FO Talks: Why Germany Saves and Why Germans Love Bonds

Nicolai Leski”
post_date=”August 17, 2026 06:16″
pUrl=”https://www.fairobserver.com/economics/fo-talks-why-germany-saves-and-why-germans-love-bonds/” pid=”163959″
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Editor-in-Chief Atul Singh and investment banker Nicolai Leski explore why Germany has one of the developed world’s highest savings rates and why German investors continue to favor bonds over stocks. They trace the roots of German financial culture through centuries of political and economic history, from the fragmented Holy Roman Empire to the trauma of the Weimar hyperinflation and the Deutsche Telekom crash. Germany’s preference for security reflects not only economic incentives but also deeply ingrained historical experiences that continue to shape attitudes toward risk and investment.

Germany values thrift over investment

Singh opens by highlighting Germany’s unusually high savings rate compared to the rest of the eurozone and asks why Germans consistently save so much of their disposable income. Leski immediately distinguishes between saving and investing, arguing that German households traditionally prioritize preserving liquidity instead of seeking higher long-term returns through equities. As he puts it, “Saving here is the classical thrift saving,” with money sitting in savings accounts or similar low-risk vehicles rather than being invested in productive assets.

Singh and Leski contrast Germany with the United States, where household debt is far more common and borrowing often finances consumption, education and homeownership. Singh suggests that the German commitment to Sparsamkeit — thrift as a virtue — resembles saving cultures found in parts of Asia. Leski agrees that Germany has developed a distinctive preference for financial security but argues that its origins lie in history rather than simple cultural attitudes.

History shaped Germany’s financial institutions

Leski explains that Germany followed a very different economic path from the Atlantic trading powers. While countries such as the Netherlands and Britain developed shareholder capitalism through overseas commerce and joint-stock companies, the German lands remained politically fragmented for centuries. Merchants operating across dozens of principalities had to navigate different currencies, tolls and legal systems, encouraging many traders to become bankers instead.

Singh contrasts this with the Dutch East India Company and Britain’s parliamentary system, where broad participation in equity markets encouraged a culture of entrepreneurship and risk-taking. Leski argues that these institutional differences continue to influence financial behavior centuries later. Germany developed stronger creditor protections and bank-centered finance, while Atlantic economies placed greater emphasis on shareholder ownership and capital markets.

Financial shocks reinforced risk aversion

The conversation then turns to the major events that shaped modern German attitudes toward investment. Singh notes that 1923 hyperinflation destroyed savings and brought profound political consequences. Leski acknowledges the apparent contradiction: Inflation should have encouraged investment in hard assets rather than cash. Instead, the experience intensified the desire for certainty and stable returns.

More recently, the Deutsche Telekom privatization left a lasting scar on retail investors. Encouraged by government advertising, many first-time investors bought shares near the height of the dot-com boom before watching the stock collapse. Leski says the episode arrived “at the perfectly wrong time” for a country with little tradition of stock ownership or financial education. Many households suffered steep losses and concluded that equities were inherently dangerous.

The speakers also discuss the 2008 financial crisis, when German banks purchased large volumes of complex structured credit products tied to US subprime mortgages. Leski argues that German institutions trusted the promise of repayment without fully understanding the underlying risks, reinforcing the country’s cautious approach to investing.

Debt, housing and the search for security

Singh asks whether the linguistic connection between Schulden (debt) and Schuld (guilt or blame) contributes to German financial conservatism. Leski considers the theory interesting but ultimately unconvincing, noting that Dutch uses similar linguistic roots despite embracing equity investment far more readily.

Singh and Leski then turn to Germany’s relatively low homeownership rate. Leski explains that while many Germans still aspire to own a house, renting is often viewed as more practical because it offers flexibility and avoids maintenance costs. Historical policies introduced after the hyperinflation also discouraged property ownership by reducing real estate values.

Throughout these examples, Leski returns to one idea: security. Limited financial education, historical experience and family traditions have all reinforced a preference for minimizing perceived risk rather than maximizing long-term returns.

Trust lies at the heart of German finance

The conversation concludes by examining an apparent contradiction in German investing. Many Germans regard government bonds as the safest possible investment while remaining reluctant to buy shares in German companies. Leski argues that this logic ultimately depends on the same source of value.

“Money is nothing but trust,” Leski explains. Government bonds are only secure because businesses generate profits, workers pay taxes and the broader economy remains productive. If investors trust the state’s ability to repay its debts, they are indirectly trusting the companies they hesitate to own.

Singh closes by suggesting that greater financial education and a better understanding of long-term investing could gradually weaken Germany’s traditional aversion to equities. While historical experience explains the country’s saving culture, Leski believes breaking the cycle of excessive caution will require Germans to rethink what genuine financial security actually means.

[Lee Thompson-Kolar edited this piece.]

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

”
post-content-short=”
Editor-in-Chief Atul Singh and investment banker Nicolai Leski explore why Germany has one of the developed world’s highest savings rates and why German investors continue to favor bonds over stocks. They trace the roots of German financial culture through centuries of political and economic…”
post_summery=”In this episode of FO Talks, Atul Singh and Nicolai Leski discuss why Germans favor bonds over stocks. They trace Germany’s financial culture to its bank-centered economy, 1923 hyperinflation and the Deutsche Telekom collapse — experiences that may have fostered a preference for security. Germany’s bond trust rests on the same productive economy that many Germans don’t invest in.”
post-date=”Aug 17, 2026″
post-title=”FO Talks: Why Germany Saves and Why Germans Love Bonds” slug-data=”fo-talks-why-germany-saves-and-why-germans-love-bonds”>

FO Talks: Why Germany Saves and Why Germans Love Bonds

Gary Grappo”
post_date=”August 14, 2026 06:44″
pUrl=”https://www.fairobserver.com/world-news/fo-live-making-sense-of-natos-future/” pid=”163907″
post-content=”

Editor-in-Chief Atul Singh hosts a discussion with former US Ambassador Gary Grappo, ex-CIA officer Glenn Carle and retired Royal Air Force officer Peter Hoskins to examine NATO’s uncertain future amid shifting American priorities, renewed European rearmament and Russia’s continued challenge to European security. While the alliance faces unprecedented political and strategic pressures, it remains essential to transatlantic security, though its members must prepare for Europe to assume greater responsibility for its own defense. The discussion explores how NATO must adapt to changing geopolitical realities without losing the institutional strengths that have sustained it for more than seven decades.

Trump accelerates NATO’s transformation

The discussion opens with the panel considering whether NATO has entered a fundamentally new era. Hoskins argues that calls for European allies to shoulder a greater share of the defense burden predate US President Donald Trump, but Trump’s confrontational style has dramatically altered the political atmosphere surrounding the alliance. Hoskins believes the United States is likely to continue reducing its military commitment to Europe over time, regardless of who occupies the White House.

Grappo agrees that American administrations have long pushed for greater burden-sharing but contends that Trump’s unusually aggressive rhetoric has strained relationships between Washington and its allies. Even so, he maintains that NATO remains central to US national security and that congressional support and public backing make an American withdrawal highly unlikely. As he puts it, “The defense and the security of Europe is a core security interest of the United States.”

Carle argues that Trump’s approach reflects a longstanding isolationist tradition within American politics rather than an entirely new phenomenon. He suggests that the combination of domestic political shifts, China’s rise and Russia’s renewed assertiveness has forced NATO to confront structural changes that were already underway before Trump’s return to office.

Europe prepares for a larger security role

The panel next examines whether Europe can build a more independent defense capability while preserving NATO’s cohesion. Hoskins points to growing military cooperation through joint procurement projects, including surveillance aircraft, submarines and frigates, as evidence that European governments are strengthening their defense industries and operational coordination.

Simultaneously, he rejects proposals for a separate European defense organization outside NATO. He argues that duplicating NATO’s command structure would waste resources and create unnecessary complications given the alliance’s existing institutional framework and the participation of countries such as Canada and the United Kingdom. Every American commander within NATO is paired with a European deputy, which gives the alliance an established structure capable of adapting even if the US military presence gradually declines.

Turkey also features prominently in the discussion. Grappo describes Ankara as a “problematic member” whose strategic importance is matched by recurring political disagreements with other allies. While he views Turkey’s decision to abandon its Russian radar system as a significant diplomatic achievement, Grappo considers the renewed F-35 agreement less consequential than the political symbolism surrounding it.

Russia has restored NATO’s purpose

The conversation then turns to the strategic environment confronting the alliance. Carle argues that the Soviet Union’s collapse left NATO searching for a clear mission, but Russia’s invasion of Ukraine has effectively restored the alliance’s original purpose by reminding members of the importance of collective defense. Rather than rendering NATO obsolete, renewed Russian aggression has strengthened its relevance.

The panel also discusses the conflict involving Iran and the absence of meaningful NATO coordination. Grappo argues that European governments were justified in declining requests to support American operations near the Strait of Hormuz because they had not been consulted beforehand and modern coalition warfare requires months of military planning and diplomatic coordination. Hoskins recalls the extensive preparation required before coalition forces entered the Gulf War, emphasizing that multinational military operations cannot be assembled overnight.

The discussion also revisits France’s longstanding interest in greater European strategic autonomy. Hoskins argues that recent events have weakened support for an independent European defense structure because NATO already possesses the experience, command systems and institutional memory needed to coordinate collective security effectively.

Populism reshapes politics on both sides of the Atlantic

Beyond military questions, the panel explores how demographic and political change is influencing NATO’s future. Carle believes that right-wing populism in the US represents a reaction against decades of social, cultural and economic transformation rather than simply a foreign policy dispute. He believes these domestic tensions have contributed to the rise of a more nationalist outlook that questions traditional alliances while stopping short of predicting a permanent American retreat from Europe.

Hoskins identifies similar political currents across Europe, particularly in France, where far-right politician Marine Le Pen has broadened her appeal beyond immigration by attracting working-class voters affected by deindustrialization. He warns that a future French government could maintain NATO’s political membership while reducing its participation in the alliance’s integrated military command, echoing former French President Charles de Gaulle’s earlier policy.

The speakers argue that countries closest to Russia, including Poland, Finland and the Baltic states, remain deeply committed to NATO because they perceive a far more immediate security threat than many Western European countries.

Rearmament brings new opportunities and new challenges

The discussion concludes with Europe’s accelerating military buildup. The speakers highlight Germany’s rapidly expanding defense budget, increased weapons production and plans to enlarge its armed forces as evidence that Berlin is assuming a greater leadership role within NATO after decades of restraint. Grappo argues that France, Italy and Spain must also increase their contributions if the alliance is to maintain credible deterrence.

Hoskins welcomes Germany’s renewed investment but notes that rebuilding military capability will require years of modernization after prolonged underinvestment. He also warns that expanding defense budgets will force difficult political choices as European governments balance military spending against popular social programs. “The higher the wall, the better the neighbor,” he recalls from a Russian military counterpart. Russia’s geopolitical ambitions continue to make NATO indispensable.

In closing, Carle suggests that emerging technologies such as drones may provide new opportunities for multinational cooperation by allowing European countries to develop joint capabilities without becoming trapped in longstanding industrial rivalries. Together, the panel concludes that NATO does not face imminent collapse but must adapt as both Europe and the US redefine their respective roles within the alliance.

[Lee Thompson-Kolar edited this piece.]

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

”
post-content-short=”
Editor-in-Chief Atul Singh hosts a discussion with former US Ambassador Gary Grappo, ex-CIA officer Glenn Carle and retired Royal Air Force officer Peter Hoskins to examine NATO’s uncertain future amid shifting American priorities, renewed European rearmament and Russia’s continued challenge…”
post_summery=”In this episode of FO Live, Atul Singh, Gary Grappo, Glenn Carle and Peter Hoskins examine NATO’s future as it faces shifting American priorities, renewed Russian aggression and Europe’s growing defense responsibilities. While Donald Trump’s approach has accelerated tensions within NATO, the alliance remains strategically indispensable. NATO is entering a period of transformation, with evolving transatlantic relationships reshaping its future.”
post-date=”Aug 14, 2026″
post-title=”FO Live: Making Sense of NATO’s Future” slug-data=”fo-live-making-sense-of-natos-future”>

FO Live: Making Sense of NATO’s Future

Glenn Carle”
post_date=”August 13, 2026 07:09″
pUrl=”https://www.fairobserver.com/politics/fo-exclusive-indias-youth-cockroach-protests-rattle-prime-minister-narendra-modi/” pid=”163894″
post-content=”

Editor-in-Chief Atul Singh and FOI Senior Partner Glenn Carle, a retired CIA officer who now advises companies, governments and organizations on geopolitical risk, examine how India’s “cockroach protests” have become a powerful symbol of youth frustration with Prime Minister Narendra Modi’s government. 

The movement took its name after Chief Justice Surya Kant made remarks in May that many interpreted as comparing unemployed young Indians to “cockroaches.” Although Kant later insisted his comments had been misunderstood, the label quickly became a rallying cry for protesters. They were led by the Cockroach Janta Party (CJP), which had initially begun as a parody political party on social media.

Glenn wryly notes that parody, it seems, is dangerous, and perhaps we all must have sympathy for dictators and political figures who decry and try to suppress politically motivated humor. The deeper question is whether Indian protests were just youth letting off some steam or the beginning of a profound political shift in the country.

From exam scandal to political movement

The immediate trigger for the protests was the leak of university entrance examinations that affected two million students. Exam papers were available for sale, favoring those who could pay. Importantly, leaks have occurred with depressing regularity under Prime Minister Narendra Modi’s government. Naturally, millions of young Indians now believe the system is corrupt, unfair and unjust.

This month, dissatisfaction reached such a high that the youth took to the streets. Young protesters demanded accountability, transparency and greater opportunity. Above all, they called for a less rigged system. They also demanded the resignation of Dharmendra Pradhan, the then education minister. The Modi government responded haughtily, saying Pradhan’s resignation was out of the question. 

Sonam Wangchuk, a well-respected environmental and civil rights activist, went on hunger strike in support of the youth protests. The government picked up Wangchuk and engaged in massive police brutality. This included firing an AK–47 into an unarmed crowd, using pellet guns and using sticks with nails at their ends to beat up the crowd. Police action fired up protesters who flooded the streets in many cities, and Pradhan resigned on July 25. This was a humiliating U-turn by the Modi government, which insisted that protesters were anti-national and Pradhan was a national treasure.

Why did students take to the streets?

Glenn points out that leaks, cheating and corruption have been going on for years. So he asks, why did students take to the streets?

Atul responds by saying that discontent against the Modi government has been brewing for a while. In the words of an officer of the heaven-born Indian Administrative Service (IAS), the Indian economy is dead and has been dead for a while. There are simply no jobs for India’s educated youth. Modi’s demonetization policy — arbitrarily taking high-denomination notes out of circulation — hurt small- and medium-sized industries. Far too many went bankrupt, and the people they employed ended up with no jobs. The Modi government also rolled out a nationwide goods and services tax in the middle of the financial year, destroying smaller businesses. More jobs disappeared.

Importantly, the Modi government has presided over corruption in the Ram Temple in Ayodhya. Modi’s Bharatiya Janata Party (BJP) won the election in no small part because it championed the building of a temple on the site where the Hindu god Ram was born after destroying a mosque on this site. Like many mosques, this was constructed in the medieval era after destroying a Hindu temple.

The Ram Temple was a civilizational project for the Hindu right, which believes India has been invaded relentlessly and colonized repeatedly. This temple was to be a Vatican-like project with world-class institutions such as universities and hospitals associated with the place of worship. Instead, a land scam, gross overinvoicing in construction and theft of cash donations by devotees have triggered public fury, especially in the Hindi heartland.

Atul comes from Uttar Pradesh, speaks Hindi and understands Indian politics. The Ram Temple corruption has incensed people because the Modi government has cheated faith and, in a religious country like India, there are consequences to cheating faith.

The US/Israel–Iran War has also taken a toll. Oil and gas prices have shot up. The government has forced consumers to use E20 fuel, which is standard petrol blended with 20% ethanol. Unfortunately, this E20 fuel is causing engine trouble and lowering mileage of two-wheelers and cars for millions of Indians. 

The exam leaks were a spark coming on top of a dry sack of hay. Simmering public discontent erupted in fury on the streets. Such was the foul language used by protesters, especially young women, against Modi and his government, that many older people were shocked. Supporters of the Modi government blamed vested interests, foreign powers plotting Modi’s downfall and a cynical opposition, but the fact remains that far too many people revolted against what they saw as a corrupt, autocratic and arrogant government.

Why leaks occur so maddeningly regularly

Atul also explains why leaks occur so regularly. The reasons are to do with both demand and supply.

