At the Intersection of Geopolitics and Geoeconomics

Middle East/North Africa

• Amidst the ongoing Israel-Hamas war, Israeli Prime Minister Benjamin Netanyahu dismissed Defense Minister Yoav Gallant due to disagreements over the war’s management, replacing him with Foreign Minister Israel Katz. Gallant had reportedly advocated for a negotiated settlement to secure the release of Israeli captives held by Hamas, contrasting with Netanyahu’s hardline stance of continuing the conflict. The dismissal triggered widespread protests across Israel, with many expressing concerns over the implications for the hostages and the potential for an escalation of the conflict. Also, the Israel Defense Forces (IDF) confirmed in October 2024 that Hamas leader Yahya Sinwar was killed during an operation in the southern Gaza Strip. The IDF has also conducted multiple strikes in Syria, while continuing to target Hezbollah in Lebanon, in an effort to disrupt weapons transfers and reduce Hezbollah’s ability to threaten Israel.
• Qatar and Turkey signed eight agreements during the 10th Turkey-Qatar High Strategic Committee meeting in Ankara, covering sectors like humanitarian aid, energy, and defense. The agreements, while non-binding, aim to enhance bilateral cooperation in alignment with both countries’ strategic objectives. Qatar’s Emir Sheikh Tamim bin Hamad Al Thani and Turkish President Recep Tayyip Erdogan held discussions before the signing ceremony, which also coincided with Qatar’s efforts in mediating a ceasefire and hostage negotiations in the Gaza conflict. The two countries have enjoyed longstanding diplomatic and economic ties, with Qatar investing heavily in Turkey, contributing to a 2023 bilateral trade of $1.34 billion.
• International Atomic Energy Agency (IAEA) Director General Rafael Mariano Grossi visited Iran’s Natanz and Fordow nuclear sites as part of his trip to Tehran. During the visit, Iranian Foreign Minister Abbas Araqchi expressed Tehran’s willingness to resolve nuclear disputes but emphasized that it would not yield to pressure. Grossi’s visit comes amid growing tensions over Iran’s nuclear activities and ahead of a potential European diplomatic push, with France, Great Britain, and Germany closely monitoring the situation. The visit is also seen as significant as former President Donald Trump’s return to the White House could alter nuclear negotiations with Iran.
• The Taliban government in Afghanistan expressed hope for a “new chapter” in relations with the United States following Donald Trump’s victory in the 2024 presidential election, aiming for progress between the two countries. This sentiment follows the Doha Agreement, signed during Trump’s first term, which led to the US withdrawal in 2021 and ended the 20-year occupation. Trump’s successor, President Joe Biden, faced criticism for the chaotic withdrawal, which led to the deaths of 13 American service members and the Taliban’s rapid recapture of Kabul. The Taliban’s refusal to grant women equal rights, including education and employment, remains a key obstacle to international recognition. 

Asia (Ex-China/India)

