At the Intersection of Geopolitics and Geoeconomics
Middle East/North Africa
- Last week, Israel’s Defense Minister Israel Katz declared the seizure of extensive Gaza territory, creating “buffer zones” and effectively isolating Rafah, a city once sheltering over 250,000 Palestinians, with military maps showing a fifth of Gaza now off-limits. Meanwhile, in Cairo on April 7th, a tripartite summit involving French President Emmanuel Macron, Egyptian President Abdel Fattah al-Sisi, and Jordan’s King Abdullah II called for an end to Israel’s Gaza offensive, where Palestinian deaths near 51,000, and urged a political solution for an independent Palestinian state. Prior to the summit, Egypt and France strengthened bilateral ties, with Macron announcing a 260-million-euro aid package and discussing a French-backed Egyptian plan for post-war Gaza governance, excluding Hamas.
- On April 12th, Iran and the U.S. held their first direct talks in years in Muscat, Oman, mediated by Omani Foreign Minister Badr bin Hamad Al Busaidi, where a 150-minute session involved at least four message exchanges between delegations led by Abbas Araghchi and Steve Witkoff. The meeting followed a February 18th trilateral discussion in Riyadh and a March 7th interview in Jeddah, and resulted in the White House hailing “very positive and constructive talks,” while Iran offered verification of its nuclear program “even 1,000 times” in exchange for sanctions relief. Despite omitting missiles and proxy groups from the agenda, Araghchi faced fierce backlash from Iran’s hardliners—most notably from ultraconservative MP Mehdi Kouchakzadeh and Raja News—for briefly greeting the U.S. side, which critics labeled a betrayal of Supreme Leader Khamenei’s February red lines. The Paydari faction, controlling a majority in parliament, accused Araghchi of committing “treason” by shaking hands with “the Great Satan,” invoking the legacy of slain General Qasem Soleimani and reigniting debates over Iran’s nuclear negotiating posture.
- At the beginning of April, eight key OPEC+ producers — Saudi Arabia, UAE, Iraq, Kuwait, Oman, Algeria, Kazakhstan, and Russia — stunned markets by nearly tripling their planned oil output hike to 411,000 barrels per day amid falling prices and global tariff tensions. Despite Brent crude falling 6% and forecasts slashed to $66/barrel, Saudi-led OPEC insisted the move reflected “positive market fundamentals” and signaled confidence in a mid-year demand rebound. Analysts like RBC’s Helima Croft said the decision was partly aimed at disciplining overproducers like Iraq and Kazakhstan, recalling Saudi Arabia’s aggressive 2020 price war to enforce compliance. The move also responded to U.S. President Trump’s renewed pressure on Gulf allies to increase supply and offset inflationary shocks from his sweeping new trade tariffs.
- Late last month, the Trump administration offered conditional sanctions relief to Syria’s transitional government, led by Ahmed al-Sharaa, following Bashar al-Assad’s ouster three months prior. Deputy Assistant Secretary Natasha Franceschi presented Syrian Foreign Minister Asaad al-Shibani a list of U.S. demands during a donor conference in Brussels, including appointing a liaison for the Austin Tice case, banning ties with Hamas and the Islamic Revolutionary Guard Corps (IRGC), and assuming control of 15,000 detainees at Al-Hol camp. If met, the U.S. would consider waiving key Caesar Act sanctions and extend General License 24 by two years beyond its July expiration. Bipartisan lawmakers, including Sen. Warren and Rep. Wilson, signaled rare support for easing sanctions to aid Syria’s stabilization under the new interim leadership
- Market Implications: The Middle East and North Africa (MENA) region faces a mix of political unrest, geopolitical tensions, and economic shifts influencing market stability. Renewed hostilities in Gaza, despite Cairo-led diplomatic efforts, continue to undermine regional stability and economic prospects, as the Palestinian Authority struggles for governance in post-war scenarios. On the economic front, resumed U.S.-Iran nuclear deal talks and OPEC’s increased oil production quotas are shaping global energy markets and regional fiscal policies. Additionally, conditional sanctions relief offered to Syria by the U.S. could spur foreign investment and aid, potentially boosting economic recovery. Overall, the political instability in the region continues to plague its economic prospects, with the major regional markets declining year-to-date.
