Welcome back everybody, and Merry Christmas to those who are celebrating it today! It may seem like Foreign Exchanges returned from winter break days ago, or at least it seems that way to me anyway, but today is our first day back at normal operations. As ever when I’ve been gone for a while, we’ll mostly stick to things happening today with a few stories from the time I was out. Or, in other words, this update is mostly about Qasem Soleimani. Enjoy!
THESE DAYS IN HISTORY
January 7, 1610: Galileo Galilei mentions in a letter his discovery three of the four Galilean moons (Callisto, Europa, Ganymede, and Io) of Jupiter. He presumably had already observed them but this is the first time he documented it. Initially assuming them to be fixed stars, it was only over subsequent days and weeks that Galileo determined that they were moons and that there was a fourth one.
January 7, 1942: The Imperial Japanese army lays siege to US and Philippine forces on Luzon Island’s Bataan Peninsula. The beleaguered US and Philippine soldiers held out for a bit over three months, but finally surrendered to Japan on April 9. Some 78,000 soldiers surrendered, 12,000 of them American—one of the largest single surrenders in US military history. Over 20,000 Philippine and hundreds of US prisoners subsequently died in the ensuing Bataan Death March to the city of San Fernando and due to the brutality with which the Japanese military treated the captives.
MIDDLE EAST
Needless to say there was some excitement in the Middle East this evening (or this morning, I guess, depending on where you are). The literal and figurative dust is still settling, but as I’m writing (a little before 10 PM Eastern Time US) it appears that Iran’s Islamic Revolutionary Guard Corps launched several ballistic missiles at two military bases in Iraq housing US soldiers—the Ayn al-Asad airbase in Anbar province and another facility near the city of Erbil. There have been unconfirmed reports of other strikes or “second waves” but, as in the immediate aftermath of other major stories, there’s a lot of exaggerated or outright false information out there as well. There have been no reports of US casualties, and while there have been unconfirmed reports of Iraqi casualties those do remain unconfirmed at this point. In fact there’s some evidence that Iran went out of its way to avoid causing US casualties, using accurate missiles instead of dummy rockets and targeting parts of both facilities where US personnel are not present.

I’ve marked Ayn al-Asad on this Google map and you can see Erbil pretty clearly to the north (Google Maps)
There’s no sign that the US is planning to respond tonight, and in fact Donald Trump’s Twitter feed suggests he may not respond at all:

The Iranians have threatened a significant escalation if there is a US response:

Attacks against civilian population centers are of course war crimes, but then that kind of thing seems to be in the air lately.
There are conflicting signals coming from within Iran as to whether or not this strike is the sole retaliation Iran plans on taking for the assassination of former Quds Force commander Qasem Soleimani. An unnamed IRGC commander has suggested to Iranian media that this is only the “first step,” though that message may intended more for domestic consumption. On the other hand, Iranian Foreign Minister Mohammad Javad Zarif seems to be saying that this is it:

The IRGC has also issued a statement threatening retaliation against any country that allows the US to retaliate from its territory, which may be enough to stop a few US regional allies in their tracks.
I’m putting this story up top because it’s obviously the most important thing happening right now (though it’s still unclear just how big a deal it is). Below you’ll find what I’d already written about what’s happening in Iraq and Iran, which I hope is still relevant although all bets may be off at this point.
YEMEN
While we were away, Yemen’s separatist Southern Transitional Council announced that it was pulling out of an agreement it reached with the Yemeni government in November that ended the STC’s uprising in Aden and other parts of southern Yemen. That deal, brokered by Saudi Arabia, was to have brought the STC into the Yemeni government. STC officials said that they were withdrawing from the accord due to violence in Shabwa province that they blamed on the Islamist Islah Party, whose involvement with the Yemeni government has been one of the separatists’ main issues. There hasn’t been any serious outbreak of violence in southern Yemen as a result of this decision but it does create the possibility that the southern front in Yemen’s war could reopen.
