CROSSROADS: Middle East, Asia, Latin America, Sub-Saharan Africa

by | May 21, 2025 | Crossroads

At the Intersection of Geopolitics and Geoeconomics

Here is a summary of the most important events that unfolded over the last month in the Middle East/North Africa, Asia (ex-China/India/Japan), Latin America, and Sub-Saharan Africa, and which may affect economic, financial, and geopolitical issues in the months ahead.

Top News This Month

  • This week, Iran’s Supreme Leader Ayatollah Ali Khamenei cast doubt on the outcome of recent indirect nuclear talks with the U.S., stating Iran will not halt uranium enrichment. 
  • President Trump announced that the U.S. would lift all sanctions on Syria. The EU announced it would also lift economic sanctions on Syria.
  • At the China-CELAC Forum in Beijing, Chinese President Xi Jinping pledged to strengthen ties with Latin American and Caribbean nations.
  • Amid escalating violence in Myanmar’s Rakhine state, Bangladesh has begun direct engagement with the Arakan Army (AA), a powerful insurgent group that now controls the border region. 
  •  The U.S. is working to broker a peace deal between Rwanda and the Democratic Republic of Congo (DRC) to end decades of conflict in the mineral-rich region.

Middle East/North Africa

  •  This week, Iran’s Supreme Leader Ayatollah Ali Khamenei cast doubt on the outcome of recent indirect nuclear talks with the U.S., held in Muscat, stating Iran will not halt uranium enrichment. Despite the U.S. describing the first four rounds as “encouraging” and Tehran calling them “difficult but useful,” Khamenei dismissed the likelihood of success and warned against U.S. demands to end enrichment. He emphasized Iran’s sovereign right to enrich uranium, calling American objections “nonsense,” and reaffirmed that enrichment is non-negotiable. Iranian Foreign Minister Abbas Araghchi echoed Khamenei, though noted Iran remains open to discussing increased transparency and peaceful verification measures.
  • President Trump announced in Riyadh on May 13th that the U.S. would lift all sanctions on Syria, surprising Treasury officials and prompting urgent internal discussions about the scope and pace of the rollback. The decision follows lobbying from Syria’s transitional government, led by interim President Ahmed al-Sharaa, which argues that sanctions have crippled reconstruction efforts after the collapse of Bashar al-Assad’s regime in December. Key U.S. allies Turkey and Saudi Arabia, both backing normalization with Syria, have pushed for relief and offered financial support, while U.S. Secretary of State Marco Rubio indicated waivers under the Caesar Act may be the first step. Though specifics remain unclear, the move marks a dramatic shift from decades of punitive U.S. sanctions linked to Syria’s support for terror groups and human rights abuses. Today, the EU also announced it would lift economic sanctions on Syria in an effort to help reconstruction efforts.
  • U.S. President Donald Trump’s May 2025 Gulf tour reshaped Middle East diplomacy by sealing over $700 billion in defense, tech, and business deals—highlighted by a $142 billion arms agreement with Saudi Arabia and more than $2 trillion in total investment pledges. The visit sidelined Israeli Prime Minister Netanyahu, whose refusal to halt the Gaza war and objection to U.S.-Iran talks created tensions with Washington. In Riyadh, Trump met Syrian President Ahmed al Sharaa—once considered an enemy by the U.S.—and signaled a policy shift by agreeing to lift U.S. sanctions on Syria (see more on this below). Trump also endorsed a ceasefire with Yemen’s Houthis and bolstered ties with Qatar and the UAE, cementing a new Sunni-led regional order while downplaying Israel’s strategic role.
  • Israel has begun allowing limited humanitarian aid into Gaza for the first time in over 2.5 months, with only five trucks entering since Monday—far below the 600 daily during a past ceasefire. This move follows pressure from allies like the U.K., France, and Canada, who have criticized the aid as “wholly inadequate” and threatened sanctions amid a worsening famine, with nearly 500,000 Palestinians facing starvation. Israeli Prime Minister Netanyahu said the easing is temporary and part of a broader plan involving a U.S.-backed Gaza Humanitarian Foundation to distribute aid via four private security-guarded hubs, each serving 300,000 people. U.N. agencies and NGOs have rejected the plan, warning it violates humanitarian principles and won’t meet Gaza’s urgent needs as the war continues. This morning, the UK froze trade talks with Israel while the EU said it would re-evaluate its relationship with Israel due to concerns over its conduct in Gaza.
  • Market Implications: Oil markets continue to be reactive to news surrounding the U.S.-Iran nuclear talks and announcements from OPEC+ members, especially as Saudi Arabia continues to ramp up output despite oil prices remaining relatively low. President Trump’s regional tour has catalyzed some market movements across MENA exchanges. The Saudi Tadawul All Share Index gained 3.2% following discussions on expanded bilateral investment frameworks. Defense and energy infrastructure stocks have been particularly responsive, with the Saudi defense sector index up 4.7% week-over-week.