On the demand side, exams are the gateway to scarce seats in top institutions, especially medical and engineering colleges, and government jobs. They are the only institutional path for upward social mobility. So, a multibillion-dollar coaching industry has developed to coach students for these exams. If a child joins a private coaching institution, he or she will be drilled for the entrance exams. Coaching starts early and ends late. The child does not go to a real school, and the private coaching company gets dummy, i.e. fake, attendance in some school so that the child qualifies for school-leaving exams. These require a minimum attendance by law.

Atul’s father believes that the coaching industry has created a culture of deceit, dishonesty, immorality and cheating. It is yet another story of misaligned incentives. The coaching companies can charge higher fees and get more students if their clients crack the entrance exams. So, it is in their interest to bribe folks conducting tests to leak papers. The demand to succeed in entrance exams is exceedingly high and the means justify the ends.

At the same time, the supply of exams is highly compromised. The National Testing Authority (NTA) is structurally poorly designed. It is headed by Abhishek Singh, an IAS officer who was in charge of AI a few months ago. He has never conducted any examination of note before his NTA assignment. Unlike the UK, an educationist is not in charge of conducting exams. In India, the IAS controls everything from the Reserve Bank of India and the Archaeological Survey of India to exams to engineering and medical colleges. The top man or woman lacking domain expertise is a recipe for disaster. Furthermore, the NTA is undermanned and uses contractors. It has also proved to be irredeemably incompetent and corrupt, causing public fury among millions of young people.

Leaks are a symbol of a failing republic

Atul points out how the youth cockroach protests took off because of spectacular incompetence at the highest levels in the Modi government. First, the Modi government underestimated the CJP, dismissing it as a mere social media phenomenon. Second, there was a complete intelligence failure of the state machinery about the scale of public discontent. Third, the key people at the top were terrible at their jobs.

Speaking of top people, Atul points to Taranjit Singh Sandhu, the lieutenant governor of Delhi, and Anurag Kumar, Delhi’s police commissioner. Sandhu is a retired officer of the Indian Foreign Service (IFS) who was India’s ambassador to the US, while Kumar is an officer of the Indian Police Service (IPS) who headed the Intelligence Bureau (IB) at the Indian embassy in Washington, DC. Kumar served Sandhu a few years ago, and the two go back a long way. Neither has any experience of law and order or crowd control. In particular, Sandhu is known to be a narcissist obsessed with self-promotion, incapable of deep conversations and of doubtful personal integrity. The BJP gave this IFS officer a ticket to run for parliament in 2024, but he lost badly. Kumar was a spy who was plucked out of IB and made the big boss of the police just before the police unleashed violence on the young protesters.

Sandhu and Kumar are emblematic of fundamental incompetence at the top of the Modi government. It has followed a policy of what Atul has called Vegetarian Stalinism, which was the subject of a full episode of The Dialectic, the flagship podcast by Atul and Glenn. In this policy, there has been a complete centralization of power. Modi rules through bureaucrats of the IAS, IFS, IPS et al who are sycophants. His face adorns posters everywhere from trains to notice boards in schools. He takes credit for everything. At some point, Modi was bound to take the blame for something, and the leaks triggered a bullet he could not dodge.

The fury of the protests demonstrates that the youth have lost faith in the Modi government, the institutions of the state and the Indian republic itself. However, the CJP protests do not have a constructive agenda or any substantive ideas for reform. They are emotive, reactive and frenzied. The young are protesting because they feel everyone and everything is for sale, from the chief justice of the Supreme Court to entrance examinations. Think of the CJP as an Indian counterpart to Occupy Wall Street that lacks coherence as a political movement.

The protests are politically extremely significant, though. Opposition leader Rahul Gandhi protested in front of Modi’s residence and was arrested. Other opposition parties also jumped into the fray to support protesters. More importantly, BJP leaders are scared that they might have to spend time in opposition because of the loss of popularity of their party and their leader among the young. Senior BJP leader and former education minister Murli Manohar Joshi decried the use of force by the Modi government. Joshi served in the previous BJP government that lost power in 2004 and is a former professor of physics. His comments show that Modi is losing ground even within the BJP.

Atul makes a bold and final point that these protests mark the beginning of the end of Modi. Modi has run a centralized government that intimidates its critics by unleashing the Enforcement Directorate, misusing the income tax department and inflicting decades of legal trouble. Now, the dam has burst. The Hindu political project has run out of steam. The urban Hindu middle class that venerates exams and expects them to be sacrosanct has lost faith in Modi and the BJP. In the coming months, India’s economic crisis will intensify, and revolutions depend on the price of bread. So, expect more chaos. Also, expect a coalition government after the next election. The BJP will not win.

[Lee Thompson-Kolar edited this piece.]

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

”
post-content-short=”
Editor-in-Chief Atul Singh and FOI Senior Partner Glenn Carle, a retired CIA officer who now advises companies, governments and organizations on geopolitical risk, examine how India’s “cockroach protests” have become a powerful symbol of youth frustration with Prime Minister Narendra…”
post_summery=”In this section of the July 2026 episode of FO Exclusive, Atul Singh and Glenn Carle examine how India’s youth-led “cockroach protests” have challenged Prime Minister Narendra Modi’s government. Protesters demanded greater accountability, transparency and democratic reform, especially after repeated leaks of university entrance exams. Autocratic Modi caved, and his education minister resigned, signaling a new political weakness that will only grow.”
post-date=”Aug 13, 2026″
post-title=”FO Exclusive: India’s Youth Cockroach Protests Rattle Prime Minister Narendra Modi” slug-data=”fo-exclusive-indias-youth-cockroach-protests-rattle-prime-minister-narendra-modi”>

FO Exclusive: India’s Youth Cockroach Protests Rattle Prime Minister Narendra Modi

Glenn Carle”
post_date=”August 12, 2026 06:15″
pUrl=”https://www.fairobserver.com/region/middle_east_north_africa/fo-exclusive-new-fronts-now-in-the-us-israel-iran-war/” pid=”163875″
post-content=”

Editor-in-Chief Atul Singh and FOI Senior Partner Glenn Carle, a retired CIA officer who now advises companies, governments and organizations on geopolitical risk, examine how the US/Israel–Iran war has entered a dangerous new phase. As the conflict spreads beyond Iran and Israel into the wider Middle East, they explore the strategic, economic and military consequences of an expanding regional war. 

The war expands across the Middle East

In July, the US/Israel–Iran War widened into a regional war with new non-state and state actors. On July 20, the Houthis declared a maritime embargo against Saudi Arabia. They control the Bab el-Mandeb, a strait that connects the Red Sea and the Gulf of Aden, which leads into the Indian Ocean. The Houthis have tried this before. In 2023, the Houthis attacked merchant ships passing through Bab el-Mandeb. In early 2024, the US and UK, along with other countries, struck Houthi targets in Yemen. After a few months of quiet, the Houthis have opened another front in the war and are considering charging fees for ships sailing through the Red Sea. 

Note: Before the war, oil, gas, and other physical exports from Gulf countries typically passed through one or more of three critical chokepoints: A tanker with Kuwaiti oil delivering to Rotterdam would have gone through all three. Further escalation could see all three blocked 

In addition to Hezbollah in Lebanon and the Houthis in Yemen, Iran has activated Shia groups in Iraq. In response, Saudi Arabia has joined the US in striking Iranian-backed targets in Iraq. Apparently, the UAE has also struck targets in Iran. The conflict is widening into a regional war.

Iran changes the tempo

Iran is increasingly feeling emboldened. Iran’s Islamic Revolutionary Guard Corps (IRGC) claimed that it had targeted a US air base and a command center in Jordan “in response to the acts of aggression of the American child-killing army.” The IRGC also said that naval forces had struck three oil tankers in the Strait of Hormuz after they “ignored warnings” and sailed along what it described as an “unsafe and illegal route” through the vital Gulf waterway.

When asked by a Fox News correspondent on Wednesday about the Iranian attack on Jordan, Trump said in an expletive-laden response that US forces would be “hitting them hard,” adding: “They’re going to get a beating.”

In a nutshell, the war shows no signs of ending. Attacks and counterattacks continue. Iran is using asymmetric warfare and decentralized decision-making brilliantly. The US is now locked into an expensive war that is costing a lot and unleashing inflation worldwide, including at home. For Iran, this war is existential. In the US, this war is unpopular. Tehran is trumping Washington for now.

Chokepoints deliver a supply shock to the global economy

As the FOI Geopolitical Risk Monitor May 2026 predicted, the war has unleashed a massive supply shock to the global economy. Over 20% of oil and gas, as well as 33% of fertilizers for the entire world, pass through the Strait of Malacca. The Iranians have closed off this strait.

As in the 1970s, inflation threatens to rip through the global economy. There is a shortage of fuel and fertilizers. Their prices will rise. This will cause a rise in food prices because agriculture needs both fuel and fertilizers. In fact, the intensifying El Niño pattern this summer, in addition to the shortage of fertilizers, will lead to a shortage of food. The poor in developing countries will go hungry. Even Americans will pay more for their food.

Bab el-Mandeb and the Strait of Hormuz have made maritime chokepoints central to global geopolitics. The 20 million barrels of oil that pass through Hormuz every day have no effective alternative route. Even the pipeline that takes some of this oil to the Red Sea port of Yanbu on the western coast of Saudi Arabia is now less effective because the Houthis have closed Bab el-Mandeb. 

The Suez Canal carries approximately 12–14% of world trade, Bab el-Mandeb another 10–12% and the Panama Canal around 6%. Traffic through Bab el-Mandeb had already fallen by roughly 55% even before the Houthis intensified their attacks. Now, the Bab el-Mandeb and Suez Canal route from Europe to Asia is blocked, increasing the time and money it takes to get cargo between the two continents. Now, ships will have to sail all around Africa.

The character of war changes

Glenn goes on to point out that the character of war has changed. The US dominates the air but does not enjoy the same dominance at sea. Sending expensive naval vessels through the Strait of Hormuz is too much of a risk for the US Navy. A cheap drone could damage a multimillion-dollar machine. The US/Israel–Iran War is making it painfully obvious that asymmetric warfare now defines the nature of war.

Glenn argues that legacy systems such as aircraft, ships, armored vehicles and massed soldiers are increasingly more vulnerable to drones. Furthermore, like Germany in World War II, the US finds itself making extremely expensive weapons systems that take a while to build. In World War II, the US churned out tanks in great volume, which overwhelmed the far fewer, though better built German Panzers. Today, the US is running out of expensive military materiel.

Atul supports Glenn’s point with numbers. Per the CSIS Cancian and Park accounting of April 24, Operation Epic Fury has led to the loss of the following kit:

1,000-plus Tomahawk cruise missiles — approximately 27% of the US inventory, on a ten-year reconstitution timeline;

Approximately 23% of JASSM inventory;

Approximately 33% of SM-6 and 50% of SM-3 interceptors;

1,430-plus PAC-3 interceptors — more than 50% of inventory;

Approximately 150 THAAD interceptors — up to 80% of the theatre-available stock;

 The entire fielded PrSM inventory.

Aircraft losses in the Iran theatre total 39 airframes: 24 MQ-9 Reapers, four F-15Es, two MC-130s, and one KC-135.

In a nutshell, Iran is producing cheap weapons at scale while the US is running short of expensive kit. Glenn points out that all war is fundamentally about logistics and supply chains. Yes, the US has ferocious strike capability, but Iran can produce drones in garages and drain American resources. The US no longer has the industrial strength it had, which led to its victory in World War II. The ability to replenish weapons and equipment matters more than the power of the initial strikes or even the killing of top leadership.

Also, Iran could expand the battlefield even further. So far, Iran has been striking American allies in the region. Iranian allies have entered the war, forcing Saudi Arabia and the UAE to reluctantly respond. Also, Iran is inflicting great pain by hitting financial centers, oil refineries and industrial production sites of American allies.

American companies are also now targets. As the Modern War Institute observes, “Cloud geography became campaign geography.” Companies such as Google, Microsoft, Palantir, Amazon, Nvidia and Oracle, together with regional digital infrastructure, are becoming part of the battlespace.

US wages unpopular war, Iran sees conflict as existential

While the war is increasingly unpopular in the US, Iran sees the war as existential. Israeli strikes killed the then-Supreme Leader Ayatollah Ali Khamenei on the first day of the war along with many of the regime’s top leaders. Yet Iran has demonstrated the ability to continue fighting. It has blocked the Strait of Hormuz, activated allies and made this war a regional conflict.

In doing so, Iran has increased the costs of war on its enemies and adversaries. The mullahs running the country have also activated Shia mythology to rally the people. Per Shia tradition, Imam Hussain ibn Ali, the grandson of Muhammad himself, led his band of 72 followers and family members to battle against thousands of troops dispatched by Umayyad Caliph Yazid I. Khamenei referred to Hussain’s sacrifice in his last address to the nation, and the dead ayatollah has become a martyr for the Shia pantheon.

Khamenei’s son Mojtaba is supposedly the new supreme leader of Iran. Yet no one has seen him since the war began. Apparently, he was injured in the strikes and might very well be dead. More importantly, the brief pause in fighting allowed the Iranian regime to conduct a spectacular funeral for Ali Khamenei. His coffin traveled more than 2,600 kilometers (over 1,615 miles) across five cities in Iran and Iraq over six days. Public mourning is a key part of the Shia tradition, and the mass hysteria on display in Khamenei’s funeral certainly boosted Iranian religiosity, nationalism and the regime.

In contrast, Americans are having growing misgivings about the war. Secretary of Defense Pete Hegseth told Congress that the conflict has already cost America $37.5 billion. He requested an additional $67 billion for operations in the region, although some analysts believe the true cost is considerably higher once they include reconstruction of damaged American military facilities. There is no clear path to victory for the US, and another forever war in the Middle East is giving many Americans a sense of deja vu after the disasters in Iraq and Afghanistan.

In a nutshell, Iran is winning, and the US is losing in this war so far.

[Lee Thompson-Kolar edited this piece.]

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

”
post-content-short=”
Editor-in-Chief Atul Singh and FOI Senior Partner Glenn Carle, a retired CIA officer who now advises companies, governments and organizations on geopolitical risk, examine how the US/Israel–Iran war has entered a dangerous new phase. As the conflict spreads beyond Iran and Israel into the wider…”
post_summery=”In this section of the July 2026 episode of FO Exclusive, Atul Singh and Glenn Carle examine how the US/Israel–Iran War has expanded to involve new actors. So far, Iran is on the ascendant because it controls one chokepoint and can squeeze the other. Not only the double chokepoint hold — Strait of Hormuz and Bab el-Mandeb — but also asymmetric warfare, where Iran uses cheap drones while the US responds with expensive interceptors, are tipping the scales in favor of Iran.”
post-date=”Aug 12, 2026″
post-title=”FO Exclusive: New Fronts Now in the US/Israel–Iran War” slug-data=”fo-exclusive-new-fronts-now-in-the-us-israel-iran-war”>

FO Exclusive: New Fronts Now in the US/Israel–Iran War

Glenn Carle”
post_date=”August 11, 2026 05:46″
pUrl=”https://www.fairobserver.com/world-news/fo-exclusive-global-lightning-roundup-of-july-2026/” pid=”163858″
post-content=”

Editor-in-Chief Atul Singh and FOI Senior Partner Glenn Carle, a retired CIA officer who now advises companies, governments and organizations on geopolitical risk, reflect on a remarkable month. From America’s 250th birthday celebrations and leadership changes in the UK to market volatility and conflicts across Africa and Eastern Europe, they examine the developments that shaped the world. They also examine the longer-term trends emerging beneath the headlines.

America: freedom at 250 and ugly politics

America turned 250 on July 4. Atul, who had been in Vienna and London, hurried back from Europe to be in Washington, DC, for the celebrations. He had a good reason: This was Atul’s first Fourth of July as an American citizen. In his words, “the flypast was impressive, the fireworks spectacular, but US President Donald Trump’s speech was a damp squib.” Trump’s rhetoric is not quite at the same level as past presidents like Thomas Jefferson, Abraham Lincoln and Theodore Roosevelt.

Despite the bright fireworks, American 250 was overshadowed by the US/Israel–Iran War and  an increasingly troubled US economy. While milling with the crowds gathered from around the country, Atul found that even Republicans were lamenting about America’s most recent foreign foray. Some said that the president had broken his vow of keeping the US out of foreign military misadventures.

Misgivings about Trump and his family profiting from high office are also deepening. On July 1, Trump’s latest financial disclosure shows his various businesses generated more than $2 billion in income in 2025, his first year back in the White House. That is more than triple his reported income from the year before. The biggest gains came from the Trump family’s cryptocurrency ventures.

Not only Republicans but also Democrats were complaining. The Democratic candidate in Maine’s Senate race, Marine Corps veteran Graham Platner, suspended his campaign after a woman he had dated, Jenny Racicot, claimed he had raped her. At 250, there is an ugliness to American politics that infects both parties.

