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

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.

Middle East/North Africa

Israel’s security cabinet approved a plan to seize and hold Gaza City, triggering large anti-war protests across Israel and urgent warnings over civilian and hostage safety. The plan involves evacuating up to 1 million Palestinians from the city and surrounding it with Israeli forces to eliminate remaining Hamas operatives, despite warnings from the Israeli Defense Forces (IDF) that such a move could endanger hostages and worsen the humanitarian crisis. The plan has drawn widespread international condemnation, with critics warning it could violate international law and deepen the suffering of civilians already facing famine and displacement. Earlier this week it was reported that Hamas accepted a plan for a ceasefire presented by Arab mediators. The plan is allegedly similar to a previous one accepted by Israel and stipulates the negotiation of a lasting ceasefire. Egypt and Qatar have sent the proposal to Israel and Israel confirmed it is reviewing the plan. Meanwhile, over the last few weeks, the IDF has intensified strikes around eastern Gaza City as civilians flee south and west.
Canada has announced plans to formally recognize Palestine at the United Nations this September, joining recent declarations by France and the United Kingdom. These moves reflect a growing diplomatic shift among Western nations in response to the ongoing Gaza war. In 2025 alone, Mexico and several Caribbean states added their recognition, building on the wave that began in 2024 with Spain, Ireland, Norway, and Slovenia. Israel and the US have both strongly opposed the recent wave of recognitions of Palestinian statehood, warning that it undermines efforts to reach a ceasefire with Gaza and secure the release of hostages.
France, Germany, and the UK have warned Iran of “snapback” sanctions over its nuclear program. The countries, nick-named the E3, sent a joint letter to the UN signaling readiness to reinstate UN sanctions unless Tehran reins in enrichment and re-engages substantively. The warning followed deputy-level talks with Iran in Istanbul, the first direct contact since the June strikes on Iranian nuclear sites by the US and Israel. Iran has threatened to escalate if sanctions are reinstated, heightening nuclear and regional risk. European officials frame the move as a last resort to deter weaponization and have given Tehran until the end of the month to come to a diplomatic solution.
New violence in Syria between Druze and Bedouin groups in the Suwayda region flared last month but was ultimately quelled by a Syria-Israel ceasefire brokered by the US and supported by Turkey and other regional actors. The truce aimed to halt sectarian violence in the Druze-majority region and prevent further Israeli intervention. Although formally announced in July, the Syria-Israel ceasefire was rooted in escalating violence that began earlier in the year, including Israeli airstrikes in March targeting Syrian government forces in Suwayda. Damascus has also announced the first parliamentary elections since the fall of former President Bashar al-Assad, drawing skepticism from observers about credibility under current conditions. Voting is scheduled to take place between September 15-20th.
Beirut instructed the Lebanese Armed Forces to draw up plans to consolidate arms under state authority, implicitly challenging Hezbollah’s independent arsenal. The cabinet move came amid US and European pressure tied to border de-escalation with Israel. Hezbollah and allies criticized the drive as externally imposed, and actual implementation remains uncertain. The debate underscores Lebanon’s fragmentation and the risks of escalation along the southern border.
Market Implications: MENA markets remain volatile amid escalating geopolitical tensions. War-risk premiums lifted Israeli defense stocks and regional credit default swaps, with Egypt’s financial outlook sensitive to further escalation. Meanwhile, diplomatic shifts—including growing recognition of a Palestinian state and European threats to reimpose UN sanctions on Iran—added complexity to regional trade and energy pricing.

