Here is a summary of the most important events that unfolded last month, and which may affect economic, financial and geopolitical issues in the months ahead:

North America

• US-China tensions heated up last month after the US and several allies, including the European Union and NATO, jointly condemned China for widespread cyberattacks such as those on Microsoft, which have affected tens of thousands of organizations. The US has explicitly accused the Chinese government of being directly involved in the cyberattacks, though others accuse Beijing of only allowing the hackers to operate. A high-level meeting between US and Chinese officials at the end of July revealed that talks between the two countries are at a stalemate. After the meeting, China’s Vice Foreign Minister Xie Feng reportedly called US foreign policy “extremely dangerous” for treating China as an “imagined enemy” and said the relationship faces serious challenges.
• During Iraqi Prime Minister Mustafa al-Kadhimi’s visit to the White House, President Biden announced the US will end its combat mission in Iraq by the end of the year. However, Biden assured that the US military will continue to assist Iraq in its fight against Islamic State but will do so primarily through training, advising, and intelligence-sharing. The announcement comes on the heels of the US troop withdrawal from Afghanistan, demonstrating the Biden administration’s desire to step back from the Middle East to concentrate time and resources on other foreign policy challenges.
• US Secretary of State Antony Blinken traveled to India last month to meet with Indian Prime Minister Narendra Modi and other government officials, highlighting the importance of Washington’s relationship with New Dehli. Among the topics discussed were tightening business ties between the two countries, enhancing Indo-Pacific engagement, and boosting Covid-19 response efforts. Blinken’s visit comes as the US seeks to strengthen its relations with India, which the Biden administration sees as critical to countering China’s influence in the Pacific region.
• The Biden administration imposed its first set of sanctions on Syria in response to human rights abuses. Deviating from the previous administration’s sanctioning of businesses, financial groups, and associates of President Bashar al-Assad’s family, these new sanctions target Syrian prisons, government officials, and leaders of militant groups. The move signals Washington’s continued efforts keep pressure on President Assad’s authoritarian regime, which has dragged the country through a ten-year war and economic crisis.

Europe

• The US and Germany reached a deal on the Nord Stream 2 pipeline shortly following German Chancellor Angela Merkel’s visit to Washington. The pipeline has been a source of tension between the two countries for several years as the US has opposed the pipeline because of concerns that it would give Russia too much leverage over European energy security. As part of the agreement, Germany will invest in and promote Ukrainian energy security and committed to sanctioning Russia if it uses energy as a weapon.  
• Though the bloc had a slow start to its vaccination campaign, the European Union (EU) has quickly surpassed the US. EU countries together have administered more Covid-19 vaccine doses per one hundred people than the US, exposing the slowdown of vaccinations in America. In July, the EU also overtook the US in first injections with 58% of people having had a first dose as compared with 56.5% in the US.
• EU leaders introduced 13 new proposed rules to help the bloc reach its climate goal of cutting greenhouse gas emissions by 55% by 2030. The new rules are based on the principle that greener options should be cheaper than those that pollute more, and include measures to expand carbon pricing, tax greenhouse gas emissions, and offer financial support to households who are energy impoverished. European Commission President Ursula von der Leyen called the plan Europe’s “man on the moon” moment.
• The final results of Bulgaria’s snap parliamentary elections released on July 13^th show the anti-elite party called There is Such a People (ITN) beat former Prime Minister Boyko Borisov’s GERB-led coalition. No party was able or willing to form a government back in April after the initial elections, sending the country into political deadlock. Despite a controversial political climate, the Organization for Security and Cooperation in Europe said the elections were competitive and respected fundamental freedoms.

Asia, Eurasia & the Pacific

• Myanmar’s military junta has extended its state of emergency for two years and said it will hold elections in 2023. Earlier in the month, officials from the military government nullified the country’s 2020 election results won by Aung San Suu Kyi and her party, the National League for Democracy. The military claims last year’s national elections were fraudulent and has since appointed a new election committee to hold a “free and fair multiparty general election” in 2023. Since the military took over in a coup on February 1^st, nearly 1,000 people have been killed by authorities and about 7,000 arrested. Leaders from the Association of Southeast Asian Nations (ASEAN) will meet about Myanmar’s crisis during this week’s group’s virtual conference. 
• During a visit by US Defense Secretary Lloyd Austin to Manila, Philippine President Rodrigo Duterte has retracted his plan to cancel the Visiting Forces Agreement (VFA), a military agreement between the US and the Philippines which allows American soldiers to conduct exercises on Philippine soil. President Duerte’s decision ensures stability in US-Philippine relations which is critical to America’s presence in the Pacific, especially as it seeks to counter China’s rising influence.
• In a stride towards improving inter-Korean relations, North Korea and South Korea have restored cross-border military hotlines. North Korea severed the hotlines last year in protest of propaganda leaflets that were coming across the South Korean border. The unexpected agreement between South Korean President Moon Jae-in and North Korean leader Kim Jong-un comes is a signal that both countries seek to push the relationship forward and regain mutual trust.
• China opened its national carbon emissions exchange, the world’s largest carbon-trading market. The market is currently limited to the country’s energy sector, responsible for 40% of China’s carbon emissions and 15% of global emissions. In the first trade on the exchange, a ton of carbon was priced at about $8.00. Beijing seeks to add other sectors to the market, such as aluminum, steel, or cement. The exchange, which was pledged by China ahead of the 2015 signing of the Paris Agreement, seeks to help the country reach carbon neutrality by 2060.