IRAQ
Speaking of Qasem Soleimani, before we get to the latest developments in Iran we should look at what’s happening in the other country affected by his assassination: Iraq. It was, after all, on Iraqi soil where Donald Trump decided to kill Soleimani, who was apparently on a diplomatic mission, in violation of just about any tenet of national sovereignty you could imagine. And so it should come as no surprise that the Iraqi parliament on Sunday voted to expel all 5000-plus United States military forces from the country. Well, technically they voted to expel all “foreign” forces from the country, but you don’t need to read too far into the tea leaves to figure out which foreign country they were targeting. The vote came despite an apparently heavy lobbying effort on the part of the Trump administration—which was only, mind you, thinking about what would be best for Iraq, not about any US interests. That lobbying effort was itself done in spite of what Axios says is Donald Trump’s own desire to withdraw US forces from Iraq (which it seems like he could do without starting a war on his way out the door, if that’s what he really wants).
Fortunately for…well, I don’t really know, to be honest—defense contractors? Anyway if you’re a fan of a perpetual US military presence in Iraq, for whatever reason, chin up because Sunday’s vote probably didn’t mean anything in practical terms. For one thing it was non-binding, though lame-duck Iraqi Prime Minister Adel Abdul-Mahdi was prepared to move forward with an actual expulsion…or at least that’s what he said before the vote (more on this presently). For another thing, the vote was taken without Sunni and Kurdish parties present (they boycotted), so it may not have strictly-speaking been legal. For a third thing, it turns out that Abdul-Mahdi really wasn’t ready to move forward with an expulsion, he was just saying that. Out of fear of any of several things—a resurgence of the Islamic State, loss of foreign investment, the possibility of being too deeply enthralled to Iran—Abdul-Mahdi now seems to be trying to cool down talk of a US withdrawal and has said even if he did act to expel US forces it would only be combat forces, not trainers and logistical personnel. So potentially the US could just reclassify its personnel and that would be that.
The likelihood that Sunday’s vote was all for show didn’t stop a morbidly hilarious comedy of errors from transpiring at the Pentagon on Monday, when somebody apparently typed up a draft letter announcing preliminary troop movements ahead of a US withdrawal from Iraq and somehow that got leaked to the press. Senior US military officials then had to race to anybody with a microphone or audio recorder to vehemently deny that anything was happening. They tried to pass it off as a communique about the redeployment of US forces within Iraq, but the plain text of the letter clearly shows otherwise. So clearly somebody in the US military is starting to plan for an expulsion but it’s unclear who that is and whether or not they’ve discussed that planning with anybody else. It’s good to know that, as they bring us to the brink of a military conflict that will undoubtedly see their already whopping annual budget increased further, the folks at the Pentagon are really firing on all cylinders.
Even as I was writing that paragraph up there, news broke that Abdul-Mahdi is saying he received a signed, official copy of the letter the Pentagon claims was only a draft being circulated for discussion. And it turns out that there was an Arabic copy of the letter, which is a pretty strange thing to prepare for something that’s only a draft. Abdul-Mahdi seems once again to be pretty clear that he wants US combat forces out of Iraq in accordance with the letter he says he now has, despite those reports from several outlets saying that he was waffling about a US withdrawal. If I told you I had any idea what’s happening here I’d be lying, so let’s just say that Iraq at the moment is a land of contrasts and leave it there.
One of the things Abdul-Mahdi presumably fears is becoming Donald Trump’s newest celebrity feud. Even though legally-speaking it probably wouldn’t be that onerous for the Iraqi PM to tell his American guests to shove off, Trump has made it clear via a series of ever more unhinged statements that he’ll punish Iraq severely if they do that. His primary concern, naturally, seems to be over money—specifically, the (admittedly substantial) money the US spent in renovating the Ayn al-Asad airbase in Anbar province. Trump wants the Iraqi government to pay the US back, though it’s not like the US military planted itself in the middle of western Iraq as an act of charity. He’s threatening to “charge [Iraq] sanctions like they’ve never seen before, ever. It’ll make Iranian sanctions look somewhat tame.” His administration is now dutifully drawing up sanctions in case it needs to respond to an Iraqi move. So that’s nice. But wait Derek, you’re saying, didn’t we just suggest a couple of paragraphs ago that Donald Trump wants to withdraw US forces from Iraq? Why would he put up a fight about this? All I can say to that is welcome to Donald Trump’s big, beautiful brain, where the only thing that really matters is whether you look tough or weak, not what you’re actually doing at any given moment. Leaving because you want to leave looks strong, but leaving because you’ve been kicked out—even if you do want to leave—looks weak.