This month, American politics changed because of the unexpected death of Lindsey Graham. He was the senior senator from South Carolina who died unexpectedly at the age of 71. Graham had just returned from Ukraine and was pushing a bill to widen sanctions against Russia. He was a strong supporter of Ukraine and Israel. Both these countries have now lost a friend on Capitol Hill.

In another unsurprising development, Trump announced new tariffs. The Supreme Court had struck down his earlier tariffs and the new ones rely on different legislation. Trump has threatened Canada with duties of 50% from August 19, in retaliation for what he claims are unfair practices by Canadian provinces that don’t buy American products. Trump was also ready to impose a new round of levies on countries after his 10%-regime expires. He is also planning to impose tariffs of 100% on generic drugs from August 2028. 

Meanwhile, American and Mexican negotiators held another session of bilateral trade talks. Trump has refused to extend the US-Mexico-Canada Agreement that Trump himself negotiated. The US is negotiating with Canada and Mexico separately to seek changes to the pact.

Politics beyond America

July was an eventful month for the UK. Great Britain now has a new prime minister: Andy Burnham. Until recently, he was mayor of Greater Manchester and known as “King of the North.” So far, Burnham has made a good debut at 10 Downing Street. Unlike other recent prime ministers who went to Oxford, the King of the North  is a Cambridge alumnus and a Catholic. A fun fact that most people do not realize is that Catholics now outnumber Anglicans in the land of King Charles.

Even as Andy rose to power, another British Catholic lost her life. Ann Widdecombe was murdered in her idyllic English village this month. She was a former MP and also a former minister in an earlier Conservative government. Recently, Widdecombe had switched to the populist-right Reform UK and was its justice spokeswoman. Like Tony Blair, she had converted to Catholicism. Widdecombe was also one of Britain’s fiercest critics of the transgender movement.

In July, Reform UK leader Nigel Farage resigned from the House of Commons. Apparently, he had taken some cash from a cryptobillionaire. Notably, Farage had stated he didn’t intend to be a prospective MP. Within weeks of receiving the $6.7 million (£5 million) gift, he abruptly changed his mind and became an MP. After his resignation, Farage has triggered a by-election in which he is running again. 

Moving east, centrists in the Hungarian parliament passed a constitutional amendment that removed Tamás Sulyok, President of Hungary, and Péter Polt, the president of Hungary’s Constitutional Court. Prime Minister Peter Magyar, who won the elections in April, said both men had put their loyalty to Viktor Orbán, the controversial previous prime minister, above the interests of the nation.

From Europe, the focus then shifts to Africa. In Zimbabwe, President Emmerson Mnangagwa signed into law constitutional amendments to extend and cement his hold on power. The amendments abolish direct presidential elections and postpone the next vote. He is emulating Robert Mugabe who ruled Zimbabwe for decades. Atul calls Mnangagwa the new Mugabe.

Neighboring South Africa is also in the news. Anti-immigrant sentiment has been rising in this country where jobs are few and the economy is in the doldrums. The anti-immigrant sentiment has soured relations with other countries and Ghana asked South African President Cyril Ramaphosa to postpone his visit. 

News in many other African countries is also grim. Fighting continues in Mali and Sudan. On July 18 in the Gao region of Mali, the Azawad Liberation Front (FLA) and the Group for the Support of Islam and Muslims (GSIM), two non-state armed groups, carried out an ambush on a military convoy. In Sudan, the Rapid Support Forces and the Sudanese Armed Forces continue to clash.

In South America, Keiko Fujimori won Peru’s presidential election. She is of Japanese descent and her father Alberto Fujimori was president. Keiko Fujimori is another victory for the right in Latin America. Rising crime and a quest for security has led to the rise of right-wing parties in this part of the world.

Frothy markets and growing risks to the global economy

In April, May and June, stock markets recorded their best quarter in six years. The S&P 500 rose by 15%, the NASDAQ Composite by 21% and the pan-European STOXX 600 by 10%. Japan’s Nikkei 225 had its best three months ever, rising by 37%. South Korea’s KOSPI increased by 68%. Even so, the share prices of some big tech giants did not fare so well in June, with Apple, Meta and Nvidia all down. Microsoft’s stock fell by 17%, making June its worst month since December 2000. Note that the markets have cooled a bit in July.

The real economy did not do as well as financial markets. The German economy has long been in trouble. So, German Chancellor Friedrich Merz unveiled a package of economic reforms on July 1. These include $11.4 billion (€10 billion) in annual income tax relief.

Japan is not doing well either. Yields on Japan’s ten-year government bonds reached 2.9% in July, the highest since 1996. Higher yields push up the costs of borrowing, leaving less for guns and butter. Japan’s gross public debt is well over 200% of GDP. As well as being concerned about the weak yen, investors are worried about how the government is going to fund its recently announced $2.3 trillion, 14-year investment plan.

American stock markets might have done alright but bond markets are signalling trouble. The 30-year US Treasury yield closed above 5% for 14 straight sessions, its longest run above that level since July 2007. This yield has finished above the 5% level 29 times this year, already the most in any calendar year since 2007. The danger lights are flashing red.

Society, sport and changing norms

America, Canada and Mexico hosted a spectacular FIFA World Cup. Spain deservedly won against an ugly Argentina. In 1966, then-British manager Alf Ramsey had called the Argentines “animals,” and that comment would hold for the behavior of the Argentine team during and after the final.

The French parliament banned children under the age of 15 from using social media. France follows Australia as the second country to prohibit social media for youngsters by law. Atul and Glenn expect this trend to gather strength in developed countries in the months ahead. Social media and cellphones are changing our brains. In the case of children, they are destroying attention spans, damaging cognitive abilities and harming learning. Societies are struggling to follow suit and politics will have to respond to this challenge, much as it once did to smoking.

Finally, July was a month of unkind climate. More than half of England is in drought because hot, dry weather has taken a toll on the country’s water supplies. Forest fires in Spain and France have been highly destructive. Japan’s south-western Kyushu region has had more than 100 aftershocks after it was struck by a powerful earthquake on July 28, that has left at least 13 dead already.

[Lee Thompson-Kolar edited this piece.]

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

”
post-content-short=”
Editor-in-Chief Atul Singh and FOI Senior Partner Glenn Carle, a retired CIA officer who now advises companies, governments and organizations on geopolitical risk, reflect on a remarkable month. From America’s 250th birthday celebrations and leadership changes in the UK to market volatility and…”
post_summery=”In the global lightning round of the July 2026 episode of FO Exclusive, Atul Singh and Glenn Carle review the key developments in the month. They reflect on 250 years of American independence, politics in the US and elsewhere, frothy markets, economic weaknesses and extreme climatic events.”
post-date=”Aug 11, 2026″
post-title=”FO Exclusive: Global Lightning Roundup of July 2026″ slug-data=”fo-exclusive-global-lightning-roundup-of-july-2026″>

FO Exclusive: Global Lightning Roundup of July 2026

Ishtiaq Ahmed”
post_date=”August 10, 2026 06:39″
pUrl=”https://www.fairobserver.com/region/middle_east_north_africa/fo-live-make-sense-of-new-and-old-pakistan-afghanistan-tensions/” pid=”163838″
post-content=”

Editor-in-Chief Atul Singh speaks with eminent scholar Ishtiaq Ahmed and Professor Thomas Barfield about the historical roots of tensions between Pakistan and Afghanistan. They trace the origins of the Durand Line dispute, examine why Pakistan’s long-standing strategy toward Afghanistan has repeatedly failed and consider how history, ethnicity and economics continue to shape relations between the two neighbors. Looking ahead, they argue that only greater regional cooperation and a more flexible political approach can prevent recurring instability.

Pakistan’s strategic depth strategy reaches a dead end

Singh opens by asking why relations between Pakistan and Taliban-led Afghanistan have deteriorated despite Islamabad’s decades-long support for the Taliban movement. Ahmed explains that Pakistan expected the US withdrawal to restore its policy of securing “strategic depth” through a friendly government in Kabul. Instead, the Tehrik-i-Taliban Pakistan has intensified attacks against the Pakistani state, while the Taliban government has expanded ties with India, Pakistan’s principal regional rival.

Pakistan further poisoned relations by deporting roughly two million Afghans. Ahmed argues that these expulsions have created deep resentment that now fuels cross-border violence. Rather than producing a more cooperative neighbor, Islamabad’s policies have reinforced Afghan distrust while weakening the influence Pakistan once believed it possessed.

Barfield adds that this outcome reflects a long-standing historical pattern. Afghan groups that relied on Pakistan during insurgencies consistently embraced Afghan nationalism once they assumed power in Kabul. As he observes, “Not Mullah Omar, not the current Taliban, not the republic ever recognized the Durand Line.”

A disputed border with deep historical roots

Ahmed traces today’s tensions back to the 1893 Durand Line and the partition of British India in 1947. Afghanistan became the only country to oppose Pakistan’s admission to the United Nations because Kabul believed the Pashtuns should have been offered the option of independence or union with Afghanistan rather than only India or Pakistan.

He also reviews later political developments that alienated many Pashtuns. Although the referendum in the Northwest Frontier Province favored Pakistan, turnout remained limited after a boycott by Pashtun leaders. Subsequent dismissals of elected provincial governments further deepened mistrust between Islamabad and the frontier regions.

Barfield emphasizes that the Durand Line itself was never intended by the British to function as a conventional international border. Instead, it separated spheres of influence while allowing communities on both sides to maintain longstanding economic and family ties. The emergence of modern nation-states attempted to impose rigid borders on societies that had historically moved freely across the frontier.

Nationalism consistently outweighs client politics

Ahmed and Barfield argue that Pakistan’s effort to treat Afghanistan as a dependent client has repeatedly failed because Afghan nationalism ultimately overrides external influence. Although Pakistan invested heavily in supporting successive Afghan insurgencies, every government that emerged in Kabul rejected Islamabad’s expectations once it exercised sovereign authority.

Barfield notes that Pakistan’s leverage has also diminished because Afghanistan now possesses alternative trade routes. India’s support for Iran’s Chabahar Port has reduced Afghanistan’s dependence on Pakistani transit, limiting Islamabad’s economic influence. Simultaneously, deporting Afghans who spent decades living in Pakistan has created an entire generation with bitter memories of expulsion.

The speakers also explore historical perceptions that continue to shape politics. Ahmed reflects on longstanding Punjabi fears of Afghan invasions, rooted in centuries of conflict across the frontier. Barfield says these historical narratives still influence modern policymaking even when political realities have changed.

Afghanistan’s greatest challenge may be economic

While security dominates headlines, Barfield believes Afghanistan’s most immediate problem is economic sustainability. During the insurgency, the Taliban relied on the previous government to continue paying civil servants and providing public services in areas under Taliban control. Once they assumed full power, however, international assistance largely disappeared.

Barfield says the Taliban “entered an empty store and declared it theirs.” Governing has proven far more difficult than fighting because Afghanistan has historically depended on outside funding rather than domestic taxation. With aid reduced and regional trade disrupted, sustaining the current government has grown increasingly difficult.

Ahmed agrees that Afghanistan has long relied on external resources, whether through foreign subsidies or broader regional relationships. Both conclude that any Afghan government faces severe constraints unless it secures stable sources of revenue beyond military success.

Flexibility offers the best path forward

Looking ahead, Singh asks whether violence is likely to continue. Ahmed states that Pakistan remains militarily stronger than Afghanistan, making outright territorial change unlikely. However, he doubts military superiority alone can resolve the political grievances that drive unrest across the frontier.

Barfield instead advocates abandoning maximalist demands over formal recognition of the Durand Line. He argues that both countries would benefit from accepting practical cooperation while allowing disagreement over historical claims to remain unresolved. Economic integration, rather than rigid legal positions, offers the best chance of reducing tensions.

Drawing on the European Union as an example, Barfield suggests that expanding trade and shared economic interests can gradually create incentives for political compromise. The discussion concludes that Pakistan’s internal diversity also requires greater decentralization and flexibility. Unless Islamabad adapts its approach toward both Afghanistan and its own regions, instability along the frontier is likely to persist.

[Lee Thompson-Kolar edited this piece.]

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

”
post-content-short=”
Editor-in-Chief Atul Singh speaks with eminent scholar Ishtiaq Ahmed and Professor Thomas Barfield about the historical roots of tensions between Pakistan and Afghanistan. They trace the origins of the Durand Line dispute, examine why Pakistan’s long-standing strategy toward Afghanistan has…”
post_summery=”In this episode of FO Live, Atul Singh, Ishtiaq Ahmed and Thomas Barfield discuss the historic roots of the Afghanistan–Pakistan conflict, specifically the Durand Line and Pashtun nationalism. Afghan nationalism overrides Islamabad’s efforts to cultivate friendly governments, while unresolved historical grievances fuel instability. Lasting stability will require political flexibility, economic integration and a federal approach to governing Pakistan’s frontier regions.”
post-date=”Aug 10, 2026″
post-title=”FO Live: Make Sense of New and Old Pakistan–Afghanistan Tensions” slug-data=”fo-live-make-sense-of-new-and-old-pakistan-afghanistan-tensions”>

FO Live: Make Sense of New and Old Pakistan–Afghanistan Tensions

Ishtiaq Ahmed”
post_date=”August 09, 2026 09:23″
pUrl=”https://www.fairobserver.com/video/fo-talks-pakistan-is-the-garrison-state-and-india-is-the-babu-state/” pid=”163832″
post-content=”

Editor-in-Chief Atul Singh and Professor Ishtiaq Ahmed examine why Pakistan evolved into a military-dominated garrison state while India became a bureaucracy-dominated “babu state,” as Atul calls it. Drawing on history, political theory and institutional development, they compare how each country inherited and transformed colonial structures after independence. Their discussion argues that although the two states followed different paths, both now require major institutional reforms to improve governance and accountability.

Weak institutions created Pakistan’s garrison state

Ahmed begins by explaining communications theorist Harold Lasswell’s concept of the garrison state, in which perceived external threats allow military institutions to dominate politics, the economy and society. He argues that Pakistan adapted this model after independence because it lacked a strong national political party following the deaths of founder Muhammad Ali Jinnah and Prime Minister Liaquat Ali Khan. Instead, the civilian bureaucracy briefly filled the vacuum before the military steadily consolidated power, culminating in General Ayub Khan’s takeover in 1958.

Ahmed describes Pakistan as a “post-colonial garrison state,” saying that the military gradually acquired authority over virtually every important national decision. Singh notes that Pakistan strengthened this system by aligning closely with the United States during the Cold War, presenting itself as a frontline state against communism while simultaneously viewing India as its principal security concern.

Singh and Ahmed then turn to how East Pakistan seceded from Pakistan and emerged as Bangladesh in 1971. They explain how political exclusion, economic grievances and ethnic discrimination destabilized the country after Bangladeshi leader Sheikh Mujibur Rahman’s electoral victory was ignored by elites in Pakistan, then West Pakistan. According to Ahmed, the creation of Bangladesh reinforced the military’s claim that only it could preserve Pakistan’s survival.

India’s inherited imperial-era bureaucracy

Singh contrasts Pakistan’s experience with India’s political evolution after independence. Whereas Pakistan’s military became the dominant institution, India retained the colonial administrative system built around the Indian Civil Service (ICS) and Imperial Police. Jawaharlal Nehru preserved these institutions, transforming them into the Indian Administrative Service (IAS) and Indian Police Service (IPS) while expanding the state’s role through socialist economic planning.

This produced a babu state, where bureaucrats, especially the IAS, exercise much of the country’s practical authority rather than elected officials. Elected mayors still have no power in India. The lord of a district is the IAS officer who controls the commanding heights of not only the state but also the local economy. Singh traces this system back to British colonial governance, under which ICS officers collected revenue, administered provinces and maintained imperial control. This was the Eastminster (in stark contrast to Westminster) model that the British operated in the colonies. India still functions according to the Eastminster model.

Ahmed agrees that India’s bureaucracy became the principal pillar of governance while the military remained outside politics. He highlights one important distinction between the two countries: “The political leaders [of India] are compelled to go to the people every four or five years… and that does have a certain virtue.” Elections force Indian politicians to seek public approval, whereas Pakistan’s military establishment can remove civilian governments without facing voters.

Problem producers: colonial bureaucracy and military rule

Both institutional models have generated long-term governance challenges. Singh contends that India’s expanding bureaucracy accumulated authority over specialized sectors without developing the technical expertise needed to manage them effectively. He points to institutions ranging from the Reserve Bank of India to the Archaeological Survey of India as examples where IAS officers with no experience or expertise lord over professionals with domain expertise.

Ahmed notes that Pakistan followed a different trajectory since both countries won their independence in 1947. During Ayub Khan’s rule (1958–1969), the country initially experienced rapid economic growth and industrialization with substantial support from the US and the World Bank. However, Pakistan’s 1965 war with India proved a turning point and the economy suffered, never to recover. Political instability has plagued Pakistan since 1965. The Afghan conflict that kicked off 1979 and the ensuing increasing Islamization prevented Pakistan from sustaining its early economic momentum.