Middle East

• Large anti-government protests have broken out in Tunisia after President Kais Saied fired Prime Minister Hichem Mechichi and suspended parliament. The move has sent Tunisia into a political crisis, with opposition parties denouncing President Saied’s actions as a coup. President Saied has clashed with the prime minister and the parliament Speaker Rached Ghannouchi in recent months and has increased his own authority by refusing to swear in ministers. Parliament has been suspended for 30 days, after which President Saied said he will govern alongside a new premier.
• Qatar approved the legal framework which will allow it to hold its first legislative elections in October. While Emir Sheikh Tamim bin Hamad al-Thani will appoint 15 members of the 45-seat Shura Council (Qatar’s legislative authority), the remaining 40 members will be selected by voters. The new law will make Qatar only the second of Gulf monarchies, alongside Kuwait, to give substantial powers to an elected parliament.
• The Taliban refuses to cease combat until Afghanistan’s President Ashraf Ghani is removed from office and a new negotiated government is installed. As US and NATO troops depart from the country, the Taliban has gone on the offensive, rapidly seizing territory. Though tensions have increased over the last few months, high-level talks in Doha just a couple weeks ago ended with the promise of more talks and greater protection of civilians.
• Iran opened its first oil terminal in the Gulf of Oman, allowing the country to bypass the strategically vulnerable Strait of Hormuz to export oil. In a speech about the project, President Hassan Rouhani said the terminal would “secure the continuation of our oil exports…this new crude export terminal shows the failure of Washington’s sanctions on Iran.”
• Lebanon’s Prime Minister-designate Saad Hariri resigned after failing to form a government. Hariri was unable to reach an agreement with President Michel Aoun over the makeup of the government, sending the country back to square one in what has been eight months of political deadlock. Following the announcement, supporters of Hariri and his Future Movement party demonstrated in the streets, and the Lebanese pound hit a new all-time low.

Latin America and the Caribbean 

• Cuba saw its largest protests in decades last month as thousands of protesters marched in the streets to demand political freedom amid significant food and medicine shortages. Security forces clashed with protesters, leading to the arrest of hundreds and condemnation from many international leaders. In response to Cuba’s crackdown on protesters and alleged human rights violations, the US imposed new sanctions targeting the country’s defense minister and a group of government security forces. President Díaz Canal has criticized protesters for taking advantage of Cuba’s poor economic situation and the pandemic and accused them of selling out to the US government. 
• Haitian President Jovenei Moise was assassinated in his home early last month amid political unrest. Though investigations are still ongoing, Haitian authorities say the assassination involved a group of more than two dozen foreign mercenaries, including 26 Colombians and two Americans of Haitian descent. The assassination comes as gang violence and protests against Moise’s government have escalated, and the economic situation worsens by the day, exacerbated by the Covid-19 pandemic.
• Thousands took to the streets in Guatemala after publicly respected anti-corruption prosecutor Juan Francisco Sandoval was fired by the country’s government. Protesters have called for the resignation of President Alejandro Giammattei and Attorney General Maria Porras, accusing the leaders of abusing their power and perpetuating corruption. Due to its “lost confidence” in Guatemala’s willingness to fight corruption, the US State Department announced it would partially suspend cooperation with its government.
• After a weeks-long impasse in which right-wing rival Keiko Fujimori challenged election results, Pedro Castillo was announced the president-elect of Peru by the country’s election authority. During his campaign, Castillo pledged to nationalize Peru’s mining and hydrocarbon sectors and set a goal of creating a million new jobs in one year. However, it won’t be smooth sailing for Castillo as Maria del Carmen Alva Prieto, a member of an opposition alliance, has been elected to lead Congress.

Sub-Saharan Africa

• The conflict in Ethiopia’s Tigray state has spilled over into the neighboring region of Afar. Fighters from the Tigray People’s Liberation Front (TPLF) have taken control of several districts in strategically important Afar, the home of the main road and railway that runs from the capital, Addis Ababa, to the seaport of Djibouti. The violence now surging through Afar has so far displaced more than 54,000 people and killed dozens of civilians. 
• As Zambia prepares to hold presidential elections on August 12^th, the military has been deployed to curb escalating political violence. Though the Electoral Commission has banned rallies because of the Covid-19 pandemic, supporters of the governing party Patriotic Front (PF) and those of the opposition party, United Party for National Development (UPND), have clashed in several provinces, including in the capital, Lusaka. President Edgar Lungu is running for a second term.
• Kenya and the United Kingdom have signed a new cooperation agreement that aims to increase investments in Nairobi. This new deal links the London and Nairobi stock exchanges and simplifies the incorporation of companies in Kenya. The ultimate goal of the agreement is to turn the capital city of Kenya into Africa’s financial hub.
• Drugmakers Pfizer and BioNTech announced a collaboration with South Africa’s Biovac Institute. Together, the companies aim to deliver more than 100 million doses per year of their Covid-19 vaccine to African countries starting next year. While the active ingredient for the vaccine will be made in Europe, the rest of the jab will be produced in Cape Town.

World

• A joint investigation conducted by 17 media organizations, including the Washington Post, found that Pegasus spyware, sold to governments by the Israeli firm NSO Group, was used to hack at least 37 smartphones owned by journalists, human rights activists and business executives. The spyware is officially intended for use by governments to track terrorists and criminal groups and is reportedly used by Hungary, India, Mexico, and Saudi Arabia, among others. The media consortium, titled the Pegasus Projects, says more revelations about the Pegasus software are forthcoming.

Suggested Reading

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