Regardless of the legalities, several European countries and NATO (and Canada, if my Twitter timeline is to be believed) have taken the hint and are redeploying their forces either out of Iraq altogether or at least into hardened, more defensible positions inside Iraq. They’re doing this because when you push past all the details, what remains at the core of this is that US and Western military forces are no longer wanted in Iraq, if they ever really were. Leaving them in place makes yet another mockery of the notion that Iraq is an independent, sovereign state and makes every US soldier and facility in Iraq a potential target for reprisal. While for some people in DC, like Marco Rubio, that’s the point—a few deal US soldiers might finally get them the war they want—but for anybody who’s not on board with a new Middle Eastern war it is indefensible.
LEBANON
As we’re assessing the fallout from the Soleimani killing I do think it’s important to note, as Kim Ghattas does here, that there are a lot of people in the Arab world—particularly in Iraq, Syria, and Lebanon—who are probably not terribly sorry to see the Iranian general depart this cruel world. Which is not to say that killing him was justified or even advisable. On the contrary, both Lebanon and Iraq had been in the midst of major national protests that were, in part, about frustration with dysfunctional sectarian political systems held in place in no small measure by Iranian interference in Lebanese and Iraqi affairs. Those protests are likely over, at least for now, as a result of the Soleimani strike. The fervor surrounding the killing will drown out the voices that have been calling for a reduced Iranian influence in the region and the tension the assassination has created will make it risky for those voices to start speaking out again. This is but one of many undesirable side effects.
SAUDI ARABIA
Saudi officials announced Tuesday that they’ve arrested Mohammed Hussein al-Ammar, a Shiʿa militant described as the country’s “most dangerous wanted terrorist” by one media outlet. Ammar has reportedly been wanted since 2016 for carrying out attacks against security forces and other alleged crimes in Saudi Arabia’s restive and predominantly Shiʿa Qatif region.
IRAN
In non-Qassem Soleimani-related news, Iranian officials announced on Sunday their fifth and potentially final reduction of commitments under the virtually defunct 2015 nuclear deal. Under this round of cutbacks the Iranians say they’ve abandoned all of the deal’s restrictions with respect to uranium enrichment. The Iranians remain bound by their commitments under the Non-Proliferation Treaty, but anything short of nuclear weapons is now on the table, which means large stockpiles of uranium potentially enriched in advanced centrifuges to upwards of 20 percent, roughly halfway to weapons grade. That’s undoubtedly going to raise tensions. The Iranians say they’ll continue working with the International Atomic Energy Agency “as before” in terms of monitoring their nuclear program, but nobody seems quite sure whether “as before” means “as under the nuclear deal,” which would be good, or “as before that,” which would not be so good. Notably the Iranians continue to say they’ll resume their obligations under the accord as soon as the United States starts resuming its obligations by lifting sanctions. More notably, the text of the nuclear deal itself gives the Iranians permission to do what they’re doing—it says that if one party is in material breach, as the US is and has been for over a year, then other parties to the deal can step back their participation.
Also, the United States has said it will not grant a visa to allow Iranian Foreign Minister Mohammad Javad Zarif to attend a meeting of the United Nations Security Council later this week. This is a pretty unambiguous violation of Washington’s diplomatic obligations as the UN host nation, although the Trump administration has offered the excuse that Zarif didn’t request his visa in time to process it, which is a technicality so it doesn’t have to outright deny Zarif’s application. Regardless of the technicalities, the administration has been toying with the UN visa process for several months now, and not just with respect to Iranian diplomats. The precedent this sets ought to be enough to prompt the UN to move its operations to Europe, but as the UN exists in a state of perpetual fear that the US will stop paying its membership dues altogether, I don’t expect it to take a step like that.