These historical choices continue to shape each country’s political culture. Singh maintains that bureaucratic centralization has created a criminally corrupt and inefficient administration, suppressing business activity, economic growth and investment, while Ahmed emphasizes that Pakistan’s military continues to dominate national decision-making through its institutional influence, manipulating elections and elected governments.

Reform requires local democracy and greater accountability

Singh and Ahmed turn to possible reforms. Singh says both countries should professionalize their bureaucracies by placing experts rather than general administrators of the IAS or the Pakistan Administrative Service (PAS) in specialized positions. Economists should oversee central banks, specialists should lead technical agencies and recruitment should move beyond a single examination system.

Singh also calls for stronger institutions that curb corruption. This would require independent bodies with top-notch investigation, proper prosecution and an efficient judiciary that resolves cases quickly. Currently, the police rely on extrajudicial methods, including executions of criminals in cold blood. Instead, Singh contends that effective law enforcement requires functioning legal institutions based on investigation, prosecution and conviction.

Ahmed broadly agrees with these proposals while emphasizing the importance of improving relations between India and Pakistan. “Pakistan and India should sit together and sort out their concerns about security and defense,” he says. Reducing bilateral tensions would weaken the military’s justification for political dominance while allowing both countries to devote greater resources to economic development.

The conversation concludes by arguing that institutional reform must also extend to local government and internal party democracy. Singh advocates stronger elected local leadership, evoking the Swiss principle of subsidiarity. This greater local democracy should be accompanied with greater accountability. Ahmed points to Sweden’s welfare state as an example of how effective public institutions can improve citizens’ lives. Lasting reform, they agree, depends not only on changing governments but on reshaping the institutions that have defined both states since independence.

[Lee Thompson-Kolar edited this piece.]

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

”
post-content-short=”
Editor-in-Chief Atul Singh and Professor Ishtiaq Ahmed examine why Pakistan evolved into a military-dominated garrison state while India became a bureaucracy-dominated “babu state,” as Atul calls it. Drawing on history, political theory and institutional development, they compare how each…”
post_summery=”In this episode of FO Talks, Atul Singh and Ishtiaq Ahmed compare Pakistan’s evolution into a military-dominated garrison state with India’s development into a bureaucracy-dominated state. While these contrasting models shaped governance and economic development, each has produced its own structural weaknesses. Professionalizing state institutions, strengthening accountability and improving India–Pakistan relations are essential to improving these governments’ effectiveness.”
post-date=”Aug 09, 2026″
post-title=”FO Talks: Pakistan Is the Garrison State and India Is the Babu State” slug-data=”fo-talks-pakistan-is-the-garrison-state-and-india-is-the-babu-state”>

FO Talks: Pakistan Is the Garrison State and India Is the Babu State

Ahmed Ihab Abuward”
post_date=”August 01, 2026 06:50″
pUrl=”https://www.fairobserver.com/region/middle_east_north_africa/fo-talks-making-sense-of-what-life-is-like-in-palestine-today/” pid=”163730″
post-content=”

Editor Lucy Golish speaks with Youth for Palestine founder Ahmed Ihab Abuward about the humanitarian crisis, the unequal distribution of resources and the resilience that has emerged amid prolonged conflict in Gaza. Its residents face severe shortages of water, electricity, housing and healthcare while class, institutional connections and trust shape access to their aid. Abuward also reflects on the unexpected ways young Palestinians are adapting through innovation, education and community leadership, arguing that long-term recovery requires more than humanitarian relief.

Basic necessities remain out of reach

Golish begins by asking Abuward to describe daily life in Gaza. He explains that ordinary concerns have given way to a struggle for survival, with access to clean water, electricity and medical care remaining severely limited. While humanitarian aid continues to enter the territory, it falls far short of meeting the needs of the population, particularly newborns and patients requiring specialized treatment. Many serious medical conditions cannot be treated locally, while travel restrictions prevent patients from seeking care elsewhere.

As a medical student, Abuward paints a bleak picture of an overstretched healthcare system where shortages of medicine, equipment and personnel continue growing. The gap between medical needs and available resources keeps widening. As he puts it, “The percentage of [dead] people… is [getting higher and higher] every time, day by day, moment by moment.”

The crisis extends beyond hospitals. Golish notes that images from Gaza often focus on physical destruction, but Abuward emphasizes that the collapse of basic services affects every aspect of daily life, making even routine activities difficult.

Conflict reshapes family life and social priorities

Despite the ongoing war, Abuward describes an unexpected increase in marriages and births. He contends that this trend stems from the disappearance of many traditional life paths. With education disrupted, employment scarce and travel largely impossible, many young people see marriage as one of the few remaining ways to move forward with their lives.

This demographic shift has placed additional pressure on an already overwhelmed healthcare system. Maternity wards operate at full capacity while hospitals struggle with severe staffing shortages. Experienced doctors have left Gaza in large numbers, leaving nursing students and junior medical students to fill critical roles long before completing their training.

Golish asks how healthcare workers cope psychologically after years of continuous crisis. Abuward explains that many effectively live inside hospitals, eating and sleeping there because they expect new casualties to arrive at any moment. Although this life is exhausting, many have adapted because they feel they have no alternative.

Innovation and education become tools for resilience

Despite the hardship, creativity has emerged from necessity. Gazans routinely improvise practical solutions using whatever materials remain available. Makeshift drying machines built from wood, glass and plastic allow families to wash and dry clothes without electricity, while homemade games help children and young people maintain their mental well-being despite the absence of schools and recreational spaces.

Abuward says that prolonged disruption has encouraged experimentation and problem-solving. “The person who has free time is creating the creativity,” he comments, suggesting that necessity has become a catalyst for innovation.

This philosophy also shapes Youth for Palestine, the nonprofit organization he founded. The organization provides informal education in practical skills such as curriculum vitae writing, leadership, analytical thinking and professional development. Rather than focusing solely on emergency relief, Abuward hopes to help students discover talents that conflict has interrupted rather than erased.

He explains that several graduates have gone on to become ambassadors for international organizations or launch their own projects. One student-led initiative developed a Short Message Service-based educational platform that allows students in conflict zones to access coursework and complete examinations without reliable Internet access. This illustrates how locally developed solutions could have broader international applications.

Trust, inequality and aid distribution

The conversation then turns to the uneven distribution of resources inside Gaza. Abuward argues that access to aid often depends on personal connections, employment with international organizations or financial resources established before the war. He describes what he sees as three broad social groups: a small minority with outside connections, those employed by non-governmental organizations and the much larger population struggling in camps with few resources.

Golish asks how these inequalities shape public attitudes. Abuward argues that many Palestinians have lost confidence in aid organizations because they believe assistance does not always reach those most in need. In his view, rebuilding trust has become as important as providing material support.

He therefore contends that transparency and accountability should accompany humanitarian assistance. Without confidence that organizations are acting honestly, vulnerable people become reluctant to share their needs or seek help, making relief efforts less effective.

Recovery requires opportunity as well as relief

Looking beyond immediate humanitarian needs, Abuward identifies temporary housing as one of Gaza’s most urgent unmet priorities. He argues that simple shelters made from wood or other inexpensive materials would offer protection from extreme weather while allowing families to remain in their communities during reconstruction.

Golish asks how international supporters can contribute effectively. Abuward cautions against donating indiscriminately through unverified fundraising campaigns, recommending instead that contributions should go to transparent, accountable organizations that clearly document how resources are used.

He concludes by calling Youth for Palestine an investment in Gaza’s future rather than only its present. The organization’s goal is to help cultivate what he calls a “leading generation” capable of rebuilding society when conditions eventually improve. His closing message broadens beyond Gaza itself: “Everyone in the world should have rights and everyone in the world [has]  a talent. We just need to think before [we] act.”

[Lee Thompson-Kolar edited this piece.]

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

”
post-content-short=”
Editor Lucy Golish speaks with Youth for Palestine founder Ahmed Ihab Abuward about the humanitarian crisis, the unequal distribution of resources and the resilience that has emerged amid prolonged conflict in Gaza. Its residents face severe shortages of water, electricity, housing and healthcare…”
post_summery=”In this episode of FO Talks, Lucy Golish and Ahmed Ihab Abuward discuss Gaza’s humanitarian conditions. Abuward describes severe essential resource shortages, unequal aid distribution and healthcare pressures, but he also highlights the resilience and creativity that have emerged among its people. Gaza’s future depends on rebuilding trust, expanding opportunities for young people and empowering them to lead reconstruction.”
post-date=”Aug 01, 2026″
post-title=”FO Talks: Making Sense of What Life Is Like in Palestine Today” slug-data=”fo-talks-making-sense-of-what-life-is-like-in-palestine-today”>

FO Talks: Making Sense of What Life Is Like in Palestine Today

Gary Grappo”
post_date=”July 28, 2026 06:12″
pUrl=”https://www.fairobserver.com/region/middle_east_north_africa/fo-talks-make-sense-of-donald-trumps-new-peace-deal-with-iran/” pid=”163646″
post-content=”

Editor-in-Chief Atul Singh and former US Ambassador Gary Grappo, who served as Envoy and Head of Mission of the Office of the Quartet Representative Tony Blair in Jerusalem, examine the Trump administration’s new memorandum of understanding (MOU) with Iran and assess whether it marks the beginning of peace or simply a pause in hostilities. They explore the agreement’s implications for Iran’s economy, the future of its nuclear program, the security of the Strait of Hormuz and the broader balance of power in the Middle East. What does the deal mean for US influence, Israel’s strategic position and the risk of a wider regional arms race?

A temporary pause, not a lasting peace

Gary describes the agreement as “a very unsatisfactory and … abysmal memorandum of understanding.” He argues that it merely creates a 60-day framework for further negotiations rather than resolving the underlying conflict. Despite fighting alongside the United States during the war, Israel is absent from the negotiating table, which highlights an important shift in regional diplomacy.

The immediate beneficiaries are Iran’s economy and leadership. Washington has temporarily lifted sanctions on Iranian oil exports, allowing Tehran to sell oil in US dollars for the first time in decades. While this will not fully repair Iran’s struggling economy, Gary says the agreement provides a significant financial boost at a moment when Tehran desperately needs liquidity. Simultaneously, conflicting public statements over nuclear inspections suggest both governments are presenting different narratives to domestic audiences while leaving the core nuclear dispute unresolved.

The Strait of Hormuz becomes the central battleground

Regarding the Strait of Hormuz, the agreement calls on Iran to make “best efforts” to keep shipping lanes open. Yet Tehran has also indicated that it intends to administer traffic through the strait, potentially charging vessels for passage.

Atul argues that such payments resemble protection money, while Gary calls the proposal “pretty much extortion” because it lacks any legal basis under international maritime law. Unlike the Panama or Suez canals, Iran provides no infrastructure that would justify transit fees. If accepted, this precedent could undermine the longstanding principle that international waterways remain open to global commerce.

Gary also draws on his experience as US ambassador to Oman. Although Iran has suggested Muscat could participate in any collection scheme, Oman has remained publicly silent. He believes the Omanis are unlikely to violate their international commitments, though they could legitimately charge for services such as search and rescue or environmental protection if necessary. Meanwhile, Oman has emerged comparatively well positioned because its oil exports largely avoid the vulnerable shipping route through the Persian Gulf.

Economic shockwaves extend far beyond the Gulf

Atul and Gary state that the conflict has disrupted the financial architecture built around Gulf energy exports. Bahrain, Kuwait and Qatar face severe challenges because their economies depend heavily on energy exports that pass through Hormuz. Higher transportation costs and uncertainty threaten both government revenues and global energy prices.

Atul expands the analysis beyond oil markets. Gulf monarchies may have to draw down reserves or sell overseas investments to maintain domestic spending commitments while simultaneously increasing defense budgets. Reduced purchases of Western assets and US Treasury bonds could tighten global financial conditions and place upward pressure on borrowing costs.

The United Arab Emirates has requested a Federal Reserve swap line. Gary describes this as an emergency liquidity mechanism. Atul characterizes the development as a reversal of the traditional flow of petrodollars, arguing that instead of Gulf wealth supporting Western financial markets, the US may increasingly find itself supporting Gulf partners during periods of crisis. Together, they suggest that the consequences of the conflict extend well beyond the Middle East into the foundations of the global financial system.

Intelligence failures and misunderstanding Iran

Much of the discussion examines why Washington misjudged the conflict. Gary argues that recent reductions in experienced personnel at the CIA and State Department removed many of the officials with the deepest knowledge of Iran. He believes this weakened strategic planning and contributed to serious miscalculations.

He is particularly critical of the assumption that military pressure and targeted assassinations could trigger the collapse of the Iranian government. Instead, the campaign strengthened domestic support for the regime through a rally-around-the-flag effect while reinforcing a political culture shaped by the 1979 Revolution and the Iran–Iraq War.

Gary argues that American policymakers underestimated Iran’s ideological resilience and negotiating style. “The Iranians have never won a war or lost a negotiation,” he says. He expects negotiations to last far longer than the 60 days envisioned in the MOU because Iranian officials have repeatedly demonstrated their willingness to delay agreements while extracting additional concessions.

A transformed strategic landscape

The discussion concludes by examining how new military technologies have altered the balance of power. Gary argues that drones have fundamentally changed naval strategy because even a single successful attack on a tanker can disrupt shipping and drive insurance costs high enough to halt commercial traffic. Control of strategic waterways no longer depends solely on major naval fleets.

Looking ahead, both speakers warn that the agreement leaves Iran’s nuclear program unresolved while increasing pressure on neighboring states to reconsider their own security strategies. Saudi Arabia may accelerate nuclear planning if confidence in American security guarantees continues to erode. Other regional powers could eventually follow.

Rather than marking the end of the crisis, Atul and Gary conclude that the MOU begins a new phase of prolonged negotiations and strategic competition. Iran appears economically strengthened, the US faces difficult diplomatic and financial challenges and the Middle East enters an even more uncertain era in which regional stability, energy markets and the global balance of power remain interconnected.

[Lee Thompson-Kolar edited this piece.]

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

”
post-content-short=”
Editor-in-Chief Atul Singh and former US Ambassador Gary Grappo, who served as Envoy and Head of Mission of the Office of the Quartet Representative Tony Blair in Jerusalem, examine the Trump administration’s new memorandum of understanding (MOU) with Iran and assess whether it marks the…”
post_summery=”In this episode of FO Talks, Atul Singh and Gary Grappo argue that the Trump administration’s agreement with Iran has weakened the US, Israel and their partners’ standing. The unresolved status of Iran’s nuclear program, uncertainty over the Strait of Hormuz and disruptions to Gulf energy exports could have great consequences. The memorandum begins a prolonged period of instability.”
post-date=”Jul 28, 2026″
post-title=”FO Talks: Make Sense of Donald Trump’s New Peace Deal With Iran” slug-data=”fo-talks-make-sense-of-donald-trumps-new-peace-deal-with-iran”>

FO Talks: Make Sense of Donald Trump’s New Peace Deal With Iran

James M. Dorsey”
post_date=”July 23, 2026 06:07″
pUrl=”https://www.fairobserver.com/region/middle_east_north_africa/fo-talks-make-sense-of-qatars-situation-in-the-us-israel-iran-war/” pid=”163568″
post-content=”

Editor-in-Chief Atul Singh speaks with journalist and author James M. Dorsey about Qatar’s position at the heart of the US/Israel–Iran war. They explore the consequences of attacks on Qatar’s critical energy infrastructure, the limits of the country’s long-standing soft power strategy and the broader transformation of Gulf security. While the war has exposed new vulnerabilities, Qatar possesses the financial resources, diplomatic experience and strategic flexibility to remain an influential regional actor.

Soft power meets military reality

Dorsey begins by explaining why Qatar occupies such an important position in the Middle East despite its small population. As one of the world’s largest natural gas producers, it shares the world’s largest offshore gas field with Iran, creating a relationship unlike that of any other Gulf state. The country has also built an international reputation as a mediator in regional conflicts, making Iran’s decision to strike Qatar particularly significant.

The attack on the Ras Laffan gas facility marked a turning point. Around 17% of Qatar’s production capacity was disabled, with estimated losses of roughly $20 billion annually and repairs expected to take as long as five years. Dorsey calls the strike a “very significant blow” to Qatar’s economy. It forced Doha to step back temporarily from its traditional mediating role before later helping facilitate negotiations between Iran and Pakistan that contributed to the recent memorandum of understanding.

Singh notes that Qatar’s influence extends well beyond energy through the Al Jazeera network and its successful hosting of the FIFA World Cup. Dorsey argues these initiatives formed part of a broader security strategy developed after Iraq’s invasion of neighboring Kuwait. Rather than relying solely on military strength, Qatar sought to make itself globally indispensable through diplomacy, media and international visibility. The current conflict, however, demonstrates that while soft power enhances influence, it cannot substitute for effective missile defenses.