Latin America & the Caribbean

  •  At the China-CELAC Forum in Beijing, Chinese President Xi Jinping pledged to strengthen ties with Latin American and Caribbean nations by promoting economic cooperation and providing 66 billion yuan ($9.1 billion) in new credit, contrasting China’s stability with the U.S. trade unpredictability under President Donald Trump. Over 30 countries attended the forum as part of a broader effort to reduce dependence on the U.S., with Xi criticizing “bullying and coercion” and backing Latin America’s “independence and self-determination.” China, now Latin America’s second-largest trading partner, saw bilateral trade exceed $500 billion last year and is expanding its regional footprint through infrastructure projects like the $1.3 billion Chancay port in Peru. Xi also vowed to increase Chinese imports from the region and expand Belt and Road participation, with Colombia formally joining the initiative.
  •  Brazilian President Luiz Inácio Lula da Silva attended Russia’s Victory Day celebrations in Moscow on May 9th, marking the 80th anniversary of WWII’s end, where he met with President Vladimir Putin to deepen bilateral ties, including agreements on science and technology. Lula also held a meeting with Slovakia’s Prime Minister Robert Fico and hosted a dinner at the Brazilian Embassy in Moscow. Following Moscow, Lula traveled to Beijing to participate in the China-CELAC summit on May 12-13, where he signed more than 30 agreements with China. Lula was accompanied by First Lady Janja da Silva and senior officials, signaling Brazil’s active engagement with both Russia and China amid shifting global alliances.
  • After 412 days in hiding at the Argentine diplomatic residence in Caracas, five top Venezuelan opposition leaders — Pedro Urruchurtu, Magalli Meda, Humberto Villalobos, Claudia Macero, and Omar González — have fled to the U.S. in a covert operation coordinated with the Trump administration. Their departure follows their critical role in organizing a major voter turnout campaign for the 2024 presidential election, ultimately leading the U.S. and several other countries to recognize opposition candidate Edmundo González as the rightful winner. The move comes just weeks before regional elections and amid Venezuela’s bid to ease tensions with Washington, including hoping for a Chevron license extension to avoid renewed oil sanctions. Meanwhile, about 900 political prisoners remain detained, and key opposition leader María Corina Machado is still in hiding.
  •  Four House Democrats — Reps. Robert Garcia, Maxwell Frost, Yassamin Ansari, and Maxine Dexter — traveled to El Salvador this week to advocate for Kilmar Abrego García, who was wrongfully deported by the Trump administration despite a 9-0 Supreme Court order protecting him. Abrego García had been sent to El Salvador’s notorious CECOT prison and remains detained, with Salvadoran officials refusing U.S. lawmakers’ requests for a visit, despite the Supreme Court’s directive to facilitate his return. The lawmakers’ visit follows a similar trip by Sen. Chris Van Hollen and highlights mounting concerns over Trump’s use of the 1798 Alien Enemies Act to deport asylum seekers without due process. Meanwhile, House Republicans support the deportations, with Speaker Mike Johnson and others alleging ties between deportees and gangs like MS-13, though court documents cast doubt on these claims.
  • Market Implications: Latin American equities have surged over the last month due to a combination of factors, including trade-war-related opportunities and improved economic conditions across some countries in the region. Year-to-date, the return across Latin American equity markets, according to the iShares Latin America 40 ETF, is 23.3%. Mexican equities have surged more than 26% this year, based on data from the MSCI Mexico IMI 25/50 Index. Latin American economies, particularly Brazil and Mexico, have benefited from trade-war dynamics, including reduced tariffs and favorable trade conditions with the U.S. Amidst this year’s volatility in U.S. markets, some investors are shifting investment to Latin American assets as an alternative to the U.S. market. Mining and agricultural commodities in particular have reacted positively to China’s increased influence in the region. Brazilian iron ore producers have outperformed broader markets by 580 basis points on expectations of increased Chinese demand. Regional currencies have strengthened modestly against the dollar, with the Brazilian real appreciating 1.2% as investors anticipate expanded export opportunities.