As for Soleimani, his funeral procession in the city of Kerman on Tuesday was so massive that it caused a stampede that killed at least 56 people and postponed the burial for several hours. The images that emerged on Monday of hundreds of thousands if not millions of Iranians pouring into the streets of major cities like Tehran and Mashhad to mourn Soleimani were impressive to say the least, and they speak to what may be the enduring result of this assassination: a united Iran. Of all Iran’s leaders, Soleimani may have been the least divisive, with a public approval rating that hovered around 80 percent and an image that set him apart from the country’s squabbling and deeply unpopular politicians and cast him instead as the defender of Iran against her foreign enemies. His death will not only galvanize many Iranians—even those unhappy with their country’s leadership—to rally around the flag, it will (as it likely will in Lebanon and Iraq) stifle dissent amid the nationalist furor. On a practical level, while losing a highly effective leader like Soleimani will hurt Iran, it will not be a serious blow. There are plenty of people in Iran who can replace him, and even if there’s no single person who can replace all the things Soleimani did, there’s no reason his replacement has to only be a single person.
Several Trump administration officials—chief among them the president himself—have claimed that Soleimani was planning “imminent” attacks against US interests, employing a sort of “we can’t show you the proof but trust us” rhetoric that this administration, more so even than its predecessors, has definitely not earned. They have to make this claim to justify the fact that, apart from Lindsey Graham and many of the assorted car dealership owners and funeral home operators who were vacationing at Mar-a-Lago over the holidays, Trump didn’t tell anybody outside his administration (for example—except for Graham—in Congress) that he was ordering the assassination of a senior Iranian official.
There is no public evidence that Soleimani was planning an attack and indeed the Iraqi government has said he was in Iraq on a diplomatic mission, responding to a Saudi overture for talks. US Secretary of State Mike Pompeo laughed off that claim to reporters on Tuesday, offering—of course—no evidence to contradict what the Iraqi government has said. Reporting has suggested a couple of scenarios that led to the assassination. In the New York Times, we’re told that the Pentagon presented killing Soleimani as the most extreme in a list of potential responses to the mob attack on the US embassy in Baghdad late last month and that they were “flabbergasted” when he chose it. This sounds like some post-facto butt covering to me, but who knows? In the Washington Post, on the other hand, John Hudson reports that the assassination was the climax of a month’s-long effort by Pompeo to cajole his boss into killing the Iranian general. This is in keeping with Pompeo’s career-long obsession with sparking a war with Iran and seems more plausible than the “oopsie we didn’t think Trump would pick that one” scenario in the NYT.

Whatever happens, at least we know we’re in good hands, am I right folks (State Department via Wikimedia Commons)
ASIA
AFGHANISTAN
Among the Iranians’ many sins, Pompeo says they’re interfering with US effort to negotiate a peace deal with the Taliban. He’s offered no specific evidence or example as to how they’ve interfered but hey, if you can’t believe Mike Pompeo who can you believe, am I right?
PAKISTAN
A motorcycle bombing in the city of Quetta killed at least two people on Tuesday evening. No group has claimed responsibility, but in Quetta it could be either Baluch separatists or the Pakistani Taliban.
NORTH KOREA
The Soleimani assassination is likely to ripple as far afield as North Korea, whose government routinely cites the examples of folks like Muammar Gaddafi and Saddam Hussein to demonstrate the efficacy of any US antagonist possessing nuclear weapons. Soleimani only bolsters the case that if you’re on Washington’s bad side you’re better off with nukes in your possession, which would seem to make Pyongyang’s denuclearization even less likely than it was before. At the same time, some analysts seem to think the strike will make the North Koreans more cautious about attempting any really provocative demonstrations, though given that North Korea has already tested both an inter-continental ballistic missile and (probably) a hydrogen bomb, it’s not clear that they’d need to make any really provocative demonstrations at this point.