Geography limits Qatar’s options

Singh describes Qatar as a “prisoner of geography,” wedged between Saudi Arabia and Iran and heavily dependent on shipping through the Strait of Hormuz. Dorsey explains that this dependence is even greater for natural gas than for oil because gas exports cannot easily be redirected through pipelines.

Unlike Saudi Arabia and the United Arab Emirates, which have invested in alternative export routes, Qatar remains closely tied to maritime access through the Strait. This explains why Doha has adopted a more measured position on proposals involving Iranian control or temporary fees for shipping through Hormuz, emphasizing stability rather than confrontation.

Dorsey says Qatar has spent decades “having to maneuver and balance on a tightrope,” maintaining workable relations with competing regional powers. Until the recent war, this balancing strategy proved remarkably successful. The attacks nevertheless demonstrate that even careful diplomacy cannot entirely shield a small state from the consequences of great-power conflict.

Security priorities shift across the Gulf

The discussion then turns to the future of Gulf security. Dorsey believes that the United States will remain the principal security guarantor because no alternative power possesses both the capability and willingness to assume that role. However, Gulf governments are likely to demand a relationship that is more consultative and conditional than in the past.

Simultaneously, Qatar and its neighbors are expected to increase defense spending significantly. Dorsey contrasts Qatar’s earlier emphasis on “software” — its diplomatic influence and soft power — with a new focus on military “hardware.” Investment in missile defense, domestic weapons production and defense industries is likely to accelerate throughout the region.

Singh questions whether countries with relatively small citizen populations can sustain larger military establishments. Dorsey responds that labor shortages can be addressed through immigration, as Gulf economies have long relied on foreign workers. He points to the UAE as evidence that a small population does not necessarily prevent the development of capable armed forces or an expanding defense industry.

The conversation also highlights increasing diversification in Gulf security partnerships. Alongside continued American protection, countries are strengthening ties with Pakistan, India, European states and potentially China while expanding indigenous military capabilities.

A permanent relationship with Iran

Despite the conflict, Dorsey argues that geography ultimately forces the Gulf states and Iran to coexist. He describes their relationship as “a Catholic marriage,” emphasizing that neither side can simply walk away from the other.

Both speakers suggest that discussions over managing the Strait of Hormuz may eventually become part of a broader regional security framework that includes Iran. Such an arrangement would remain politically difficult, particularly given unresolved tensions involving Israel and the Palestinian issue, yet both regard regional dialogue as unavoidable over the long term.

Dorsey believes Iran has emerged from the conflict strategically stronger despite suffering military and economic damage. The survival of the Iranian regime, the prospect of sanctions relief and the possibility of reconstruction funding leave Tehran better positioned than many observers expected. Although domestic grievances remain unresolved, he believes that they have temporarily been overshadowed by wartime nationalism.

Qatar remains resilient despite greater risks

In concluding, Singh asks whether Qatar can preserve its international influence despite becoming a direct target during the conflict. Dorsey says that although the country’s security environment has become considerably more dangerous, its core strengths remain intact.

Qatar retains substantial financial resources, sophisticated diplomacy and decades of experience navigating complex regional rivalries. Those advantages, combined with its central role in global energy markets, provide the resilience needed to adapt to a changing Middle East.

The Gulf states are entering a new era in which diplomacy alone is no longer sufficient. Soft power will remain an important source of influence, but it will increasingly be complemented by stronger defense capabilities, diversified security partnerships and greater regional coordination as the balance of power continues to evolve.

[Lee Thompson-Kolar edited this piece.]

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

”
post-content-short=”
Editor-in-Chief Atul Singh speaks with journalist and author James M. Dorsey about Qatar’s position at the heart of the US/Israel–Iran war. They explore the consequences of attacks on Qatar’s critical energy infrastructure, the limits of the country’s long-standing soft power strategy and…”
post_summery=”In this episode of FO Talks, Atul Singh and James M. Dorsey examine how the US/Israel–Iran conflict has made diplomatic Qatar a target. They discuss the economic consequences of attacks on its gas infrastructure and the Gulf’s shift toward diversified security partnerships. Qatar’s financial strength and regional influence should help it adapt to the changing power balance.”
post-date=”Jul 23, 2026″
post-title=”FO Talks: Make Sense of Qatar’s Situation in the US/Israel–Iran War” slug-data=”fo-talks-make-sense-of-qatars-situation-in-the-us-israel-iran-war”>

FO Talks: Make Sense of Qatar’s Situation in the US/Israel–Iran War

Kent Jenkins Jr.”
post_date=”July 21, 2026 06:03″
pUrl=”https://www.fairobserver.com/politics/fo-talks-andy-burnham-britains-new-captain-in-tumultuous-times/” pid=”163547″
post-content=”

Editor-in-Chief Atul Singh and Kent Jenkins Jr., a former political reporter from The Washington Post turned communications consultant, discuss the rise of Andy Burnham as Britain’s seventh prime minister in a decade. They examine Burnham’s working-class roots, his governing philosophy of “Manchesterism” and the political and economic challenges awaiting his government. Can Burnham offer a credible alternative to both Thatcherism and the populist movements that have reshaped British politics over the past decade?

King of the North challenges London’s political orthodoxy

Jenkins believes that Burnham stands apart from recent British prime ministers because of his background and his political experience. Rather than emerging through Westminster, Burnham spent nearly a decade as mayor of Manchester, where he developed a policy platform centered on stronger local government, public investment and regional empowerment. As Jenkins puts it, Burnham is “very much unlike his predecessors” because of his biography, political path and policy agenda.

Singh places this argument in historical context, noting that Britain has produced several prime ministers from modest backgrounds, including Margaret Thatcher, John Major and Keir Starmer. Even so, Burnham’s rise from Manchester rather than Westminster remains unusual.

Additionally, Singh and Jenkins explore Burnham’s working-class upbringing, his Catholic background and his experience as the first member of his family to attend university. Unlike most recent prime ministers, Burnham is a Cambridge graduate. These experiences, together with his years outside what he calls “the Westminster bubble,” allow him to connect with voters who feel ignored by Britain’s political elite.

Burnham’s personal story has appeared to resonate with working-class voters who have defected from Labour during the Brexit era. His struggles with what he later described as imposter syndrome reinforce an image of a politician who personally understands the struggle of moving up in society.

New Manchesterism and break with New Labour

The conversation turns to Burnham’s governing philosophy, which he calls Manchesterism. Singh explains that the original 19th-century Manchester School championed free trade and laissez-faire economics, whereas Burnham has repurposed the term to describe a more interventionist approach with more government involvement. However, New Manchesterism involves devolving power away from Westminster to local bodies in the UK.

Jenkins highlights several reforms Burnham introduced as Mayor of Greater Manchester, including bringing buses back under public control, capping fares, improving regional transport and advocating greater investment in technical education and council housing. He argues that Burnham’s visible improvements, such as Manchester’s bright yellow buses, demonstrated that the government could still deliver practical results at a time of widespread political cynicism.

Singh agrees that Burnham deserves credit for improving regional planning and transport integration but says that Manchester’s wider revival also reflected broader economic forces. Foreign investment, growth in technology and life sciences, sovereign wealth funding in sports a la Manchester City, similar investments in real estate that have lowered rents compared to London, and the city’s expanding knowledge economy have all contributed to the city’s resurgence. Burnham successfully “rode a wave” of economic transformation while also helping shape it.

Much of the discussion contrasts Burnham’s priorities with those of former Prime Minister Tony Blair. Blair recently argued that Labour should focus primarily on artificial intelligence, national competitiveness and Britain’s role in the global economy. Burnham instead emphasizes inequality, local communities and rebuilding public trust from the ground up.

Jenkins states that Burnham represents one of the first major center-left leaders to develop a comprehensive response to the populist politics that emerged after Brexit and Donald Trump’s election. Rather than dismissing those voters, Burnham seeks to address the economic frustrations and regional inequalities that fueled their dissatisfaction.

Critics question Burnham’s consistency, pointing out that he previously opposed devolution when he was part of the Westminster bubble before opportunistically embracing them when he became a mayor. Even so, Singh and Jenkins agree that Burnham has fundamentally shifted Labour’s emphasis away from Westminster and toward local communities. His proposal to devolve greater authority to cities and regions reflects both practical experience and a broader political strategy.

A difficult inheritance and Burnham’s big test

Despite Burnham’s popularity, Britain faces severe problems. Singh outlines a daunting economic landscape that includes high public debt, persistent fiscal deficits, deteriorating infrastructure and mounting welfare costs. Burnham inherits what he calls a “poisoned chalice” after years of economic stagnation and institutional decline.

Jenkins observes that many important questions remain unanswered. Burnham has spoken extensively about local government, housing, transport and vocational education but far less about national economic management or foreign policy. Whether Manchesterism can successfully expand from governing a city to governing an entire country remains uncertain.

Singh and Jenkins further examine Burnham’s dispute with Blair over Labour’s future direction. As noted earlier, Blair and Burnham have different visions of the future. The former prescribes a top-down approach to drag the UK to the heart of the global economy while the latter pushes for a bottom-up approach that puts communities first. Clearly, Blair and Burnham not only have policy disagreements but also fundamentally different worldviews.

Singh and Jenkins go on to place Burnham within the bigger picture of Anglo-American politics. Singh compares Burnham’s rise with earlier political realignments led by Thatcher, Ronald Reagan, Bill Clinton and Blair in the days before the populism of Brexit and Trump. Burnham is now attempting to define the next phase of that political cycle by offering a center-left alternative based on local empowerment instead of more globalization.

Neither speaker sees an easy path ahead. Jenkins believes Burnham is an exceptionally skilled politician who has successfully navigated both local and national politics, though he stresses that success in office will require considerable luck alongside political talent. Singh is more pessimistic, arguing that Britain’s fragmented political landscape and mounting economic pressures make lasting success unlikely regardless of who occupies Downing Street.

Burnham has already altered the terms of Britain’s political debate. Whether Manchesterism ultimately reshapes the country or becomes another short-lived experiment will depend not only on Burnham’s leadership but also the larger economic, political and geopolitical forces no one really controls.

[Lee Thompson-Kolar edited this piece.]

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

”
post-content-short=”
Editor-in-Chief Atul Singh and Kent Jenkins Jr., a former political reporter from The Washington Post turned communications consultant, discuss the rise of Andy Burnham as Britain’s seventh prime minister in a decade. They examine Burnham’s working-class roots, his governing philosophy of…”
post_summery=”In this episode of FO Talks, Atul Singh and Kent Jenkins Jr. discuss British Prime Minister Andy Burnham’s rise and how his philosophy of Manchesterism seeks to reshape British politics. Burnham is attempting to reconnect Labour with working-class voters by shifting power from Westminster to local communities. Whether Manchesterism can succeed may determine the future of Britain’s center-left.”
post-date=”Jul 21, 2026″
post-title=”FO Talks: Andy Burnham — Britain’s New Captain in Tumultuous Times” slug-data=”fo-talks-andy-burnham-britains-new-captain-in-tumultuous-times”>

FO Talks: Andy Burnham — Britain’s New Captain in Tumultuous Times

Emma Isabella Sage”
post_date=”July 20, 2026 06:28″
pUrl=”https://www.fairobserver.com/world-news/fo-live-antisemitism-is-rising-again-why-and-why-now/” pid=”163539″
post-content=”

Editor-in-Chief Atul Singh speaks with Emma Isabella Sage, a research affiliate at the University of Glasgow, and Josef Olmert, a former Israeli government official and Middle East scholar, about the historical roots and contemporary resurgence of antisemitism. Drawing on personal experiences, historical analysis and debates over Zionism, they argue that the current wave of hostility cannot be understood solely through the lens of the Israeli–Palestinian conflict. Instead, they explore how centuries-old prejudices, political polarization and competing historical narratives continue to shape perceptions of Jewish identity and the State of Israel.

Personal histories reveal an enduring prejudice

Singh opens by asking why antisemitism appears to be resurging around the world. Olmert responds with personal experiences from Great Britain and the United States that convinced him antisemitism often lies dormant before reemerging during moments of crisis. He says that the October 7 attacks and the war in Gaza became a catalyst that revived long-standing prejudices, causing many Jews outside Israel to fear being judged collectively for the actions of the Israeli state. He also notes that Jews remain disproportionately targeted in religious hate crimes; antisemitism repeatedly assigns collective responsibility to Jewish communities.

Sage complements this perspective with her family history. Her grandfather lost his banking job in Britain because he was a German citizen, and was then forced to return to Germany, where he was persecuted for being Jewish. She recounts how her great-grandmother starved herself to death so her son could escape Nazi Germany, and reflects on returning decades later to a German village that had once been 13% Jewish, where she is now the only Jewish inhabitant.

Living in Germany today, Sage observes that Holocaust education has created widespread awareness of Jewish suffering without necessarily producing genuine knowledge about Jewish life. Many people believe they understand Judaism because they know its history of persecution, yet know little about Jewish traditions, culture or identity. Sage and Olmert agree that personal stories illustrate how antisemitism persists across generations in ways that broad historical narratives often fail to capture.

Historical narratives and national responsibility

The discussion broadens to examine how different countries confronted antisemitism before and during World War II. Olmert states that prejudice against Jews extended well beyond Nazi Germany, citing British political attitudes during the 1930s and claiming that many Allied leaders opposed Hitler for strategic rather than humanitarian reasons. Singh counters that Britain remained comparatively more tolerant than continental Europe, noting that Benjamin Disraeli had become prime minister despite his Jewish origins. Their exchange highlights the tension between judging historical figures by contemporary standards and recognizing how deeply embedded antisemitism was across European societies.

Sage then shifts attention to the US. She challenges the popular narrative that America entered the war primarily as a humanitarian force, pointing instead to the Evian Conference and the widespread reluctance to accept Jewish refugees before the Holocaust. She says that opportunities existed to save lives before mass extermination began but were not taken. This raises uncomfortable questions about international responsibility.

Additionally, Olmert mentions that antisemitism has never been universal. Jewish communities historically experienced far less hostility in some civilizations, such as India and China, than they did in Europe or parts of the Middle East. Singh suggests that societies without exclusive religious claims to universal truth often developed different relationships with minority faiths, leading to a discussion of how theological traditions may have shaped attitudes toward Jews across different regions.

Sage and Olmert suggest that acknowledging the variations in attitudes worldwide is essential to understanding contemporary debates. Antisemitism is not an exclusively German phenomenon; rather, it is a broader problem that existed across Europe, the Middle East and North America long before the Holocaust reached its deadliest phase.

Israel, Zionism and competing historical narratives

Can contemporary antisemitism be explained primarily as a reaction to Israeli policies? Singh presents the argument, frequently postulated by Muslim intellectuals, that hostility toward Jews in the Arab largely stemmed from the creation of Israel. Olmert strongly rejects this interpretation, pointing to examples of anti-Jewish discrimination under earlier Muslim rule. He says hostility toward Jews predates Zionism by many centuries.

Olmert believes the deeper issue is the transformation of Jews from a vulnerable minority into a sovereign people capable of defending themselves. He contends that many societies struggle to accept this reversal of historical roles. Sage agrees, but adds that the Middle East contains many vulnerable minorities besides Jews whose experiences are often overlooked, and that if the problem of discriminatory hatred in the Middle East really stemmed from the creation of Israel, then stateless minorities should be faring much better than they are. She describes the Israeli–Palestinian conflict principally as an ethnic and national conflict over land and self-determination rather than primarily a religious struggle. She compares it to disputes in the Balkans, Nagorno-Karabakh and Cyprus as examples of ethnic conflict between competing national claims..

Sage also challenges common descriptions of Jewish identity. She and Olmert both reject labels such as “Judeo-Christian,” arguing that Judaism developed along its own historical path rather than serving merely as a precursor to Christianity. She describes Jews as an ancient people with a shared ethnic identity as well as a religious tradition. Many contemporary misunderstandings arise, she contends, because outsiders struggle to distinguish between Judaism as a faith and the Jewish people as a nation.

The discussion also addresses widespread misunderstandings surrounding Zionism. Sage defines it simply as support for Jewish self-determination and contends that many critics attach far broader meanings to the term. As she explains, “It’s the belief that Jews have a right to self-determination.” Olmert similarly maintains that Zionism represents the collective response Jews developed after centuries of persecution rather than an ideology that can be separated from Jewish historical experience.

New forms of antisemitism on the left and right

The speakers both argue that antisemitism today emerges across the political spectrum. Olmert points to hostility from far-right movements alongside growing anti-Zionism on parts of the political left. Sage believes the distinction between criticism of Israel and antisemitism has become deliberately obscured by language which conceals deeper prejudices.