Asia (ex-China/India/Japan)

  • Vietnam and Thailand have elevated their diplomatic relationship to a “comprehensive strategic partnership,” the highest level in Vietnam’s ranking system. This upgrade, announced during Thai Prime Minister Paetongtarn Shinawatra’s visit last week to Hanoi, highlights a push to deepen cooperation in trade, clean energy, digital and green economies, innovation, and high-tech agriculture. Thailand became Vietnam’s 13th comprehensive strategic partner, a significant jump from just four in 2022. The move underscores Vietnam’s broader goal of strengthening ASEAN ties and promoting regional unity. Thailand is Vietnam’s largest trading partner in Southeast Asia, with bilateral trade reaching $20.3 billion in 2024. Both countries also run large trade surpluses with the U.S., facing steep reciprocal tariffs under former President Trump’s policy. A new target has been set to boost trade to $25 billion. The visit also led to eight bilateral agreements in economic, security, and educational fields, and included a meeting with Vietnam’s Communist Party leader, To Lam.
  • Amid escalating violence in Myanmar’s Rakhine state, Bangladesh has begun direct engagement with the Arakan Army (AA), a powerful insurgent group that now controls the border region. This shift comes after repeated kidnappings of Rohingya refugees and Bangladeshi fishermen, primarily for fundraising. Dhaka’s interim government, led by Muhammad Yunus, argues that dialogue with the AA is necessary to protect national interests, given Myanmar’s military retreat from the area. Over a million Rohingya have fled to Bangladesh since 2017, with another 118,000 arriving since late 2023. Camps in Cox’s Bazar are overcrowded, forcing authorities to repurpose abandoned buildings. Rohingya refugees accuse the AA of brutality, forced labor, and ethnic cleansing, and fear returning home without international protection. Myanmar has deemed only 180,000 out of 800,000 refugees eligible for repatriation. Experts say resolving the crisis requires intervention from the U.N. and regional powers like China and India to pressure both Myanmar and the AA.
  • Philippine President Ferdinand Marcos Jr. is shifting focus to his economic agenda after his coalition suffered a setback in the last week’s midterm elections, winning only five of 12 Senate seats. With Vice President Sara Duterte’s camp gaining momentum and Marcos’ approval rating slipping to 60%, he now aims to solidify his legacy by advancing developmental goals like healthcare, education, agriculture, and infrastructure. Marcos offered to reconcile with the Duterte family, recognizing their growing influence and Sara’s upcoming impeachment trial. Analysts say Marcos must deliver tangible economic results and navigate rising opposition from both Duterte loyalists and liberal progressives. While his legislative agenda may still pass with relative ease due to congressional allies, controversial bills could provoke resistance. Observers predict governance will become more reactive as Marcos juggles competing factions ahead of the 2028 elections. Though unlikely to be remembered as great, Marcos may escape the condemnation that defined his father’s legacy.
  • At a May 4th meeting in Milan, finance ministers and central bank chiefs from Japan, China, South Korea, and ASEAN warned that rising global trade protectionism threatens economic stability and integration. Without naming the U.S., their joint statement criticized increasing tariffs, referencing new duties from the Trump administration—up to 49% for Cambodia and 46% for Vietnam—that could significantly harm Southeast Asia’s export-driven economies. The officials reaffirmed support for a free, rules-based multilateral trading system centered on the World Trade Organization and called for greater regional cooperation to withstand global uncertainties. They emphasized strengthening long-term economic resilience and maintaining flexibility to respond to near-term challenges like protectionism and financial volatility. The group also agreed to expand the Chiang Mai Initiative—a regional financial safety net—to cover crises like pandemics and natural disasters. Members discussed pre-crisis contributions to the fund, potentially modeling it after the IMF’s reserve system, and will continue talks on implementation.
  • Market Implications: Southeast Asian markets are experiencing distinctive cross-currents as diplomatic realignments and political transitions reshape the investment environment across this dynamic region. The Vietnam VN-Index and Thailand SET have gained 3.2% and 2.7% respectively since the announcement of their Comprehensive Strategic Partnership. Trade volumes between the two economies are projected to increase by 35% over the next three years, according to commerce ministry estimates. The PSEi has rallied since Philippine election results were confirmed, outperforming the broader MSCI Emerging Markets Asia index. Foreign institutional investors have deployed approximately $780 million into Philippine equities post-election, according to exchange data, reversing previous outflows. The peso has strengthened 1.1% against the dollar, reflecting improved investor confidence in policy stability and fiscal management. The ASEAN bloc’s renewed commitment to regional free trade initiatives has reinforced positive sentiment across ASEAN equity markets. The FTSE ASEAN All-Share Index has gained 2.1% following the ministerial declaration on accelerated tariff reductions and digital trade facilitation. Regional currencies have strengthened collectively against the dollar by an average of 0.9% as investors price in enhanced intra-regional commerce potential.

