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

In the last month, Israel has proceeded with its planned offensive into Gaza city, following the breakdown of ceasefire talks. The resumption of similar talks remains unlikely in the immediate future, in part due to the Israeli airstrike on a Hamas delegation. The airstrike, which occurred in neutral Qatar, killed six junior members of the delegation and a Qatari security official. Both Qatar and the United States were given notice of the attack only immediately prior, with President Donald Trump commenting he was “not pleased” after the fact. In light of both incidents, the EU is considering measures to formally recognize Palestine; 16 of the 27 EU member states recognize Palestine at the national government level, with France, Belgium, and Portugal concurring this month. Further, several EU member states have enacted total or partial arms embargos against Israel, while the EU weighs implementing similar controls.
In addition to their conflict in Gaza, Israel has engaged in an air campaign against the Houthis in Yemen. The ongoing strikes against the Houthis were instigated by the latter’s missile attack on the Ben Gurion Airport in Israel; subsequently, Israel has made strikes against the Sanaa International Airport, the port in Hodeida, as well as Yemeni infrastructure and military installations used by the Houthis. The highest-profile target for Israeli airstrikes was the late Yemeni Prime Minister Ahmed al-Rahawi, who was killed in August along with other senior government officials. The Houthis have been supported by the Iranian-led “Axis of Resistance,” as well as other groups in the region opposed to Israel. The Houthis’ position in Yemen gives them strategic leverage over the Red Sea and access to the Indian Ocean, which makes the area important for international trade.
Pakistan and Saudi Arabia signed a Strategic Mutual Defense Agreement earlier this month in Riyadh. This represents a formalization of the existing strategic partnership between the two countries, which have had close military ties since the 1960s. Despite speculation that this would extend its nuclear umbrella to cover Saudi Arabia, the agreement does not explicitly state that the Saudis would be under the protection of Pakistani nuclear force. This deal codifies a longstanding partnership between the two nations as Saudi Arabia seeks to strengthen its defensive posturing following Israeli airstrikes in Yemen and Qatar. Pakistan has additionally made an agreement with China for a $2 billion loan for self-development. This is part of mutual efforts to improve upon the China-Pakistan Economic Corridor (CPEC), aiming to increase trade and expand the China-Gwadar-Africa shipping route.
Following an agreement earlier this month in Cairo for the International Atomic Energy Agency (IAEA) to resume inspection of Iranian nuclear facilities, Tehran has threatened to suspend its cooperation with the international nuclear agency. The agreement would allow the IAEA access to Iranian nuclear facilities, including those damaged by American and Israeli airstrikes last month. However, the threats to suspend cooperation with the IAEA were spurred by the E3 group (France, Germany, and the UK) reinitiating their “snapback” sanction mechanism. The resumption of sanctions from the E3 was, in turn, a reaction by the member states towards a perceived escalation of Iran’s nuclear program, most notably by surpassing enrichment limits set by a 2015 agreement.
Market Implications: MENA markets are navigating heightened geopolitical volatility, with Israel’s intensified Gaza campaign and strikes in Yemen and Doha raising headline risk and disrupting Red Sea trade routes, pressuring Gulf shipping margins and Egypt’s canal revenues. Diplomatic shifts, including Western moves toward Palestinian state recognition and a Saudi-Pakistan defense pact, are reshaping regional security dynamics and boosting interest in defense-related equities. Meanwhile, Iran’s agreement to resume nuclear inspections has slightly eased crude risk premiums, benefiting oil-importing economies like Egypt and Morocco. Overall, regional markets face mixed signals: elevated defense and shipping sector activity, but persistent macro and political uncertainty.