Latin America & the Caribbean

Opposition senator and presidential hopeful Miguel Uribe Turbay died from gunshot wounds sustained at a June Bogotá rally, re-igniting fears of political violence. Authorities have arrested multiple suspects, including a teenage gunman, while investigators examine possible links to armed groups. The killing highlights political polarization ahead of 2026 elections and has drawn church and civic appeals for a stop in violence. Deepening divisions between the government and opposition, Colombian President Gustavo Petro’s push for labor reform was rejected by the Senate, prompting him to call for a national referendum in October.
Bolivia is heading toward a historic presidential runoff on October 19th after centrist Senator Rodrigo Paz and right-wing former President Jorge “Tuto” Quiroga emerged as the top contenders in the first round of voting. Rodrigo Paz, son of former President Jaime Paz Zamora, led the first round with over 31% of the vote by positioning himself as a moderate reformer focused on decentralization, small business support, and anti-corruption measures. Quiroga, who received about 27%, is campaigning on a platform of fiscal austerity, privatization, and closer ties with the US and Israel, drawing inspiration from Argentina’s libertarian president Javier Milei. This marks the end of two decades of dominance by the leftist Movement Toward Socialism (MAS) party, which collapsed amid deep internal divisions and widespread public frustration over economic mismanagement, soaring inflation, and shortages of basic goods. The country continues to grapple with its worst economic crisis in four decades.
The Panama Canal Authority is preparing tenders to build/operate new terminals on both ends of the waterway and has signaled a pivot into owning ports as part of an $8.5 billion plan. The push follows BlackRock’s deal to acquire Hutchison’s global port assets, including Balboa and Cristóbal at the Canal’s ends. Investors debate efficiency gains versus expropriation/competition concerns as the ACP expands its footprint. Early consultations with operators are expected ahead of a formal tender round.
In response to the 50% tariffs imposed by the US on Brazilian exports, President Lula announced a 30-billion-real program (equivalent to $5.5 billion), “Sovereign Brazil”, to support exporters targeted by new US tariffs, including tax deferrals, SME credits and expanded insurance. The plan has been outlined as a lifeline for agribusiness and manufacturers while it pushes for negotiated relief. The fiscal implications are modest but add to a crowded policy agenda. The program could boost Brazil’s export competitiveness, potentially affecting regional trade balances and market share in sectors like soy, beef, and manufactured goods—areas where Chile also competes.
Businessman Laurent Saint-Cyr has taken over leadership of Haiti’s Transitional Presidential Council. His inauguration occurred in Port-au-Prince even as gang leaders threatened the transition. Saint-Cyr’s term runs until February 7, 2026, when the council’s mandate is set to end and a newly elected president be inaugurated, although it is unclear if elections called for November will be able to take place. CARICOM partners and donors cautiously welcomed the move while pressing for security and governance benchmarks. However, public skepticism remains high given past false starts.
Market Implications: The Panama Canal Authority’s decision to tender two port terminals and pursue an LPG pipeline signals a push toward vertical integration, potentially boosting canal revenues and reshaping pricing dynamics for operators. In Colombia, the rise in political risk is prompting investor caution around the peso and government bonds. Brazil’s new 30 billion real credit line to shield exporters from US tariffs is offering near-term relief for key sectors like meatpacking and machinery. Overall, regional equity markets have done well, gaining several percentage points over the last month to notch a more than 28% year-to-date return, according to the S&P Latin America 40 Index. In general, we are of the belief that emerging markets, and small- and mid-cap stocks outside the US, present good prospects.

Asia/Eurasia (ex-China/India/Japan)

Armenia and Azerbaijan signed a peace declaration at the White House on Aug. 8^th. Provisions center on border delimitation, security cooperation and normalization after Nagorno-Karabakh’s fall. The deal was brokered solely by the US, sidelining Russia and the EU, which had previously played key roles in mediation. However, the EU has “initialed” a broader treaty text, indicating its intent to support implementation, especially in areas like border demarcation, customs interoperability, and infrastructure funding. Implementation risks remain significant and will require sustained US–EU engagement. Still, the agreement marks the most substantive breakthrough in years.
Washington reduced planned tariffs on South Korean imports from 25% to 15% after Seoul pledged $350 billion in US investments and $100 billion in energy purchases. Details and timelines are still being negotiated, and South Korean media/policy outlets have emphasized the importance of the deal’s final details. President Lee Jae-myung will visit Washington on August 25th to finalize the agreement.
After deadly border clashes in late July, a ceasefire between Cambodia and Thailand took effect with ASEAN monitors deploying along the disputed frontier. However, sporadic incidents, including a Thai landmine injury and the capture of 18 Cambodian soldiers just hours after the truce took effect, underscore the truce’s fragility. Both governments say they’ll pursue talks on demarcation and cross-border economic zones. Humanitarian displacement remains significant in nearby districts, with over 51,000 people in Cambodia alone displaced.
Jakarta and Lima signed a free-trade agreement to lower tariffs on agriculture, textiles and manufactured goods, with trade flows set to ramp up into 2026. The agreement also includes collaboration in defense, mining, energy transition, food security, and targets narcotics trafficking and illegal trade, reflecting a broader security and governance agenda. The pact complements Indonesia’s South-South push and Peru’s diversification beyond the US–Pacific relationship.
Bangladesh is preparing for national elections, most likely to be held in February 2026, following the ousting of Prime Minister Sheikh Hasina in 2024. The interim government, led by Nobel laureate Muhammad Yunus, has pledged to implement sweeping reforms to ensure a transparent and credible vote. These include deploying AI-enabled body cameras for polling staff, reassigning police officials to prevent bias, and mobilizing tens of thousands of security personnel. However, opposition groups are pushing for an earlier election date and demanding constitutional legitimacy for the transitional framework. Some parties are also calling for a Constituent Assembly to draft a new constitution, which could complicate the timeline. International partners have emphasized the need for robust monitoring and human rights protections, especially given Bangladesh’s history of electoral irregularities and recent political violence.
Market Implications: In Asia, the US scaled-back proposed tariffs on South Korean imports and Seoul’s pledged US investments are supporting key sectors like autos and shipbuilding, though final terms remain pending. Indonesia’s new trade agreement with Peru expands market access for palm oil, fisheries, and light manufacturing, offering strategic gains for ASEAN supply chains despite modest volumes. Global trade developments have boosted regional equity markets, with the MSCI Emerging Markets Asia Index gaining over 19% year-to-date. As mentioned above, we see strong potential in emerging markets and in small- to mid-cap equities outside the US.