Sub-Saharan Africa

  • Last month, Egyptian President Abdel Fattah al-Sisi hosted Sudanese army chief Gen. Abdel Fattah al-Burhan in Cairo to discuss Sudan’s postwar recovery, regional coordination, and Nile water security. Egypt is positioning itself for a central role in Sudan’s reconstruction, having identified 52 local companies for rebuilding projects after the Sudanese Armed Forces (SAF) recaptured Khartoum from the Rapid Support Forces (RSF) in March. The leaders also reaffirmed opposition to Ethiopia’s unilateral actions on the $4.6 billion Grand Ethiopian Renaissance Dam (GERD), demanding adherence to international law and binding agreements on water flow. Burhan’s visit is part of a broader diplomatic campaign to secure foreign support and aid following the devastating civil war that began in April 2023. Over the past month, Sudan’s civil war has entered a dangerous new phase as the paramilitary Rapid Support Forces (RSF) launched drone attacks on Port Sudan, a previously safe city housing key infrastructure, diplomats, and humanitarian groups. This shift follows the RSF’s loss of Khartoum and reflects a strategic move toward remote warfare.
  •  The U.S. is working to broker a peace deal between Rwanda and the Democratic Republic of Congo (DRC) to end decades of conflict in the mineral-rich region. On May 15th, Massad Boulos, Trump’s senior Africa adviser, discussed a draft agreement with Presidents Paul Kagame of Rwanda and Felix Tshisekedi of the DRC, receiving positive responses from both. Final feedback is expected soon, with possible amendments. The deal, supported by the African Union and Qatar, aims to stabilize eastern Congo, where fighting involving Rwandan-backed M23 rebels has led to mass displacement and casualties. The U.S. hopes to finalize the deal in the coming weeks and attract Western investment. Secretary of State Marco Rubio is prepared to host the foreign ministers in Washington. While the rebels and Congo’s government have agreed in principle to peace, frustration lingers over slow progress. Rwanda denies arming M23, asserting its actions are in self-defense.
  • Iran is strengthening security and economic ties with African nations to boost its geopolitical influence, gain access to natural resources, and secure hard currency. This month, Iranian police chief Brigadier General Ahmad Reza Radan signed security cooperation agreements with Ethiopia and Burkina Faso, focusing on counterterrorism, cybercrime, and trafficking. Iran may also be offering internal repression expertise, as both countries have authoritarian regimes that suppress dissent. Radan, with a background in internal security crackdowns, has expanded Iran’s global security outreach since 2023, forming partnerships with countries like China and Russia. These efforts could help Iran export its authoritarian model while gaining economic benefits. Simultaneously, Iran is expanding trade and investment in Africa. At the 2025 Iran-Africa Economic Cooperation Summit, Iran announced a $10 billion trade target and signed multiple deals in mining, agriculture, petrochemicals, and healthcare. New infrastructure and financing projects aim to solidify long-term economic collaboration with African partners.