Latin America & the Caribbean
- On April 13th, Daniel Noboa claimed victory in Ecuador’s presidential election with 55.88% of the vote, defeating leftist rival Luisa González, who garnered 44.12%. González, backed by former President Rafael Correa, rejected the results and demanded a full recount, alleging widespread electoral fraud. With more than 13.7 million registered voters, the election took place amid heightened concerns over crime and Ecuador’s struggling economy, with Noboa pledging reforms, including a tough stance on organized crime. The outcome was confirmed by the National Electoral Council, although Noboa’s victory faces continued opposition, particularly from González’s supporters and Correa.
- The Community of Latin American and Caribbean States (CELAC) held its 9th annual summit in Tegucigalpa, Honduras, with 30 of 33 member countries endorsing a final declaration critiquing U.S. tariffs and calling for reforms within the United Nations, including support for a Latin American and Caribbean candidate for secretary-general. Colombian President Gustavo Petro took over the rotating presidency of CELAC, aiming to host dialogues with key global entities like the European Union (EU), Gulf Cooperation Council (GCC), and China. Mexico’s President Claudia Sheinbaum, marking a shift from her predecessor’s stance, announced plans to organize a regional economic summit. However, the summit highlighted divisions within the region, as countries like Argentina, Paraguay, and Nicaragua abstained from the joint statement, largely due to their alignment with U.S. policies.
- Argentina secured a $20 billion agreement with the IMF, including a $12 billion upfront payment, as President Javier Milei eased strict currency controls, allowing the peso to trade within a range of 1,000-1,400 per dollar. Milei also eliminated the “dollar blend” rule and lifted the $200 monthly cap on dollar purchases, marking a significant policy shift. This agreement, the 23rd of its kind, is seen as a step toward stabilizing Argentina’s economy, with a projected 5% growth for 2025 despite inflation hovering around 27.5%. Additionally, the World Bank and IDB are providing $22 billion in aid over the next three years to bolster Argentina’s reserves and economic recovery.
- Colombian President Gustavo Petro suggested legalizing cocaine during a tense meeting with U.S. Secretary of Homeland Security, Kristi Noem, in Bogotá, claiming it could help combat drug trafficking, similar to alcohol legalization. Some of Petro’s additional comments, which startled Noem, were misinterpreted, leading her to falsely accuse him of claiming ties to the Venezuelan gang, Tren de Aragua (designated a foreign terrorist organization by the US), a claim later debunked by Petro’s officials. Colombia’s Minister of Defense, Pedro Sánchez, clarified the legal status of Tren de Aragua in Colombia as a Common Organized Crime Group and revealed that 106 gang members, including four leaders, had been arrested. The incident added to ongoing tensions between Petro and U.S. officials, especially following previous diplomatic disputes over immigration policies.
- Mexican President Claudia Sheinbaum strongly opposed any U.S. drone strikes on Mexican cartels, asserting that Mexico would defend its sovereignty against “violations by land, sea, or air.” This statement followed reports that the Trump administration was considering unilateral military action to target drug cartels in Mexico, with six Mexican cartels already designated as foreign terrorist organizations by the U.S. Sheinbaum, who took office in October 2024, has cracked down on organized crime, including making major fentanyl busts and extraditing 29 cartel leaders to the U.S. She emphasized that any U.S. military strikes could severely harm bilateral relations, especially given Mexico’s historical sensitivity to foreign intervention.
- Market Implications: Latin American markets are navigating a dynamic environment shaped by elections, economic reforms, and regional security concerns. In Ecuador, President Daniel Noboa’s re-election has brought a sense of political stability, with his administration expected to focus on economic reform and combating narcotrafficking. Meanwhile, Argentina’s $20 billion Extended Fund Facility agreement with the IMF, coupled with significant economic reforms like the removal of currency controls, aims to stabilize the economy and attract foreign investment, potentially improving bond and equity values. In Mexico, tensions with the United States over potential drone strikes targeting drug cartels have raised concerns about diplomatic relations and cross-border economic activities, while trade tensions and uncertainty continue. On a broader scale, CELAC continues to foster regional cooperation, with recent summits focusing on economic collaboration and collective responses to external challenges, enhancing trade and investment resilience across Latin America. Year-to-date, the return across Latin American equities markets, according to the iShares Latin America 40 ETF, is 8.52%.