•  Japan’s longtime ruling Liberal Democratic Party (LDP) suffered a significant electoral defeat, losing its majority in the House of Representatives for the first time in 15 years. This outcome stemmed from a snap election called by Prime Minister Shigeru Ishiba, who had assumed office earlier that month. Ishiba’s strategy to solidify his position backfired as public dissatisfaction with rising living costs, inflation, and a major political funding scandal within the LDP contributed to the party’s loss. The LDP and its coalition partner Komeito secured only 215 seats out of 465, falling short of the 233 needed for a majority. This election marked the LDP’s worst performance since 2009 when they were forced to relinquish control to an opposition party. Despite the setback, Ishiba announced that he would not resign, promising internal reforms and policy discussions to form a government. The LDP’s future and the stability of one of the world’s most important economies remain uncertain pending the upper house elections scheduled for the following summer.
•  Sri Lankan President Anura Kumara Dissanayake’s leftist National People’s Power (NPP) coalition won a decisive victory in snap parliamentary elections, securing at least 123 seats in the 225-member assembly. Riding on his September presidential election win, Dissanayake’s anti-corruption agenda and promises to recover stolen assets resonated with voters still reeling from the 2022 economic crisis. For the first time since independence, the Tamil-majority Jaffna district voted for a Marxist party, showcasing widespread support for Dissanayake’s reforms. Despite pledging to renegotiate a $2.9 billion IMF bailout, Dissanayake has opted to uphold the deal, earning backing from the private sector, as the stock market gained 16% since his rise to power.
• Myanmar’s military leader, Senior Gen. Min Aung Hlaing, embarked on his first trip to China since the military coup in February 2021. He participated in several meetings, including the Greater Mekong Subregion summit, which included representatives from China and five Southeast Asian nations. During this trip, Min Aung Hlaing met with Chinese Premier Li Qiang, who confirmed China’s continued support for Myanmar’s military government. He also held separate meetings with Thai Prime Minister Paetongtarn Shinawatra on November 7 and Cambodian Prime Minister Hun Manet on November 6 in Kunming, China, where they discussed closer bilateral ties and the upcoming elections planned by Myanmar’s military government in 2025. Min Aung Hlaing is believed to have a friendly relationship with the former prime ministers of Thailand and Cambodia, Thaksin Shinawatra and Hun Sen, who are the fathers of the current prime ministers.
•  Indonesia and Russia launched their first-ever independent joint naval exercises in the Java Sea, near Surabaya, Indonesia, involving warships, helicopters, and drills to enhance naval interoperability. This unprecedented move reflects Indonesia’s foreign policy of nonalignment under President Prabowo Subianto, who seeks balanced ties with global powers, having previously visited Russia in July to strengthen defense collaboration. The five-day drills, divided into harbor and sea phases, follow Indonesia’s broader defense strategy, including resumed exercises with China and participation in US-led Super Garuda Shield drills. Russian Ambassador Sergey Tolchenov emphasized that the exercises aim to promote regional security and stability without targeting any specific nation.
• Vietnam and the United Arab Emirates (UAE) signed a Comprehensive Economic Partnership Agreement (CEPA), marking Vietnam’s first free-trade agreement with a Middle Eastern nation. Signed by Vietnamese Prime Minister Pham Minh Chinh in Dubai, the deal concludes a year of negotiations and aims to enhance trade in sectors like agriculture, energy, technology, and logistics. The CEPA commits the UAE to eliminate tariffs on 99% of Vietnamese exports, while Vietnam will remove tariffs on 98.5% of UAE exports. Bilateral trade between the two nations reached $4.7 billion in 2023, reflecting a 6% increase from the previous year.
• Market Implications: The Comprehensive Economic Partnership Agreement (CEPA) between Vietnam and the UAE will enhance trade flows across Asian markets by fostering stronger supply chain linkages. Vietnam’s tariff-free access to UAE markets, particularly for textiles and electronics, boosts its competitiveness in Southeast Asia. Simultaneously, UAE investments in Vietnam’s manufacturing and green energy sectors will strengthen Vietnam’s role as a regional manufacturing hub. This agreement also encourages intra-Asian trade by integrating Vietnam more deeply into global markets, likely benefiting logistics, agriculture, and technology sectors. Analysts expect increased investor confidence in Vietnam, stimulating financial and trade activities across Asia​. Japan’s recent election results, which saw the ruling Liberal Democratic Party (LDP) lose its parliamentary majority, have generated mixed reactions in Asian financial markets. Initially, concerns about political uncertainty created market jitters, particularly around fiscal policy and potential economic reforms. However, both the Nikkei and Topix Indices rose by about 2% post-election, reflecting optimism that the government might introduce fiscal stimulus to regain public trust. This could positively impact regional markets by boosting trade and investment sentiment. The Japanese yen, meanwhile, weakened against the dollar, making Japanese exports more competitive and attracting foreign investors. This dynamic could ripple across Asia, influencing trade balances and investment flows. Moreover, Japan’s ongoing corporate reforms and emphasis on shareholder returns are expected to maintain investor confidence, stabilizing markets despite political shifts.

