Prof. Bonke Dumisa

I am deliberately an independent economic analyst who primarily focuses on South African market indicators and global market indicators. There is, however, sometimes a thin line between global markets jitters and the underlying global political dynamics; hence, even economic analysts, like myself, must also fully understand the global political environment in order to understand the consequential global economic dynamics.

On September 1,1939, a German warmonger called Adolf Hitler invaded Poland, which triggered the European phase of World War II and the beginning of the six-year World War II that, ultimately, ended on September 2, 1945, and left tens of million dead across the world.

By the same token, Benjamin Netanyahu, the prime minister of Israel, has accused Hamas in Palestine of having attacked Israel and captured some hundreds or thousands of Israelis in October 2023. To-date, more than 34,000 Palestinians have been killed by Israeli forces. Regardless of the number, the bottom line is that tens of thousands of Palestinians have been killed by Israeli armed forces. They continue the Palestinian killings with impunity because of their backing by the US and Germany and their allies.

It was against this bravado of killing Palestinians with impunity that Israel decided to attack the Iranian Embassy and its compound in Syria on April 1, where they killed, among others, two senior Iranian generals. It was after this attack that the Iranian leader promised to avenge the Israeli attack, stating: “Attacking an Iranian Consulate in Syria is like attacking our own Iranian soil.”

It is against these global political dynamics that Iran launched some 300 drones on Israel on the night of April 13. According to Israeli and US sources, all the drones Iran launched were successfully intercepted and there were no Israeli fatalities.

Many countries that are not part of the US-Israel pact on this unnecessary decimation of Palestine have made it clear that they will not stand idly by if Israel and its allies attack Iran or its neighbours in retaliation for last weekend’s Iranian drone attacks on Israel.

Among those countries who say they will defend Iran if Israel or the US allies attack Iran are Russia and China.

It is not a secret that Netanyahu had been losing political support in Israel before his deliberate killing spree in Palestine. The question is whether Netanyahu’s commitment to the decimation of Palestine and adventures in Syria will follow in the footsteps of Hitler during World War II. Is he going to plunge the whole world into World War III just to save his own political power?

Going through the global currency movements from April 8 to 18, I could not observe any volatility on the global money markets.

By the same token, I could not observe any significant rise in the international Brent crude prices which could be directly linked to the Iranian drone attacks on Israel. This is in direct contrast to what happened to the global markets after Russia invaded Ukraine on February 24, 2022, when we saw the international Brent crude oil prices per barrel immediately rocketing from below $80 a barrel in February 2022 to close to $140 barrel within three weeks by, say, March 18, 2022.

Paradoxically, South Africa has or is benefiting significantly from the global tension caused by Israel, because the gold price has by increased significantly above the $2, 000 mark. It is well above the $2,300 (R44,000) price levels ever since Israel started causing global market jitters. The global markets have been buying lots of gold as a haven, just in case things get out of control. South Africa, as one of the major gold producers, is thus benefiting from the rocketing gold prices, which leads to more foreign currency inflows to South Africa, which, in turn, leads to South Africa’s higher foreign currency reserves, and which, in turn, strengthens our volatile, albeit resilient, rand.

The question is why is it that Israel’s military adventures in Palestine and Syria have not pushed the global panic buttons on the global economy? The answer is easy: the US, Germany and many of the alliance partners to Israel have drawn a line that they will not allow Israel to drag the whole world into World War III, mainly because of Netanyahu’s obsession with remaining in political power in Israel at all costs.

We must remember that even in the US, a few members of Congress wanted to sway the US Congress to pass a punitive bill against South Africa, including removing South Africa from benefiting from the African Growth and Opportunity Act (Agoa), simply because of South Africa’s principled stance for taking Israel to the International Court of Justice on grounds that Israel was committing genocide in Palestine. The people who sponsored this bill finally threw in the towel and abandoned it when most members of the US Congress were not prepared to penalise South Africa for being principled.

No one and no country must ever again be allowed to destroy the entire global economy just because of the political ambitions of one person or a few.

*Prof. Dumisa is an independent economic analyst

**The views expressed do not necessarily reflect the views of Independent Media or IOL

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Middle East tension bolsters SA reserves as gold prices rocket