She introduces the idea of “Holocaust inversion,” and explains that some Europeans and Americans cope with inherited historical guilt by drawing a false moral equivalence between  Jews and Nazis. According to this interpretation, shifting blame onto contemporary Israel allows societies to distance themselves from responsibility for past atrocities.

Drawing on her previous experiences as a university student, Sage describes initially participating in progressive activism before discovering that her Jewish identity was being used to deflect accusations of antisemitism: that she was valuable to the group as a “fig leaf” to cover unseemly truths. After the Tree of Life synagogue shooting, she says fellow activists responded not with sympathy, but by questioning the political views of the victims. This convinced her that Jewish communities ultimately could not rely on others for protection. As she puts it, “We have to be the ones who look out for each other.”

Olmert states that criticism of Israel often applies standards not demanded of other states engaged in armed conflict. While acknowledging that Israeli governments can make mistakes and criticizing some figures on Israel’s far right, he insists that Jews retain the right to defend themselves and rejects attempts to deny Israel’s legitimacy through comparisons with Nazi Germany.

Compromise, coexistence and the future

The conversation concludes by examining why efforts to resolve the Israeli–Palestinian conflict remain so difficult. Olmert says the greatest obstacle is what he calls an absolutist approach that rejects any Jewish national rights. He contrasts this with his own support for compromise, while acknowledging that Israeli extremists also damage prospects for peace.

Singh raises critiques from figures such as political scientist Norman Finkelstein, who argues that Israeli military actions have become disproportionate and counterproductive. Olmert dismisses proportionality as an unreliable measure in wartime and insists that Israel’s first obligation is to protect its citizens. Sage similarly believes that genuine support for Palestinians should focus on improving refugees’ political and economic futures rather than perpetuating permanent displacement.

Throughout the discussion, Singh repeatedly returns to the human cost of the conflict, pointing out that continuing cycles of violence risk radicalizing new generations on both sides. Olmert agrees that political compromise remains desirable. However, he insists that any lasting settlement must begin with mutual recognition of both Jewish and Palestinian national rights rather than denying either people’s legitimacy.

Despite the bleak picture they paint, the speakers end on an optimistic note. Olmert predicts that renewed antisemitism will ultimately strengthen Jewish identity and support for Israel rather than weaken it. He closes with a declaration of resilience: “Whether you like us or not… we are going to exist for 3,000 years more.”

[Lee Thompson-Kolar edited this piece.]

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

”
post-content-short=”
Editor-in-Chief Atul Singh speaks with Emma Isabella Sage, a research affiliate at the University of Glasgow, and Josef Olmert, a former Israeli government official and Middle East scholar, about the historical roots and contemporary resurgence of antisemitism. Drawing on personal experiences,…”
post_summery=”In this episode of FO Live, Atul Singh, Emma Isabella Sage and Josef Olmert discuss the historic roots and modern resurgence of antisemitism. Longstanding antisemitic narratives have been revived and reshaped around the Gaza war, bolstered by political extremism. Confronting antisemitism requires a deeper understanding of history, identity and the enduring forces that continue to shape modern conflicts.”
post-date=”Jul 20, 2026″
post-title=”FO Live: Antisemitism Is Rising Again — Why and Why Now?” slug-data=”fo-live-antisemitism-is-rising-again-why-and-why-now”>

FO Live: Antisemitism Is Rising Again — Why and Why Now?

Mehdi Alavi”
post_date=”July 19, 2026 08:24″
pUrl=”https://www.fairobserver.com/region/middle_east_north_africa/fo-talks-what-the-domestic-situation-in-iran-tells-us-about-the-war/” pid=”163520″
post-content=”

Multimedia journalist Luke De Cresce and Mehdi Alavi, author and founder of the Peace Worldwide Organization, discuss how the ongoing war has reshaped political life inside Iran. While much international attention focuses on military operations and diplomacy, Alavi argues that the domestic consequences tell a different story, with tighter information controls, rising nationalism and growing public support for the Islamic Revolutionary Guard Corps (IRGC). He contends that many Western assessments misunderstand Iranian society and therefore misread both the country’s internal politics and its negotiating position.

Communication restrictions reinforce domestic control

De Cresce and Alavi begin with the state of communications inside Iran. Although Western media reports that Internet access has largely returned, Alavi says restrictions on international communication remain significant. Before January 8, contacting relatives and friends through WhatsApp was straightforward, but since then international calls often fail and messages that once received replies within hours can now take days or even a week.

Simultaneously, Alavi notes that communication within Iran remains far more reliable through domestic platforms such as Bale. He says that the government has maintained these internal systems while limiting outside connections because it believes foreign intelligence agencies have used international communication channels to organize terrorist opposition activity. In his view, these restrictions are intended to strengthen domestic security rather than isolate ordinary citizens.

War strengthens the IRGC and national unity

A central theme of the interview is the growing influence of the IRGC. Alavi argues that American military action has produced the opposite effect from what Washington expected by increasing public support for the Iranian state instead of encouraging regime change. “They really united Iran,” he says, describing frequent large nighttime demonstrations in support of the Revolutionary Guard across major cities.

Alavi attributes this response to Iran’s long civilizational history, saying that outsiders underestimate the strength of national identity. He compares the country to a family that may have internal disagreements but will unite against an external threat. He believes this shift has strengthened the IRGC politically and will allow it to play an even larger role after the conflict ends.

He also distinguishes between Iran’s elected government, which he characterizes as more willing to negotiate with Western countries, and the IRGC, which he says prioritizes national strength and self-reliance. According to Alavi, many Iranians now favor a significantly tougher response toward the United States than government leaders have been willing to pursue.

Economic hardship does not weaken public resolve

Inflation and sanctions have affected everyday life in Iran. Alavi acknowledges that economic conditions have deteriorated sharply, with some consumer prices doubling within a year. Despite these pressures, he says many Iranians are prepared to accept financial hardship if they believe it protects the country’s independence.

“Inflation is very bad in Iran,” Alavi says. But strong family and community networks help people endure economic difficulties. He contrasts Iranian social structures with those in the US, noting that relatives and neighbors often assist one another during periods of financial distress.

Alavi also suggests that many Iranians believe prolonged conflict will impose increasing economic costs on the US through higher energy prices and domestic political pressure. From this perspective, enduring short-term hardship is viewed as part of a longer strategic contest rather than a sign of national weakness.

Western reporting and future geopolitical alignment

Alavi concludes by assessing media coverage, domestic unrest and Iran’s long-term future. He states that protests reported in Western media were much smaller than portrayed and notes that authorities relied largely on volunteer Basij forces operating within the IRGC rather than deploying the regular military, which he interprets as evidence that officials did not view the demonstrations as an existential threat.

Alavi further contends that Western media coverage consistently exaggerates negative developments inside Iran while overlooking events that contradict prevailing narratives. This, he argues, contributes to persistent misunderstandings of Iranian public opinion and government policy.

Looking ahead, Alavi predicts that Iran will increasingly orient itself toward China, Russia and other non-Western partners. “The future should be with China and Russia and the neighboring countries,” he says. He believes the war has convinced many Iranians that closer ties with the West are unlikely to deliver lasting economic or political benefits. In his view, this strategic reorientation will shape both Iran’s postwar economy and its place in an increasingly multipolar international system.

[Lee Thompson-Kolar edited this piece.]

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

”
post-content-short=”
Multimedia journalist Luke De Cresce and Mehdi Alavi, author and founder of the Peace Worldwide Organization, discuss how the ongoing war has reshaped political life inside Iran. While much international attention focuses on military operations and diplomacy, Alavi argues that the domestic…”
post_summery=”In this episode of FO Talks, Luke De Cresce and Mehdi Alavi examine how the ongoing war has reshaped Iran’s domestic political climate, communications and public attitudes. Foreign pressure has strengthened national unity, increased IRGC support and reinforced skepticism toward the West. Alavi predicts Iran will deepen its partnerships with China and Russia while avoiding Western influence.”
post-date=”Jul 19, 2026″
post-title=”FO Talks: What the Domestic Situation in Iran Tells Us About the War” slug-data=”fo-talks-what-the-domestic-situation-in-iran-tells-us-about-the-war”>

FO Talks: What the Domestic Situation in Iran Tells Us About the War

Glenn Carle”
post_date=”July 16, 2026 05:55″
pUrl=”https://www.fairobserver.com/region/europe/fo-exclusive-keir-starmer-falls-to-the-king-of-the-north/” pid=”163455″
post-content=”

Editor-in-Chief Atul Singh and FOI Senior Partner Glenn Carle, a retired CIA officer who now advises companies, governments and organizations on geopolitical risk, examine why the British Labour Party’s commanding parliamentary majority has failed to translate into political domination. “Broken Britain,” as the UK is often called these days, faces deep-rooted, difficult problems that no change of government can solve speedily. 

After a poor showing at the local elections, British Prime Minister Keir Starmer is increasingly vulnerable. Lying in wait is Andy Burnham, the mayor of Manchester known as the King of the North. Burnham has just won a by-election to parliament, clearing his path to 10 Downing Street.

A shallow victory masks a deeper crisis

At first glance, Labour’s 2024 election victory appeared overwhelming. The party won 411 seats out of 650 in the House of Commons after the Conservatives had secured 365 seats in 2019, breaching Labour’s fabled red wall in the North. Yet it was a shallow victory. The number of votes went down, even as seats went up, suggesting that Labour’s mandate was far weaker than its parliamentary majority implied.

Starmer entered office with a reputation as an honest, decent and hardworking public servant, and an excellent lawyer. What he lacked, however, was vision, direction, agenda, policies and governing philosophy. Like former prime minister Rishi Sunak, Atul says, he displayed the “charisma of a dead mouse,” combined with U-turns and damaging lapses in judgment that quickly undermined public confidence in his leadership.

FOI’s data analysis of the 2019 and 2024 election votes and members of parliament (MPs) elected

Almost immediately after Starmer took office, his blunders reinforced that perception. The decision to scrap a popular winter fuel handout for pensioners provoked an immediate backlash. He also admitted accepting free clothing and football tickets from wealthy donors, damaging the image of integrity that had helped bring Labour to power. The appointment of Peter Mandelson as ambassador to the US revived old controversies when it came to light that the “Dark Lord,” a nickname for Mandelson, was close to infamous sex trafficker Jeffrey Epstein.

For all his faults, Starmer had some genuine achievements. He helped steer international support for Ukraine after US President Donald Trump largely withdrew American backing. Starmer also worked to position Britain for a leading role in the AI revolution. Importantly, he brought net immigration down from the record levels that had fueled support for the populist right. 

Broken Britain looks to Burnham

Starmer’s governing philosophy rested on a simple proposition: “Tories were responsible for all problems in the UK.” Yet Britain’s malaise cannot be pinned on the sins of one party. Broken Britain has endured years of economic stagnation, strained public services and declining confidence in political institutions. As veteran journalist Andrew Neil observed, the country has been governed by a “parade of mediocrities.”

Political instability has become the norm. Britain had five prime ministers in 37 years and then cycled through seven in ten years, leaving successive governments focused on surviving rather than governing. As Atul puts it, living in Britain today is “like watching the Romans turn into Italians.” One can see a slow erosion of national confidence rather than a dramatic collapse of the country.

These pressures on the country have exposed Labour’s internal contradictions. Labour presides over an unwieldy coalition of liberal and left-leaning middle classes, working-class white voters and minorities, which now comprise mainly Muslims. Holding together such a broad alliance becomes increasingly difficult as economic pressures and cultural divisions deepen.

Against that backdrop, attention has shifted to Burnham. Mayor of Greater Manchester from 2017 to 2026 and the member of parliament for Leigh from 2001 to 2017, Burnham served in several cabinet positions under Gordon Brown, ending up as Secretary of State for Health from 2009 to 2010. 

Burnham identifies as a socialist and is associated with the soft left faction of the Labour Party. He also presents himself as a politician guided by faith. A Catholic like former prime ministers Boris Johnson and Tony Blair, he attended a Catholic school and has said that “Catholic social teaching underpins my politics.” Unlike Johnson and Blair, who attended Oxford, Burnham studied English literature at Cambridge. No less than 31 British prime ministers have been Oxonians, while only 14 have been Cantabrigians. Burnham will become the first Cambridge man to enter 10 Downing Street since Stanley Baldwin, who was prime minister from 1935 to 1937.

Burnham’s ascent to the top job has been gradual. He finished fourth in the 2010 Labour Party leadership election, then came second to Jeremy Corbyn in the 2015 election. During the Covid pandemic, Burnham dramatically raised his national profile by standing on the steps of Manchester Central Library in October 2020. Dressed in jeans and a worker’s jacket, this ambitious politician harshly criticized the Johnson government’s Covid restrictions.

Burnham is a slippery politician who has changed his positions opportunistically. In 2015, he opposed devolution of health services to local leaders as shadow health secretary. Less than a year later, Burnham reversed course and championed devolution. By this time, he was running for mayor of Greater Manchester, and devolution meant he would enjoy greater power. The public forgave Burnham for his opportunistic inconsistency and his popularity continued to grow. When he applied to stand as Labour’s candidate for the House of Commons in the 2026 Gorton and Denton by-election, Starmer shot it down. The prime minister was keeping a potential rival out of Westminster and, unluckily for him, Labour not only lost that seat but finished in third place. Once Labour fared poorly in the local elections, Starmer’s position was untenable and Burnham’s entry into 10 Downing Street inevitable.

Starmer’s greatest political challenge has come not from the Conservatives but from within his own party. As Broken Britain continues to struggle, Labour’s future will be shaped not by the man in Downing Street, but by the King of the North.

[Lee Thompson-Kolar edited this piece.]

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

”
post-content-short=”
Editor-in-Chief Atul Singh and FOI Senior Partner Glenn Carle, a retired CIA officer who now advises companies, governments and organizations on geopolitical risk, examine why the British Labour Party’s commanding parliamentary majority has failed to translate into political domination….”
post_summery=”In this section of the June 2026 episode of FO Exclusive, Atul Singh and Glenn Carle examine why British Prime Minister Keir Starmer’s huge parliamentary majority has proved fragile in the face of the country’s deep problems. At a time of crisis, Starmer’s political blunders and lack of vision have opened the door to Andy Burnham, the “King of the North,” who is likely to take over as the next prime minister.”
post-date=”Jul 16, 2026″
post-title=”FO Exclusive: Keir Starmer Falls to the King of the North” slug-data=”fo-exclusive-keir-starmer-falls-to-the-king-of-the-north”>

FO Exclusive: Keir Starmer Falls to the King of the North

Glenn Carle”
post_date=”July 15, 2026 06:29″
pUrl=”https://www.fairobserver.com/region/middle_east_north_africa/fo-exclusive-iran-trumps-trump-in-new-art-of-the-deal/” pid=”163418″
post-content=”

Editor-in-Chief Atul Singh and FOI Senior Partner Glenn Carle, a retired CIA officer who now advises companies, governments and organizations on geopolitical risk, examine the broader strategic implications of the US/Israel–Iran conflict. Its significance extends well beyond the immediate military and diplomatic outcomes, revealing a changing balance of power in the Middle East and a transformation in the character of modern warfare. The lessons, they contend, will shape how both great and lesser powers approach conflict in an increasingly contested international order.

A memorandum in Iran’s favor

Perhaps the month’s most consequential geopolitical development is the reported US–Iran Islamabad Memorandum of Understanding. This memorandum reveals that the state of affairs is worse than prior to the conflict.

According to the memorandum, Washington would lift its blockade on Iran, allowing normal commercial transit through the Strait of Hormuz to resume. The US would also withdraw its naval forces from the region within 30 days and end sanctions on Iranian petrochemicals and oil. This would make large-scale sales to China and other countries possible once again. In addition, Washington reportedly pledges to prepare an international reconstruction fund worth $300 billion.

Iran’s commitments are more limited and explicitly temporary. Tehran offers a 60-day pause in hostilities, together with a temporary 60-day agreement allowing commercial vessels to transit the Strait of Hormuz. Iran also agrees to maintain the status quo on its nuclear program while negotiations continue, rather than expanding or dismantling it during the talks.

The memorandum also raises questions about Israel and Shia militia Hezbollah, which is based in Lebanon. Iran insists that the understanding includes a cessation of Israeli attacks on Hezbollah in Lebanon. Israel has resisted and denied that such a commitment exists. Even so, the practical effect appears to be that the US has pressured Israel to adhere to Iran’s conditions by avoiding further escalation while negotiations proceed.

The memorandum leaves many of the underlying strategic issues unresolved while granting Iran major economic and diplomatic concessions. If implemented, the memorandum would represent a settlement that is fundamentally different from, and arguably less favorable to Washington than, the status quo ante bellum (the situation before the conflict).