Latin America

• Chinese President Xi Jinping and Peruvian President Dina Boluarte inaugurated the $3.5 billion Chancay megaport, a China-backed project set to transform Latin America’s trade routes by connecting regional exports, such as Brazilian soybeans and Chilean copper, directly to Asian markets. This development, part of China’s Belt and Road Initiative, has intensified concerns in the US about China’s strategic influence, with critics warning the port could accommodate Chinese military vessels. Amid diminished US engagement in Latin America, Beijing has gained a strong foothold in the region, but the US could regain influence under Trump’s administration with Marco Rubio as Secretary of State.
• The Mexican Supreme Court unanimously dismissed a proposal that would have invalidated significant portions of a controversial judicial overhaul passed earlier in September. This overhaul, a key initiative of the governing Morena party and newly elected President Claudia Sheinbaum, mandates the election of nearly all judges, a move that has sparked criticism from legal scholars and international organizations concerned about potential politicization of the courts. Justice Juan Luis González Alcántara had put forward the proposal as a compromise to preserve some judicial independence. However, the court’s decision effectively ends legal challenges against the overhaul, leaving President Sheinbaum free to implement it without facing a constitutional crisis or jeopardizing her standing within her party. In the lead-up to this decision, eight of the eleven Supreme Court justices announced their resignations rather than participating in the upcoming elections for judges.
• Argentina’s President Javier Milei dismissed Foreign Minister Diana Mondino after Argentina voted at the UN to lift the US embargo on Cuba, breaking alignment with the US and Israel. Mondino, an important figure for Argentina’s global image, was replaced by Gerardo Werthein, the ambassador to Washington, as Milei reaffirmed opposition to Cuba’s dictatorship and pledged support for Western democratic values. The UN resolution, supported by 187 countries and opposed only by the US and Israel, highlighted regional tensions over the decades-long embargo first imposed in 1962 to counter Fidel Castro’s socialist regime. This move marks a shift in Argentina’s foreign policy, which under the previous Peronist government had maintained close ties with Cuba, reciprocated by Cuban support for Argentina’s sovereignty claims over the Falkland Islands.
• Uruguay’s presidential runoff pits Yamandú Orsi of the leftist Broad Front against Álvaro Delgado of the center-right National Party, following an October first-round where Orsi secured 43.9% of votes and Delgado 26.8%. Orsi emphasizes community-driven security measures, maintaining state employment, and collaboration within Mercosur, while Delgado supports stricter gang penalties, reducing public sector jobs, and pursuing bilateral trade deals outside Mercosur. Both candidates pledge no new taxes despite the fiscal deficit, propose measures to reduce childhood poverty, and highlight their negotiation skills to navigate a split parliament. Orsi aims to leverage his Broad Front’s Senate majority, while Delgado relies on his coalition-building experience under President Luis Lacalle Pou’s administration.
• The sixteenth Conference of the Parties (COP16) to the UN Convention on Biological Diversity (CBD) took place in Cali, Colombia, and saw limited progress in implementing the Kunming-Montreal Global Biodiversity Framework (GBF). COP16 aimed to advance the implementation of the GBF, a landmark agreement signed at COP15 in Montreal in 2022 to halt and reverse biodiversity loss by 2030. Despite the efforts of COP president Susana Muhamad of Colombia and participation from various countries, including megadiverse nations like Brazil, India, and Colombia, as well as developed countries like the EU and the UK, several key issues, including financing for biodiversity conservation and a monitoring framework for assessing progress, remained unresolved. Disagreements arose between developed and developing countries regarding financial commitments, with developing nations pushing for a new global biodiversity fund separate from existing mechanisms like the Global Environment Facility (GEF). The conference concluded without reaching a consensus on these critical issues, leaving them to be revisited at future intersessional meetings.
• Market Implications: The recent inauguration of the Chancay megaport (built by state-owned Cosco) in Peru by China’s President Xi Jinping is set to influence Asian financial markets through enhanced trade connectivity and economic integration. The port, a $1.3 billion investment under China’s Belt and Road Initiative, aims to streamline trade between Latin America and Asia. It will reduce shipping costs and times, particularly for commodities like copper and agricultural products critical to Asian economies, especially China. The project positions Peru as a significant logistics hub, bolstering China’s access to South American resources and potentially driving demand for related industries in Asia. It also showcases China’s growing geopolitical and economic influence, which may impact market sentiment regarding regional trade dynamics and partnerships.

