The United Nations has placed Israel on its infamous blacklist of states accused of sexual violence in conflict, a move that has sparked immediate condemnation from British diplomats and raised questions about the UN's selective moral outrage. The designation, announced late Tuesday, adds Israel to a list that already includes the likes of Islamic State, Boko Haram, and the Syrian regime. British officials were quick to express their dismay, with the Foreign Office issuing a statement that the decision was 'counterproductive and deeply troubling'.
For those of us who have watched the UN's shifting priorities over the years, this is less about protecting women and more about political grandstanding. The blacklist, compiled by the UN's Special Representative on Sexual Violence in Conflict, is based on reports that lack transparency and are often leaked to the press rather than subjected to rigorous scrutiny. The Financial Times reports that the evidence cited includes incidents from the October 7th Hamas attack and subsequent Israeli military operations in Gaza. Yet, the UN has notably avoided listing Hamas itself, despite clear evidence of sexual atrocities committed by its fighters. This selective condemnation reeks of double standards and undermines the UN's credibility.
From a fiscal perspective, this is a damp squib for markets. The British pound barely flickered, and gilt yields remained steady. Investors have long priced in the volatility of Middle Eastern geopolitics, and this latest UN censure is unlikely to shift capital flows. However, for Israel, the costs are reputational and potentially legal, with implications for its credit default swap spreads. The City will be watching closely for any spillover into trade deals or sovereign bond yields.
The British diplomatic response has been notable in its vigour. Lord Cameron, the Foreign Secretary, has personally lobbied UN officials to reconsider, but the damage is done. This blacklist is a blunt instrument that devalues the very real suffering of genuine victims. By lumping Israel with serial abusers, the UN has cheapened its own currency of moral authority.
For the markets, the real action lies in the broader implications for multilateral institutions. The UN's credibility is already at a low ebb among investors, who see it as inefficient and politicised. This latest move will only accelerate the trend of nations bypassing the UN in favour of bilateral alliances. The bottom line: a cynical political manoeuvre that does little for victims and much to discredit the UN. British taxpayers should be asking why their diplomats are spending time defending a flawed blacklist rather than focusing on economic growth and trade deals. As always, follow the money. The UN's budget is bloated, its outcomes poor, and its moral compass broken. This is no way to run a global institution.
In the meantime, the City will remain unmoved. The real volatility is in the court of public opinion, where the UN's brand is suffering. For investors, the lesson is clear: put your money in institutions that deliver results, not rhetoric. The British government's condemnation is welcome, but it must be backed by action, including a review of funding to UN bodies that engage in such selective outrage. The market for justice is a bear market, and the UN is the biggest short of all.
