🇮🇱 No business like war business: Israeli defense contractors’ profits boom while economy takes a beating

Israel’s Central Bank expects the war in Gaza to cost a whopping 250 billion shekels ($67.4 billion US) through 2025, as defense spending as a share of GDP jumps from 5.3% to 9%. Q4 of 2023 saw Israel’s GDP drop by nearly 20% relative to the third quarter, with consumption dropping 27% and investment by 70%.

But as the civilian economy suffers, Israel’s arms makers have no complaints, boasting record profits. Israel’s top three defense giants – Israel Aerospace Industries (IAI), Rafael Advanced Defense Systems and Elbit Systems have each enjoyed surging stock prices and orders growing at a pace beyond their ability to keep up.

◻️ IAI reported a 7% growth in sales to $5.3 billion in 2023, a 49% jump in net profit, with production ranging from drones, missiles, bombs, radars and electronic warfare articles to space-based defenses. Its order backlog has soared to $18 billion.

◻️ Rafael – makers of Tamir missiles for the Iron Dome and an array of other air defense and anti-tank missiles and drones, saw a record 21% increase in sales and a whopping 85% increase in order volume, with net profits hitting $158 million – a 17% jump from 2022, and the backlog of orders reaching over $14 billion.

◻️ Elbit, makers of much of the “guts” of Israeli weapons, plus drones, communications equipment, small arms, cluster munitions and armored vehicles, saw profits jump 8% in 2023, with revenues reaching nearly $6 billion, and Q1 2024 results put out this week showing $1.6 billion in revenues, and a $20.4 billion order backlog.

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🇲🇽 Mexico’s presidential hopeful Sheinbaum: profile and geopolitical approach

Сlaudia Sheinbaum, former Mexico City mayor and left-leaning Morena party frontrunner, may become Mexican first female president following the June 2 national vote.

What's known about the presidential favorite?

◻️ Claudia Sheinbaum Pardo, 61, is a Mexican environmental engineer-tunred-politician.

◻️ Served as the secretary of the environment of Mexico City in 2000-2006 during current President Andrés Manuel Lopez Obrador's tenure as mayor.

◻️ In 2014, Sheinbaum joined Lopez Obrador's Morena Party and is now seen as his political heir to the presidency.

◻️ Defining herself as a left-leaning Mexican politician, Sheinbaum is expected to maintain good ties with Cuba and Venezuela. She has referred to late Cuban leader Fidel Castro with respect.

◻️ She has vowed to reduce Mexican companies' dependence on supply chain links with China. Mexico overtook China to become the US' biggest trading partner in 2023.

◻️ She has hailed the "enormous potential" of the US-Mexico-Canada Agreement (USMCA) for the Mexican economy in the future.

◻️ Sheinbaum supported Lopez Obrador's stance on Russia's special military operation in Ukraine and opposed joining the West's sanctions against Moscow. Mexico rejected sending weapons to the Kiev regime and slammed the US military support to Ukraine. "The war in Ukraine only feeds big arms producers and hurts millions of people," she tweeted in September 2022.

◻️ International observers expect that Sheinbaum would maintain the same "measured" approach towards the Israel-Palestine matter as Lopez Obrador. She has called for the two-state solution, although Mexico has not yet recognized Palestine as a state. On May 28, Mexico filed a "declaration of intervention" to join the case brought by South Africa, which accuses Israel of genocide in Gaza.

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🇪🇺🇭🇺 Why does the EU top brass have a grudge against Hungary’s PM?

Hungary will be denied senior posts in the European Commission after the June elections, Politico reported, as “punishment” for opposing the proxy conflict in Ukraine.

Hungary has long been a thorn in Brussels’ side. Here are key points of contention between Prime Minister Victor Orban and the EU:

◻️ The EU criticized Hungary's 2010s newly-adopted constitution for increasing state control over the judiciary, media and NGOs. Orban in turn accused the “inadequate” Western political elite of trying to take Europe “into a post-Christian era, and into an era when nations disappear.”

◻️ In 2016, Orban threatened to sue the EU over compulsory migrant resettlement quotas.

◻️ In 2018, Hungary passed a law criminalizing aid to illegal migrants and expelled US-based NGO kingpin George Soros' foundations for political meddling.

◻️ In 2020, Hungary defined parents' genders in its constitution — “the mother is a woman, the father is a man” — to counter Western ideological influences.

◻️ In December 2022, Orban called for the dissolution of the European Parliament, accusing it of "Hungarophobia."

In response to the Ukraine crisis, Hungary has opposed sanctions on Russia and pushed for peace talks.

➖ In March 2022, Hungary banned weapons deliveries to Kiev.

➖ In December 2023, Hungary blocked €50 billion in EU aid for Ukraine.

➖ In January, Hungary opposed a new EU fund for rapid military aid to Kiev.

➖ Hungary has delayed legislation to fast-track seizing interest on frozen Russian assets and giving the money to Ukraine.

EU officials have used financial incentives and threats to pressure Orban. In January, Orban accused Brussels of trying to blackmail Hungary by threatening to end economic support and destabilizing its currency. Orban has dismissed the “Russian threat” rhetoric as EU and NATO “war planning” and announced efforts to redefine Hungary’s status in the alliance.