Latin America & the Caribbean

Former Brazilian President Jair Bolsonaro was sentenced to just over 27 years in prison after being convicted of a coup attempt in 2022 following his defeat in the presidential election. Bolsonaro was convicted by a five-judge panel of plotting a coup d’état, taking part in an armed criminal organization, attempting to abolish Brazilian democracy by force, committing violent acts against state institutions, and damaging public property. While his lawyers plan to appeal the conviction, the charges will become irreversible should the appeals process fail. News of the conviction incited protests and counter-protests by Bolsonaro’s supporters and opponents, respectively. These protests were exacerbated by the former president’s conservative allies, who hold a majority in congress, seeking to pass an amnesty bill for Bolsonaro. U.S. President Donald Trump, a longtime ally of Bolsonaro, reacted to the ruling by calling it “very surprising” and likening it to his own legal battles. Trump has denounced the trial as a “witch hunt” and linked a proposed 50% tariff on Brazilian imports to Bolsonaro’s legal proceedings, as reported last month.
Argentina’s central bank has recently sought to prop up the flagging Argentine peso, most notably by selling off over $1.1 billion USD. Argentina’s currency has been recently plagued with a number of issues, ranging from allegations of corruption at the country’s central bank to liquidity issues and poor international demand. US Secretary of Treasury Scott Bessent had recently made comments in support of Argentine monetary policy, calling for a “strong and forceful” action to help stabilize the peso; the IMF has additionally relaxed monetary controls in order to assist. Since then, the peso-backed assets have rebounded, although analysts have indicated that the peso is overvalued and will need a further devaluation of 30% in order to stimulate the economy. President Donald Trump echoed support for Argentina during a meeting with President Javier Milei this week, stating that the U.S. would help but does not believe a bailout is necessary, calling Milei’s efforts “fantastic” and linking future trade policy to Argentina’s economic recovery.
South American trade bloc Mercosur and the European Union have reached an agreement on a wide-ranging trade deal. The landmark deal provides significant boons for European goods, such as expanded market access for manufactured goods and IP protection against South American imitators. Other financial instruments include a reduction of tariffs between the EU and South America by 90%, as well as streamlining foreign investment in the latter. However, the agreement, which has yet to be ratified, faces notable backlash from both sides’ constituents. European farmers fear that the trade deal will leave domestic markets vulnerable to cheap imported food, while activists are concerned over the potential to increase damage to natural biodiversity and indigenous communities in South America.
Chile is undergoing campaigns for both its presidency and congress. With election day on November 16^th, current polling indicates a tight race. The frontrunners are Jeanette Jara, the candidate for the Unity for Chile coalition and member of the community party, and José Antonio Kast, a member of the conservative Republican Party of Chile. Veteran right-wing candidate Evelyn Matthei was also a top candidate, but her polling has decreased recently. The Chilean election has been polarized by concerns over public safety, economic stagnation, and immigration. Debates have grown increasingly heated, with candidates clashing over proposed reforms to the country’s pension system and approaches to crime prevention. Voter turnout is expected to be high, reflecting the deep public interest in shaping Chile’s political future.
The U.S. has conducted at least four military strikes against suspected drug smugglers off the coast of Venezuela since the beginning of September. The initial strike occurred on September 2^nd against a speedboat claimed to be operated by the Tren de Aragua gang to smuggle narcotics, killing 11. Venezuelan dictator Nicholas Maduro has denounced the claims of drug trafficking, calling the sinking an “undeclared war” by the United States. President Donald Trump has justified the strikes as necessary for national security, stating that “narcoterrorists” pose a legitimate threat. This follows the U.S. designating several South- and Central American cartels as terrorist organizations, as well as doubling the bounty for the arrest of Nicholas Maduro to $50 million.
Market Implications: Latin American markets are grappling with heightened political and economic volatility. Bolsonaro’s 27-year sentence has intensified polarization and may stall legislative negotiations, while Argentina’s aggressive currency intervention highlights deepening reserve stress and fuels asset volatility. Chile’s upcoming presidential election keeps copper-linked equities reactive to policy shifts and currency moves. Meanwhile, progress on the EU-Mercosur trade accord offers medium-term upside for industrial and agricultural sectors, though U.S. tariffs and compliance costs temper optimism. Regional markets have continued to make gains over the last month, with the S&P Latin America 40 Index up more than 35% year-to-date, but are likely to remain choppy in the near term.