JAPAN
It’s been mostly lost in the Soleimani freakout, but there’s a bit of a diplomatic dispute happening right now between Japan and Lebanon over the fate of former Nissan chairman Carlos Ghosn. Japanese authorities arrested Ghosn in 2018 on what, as far as I can tell, was pretty much every corruption charge ever, but he skipped bail on December 30 of last year and headed off to Turkey and then to Lebanon, where he’s a citizen. To be fair Lebanon is a lovely country when it’s not in the throes of massive anti-government protests or civil war or the like, though I doubt Ghosn was thinking about that. The Japanese government would very much like him back, but Lebanon usually doesn’t extradite its citizens and Ghosn, who has an estimated $120 million stashed somewhere and says the Japanese legal system is “rigged” against him, can certainly afford a protracted legal battle.
OCEANIA
AUSTRALIA
I know there’s a lot happening right now but in case you missed it Australia is on fire:
Weather is set to worsen what is already one of the most widespread and devastating outbreaks of bush fires in Australia’s history. On Friday, “extreme” fire danger will encompass a swath of Australia that includes some of its most populated areas in Victoria and New South Wales in particular, with the possibility that separate fires could merge into even more monstrous blazes.
Ahead of the fires, officials have taken unprecedented steps to move people out of harm’s way, including evacuating tens of thousands in the predominantly coastal communities of southeastern Victoria and New South Wales. Some residents were rescued by the Australian military, including in Mallacoota, where residents were forced to take shelter on boats as a fire burned through the seaside town on New Year’s Eve.
To be clear the whole country isn’t on fire. Unfortunately, some of the parts that aren’t on fire are instead blanketed in smoke from the parts that are. Australia routinely has brushfires, but these have been greatly exacerbated by what has been one of the hottest and driest years in Australian history, on account of that climate change business that Australia’s prime minister still isn’t sure is real. A cold snap over the past few days has given firefighters a chance to regroup and try to contain the blazes, but that cold snap won’t last and there’s still little rain in sight.
KIRIBATI
The Chinese government is apparently very pleased with Kiribati for its decision back in September to cut ties with Taiwan and open them with Beijing. Chinese President Xi Jinping welcomed Kiribati President Taneti Maamau to Beijing this week to sign a memorandum of understanding bringing Kiribati into China’s Belt and Road Initiative.
AFRICA
SUDAN
The United Nations Office for the Coordination of Humanitarian Affairs says that some 40,000 people have been displaced due to recent inter-tribal violence in Sudan’s West Darfur province. The clashes apparently started with the stabbing of an Arab man late last month. Many/most of the displaced have reportedly crossed into Chad. The Sudanese government appears to have stabilized the situation by deploying military units to the region. There were also more inter-tribal clashes in Port Sudan last week that killed at least 15 people.
LIBYA
Monday saw the first big movement in Libya’s long stalemated civil war, when the “Libyan National Army” of warlord Khalifa Haftar swept into the coastal city of Sirte, taking it from forces loyal to Libya’s internationally recognized Government of National Accord. Sirte is an important coastal city, centrally-located, and its capture will help the LNA shore up its offensive against Tripoli (an offensive that has drastically increased civilian casualties, by the by). GNA-aligned forces insisted that they voluntarily withdrew from the city to “avoid bloodshed,” for whatever that’s worth. The city’s rapid fall may have had more to do with the fact that one of the military units defending it defected to the LNA.
The GNA is suddenly reeling, but its fortunes may be about to change because the Turkish government is deploying forces to Libya to aid it. Details on the deployment are unclear (they’re apparently just sending “advisers” for the time being, but they could wind up sending some of those Syrian rebels they’ve been cultivating as proxies) but a Turkish military presence might help counter the Russian “mercenary” forces and UAE drones that have played vital roles in Haftar’s resurgence. The goal seems to be to do just enough to ensure that Tripoli doesn’t fall to Haftar. That would be in keeping with the position of another actor, Algeria. Its new president, Abdelmadjid Tebboune, called Tripoli a “red line” after meeting with Libyan Prime Minister Fayez al-Sarraj on Monday.