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Revealed: NATO’s air defense shield in Eastern Europe essentially nonexistent

NATO presently has “less than 5 percent” of the capacity necessary to protect its so-called eastern flank ringing Russia from air and missile strikes in the event of a “full-scale” escalation with Moscow, officials familiar with the alliance’s internal calculations have told the Financial Times.

💬 “[Air and missile defense capabilities are] a major part of the plan to defend Eastern Europe from invasion. And right now, we don’t have that,” an anonymous senior NATO diplomat told the outlet.

“[Air defense] is one of the biggest holes we have. We can’t deny it,” a second NATO diplomat said.

The stunning admission echoes revelations from explosive testimony in the US Senate earlier this month that North America is virtually defenseless not only against Russian hypersonic missiles, but even to a conventional missile and drone attack like the one Iran carried out against Israel in mid-April in retaliation to Tel Aviv’s deadly April 1 attack on the Iranian Embassy compound in Damascus, Syria.

The back-to-back admissions that NATO air and missile defenses on both sides of the Atlantic are woefully inadequate opens the door to a host of questions, not the least of which is the sincerity of US and European officials’ claims that Russia would attack NATO if it managed to defeat the alliance’s proxy armies in Ukraine. One would think that if alliance seriously believed in the ‘Russian threat’ to the homeland that it would save limited and dwindling air defense capabilities instead of sending them to Ukraine to be destroyed in conditions of near-total Russian air superiority.

The apparently shambolic state of NATO air defenses is also somewhat surprising when considering that the alliance spent $1.3 trillion – the equivalent of over 55 percent of global defense spending, in 2023 – more than 13 times what Russia did over the same period.

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◻️ Pepe Escobar: The West is Hell-Bent on Provoking Russia Into Hot War

◻️ No business like war business: Israeli defense contractors’ profits boom while economy takes a beating

◻️ EXPOSED: French Foreign Legion fighters pop up in Ukraine

◻️ ABCs of Abrams’ weak spots: comprehensive list of problems with US’ top tank revealed in Ukraine

◻️ Why does the EU top brass have a grudge against Hungary’s PM?

◻️ NATO’s grip on Gotland: Who’s militarizing the Baltic Sea?

◻️ Czech bid to buy artillery ammo for Ukraine on verge of collapse

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Volodymyr Zelensky has instructed officials and deputies to publicly attack US President Joe Biden and Chinese President Xi Jinping for their reluctance to attend his Ukraine ‘peace’ summit in Switzerland on June 15–16, British newspaper The Financial Times (FT) reported, citing a leaked document.

According to an unnamed senior Ukrainian official, there has been "paranoia" in Zelensky's office in recent months. “Zelensky has deep anxiety about the military situation, but especially about the peace summit in June,” the official said. The sources note that Zelensky sees no point in the forum if Biden and Xi do not turn up.

US officials told the newspaper that Kiev decided to go ahead the summit at the exclusive Swiss resort despite warnings from Washington that Biden may not be able to attend on those dates. A number of members of the Ukrainian government told the FT that they were concerned that Zelensky's orders could damage relations with the US. According to them, Zelensky should not “bite the hand that feeds” him.

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🇨🇳 China-Arab ties strengthen amid multipolarity and geopolitical shifts

Chinese-Arabian relations, particularly with Saudi Arabia and the UAE, are rapidly growing due to the multipolarity trend, US pressure on China and conflicts in Ukraine and Gaza.

At the China-Arab States Cooperation Forum, Chinese President Xi Jinping emphasized China's commitment to partnership for peace and stability.

The forum saw the participation of leaders from Egypt, UAE, Bahrain and Tunisia. Additionally, China and Russia have positioned themselves as leaders of BRICS, which now includes UAE and Egypt, with Saudi Arabia also invited to join.

Arab states have shown more support for China’s peace plan for Ukraine than Western proposals, with Saudi Arabia suggesting China as a key intermediary for a Gaza ceasefire.

Here is the economic foundation for this Arab-Chinese rapprochement:

◻️ China sources over one-third of its oil from six Gulf Cooperation Council members, with only Russia supplying more than Saudi Arabia (85.9 million metric tons in 2023).

◻️ A significant portion of Saudi-Chinese oil trade is conducted in ‘petro-yuans’, attributed to "geopolitical risks," according to Silk Road Fund chairman Zhu Lun.

◻️ De-dollarization and expansion of Arab-Chinese trade to the non-energy sectors were the goals set by Xi during his visit to Riyadh in December 2022. He called for more investment in AI and green tech.

◻️ In June 2023, Riyadh signed a $5.6 billion deal with a Chinese electric carmaker to establish a joint venture in Saudi Arabia.

◻️ Xi proposed creating a "joint space debris observation center" and developing space aircraft for scientific and passenger missions with Arab countries.

◻️ At the China-Arab States Cooperation Forum, China signed Belt and Road cooperation agreements with all 22 Arab countries and the Arab League, implementing over 200 major projects benefiting nearly 2 billion people. China expects diplomatic support from Arab nations on the Taiwan issue.

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