Asia (ex-China/India)
- Japanese Prime Minister Shigeru Ishiba and NATO chief Mark Rutte agreed to enhance defense industry cooperation, particularly in dual-use technologies, to counter security challenges from Russia and China. Japan has increasingly engaged with NATO since Russia’s 2022 invasion of Ukraine, with both sides emphasizing the inseparability of Indo-Pacific and European security. During his visit, Rutte highlighted the importance of NATO’s expanded focus on the Indo-Pacific region amidst China’s growing military power. Japan also expressed interest in joining NATO’s NSATU command to support military aid to Ukraine, with Defense Minister Gen Nakatani discussing collaboration in Wiesbaden, Germany.
- On March 28th, an earthquake struck central Myanmar, causing widespread destruction, killing over 3,600 people, and injuring more than 5,000. The disaster exacerbated the ongoing crisis in the country, which has been struggling since the 2021 coup, with over 2 million displaced, primarily in Sagaing Region, devastated by counterinsurgency violence. Despite international aid commitments of $50 million and 1,000 rescuers, the military junta continues to obstruct aid efforts, prioritizing counterinsurgency over humanitarian relief. Myanmar’s crisis is compounded by a growing geopolitical shift, with countries like China, Russia, and India stepping in with aid, while Western support wanes due to shifting foreign policy priorities.
- This month, South Korea’s Constitutional Court unanimously removed South Korean President Yoon Suk Yeol from office after parliament’s impeachment in December 2024. As reported in December, South Korean President Yoon Suk Yeol declared martial law, citing political deadlock and alleged threats from “anti-state forces.” His decree led to chaos, with troops sent to parliament and lawmakers obstructing the move. By dawn, Yoon reversed the decision, and in January 2025, he faced criminal charges for insurrection. His official removal from office this month triggered a new presidential election, and acting President Han Duck-soo vowed to carry out the election as mandated. Yoon’s fall marked the swiftest presidential exit in South Korea’s democratic history, with opposition leader Lee Jae-myung positioning himself as a potential successor.
- Last week, ASEAN economic ministers, led by Malaysia’s Trade and Investment Minister Zafrul Aziz, criticized the U.S. for imposing new tariffs, which they warned could disrupt regional and global trade. Despite this, they pledged not to retaliate, instead proposing a “frank and constructive dialogue” with the U.S. to resolve trade concerns. They also announced the formation of an ASEAN Geoeconomics Task Force to create a forward-looking policy response to emerging challenges. The ministers emphasized strengthening ASEAN-U.S. economic cooperation and reaffirmed their commitment to a rules-based multilateral trading system.
- Vietnam approved SpaceX’s Starlink satellite internet service for a five-year pilot program, allowing up to 600,000 subscriptions nationwide. The program, which must conclude before January 1, 2031, will provide internet access to remote areas, complementing limited infrastructure. Key government entities, including the Ministry of National Defense and the Ministry of Public Security, will oversee the project. This approval comes as Vietnam works to reduce its $123.5 billion trade deficit with the U.S. and attract foreign investment, particularly in high-tech sectors like AI and semiconductors.
- Market Implications: Asian markets, excluding China and India, are contending with significant geopolitical, natural, and technological influences. Japan’s collaboration with NATO to enhance defense industry cooperation, targeting dual-use technologies and cyber defense, is poised to benefit Japanese defense sectors amid growing security challenges. Myanmar faces severe economic disruption following the 7.7 magnitude earthquake, compounded by the military junta’s internet shutdowns. The disaster’s impact on trade and regional investment is also being felt in neighboring countries. In South Korea, political uncertainty looms as the Constitutional Court’s removal of President Yoon Suk Yeol shakes investor confidence, potentially affecting financial markets and trade policies. Meanwhile, ASEAN countries are responding to U.S. tariffs by exploring diversification of trade partnerships and boosting regional integration. Vietnam’s approval of SpaceX’s Starlink pilot project highlights the region’s focus on technological advancements, promising improved connectivity and foreign investment in digital infrastructure. Overall, markets in Southeast Asia have struggled this year amid U.S. tariff developments, with equity markets down 5.26% for the year, as tracked by Bloomberg’s Southeast Asia ETF. Meanwhile, Japan is weathering market turmoil better than its regional partners, with its equity markets up 0.81% year-to-date, according to the MSCI Japan Index.