Sub-Saharan Africa

The peace process between the Democratic Republic of Congo (DRC) and the Rwanda-backed M23 rebel group remains stalled despite a July 19th declaration of principles aimed at finalizing a peace deal by August 18th. The Doha talks, mediated by Qatar and supported by the US, were expected to culminate in a formal agreement, but M23 representatives did not arrive in Doha as scheduled, citing ongoing Congolese military attacks and unmet conditions such as the release of prisoners. M23 has since indicated it will send a technical delegation to Doha under pressure from Qatari mediators, though expectations for progress remain low. Humanitarian conditions have deteriorated in and around Goma after earlier rebel gains.
Washington sanctioned minerals traders PARECO-FF, Congolese miner CDMC, and Hong Kong-based traders East Rise and Star Dragon for profiting from illicit coltan flows from Rubaya and fueling violence. The sanctions freeze US-based assets and prohibit transactions, aiming to redirect global buyers toward verified, conflict-free supply chains. Investigations revealed that rebel control of Rubaya has financed armed operations, fueling violence and instability across North Kivu. The US Treasury’s action adds significant compliance risk across the tantalum and cobalt supply chains, which are critical to electronics and battery manufacturing. The move underscores growing international pressure to clean up mineral sourcing and curb the economic engines of conflict.
South Africa’s government has distanced itself from controversial comments made by its top military official during a visit to Iran, where he praised regional “resistance” movements. Officials emphasized that the remarks do not reflect official policy and reiterated South Africa’s commitment to neutrality and non-alignment in Middle East affairs. The incident comes at a sensitive time, as Pretoria seeks tariff relief from Washington and aims to avoid entanglement in geopolitical tensions. Domestic critics warned the remarks could harm trade and diplomatic ties. Government communications have since emphasized neutrality and non-alignment.
The World Bank signaled support for a 1,500-MW Mphanda Nkuwa hydropower project on the Zambezi River in Mozambique, offering a mix of debt, equity, and guarantees, with financial close targeted for late-2025 and commissioning around 2031. Maputo pitches the $5-6.4 billion initiative as a regional power export anchor. While developers tout modern mitigation plans, ESG groups have raised concerns over potential displacement and river-flow disruption. The project’s scale and location make it a flashpoint for environmental scrutiny, but also a key opportunity for Southern Africa’s energy transition.
Sudan faces its worst cholera surge in years, with Doctors Without Borders reporting at least 40 deaths in a single week and nearly 100,000 suspected cases since 2024. The outbreak has spread into eastern Chad’s refugee settlements, prompting UNHCR/UNICEF warnings and targeted vaccination/prevention campaigns. The World Health Organization (WHO) says conflict-driven displacement, water scarcity and the rainy season are amplifying transmission.
Market Implications: Sub-Saharan markets faced mixed pressures this month. Intensified fighting between the DRC army and M23 rebels disrupted logistics around Goma, raising supply-chain risks for tantalum and cobalt and benefiting traceable producers in Zambia while hurting DRC-exposed miners and insurers. US sanctions on mineral traders and armed groups added compliance costs and could tighten coltan flows. In South Africa, the government distancing itself from its army chief’s remarks in Iran eased fears of diplomatic fallout and offered modest support for the rand and government bonds. Meanwhile, World Bank backing the $6.4 billion Mphanda Nkuwa hydro project is boosting regional energy ambitions.

Top News This Month

Middle East/North Africa

Latin America & the Caribbean

Asia/Eurasia (ex-China/India/Japan)

Sub-Saharan Africa

Suggested Reading

Search

Archives