Sub-Saharan Africa

• The IMF and the Democratic Republic of Congo (DRC) have agreed to two loan programs totaling nearly $3 billion to support the country’s economic growth and green transition. The Extended Credit Facility (ECF), valued at $1.8 billion, aims to foster growth, economic diversification, job creation, and poverty alleviation, while the $1.1 billion Resilience and Sustainability Facility (RSF) focuses on helping the DRC transition to a low-carbon economy and enhance climate resilience. Both agreements, spanning three years, await approval by the IMF’s executive board, scheduled for mid-January 2025. This marks a strategic effort to align the DRC’s development goals with global sustainability initiatives.
• The Access and Allocation Mechanism (AAM) has allocated 899,000 vaccine doses to nine African countries hardest hit by the mpox surge, with 85% going to the Democratic Republic of the Congo (DRC), the epicenter of the outbreak, reporting over 38,000 suspected cases and 1,000 deaths this year. Supported by Africa CDC, CEPI, Gavi, UNICEF, and WHO, this initiative focuses on stopping transmission through targeted vaccinations for high-risk groups, with a goal of vaccinating 1.4 million people by the end of 2024 in Phase 1. The vaccine supply, exceeding 5.85 million doses by year-end, comes from multiple donors, including the European Union, the United States, Canada, and Japan. Future phases aim to expand protection to additional high-risk populations and build long-term immunity across Africa.
• Chad’s President Mahamat Idriss Deby has threatened to withdraw Chad’s troops from the Multinational Joint Task Force (MNJTF) of the Lake Chad Basin Commission, citing insufficient assistance and coordination among member states following a Boko Haram attack that killed over 40 Chadian soldiers last week. The MNJTF, comprising troops from Chad, Cameroon, Nigeria, Niger, and Benin, was created in 2012 and operates with African Union and UN support to combat Boko Haram and secure the Lake Chad Basin. Deby’s dissatisfaction follows the recent deadly attack in Ngouboua, near Nigeria, and allegations of mistaken strikes on fishermen, which Chad’s government denies. Since 2009, Boko Haram’s violence has resulted in over 40,000 deaths and displaced 3 million people across the region, according to the UN.
• Botswana’s ruling Botswana Democratic Party (BDP), in power since independence in 1966, suffered a historic defeat in the November 2024 elections, securing only four parliamentary seats. The opposition Umbrella for Democratic Change (UDC), led by Duma Boko, won 35 seats to form the new government, pledging to tackle high unemployment and adopt a new economic strategy benefiting all citizens. Outgoing President Mokgweetsi Masisi conceded defeat, praised Botswana’s democratic transition, and committed to a smooth transfer of power. Analysts lauded the peaceful change in government, with the UDC promising to create up to 500,000 jobs within five years.
• Mozambique’s government has banned protests in response to post-election unrest that followed last month’s disputed presidential election, which saw Frelimo’s candidate, Daniel Chapo, declared the winner with over 71% of the vote. Violent clashes have left at least 18 people dead, with opposition leader Venâncio Mondlane going into hiding after his aide and lawyer were killed, and protests began on October 9, 2024. Interior Minister Pascoal Ronda labeled the protests as “acts of terrorism” and blamed organizers for inciting violence, while the government-imposed internet restrictions to quell dissent. Meanwhile, rights groups have reported a death toll exceeding 30, and two South African journalists covering the unrest have been detained in Maputo.

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