Sub-Saharan Africa
- Sudan’s military, led by General Abdel Fattah al-Burhan, retook control of Khartoum on March 30th, marking a pivotal moment in the ongoing civil war that has killed tens of thousands and displaced 12 million. The Sudanese Armed Forces (SAF) have made significant territorial gains, bolstered by foreign support from Saudi Arabia, Qatar, Egypt, and others, while facing resistance in the western district of Omdurman and southern areas. The conflict pits the SAF against the Rapid Support Forces (RSF), led by Muhammad Hamdan Dagalo, whose militia has terrorized Darfur and continues to receive backing from the UAE. Despite the SAF’s success in Khartoum, experts warn that pushing into Darfur could lead to a quagmire, with concerns over stretched supply lines and the risk of escalating violence.
- On April 10th, high-stakes peace talks began in Doha, Qatar between the Congolese government and M23 rebels, backed by an estimated 4,000 Rwandan troops, after M23 seized Goma in January and Bukavu in February, killing 3,000 and displacing over 7 million. Led by Bertrand Bisimwa of the Congo River Alliance, the rebels are demanding amnesty and the annulment of prosecutions, while Congo’s delegation—comprised largely of national security officials—insists on rebel withdrawal from occupied territory. The talks follow a recent Qatar-mediated meeting between Presidents Felix Tshisekedi and Paul Kagame, as prior regional peace efforts collapsed. Analysts stress that only sustained international pressure, especially on Rwanda, can compel real concessions and avert further escalation in the mineral-rich eastern provinces.
- Algeria closed its airspace to Mali on April 7th in response to what it called “recurrent violations,” days after shooting down a Malian armed drone near Tin Zaouatine between March 31st and April 1st. The incident sparked a major diplomatic rift as Mali, Burkina Faso, and Niger—members of the Alliance of Sahel States (AES)—recalled their ambassadors, accusing Algeria of violating international law and destabilizing the region. Mali’s Prime Minister General Abdoulaye Maiga accused Algeria of sponsoring terrorism, while Bamako claimed the drone was 10km inside Malian territory, contradicting Algeria’s claim of a 2km airspace breach. The crisis underscores rising tensions between Algeria and the AES, who cut ties with ECOWAS in 2023 and have since deepened military cooperation with Russia.
- Last week, the Democratic Republic of Congo handed over three American citizens—previously sentenced to death for a failed May 2024 coup led by U.S.-based Christian Malanga—after commuting their sentences amid high-level negotiations with Washington. Their release followed meetings in Kinshasa between President Felix Tshisekedi and U.S. President Donald Trump’s senior Africa adviser, Massad Boulos, as the two sides explored a minerals-for-security deal. Congo, which holds vast reserves of cobalt and lithium used in batteries and phones, is seeking U.S. military support—including troop training and intelligence—in exchange for access to critical resources, currently dominated by Chinese firms. The move highlights a strategic U.S. pivot to counter China’s 70% share in Congo’s mining sector, amid escalating violence from Rwandan-backed M23 rebels in eastern Congo.
- Market Implications: Sub-Saharan African markets continue to be shaped by ongoing conflicts and diplomatic efforts. In Sudan, the civil war continues to cause severe humanitarian and economic disruptions, threatening regional stability and trade through the Red Sea. Meanwhile, peace talks in Qatar between the Democratic Republic of Congo (DRC) and the Rwandan-backed M23 rebels could signal progress in stabilizing the mineral-rich regions, which are crucial for global supply chains of minerals like coltan and cobalt. Elsewhere, rising tensions between the Alliance of Sahel States (AES) and Algeria highlight the fragile security dynamics in the Sahel, potentially hindering cross-border trade. In the Republic of Congo, positive diplomatic moves, including negotiations over mineral exports and cooperation on international incidents, are fostering hope for increased foreign investment. Despite the volatility, market indicators like the VanEck Africa Index ETF and the iShares MSCI South Africa ETF, with YTD returns of 8.08% and 11.41% respectively, show cautious optimism among investors, contingent on conflict resolution and successful diplomatic outcomes.
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