Trump’s war aims: incoherent, ad hoc and changing

Four principal strategic objectives justified the conflict. The sine qua non was eliminating Iran’s nuclear program. Yet the reported outcome appears to represent a regression from the Joint Comprehensive Plan of Action (JCPOA), rather than an improvement on it. The Obama administration negotiated the JCPOA over many years and curbed Iran’s nuclear program. The memorandum does not dismantle Iran’s nuclear capabilities. Instead, it merely maintains the status quo on its nuclear program while talks continue, leaving the central issue of nuclear proliferation unresolved.

A second objective was overthrowing Iran’s regime of mullahs. US President Donald Trump’s attack on Iran has enabled hardliners to take charge in Iran. They are now more securely in power than antebellum. Rather than weakening the Islamic Republic politically, the war seems to have strengthened the regime and bolstered the people’s fighting spirit.

A third objective was degrading Iran’s conventional military capabilities, notably its missile capabilities and stockpiles. Iran’s conventional capabilities were always largely toothless, incapable of projecting power beyond its immediate region. To that extent, any degradation of those conventional capabilities is strategically irrelevant and does not materially change the balance of threats.

Iran’s missile capabilities have been degraded, but remain at roughly 70% of their antebellum level, leaving Tehran still able to strike anywhere in the Middle East and destabilize the region. Drones, by contrast, were barely mentioned before the conflict. They are now defining the war space worldwide, demonstrating an ability to challenge conventional military power, particularly by denying access to territory and destabilizing entire regions.

The fourth objective was stopping Iran’s support for its regional surrogates: Houthis, Hezbollah, Hamas and Iraqi Shia militias. Those surrogates have been weakened, but primarily as a result of Israeli military action rather than US action. Simultaneously, they remain supported de facto and de jure by Iran. Tehran has not renounced its long-standing commitment to them. As a result, the broader regional network that has underpinned Iranian influence has been damaged, but not dismantled.

Taken together, none of the four principal strategic objectives appears to have been fully achieved. The nuclear program remains intact, the regime has become more secure, missile capabilities remain a regional threat and Iran’s proxy network survives despite suffering important setbacks.

Strategic implications

The memorandum has other far-reaching strategic implications. In the region, Iran appears stronger than before. Although it has suffered military and economic costs, Iran has emerged with its political system intact, its missile deterrent largely preserved and the prospect of renewed economic relief through the easing of sanctions.

Israel is tactically and operationally safer in the medium term. Hezbollah and other Iranian-backed groups have been weakened, reducing the immediate military threat on Israel’s borders. In the long term, however, Israel may be worse off, becoming more isolated from the US, from its allies and within the region if Washington increasingly prioritizes regional stability over confrontation with Iran.

Beyond the Middle East, the US and all great powers must now confront the equalization of the battle space. Hegemony has become harder to achieve than ever before. Technological change has made it increasingly difficult for even the most powerful militaries to dominate weaker adversaries at an acceptable cost.

Drones in 2026 are what the machine gun was in 1914. Just as the machine gun transformed warfare by making traditional offensive operations extraordinarily costly, drones are reshaping the modern battlefield by making it easier to deny territory, disrupt logistics and impose significant costs on conventionally superior forces.

As a result, offensives have become harder, and lesser powers are increasingly able to challenge great powers. This lesson extends well beyond the Middle East and is relevant for the US, China, Russia and even Turkey. The strategic environment has shifted in ways that make military intervention more uncertain and more expensive than many policymakers have so far assumed.

In that context, he who hesitates might survive, instead of becoming bogged down and suffering defeat. Strategic restraint may increasingly prove to be a source of strength rather than weakness as major powers adapt to a more contested and technologically equalized battlefield.

The conflict has ultimately panned out much as FOI predicted in May. The Trump administration is trapped in a Hormuz Crisis, and the memorandum reveals that America is playing a weak hand badly.

[Lee Thompson-Kolar edited this piece.]

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

”
post-content-short=”
Editor-in-Chief Atul Singh and FOI Senior Partner Glenn Carle, a retired CIA officer who now advises companies, governments and organizations on geopolitical risk, examine the broader strategic implications of the US/Israel–Iran conflict. Its significance extends well beyond the immediate…”
post_summery=”In this section of the June 2026 episode of FO Exclusive, Atul Singh and Glenn Carle assess the reported US–Iran Islamabad Memorandum, which favors Iran and fails to achieve American objectives. The war didn’t eliminate Iran’s nuclear program, topple its regime or neutralize its military capabilities and curb its regional influence.”
post-date=”Jul 15, 2026″
post-title=”FO Exclusive: Iran Trumps Trump in New Art of the Deal” slug-data=”fo-exclusive-iran-trumps-trump-in-new-art-of-the-deal”>

FO Exclusive: Iran Trumps Trump in New Art of the Deal

Glenn Carle”
post_date=”July 14, 2026 06:57″
pUrl=”https://www.fairobserver.com/world-news/fo-exclusive-global-lightning-roundup-of-june-2026/” pid=”163400″
post-content=”

Editor-in-Chief Atul Singh and FOI Senior Partner Glenn Carle, a retired CIA officer who now advises companies, governments and organizations on geopolitical risk, recap the most important developments of the month.

American stocks, economics and politics

Elon Musk’s much-hyped company SpaceX’s massive initial public offering (IPO) dominated the news for days. This IPO is not a marker of just success in business but captures how the market itself is eroding dramatically. Regulators rewrote rules to make exceptions for SpaceX. Elon Musk, the SpaceX CEO, is clearly proving that he can defy or bend the rules. The IPO is setting a precedent that may shift the free market from the public domain into a private affair for billionaires.

Global business leader Usama Malik compares SpaceX to other stocks on the markets: “At the offering’s $1.75 trillion floor, roughly 94 times trailing revenue. The most expensive stock in the S&P 500, Palantir, trades at 67 times sales. Meta went public, growing 88% a year at 28 times revenue; Google, growing 240%, went out at ten. Value SpaceX’s three segments at twice what their public rivals command — a deliberately ‘soft ball’ exercise — and you reach about $1 trillion. The remaining three-quarters of a trillion dollars rests on one device: a ‘total addressable market’ of $28.5 trillion, nearly the size of the entire US economy, of which $22.7 trillion is filed under ‘enterprise AI,’ about 30 times the size of the enterprise software market that actually exists.”

The SpaceX IPO shows that the US economy is increasingly reliant on technology and rich people, while consumer industries and poorer people are falling behind. The Financial Times reports that a data center boom is going on even as traditional consumer goods companies are struggling, hobbled by insurgent rivals and flat population growth.

Note that the surging stock market has boosted the upper class’s wealth. This is what Moody’s Analytics Chief Economist, Mark Zandi, told Bloomberg. Upper class spending has driven economic growth, which is vulnerable to a market crash. In contrast, the lower half of earners have barely seen wage growth for a year. Data shows that 37% of Americans could not cover an unexpected $400 expense from cash or savings, up from 32% in 2021.

Given such economic circumstances, it is unsurprising that leftwing challengers in New York ousted two House Democrats in the primary on June 23. This is a major victory for Mayor Zohran Mamdani and his faction of the party. Representative Dan Goldman lost in a landslide defeat to former New York city council member Brad Lander, who told supporters that their movement could “vanquish Trump’s fascism.” Meanwhile, Representative Adriano Espaillat narrowly lost to Darializa Avila Chevalier, a pro-Gaza activist who has not held any political office. State Legislator Claire Valdez, another Mamdani ally who rallied last week with him and Vermont Senator Bernie Sanders, easily won an open seat over Brooklyn’s borough president. At her victory party, Valdez called for “Solidarity forever, abolish ICE, free Palestine, organize your union and join [Democratic Socialists of America].”

Indian protests, Chinese pharmaceuticals and Norway considering rejoining EU

An Indian political movement that began as satire attracted thousands of supporters in a protest on June 20, reflecting real frustration among the country’s youth. Recent Boston University graduate Abhijeet Dipke started the Cockroach Janata Party (janata means people) after Indian Chief Justice Surya Kant compared young unemployed Indians to cockroaches. Anger swelled in May after a medical school entrance exam was voided over a leak, setting millions back in their careers. The New Delhi protesters were “disillusioned with the institutions of the republic itself” amid a tough job market and rising costs, per Scroll.

Even as India is embroiled in a hot mess, China’s spectacular ascendance in biotech is raising alarm bells among some Western lawmakers and investors. American drug manufacturer Eli Lilly entered into its latest agreement with Chinese drugmaker Haisco Pharmaceutical Group on June 1. The licensing deals have raised concerns that the US could rely too heavily on Chinese biotech firms, making the industry susceptible to weaponization in a future conflict between the superpowers. “Biotech is just the latest battleground,” one investor commented. China’s advantage in pharma is not unlike its dominant electric vehicle sector. According to ChinaTalk, “process expertise, cost efficiency, labor and talent, and deep integration into global supply chains” make Chinese biotech formidable.

On June 1, Norwegian Minister of Foreign Affairs Espen Barth Eide stated that Norway is reconsidering joining the EU. He cited a shift from a “benign world” to a “crazy world” as the reason. Norwegians voted twice, in 1972 and 1994, to remain separate from the bloc. However, the nation joined the single market, which makes it subject to EU trade agreements without any negotiating power.

Tariff wars with Washington and NATO’s growing divisions make EU membership more appealing per Eide. The EU would benefit from admitting Europe’s largest oil and gas producer. It is already looking to add new members: Iceland will hold a referendum in August, and nine other European countries are candidates, including Ukraine. The bloc opposes a British return, however.

American push for quantum computing

Back in the US, the Trump administration is investing $2 billion in nine quantum computing companies, a major bet on the nascent technology becoming commercially viable. In return, the US government will receive some equity, as it acts increasingly more like a sovereign wealth fund. The Wall Street Journal reports that the government recently backed a rare-earths magnet maker and a mining company. Quantum, like fusion power, self-driving cars and AI, is a technology that skeptics joke is 30 years off and always will be. But like those industries — especially AI — it looks to have turned a corner, with the remaining obstacles being ones of scale and engineering rather than theoretical breakthroughs.

State capitalism seems to be taking root in the US. Refilling America’s dwindling cache of munitions took center stage at the White House as US President Donald Trump gathered defense companies to talk about juicing production. On June 22, Trump said, “We’re really in a big strong economic push to do the weapons” and added that auto companies with “excess capacity” would help produce missiles.

The meeting followed one from March with defense contractors and included similar participants. The Iran War has eroded stockpiles of expensive weapons that take months to assemble. The Pentagon declined to provide details about the meeting itself, but the Pentagon’s chief spokesman, Richard Sean Parnell, stated that the military “has everything it needs to execute at the time and place of the President’s choosing.” Meanwhile, Congress sought to bar defense contractors from executing stock buybacks or paying dividends without Pentagon approval, an extension of a January executive order. This shows how the US is now tempering capitalism in the defence space, planting the seeds of a new system.

[Lee Thompson-Kolar edited this piece.]

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

”
post-content-short=”
Editor-in-Chief Atul Singh and FOI Senior Partner Glenn Carle, a retired CIA officer who now advises companies, governments and organizations on geopolitical risk, recap the most important developments of the month.American stocks, economics and politicsElon Musk’s much-hyped company…”
post_summery=”In this section of the June 2026 episode of FO Exclusive, Atul Singh and Glenn Carle analyze several key developments of the month. They analyze SpaceX’s IPO, left-wing candidates winning Democratic primaries in New York, and the American economy’s increasing reliance on tech and rich people with consumer industries and the poor falling behind. They also highlight rising youth disillusionment in India with the institutions of the republic, Norway reconsidering joining the EU, China’s ascendance in biotech, and other issues.”
post-date=”Jul 14, 2026″
post-title=”FO Exclusive: Global Lightning Roundup of June 2026″ slug-data=”fo-exclusive-global-lightning-roundup-of-june-2026″>

FO Exclusive: Global Lightning Roundup of June 2026

Martin Plaut”
post_date=”July 12, 2026 09:32″
pUrl=”https://www.fairobserver.com/video/fo-explainers-xenophobic-attacks-in-south-africa/” pid=”163362″
post-content=”

Martin Plaut, a journalist, academic and author, explains the wave of xenophobic violence unfolding across South Africa. As groups demand that undocumented migrants leave the country, he examines the economic pressures driving the unrest, the government’s response and the broader political forces he believes may be shaping the crisis.

Economic hardship fuels rising violence

Plaut describes South Africa’s xenophobic violence as an urgent national crisis that intensified after activist groups gave undocumented migrants a deadline of June 30 to leave the country. Marches have taken place across the country, with participants carrying weapons and whips while targeting migrants from elsewhere in Africa. Calling the situation “extremely explosive,” Plaut argues that the unrest reflects deep social and economic frustrations rather than isolated incidents.

South Africa’s exceptionally high unemployment rate, Plaut explains, lies at the heart of the violence. Around 60% of people under the age of 24 are unemployed, leaving many young South Africans with few economic opportunities. Rather than directing their anger toward political leaders or economic structures, many instead blame migrants competing for scarce jobs.

Plaut points to the human cost of this violence. Nearly 500 foreign Africans have been killed over the past four years, while thousands more have fled areas such as Durban or accepted evacuation assistance from governments including Malawi, Ghana, Kenya and Nigeria. Roughly three million migrants currently live in South Africa, many without formal documentation, making them especially vulnerable during periods of unrest.

Civic organizations are attempting to counter the anti-migrant narrative by arguing that South Africa’s economic woes stem from systemic failures rather than the presence of foreign workers. This message has struggled to gain widespread support, however.

Political narratives and disputed outside influence

Beyond the economic causes, Plaut argues that political rhetoric and competing interests are aggravating tensions. He points specifically to the African National Congress, criticizing comments by the party’s secretary general blaming Zimbabwean workers for undermining unions during apartheid. Such statements risk encouraging further hostility toward migrants at a particularly volatile moment.

Plaut also presents broader claims about foreign influence, while acknowledging that evidence remains incomplete. He says there are “indications” that Israeli or Jewish funders have supported xenophobic political groups following South Africa’s case against Israel at the International Court of Justice, although he is not alleging direct involvement in the street marches themselves.

He advances a second, more far-reaching argument involving Russia and South Africa’s abandoned 2015 nuclear agreement with Moscow. Plaut contends that interests connected to that project have supported campaigns seeking constitutional changes, including replacing the preamble stating that South Africa belongs to all who live there with language limiting that principle to South African citizens. He acknowledges that the argument “sounds bizarre” but maintains that political efforts surrounding constitutional change are genuine.

Plaut concludes that South Africa faces an immediate security challenge. Although South African President Cyril Ramaphosa has appealed to traditional leaders and deployed police, Plaut criticizes authorities for failing to enforce existing laws prohibiting demonstrators from carrying weapons. He also notes that the government has neither declared a state of emergency nor banned the marches despite the escalating tensions.

Unless the government can contain the violence and address deeper economic problems, both migrants and South African society face growing risks.

[Lee Thompson-Kolar edited this piece.]

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

”
post-content-short=”
Martin Plaut, a journalist, academic and author, explains the wave of xenophobic violence unfolding across South Africa. As groups demand that undocumented migrants leave the country, he examines the economic pressures driving the unrest, the government’s response and the broader political…”
post_summery=”In this episode of FO Explainers, Martin Plaut explains how soaring unemployment and economic hardship have fueled xenophobic violence against migrants across South Africa, creating a national crisis. Allegedly, foreign interests linked to Israel and Russia are influencing groups seeking constitutional change. The government’s limited response has failed to contain the unrest, leaving the country exposed to escalating risks.”
post-date=”Jul 12, 2026″
post-title=”FO Explainers: Xenophobic Attacks in South Africa” slug-data=”fo-explainers-xenophobic-attacks-in-south-africa”>

FO Explainers: Xenophobic Attacks in South Africa

David Mahon”
post_date=”July 09, 2026 06:23″
pUrl=”https://www.fairobserver.com/region/asia_pacific/fo-talks-north-korea-unveiling-the-hidden-truth/” pid=”163330″
post-content=”

Editor-in-Chief Atul Singh and Beijing-based Kiwi investor David Mahon examine why North Korea has suddenly become more visible on the international stage following high-profile visits by Chinese President Xi Jinping and Russian President Vladimir Putin. They explore North Korea’s history, economic realities, nuclear strategy and uncertain future while considering how changing US influence may reshape regional security. Pyongyang’s growing importance reflects broader shifts in the balance of power across Asia rather than a simple strengthening of alliances.

A dynasty shaped by history

Understanding North Korea requires looking far beyond the Korean War. Mahon traces the country’s political culture back to the Joseon Dynasty, which ruled Korea for roughly five centuries and established a tradition of dynastic continuity that still shapes public acceptance of the Kim family’s authority today. Legendary qualities attributed to the Kim leaders, he suggests, resemble those once associated with Korea’s monarchs, reinforcing a political culture in which one ruling family occupies an almost sacred position.