  • Nigeria’s economy experienced its fastest growth in nearly a decade in 2024, driven by strong fourth-quarter performance and improved fiscal conditions, according to the World Bank. Growth reached 4.6% year-on-year in Q4, with continued expansion expected into 2025. Key reforms by President Bola Tinubu — including ending fuel subsidies, cutting electricity allowances, and devaluing the naira — have boosted revenue but also intensified inflation. Government income rose by 4.5% of GDP, aided by tax improvements and remittances, reducing the fiscal deficit from 5.4% in 2023 to 3% in 2024. Nigeria’s foreign exchange reforms have stabilized the currency and allowed reserves to surpass $37 billion. While the reforms strengthened economic fundamentals, the World Bank cautioned that persistently high inflation remains a major challenge. The World Bank forecasts 3.6% GDP growth for Nigeria in 2025.
  •  In a controversial move, the Trump administration granted refugee status to 59 white South Africans, primarily Afrikaners, citing racial persecution and safety concerns amid farm attacks. On May 12th, the group arrived in the U.S. on a chartered flight, receiving unusually swift approval—under three months—despite Trump’s broader restrictions on refugee admissions. Trump claimed white farmers in South Africa faced “genocide” and land seizures, though official South African data does not support claims of mass targeted killings. The administration’s prioritization of Afrikaners—historically the ruling class under apartheid—has drawn criticism from South Africa and refugee advocates, who argue the move is politically motivated and racially biased. While South African officials condemned the policy as an attack on their constitutional democracy, U.S. officials framed it as a defense against racial persecution. Some U.S. religious organizations, including Episcopal Migration Ministries, refused to participate, citing ethical concerns. Critics argue the expedited resettlement highlights the administration’s selective and politicized approach to refugee policy.
  • Market Implications: The Trump administration’s diplomatic engagement with Rwanda and the DRC has sparked some optimism for investors, but stability in the region is far from secure. The regional conflict has previously disrupted critical mineral supply chains, particularly affecting cobalt and coltan markets. The Sudanese civil war continues to exact a devastating humanitarian toll while creating economic fragmentation. Regional trade patterns have reconfigured, with Kenya and Ethiopia experiencing increased transit volumes as alternative trade corridors emerge. Agricultural commodity prices remain elevated, with East African wheat prices 27% above pre-conflict levels. With Nigeria’s economy posting its strongest performance in a decade, the Nigerian Stock Exchange All-Share Index has significantly outperformed broader frontier market indices year-to-date. The naira has stabilized following previous volatility, appreciating 2.4% against the dollar this quarter.

Suggested Reading

Chips, deals and geopolitics

Samuel Wendel, Al-Monitor

China’s Patience Will Beat US Threats in Latin America

Juan Pablo Spinetto, Bloomberg

ASEAN joins Japan, China and South Korea in protectionism warning

Yuka Furubayashi, Nikkei

 Peace Talks in the Era of Transactionalism

Michelle Gavin, Council on Foreign Relations

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