KENYA
A group of al-Shabab fighters attacked a telecommunications antenna in Kenya’s eastern Garissa province on Tuesday, triggering a gunfight with police in which four bystanders—all of them children—were killed. Al-Shabab has been quite active in Kenya over the past few days. This was the third attack the group carried out this week, including one against a military base on Sunday that killed three Americans.
EUROPE
CROATIA
Croatia has a new president-elect, so at least somebody is having a nice time. Former prime minister Zoran Milanović of the Social Democratic Party defeated incumbent Kolinda Grabar-Kitarović in Sunday’s runoff. Milanović focused his campaign mainly around anti-corruption issues. The Croatian presidency is a pretty weak office but does play some political role, especially in foreign affairs.
AUSTRIA
Sebastian Kurz is once again the chancellor of Austria. The leader of the conservative Austrian People’s Party, who lost the premiership in May when his ultra-right coalition with Austria’s Freedom Party collapsed amid a corruption scandal, has returned to power in the wake of September’s snap election, albeit at the head of a much different coalition. This time he’s working with the Austrian Green Party, which has in the past been deeply critical of Kurz’s hardline anti-immigration positions and his overt Islamophobia. Luckily neither of those things is really central to Sebastian Kurz’s overarching political ideology, which can be summed up as “Sebastian Kurz should be the chancellor of Austria.”
SPAIN
Pedro Sánchez, meanwhile, can finally drop the “interim” from his “interim prime minister” title. It took two elections last year, but Sánchez emerged from November’s snap poll, a poll made necessary because he failed to cobble together a working government after April’s election, a bit more willing to work and play with others. Toward that end, Sánchez’s Socialist Party formed a coalition—which Sánchez had resisted and which is the first coalition government Spain has had in the post-Franco period. Even at that, the coalition doesn’t control a majority in parliament and so Sánchez also promised the pro-Catalan independence Republican Left party that he work work to resolve Catalonia’s issues. In return, Republican Left legislators abstained from Tuesday’s confidence vote, thereby giving Sánchez and his partners an ultra thin two vote majority and allowing him and his cabinet to take office.
AMERICAS
VENEZUELA
It’s been an exciting few days for would-be Venezuelan president Juan Guaidó. On Sunday, Nicolas Maduro’s security forces physically barred Guaidó from attending the first session of the Venezuelan National Assembly. The opposition leader was to be reelected speaker of the legislature, the perch from which he’s also claiming to be the rightful president of the whole country. With Guaidó unable to get into the building the assembly elected another president, though opposition parties met together and symbolically reelected Guaidó. Things looked bleak for the Trump administration’s favorite Venezuelan. But then on Tuesday, Guaidó dramatically charged through a police cordon and into the National Assembly building, where he was indeed reelected as speaker after all.
Allowing for the fact that we don’t know how this is all going to shake out in the end, this seems like a pointless overreach on Maduro’s part, and I don’t mean because the whole affair might lead to more US sanctions. If we’ve learned anything over the past year it’s that Juan Guaidó was no actual threat to Maduro’s presidency. His attempt to oust Maduro, which ultimately depended on a military coup, had all but fizzled out. He was at best the speaker of a legislature that has been stripped of power by Maduro and his Supreme Court. But now he’s speaker of that legislature and the man who braved Maduro’s repressive police in defiance. This incident may breathe new life into Guaidó’s movement, which I’m assuming is not the effect Maduro intended.
UNITED STATES
Finally, the Institute for Policy Studies’ Sarah Anderson looks at one of the ancillary effects of the escalation in US-Iran tensions—the financial windfall for US defense contractors:
CEOs of major U.S. military contractors stand to reap huge windfalls from the escalation of conflict with Iran. This was evident in the immediate aftermath of the U.S. assassination of a top Iranian military official last week. As soon as the news reached financial markets, these companies’ share prices spiked, inflating the value of their executives’ stock-based pay.
I took a look at how the CEOs at the top five Pentagon contractors were affected by this surge, using the most recent SEC information on their stock holdings.