shelter as it races to prepare for a major summit.

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