Singh and Mahon then turn to the upheavals of the 20th century. Japanese colonial rule, liberation after World War II and the Korean War fundamentally reshaped the peninsula, yet the conflict ended only with an armistice rather than a peace treaty. Mahon notes that China withdrew its forces from North Korea after the war while the United States maintained troops in the South, creating the strategic balance that still defines Northeast Asia.

Isolation and economic survival

North Korea remains one of the world’s most isolated countries despite recent diplomatic attention. Mahon describes an economy constrained by mountainous terrain, limited farmland and chronic shortages, leaving the country heavily dependent on China, which accounts for roughly 90% of its trade. During his visit a decade ago, he found a sharp contrast between the relatively prosperous appearance of Pyongyang and the extreme poverty of rural communities, where traditional farming methods remain common.

“There’s a desperation in that country,” Mahon admits.

Beyond official trade, North Korea relies on weapons exports and illicit activities to generate revenue while maintaining strict internal controls over information and movement. Singh notes the country’s chronic malnutrition, pointing to the significant height difference between North and South Koreans as evidence of decades of economic hardship. Yet despite repeated predictions of collapse, the regime has continued to survive through external support, internal repression and extraordinary political resilience.

Russia, China and the nuclear question

Recent visits by Putin and Xi signal what Mahon sees as a new phase in managing North Korea rather than transforming it into a formal military ally. Russia’s need for ammunition and manpower during the war in Ukraine initially deepened ties with Pyongyang, while China now appears more willing to engage directly with its neighbor after years of frustration over its nuclear and missile programs.

Mahon argues that Beijing’s primary objective is stability rather than confrontation. “China has no benefit in seeing any conflict anywhere,” he states.

Mahon characterizes North Korea’s nuclear arsenal as an insurance policy. He says that Pyongyang believes nuclear deterrence is the only reliable guarantee of regime survival after observing the experiences of countries that surrendered their strategic capabilities. Singh notes that while North Korea’s conventional military already poses a serious threat to South Korea, long-range nuclear weapons have transformed it into a global security concern for both Washington and Beijing.

Reform or renewed instability?

Succession remains one of North Korea’s greatest uncertainties. Singh observes that the leading candidates to succeed Kim Jong Un are reportedly women, an extraordinary possibility in a traditionally patriarchal political culture. Mahon nevertheless describes Kim as an effective ruler who has consolidated power despite inheriting leadership without the revolutionary credentials of previous generations.

Looking ahead, Mahon considers gradual economic reform modeled loosely on Deng Xiaoping’s China to be the most plausible path toward greater prosperity while preserving political control. Simultaneously, he warns that declining American influence across the Asia-Pacific region could create new security risks by encouraging regional tensions involving Japan, the Philippines and the Korean Peninsula.

Singh also questions whether North Korea can indefinitely sustain its current economic model. Mahon acknowledges that repeated predictions of imminent collapse have consistently proven incorrect, arguing that highly centralized regimes often endure far longer than outsiders expect. While he believes gradual economic opening offers the country’s best long-term prospect, he cautions that any transition will depend on decisions by the Kim leadership rather than outside pressure. Whether Pyongyang embraces reform, maintains its current path or faces an unforeseen crisis, he concludes that North Korea will remain a significant factor in the evolving strategic balance of East Asia.

“The West has to wake up and realize it’s about 500 years behind on its homework on Asia.” Mahon concludes.

North Korea’s future remains deeply uncertain, but its isolation can no longer be understood in isolation from the wider transformation of the Asia-Pacific. As China, Russia and the US adjust to a changing regional balance, the choices made in Pyongyang will increasingly shape Northeast Asia’s security and geopolitical future.

[Lee Thompson-Kolar edited this piece.]

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

”
post-content-short=”
Editor-in-Chief Atul Singh and Beijing-based Kiwi investor David Mahon examine why North Korea has suddenly become more visible on the international stage following high-profile visits by Chinese President Xi Jinping and Russian President Vladimir Putin. They explore North Korea’s history,…”
post_summery=”In this episode of FO Talks, Atul Singh and David Mahon examine North Korea’s historical development and growing geopolitical importance as China and Russia engage with Pyongyang. Its nuclear program, dependence on China and dynastic political system have allowed it to endure despite repeated predictions of collapse. Its future depends on how shifting power dynamics reshape its strategic environment.”
post-date=”Jul 09, 2026″
post-title=”FO Talks: North Korea — Unveiling the Hidden Truth” slug-data=”fo-talks-north-korea-unveiling-the-hidden-truth”>

FO Talks: North Korea — Unveiling the Hidden Truth

Sam Tully”
post_date=”July 05, 2026 06:33″
pUrl=”https://www.fairobserver.com/economics/fo-talks-indias-reckoning-reform-or-regression/” pid=”163287″
post-content=”

Editor-in-Chief Atul Singh and senior finance professional Sam Tully discuss the sharp withdrawal of foreign capital from India and what it reveals about the country’s economic trajectory. They explore whether recent market weakness reflects temporary geopolitical turbulence or deeper structural problems involving investment, manufacturing, bureaucracy and policy. While Singh fears India risks repeating past crises without major reforms, Tully argues that the country retains important economic strengths despite mounting challenges.

Foreign investors lose confidence

The conversation opens with a striking statistic: Foreign portfolio investors have withdrawn roughly $45 billion from Indian markets over the past two years, including about $18.5 billion in 2025 and another $20 billion by early June 2026. Foreign ownership of Indian equities has fallen to its lowest level in over a decade, raising concerns that international investors are reassessing India’s prospects.

Tully attributes the trend to both external and domestic factors. Geopolitical instability around the Strait of Hormuz has threatened energy and fertilizer supplies that are critical to South Asia, creating inflationary pressures across the region. Simultaneously, India’s traditionally high market valuations have become harder to justify because corporate earnings have disappointed while competing markets such as China, Taiwan and South Korea have benefited from the global boom in AI-related hardware.

As Tully explains, “India’s expensive. It doesn’t have the exposure to the AI hardware that we see in Korea, Taiwan and China.” As a result, investors increasingly see better opportunities elsewhere.

Growth slows as structural weaknesses emerge

Singh says that India’s problems extend well beyond short-term market sentiment. He points to sluggish private-sector capital expenditure, weak innovation and declining international competitiveness. Indian technology companies have excelled in services but invested relatively little in proprietary products, leaving the country absent from many of today’s fastest-growing industries.

Tully agrees that private investment has lagged despite strong corporate balance sheets. Rather than a shortage of capital, he points to structural obstacles including land acquisition, labor regulations and complex approval processes that discourage businesses from expanding manufacturing.

The speakers also revisit earlier policy decisions such as demonetization and the rollout of the Goods and Services Tax. Singh contends these measures damaged small and medium-sized businesses, reducing employment and weakening domestic demand. Tully adopts a more measured view, acknowledging that consumption has slowed while emphasizing that India’s large domestic consumer market remains one of its greatest long-term advantages.

They also note that India failed to capitalize fully on the “China plus one” opportunity. Although initiatives such as Make in India encouraged manufacturing, production has not expanded at the pace seen elsewhere in Asia, leaving India with relatively little exposure to sectors such as semiconductors and AI hardware.

Demographic pressures meet bureaucratic barriers

The discussion then turns to India’s labor market. Around 90% of employment remains in the informal sector, only about 80–90 million people are registered taxpayers and roughly ten million new workers enter the labor force every year.

Singh argues that without stronger job creation, India’s demographic dividend risks becoming a liability rather than an advantage. He observes that many talented Indians continue to pursue education and careers overseas, suggesting both capital and skilled labor increasingly “vote with their feet.”

Tully acknowledges these concerns but highlights encouraging developments within India’s startup ecosystem. Entrepreneurs are applying new technologies to agriculture, education and other sectors, creating innovative businesses that continue attracting venture capital despite broader economic uncertainty.

The speakers devote considerable attention to India’s bureaucracy. Drawing on his own experience in government, Singh criticizes the Indian Administrative Service for retaining a centralized, interventionist mindset that he believes discourages entrepreneurship and efficient policymaking. Tully is more sympathetic toward institutions such as the Reserve Bank of India, though both agree that structural reforms remain necessary to improve the business environment.

The rupee, domestic investors and reform

The weakening rupee becomes another focal point of the discussion. Singh states that continued currency depreciation erodes investor returns while making India less attractive for foreign capital. Unlike export-driven economies that may benefit from weaker currencies, India’s domestic-oriented economy gains relatively little from this adjustment.

Tully agrees the rupee’s decline deserves attention but believes the broader economy remains more resilient than it was before the 1991 balance-of-payments crisis. Domestic investors have increasingly offset foreign selling, helping stabilize markets even as overseas funds reduce their exposure.

Nevertheless, Singh warns that systematic investment plans have left many middle-class investors supporting valuations while experienced foreign investors exit. He raises the possibility of a sharp correction if confidence deteriorates further.

Tully remains cautious but less pessimistic. “I don’t have quite that strong a sense of foreboding,” he says. He considers India’s underlying fundamentals reasonably robust despite the recent setbacks.

Waiting for reform

India stands at an important crossroads. External shocks — from Middle Eastern instability to US tariffs — have compounded domestic weaknesses, yet many of the country’s challenges originate within its own institutions and regulatory framework.

Singh and Tully believe another wave of structural reforms is needed to strengthen manufacturing, encourage investment and improve ease of doing business. They differ on urgency, however. Singh says history shows that meaningful reform often follows severe crises. Tully hopes corrective measures can arrive before conditions deteriorate that far.

Tully concludes, “We must not underplay the extent of the success and transformation that you have seen in India,” even as the country confronts difficult choices about sustaining growth in an increasingly competitive global economy.

[Lee Thompson-Kolar edited this piece.]

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

”
post-content-short=”
Editor-in-Chief Atul Singh and senior finance professional Sam Tully discuss the sharp withdrawal of foreign capital from India and what it reveals about the country’s economic trajectory. They explore whether recent market weakness reflects temporary geopolitical turbulence or deeper structural…”
post_summery=”In this episode of FO Talks, Atul Singh and Sam Tully examine why investors have withdrawn $45 billion from Indian markets — does India face a temporary slowdown, or structural crisis? They discuss weakening earnings, geopolitical shocks and declining competitiveness while weighing India’s strengths against mounting risks. Though major reforms come after crises, India’s fundamentals seem stronger than critics acknowledge.”
post-date=”Jul 05, 2026″
post-title=”FO Talks: India’s Reckoning — Reform or Regression?” slug-data=”fo-talks-indias-reckoning-reform-or-regression”>

FO Talks: India’s Reckoning — Reform or Regression?

Alix Willemez”
post_date=”June 24, 2026 06:07″
pUrl=”https://www.fairobserver.com/world-news/fo-talks-who-owns-the-ocean-the-hidden-law-that-rules-the-ocean/” pid=”163123″
post-content=”

Fair Observer’s Communications and Outreach officer, Roberta Campani, speaks with Dr. Alix Willemez, a specialist in the law of the sea, about the growing importance of ocean governance in an era of geopolitical competition, environmental pressure and technological dependence. Their discussion ranges from the foundations of maritime law to the emerging High Seas Treaty and the strategic waterways that keep the global economy functioning. Willemez argues that humanity is only beginning to understand the ocean’s central role in sustaining modern life and regulating the planet.

The ocean’s hidden role in modern life

Campani begins by asking a deceptively simple question: Who owns the ocean, and why does it matter?

Willemez explains that the ocean underpins nearly every aspect of modern civilization. Half of the oxygen humans breathe is produced by marine phytoplankton. The ocean also absorbs and redistributes heat through global currents, moderating temperatures and creating the stable climate conditions that make agriculture possible.

Its economic importance is equally significant. Roughly 90% of global trade travels by sea, while approximately 95% of international communications rely on fiber-optic cables laid along the ocean floor. Internet traffic, banking transactions, streaming services and countless other digital activities depend on infrastructure hidden beneath the waves.

The ocean is also becoming an increasingly important source of renewable energy through offshore wind and tidal power. Yet despite this dependence, Willemez notes that many people remain largely unaware of the ocean’s role in their daily lives.

From cannonballs to freedom of the seas

The legal framework governing the oceans developed gradually over centuries. Willemez describes how early maritime jurisdiction was based on the so-called cannonball rule. A state’s authority extended only as far as a shore-based cannon could fire, roughly three nautical miles.

As maritime technology advanced and states expanded their commercial ambitions, this approach became inadequate. The emergence of global trade routes forced governments to develop more sophisticated legal principles.

A pivotal figure in this process was the 17th-century Dutch jurist Hugo Grotius. Working during an era when Spain and Portugal sought to dominate major sea routes, Grotius argued that oceans should remain open to all rather than becoming private domains controlled by individual powers.

His principle of freedom of navigation became one of the foundations of modern maritime law. While states eventually expanded their maritime claims, the idea that ships should generally be able to move freely across the world’s oceans remains central to contemporary governance.

UNCLOS and the rise of the High Seas Treaty

The modern legal foundation for ocean governance is the United Nations Convention on the Law of the Sea (UNCLOS), adopted in 1982.

UNCLOS established territorial seas extending 12 nautical miles from a country’s coastline, where states exercise broad sovereignty. Beyond that lies the Exclusive Economic Zone, stretching to 200 nautical miles, where states enjoy rights over fisheries and natural resources while preserving freedom of navigation for foreign vessels. The convention also recognizes continental shelf rights over seabed resources.

However, UNCLOS left significant gaps regarding the high seas, the vast areas beyond national jurisdiction that cover roughly half the planet’s surface.

Scientific discoveries have transformed understanding of these regions. Researchers increasingly recognize the importance of deep-sea ecosystems and genetic resources that could contribute to future medical and technological breakthroughs.

To address these challenges, governments negotiated the Biodiversity Beyond National Jurisdiction agreement, commonly known as the High Seas Treaty. The treaty was adopted by UN member states on June 19, 2023, and entered into force on January 17, 2026, after reaching the 60-ratification threshold required to take effect. It seeks to strengthen protections for biodiversity in international waters and establish new mechanisms for cooperation.

Willemez notes that support continues to grow. “145 countries have signed the treaty,” she explains, while a large and growing number have formally ratified it, making its provisions legally binding.

Maritime chokepoints and geopolitical conflict

The conversation then turns to places where maritime law collides with geopolitical realities.

The Strait of Hormuz remains one of the world’s most critical waterways. Although international law guarantees freedom of passage, tensions between Iran and the United States have produced a de facto double blockade.

Iran raises commercial risks through threats involving mines and drones, dramatically increasing shipping insurance costs. Simultaneously, Washington seeks to restrict Iranian oil exports. The result is growing pressure on one of the world’s most important energy corridors.

Other chokepoints face different challenges. The Strait of Malacca serves as a vital route for Asian trade and global electronics supply chains. The Suez Canal, governed through separate treaty arrangements and administered by Egypt, remains indispensable to commerce linking Europe, Africa and Asia.

The Panama Canal faces a different threat. Because its lock system depends on freshwater supplies, drought conditions can significantly reduce shipping capacity, increasing transportation costs and disrupting supply chains worldwide.

Toward a more integrated system of ocean governance

Despite progress, Willemez argues that ocean governance remains fragmented. Shipping, fisheries, biodiversity protection and seabed mining are overseen by different organizations operating largely independently of one another.

That fragmentation is increasingly at odds with scientific understanding of the ocean as an interconnected ecosystem.

Willemez considers the most promising development to be the growing shift toward ecosystem-based governance. The High Seas Treaty could enable the creation of marine protected areas that safeguard migratory species throughout their entire life cycles rather than only within individual national jurisdictions.

“The fact that we think of the ocean as an ecosystem is a real progress,” she says.

Looking ahead, Willemez believes the combination of scientific discovery, international cooperation and growing environmental awareness is pushing governments toward a more holistic approach. As debates over deep-sea mining, biodiversity and maritime security intensify, the ocean is becoming one of the defining arenas of global governance in the 21st century.

[Lee Thompson-Kolar edited this piece.]

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

”
post-content-short=”
Fair Observer’s Communications and Outreach officer, Roberta Campani, speaks with Dr. Alix Willemez, a specialist in the law of the sea, about the growing importance of ocean governance in an era of geopolitical competition, environmental pressure and technological dependence. Their discussion…”
post_summery=”In this episode of FO Talks, Roberta Campani and Alix Willemez examine the ocean’s vital role in sustaining modern life and the laws that govern it. Willemez traces maritime law’s evolution from the principle of freedom of the seas to the High Seas Treaty. They also discuss the growing challenges of balancing global commerce, security and environmental protection.”
post-date=”Jun 24, 2026″
post-title=”FO Talks: Who Owns the Ocean? The Hidden Law That Rules the Ocean” slug-data=”fo-talks-who-owns-the-ocean-the-hidden-law-that-rules-the-ocean”>

FO Talks: Who Owns the Ocean? The Hidden Law That Rules the Ocean