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

Nepal has recently undergone an intense political shakeup following major protests this month. In response to the former prime minister’s ban on social media, youths took to the streets to protest, which soon escalated to a widespread demonstration against corruption. Following the burning of the Nepalese parliament and several politicians’ homes, negotiations between the army, president, and representatives of the protest resulted in the appointment of former chief justice Sushila Kakari as interim prime minister. The first female to hold the position, Prime Minister Kakari moved to dissolve parliament and hold elections, a move that former parliamentarians have denounced as illegal.
Concluding a decade of negotiations, the European Union and Indonesia have agreed to a Comprehensive Economic Partnership Agreement (CEPA). Once ratified, the agreement will eliminate tariffs on the vast majority of products and increase market access for both European and Indonesian goods. Further, the deal increases European access to rare minerals and includes a framework for encouraging sustainable investment in Indonesia. However, CEPA does not resolve the ongoing dispute between Indonesia and the World Trade Organization, which arose from Indonesia’s ban on nickel exports. Another challenge in the agreement is a CEPA protocol that will require Indonesia to prove that its exports and practices do not contribute to deforestation.
The United States and South Korea have entered into talks for visa reform following the raid on Hyundai-LG battery plant in Georgia. The raid led to the detention of approximately 300 Korean nationals who were working in the U.S. illegally, due to the use of improper visas. The incident has resulted in backlash on both sides, with South Korea alleging the mistreatment of their workers setting up the plant, and American onlookers criticizing the lack of American labor, as the plant was the result of a previous agreement for Korean investment in American industry. Said investment, totaling around $350 billion, will continue after the current dilemma is resolved, according to South Korean Foreign Minister Cho Hyun. Current proposals for resolving the issue include a new E-4 visa category for skilled professionals and clarification of rules surrounding B-1 short-term business visas.
Following widespread protests in Indonesia concerning government corruption and economic hardship, President Prabowo Subianto has reshuffled the cabinet in an effort to please voters. Notable changes include longstanding finance minister being replaced by economist Purbaya Yudhi Sadewa, and retired police general Djamari Chaniago taking the top security ministry. While President Subianto has characterized the move as an effort to rebuild public trust, critics have alleged that the new ministers were picked to consolidate power and do not address the root causes of the protests. The widespread demonstrations in Indonesia erupted after parliament increased allowances for its members and intensified after a delivery worker was killed by police early in the movement. Underlying causes for the unrest include a stagnant economy, rising costs of living, and the growing dependence on gig work, which the martyred worker has come to symbolize.
Market Implications: Asian markets outside China, Japan, and India are navigating a mix of political upheaval and trade-driven optimism. Nepal’s government collapse amid deadly protests has elevated risk premia, weighing on infrastructure and tourism-linked assets. Indonesia’s EU trade deal promises export growth across key sectors, though domestic instability and leadership changes have rattled investor confidence. In Korea, visa tensions with the U.S. are delaying industrial projects and injecting uncertainty into capex plans, especially in autos and batteries. Overall, Asian equities are expected to extend their lead over U.S. peers amid dollar weakness and strong emerging market investment. The MSCI Emerging Markets Asia Index has gained nearly 26% year-to-date.

Sub-Saharan Africa

Earlier this month, the Grand Ethiopian Renaissance Dam (GERD) was completed and inaugurated. Situated on the Blue Nile, the Dam is expected to provide electricity to more than 60% of Ethiopia’s population, who were previously without power. The $5 billion dollar project was primarily financed through domestic efforts, such as the sale of government bonds and public contributions, resulting in a sense of public ownership and the dam being seen as a symbol of national pride. However, the completion of the dam has raised tensions between Ethiopia and nations downstream on the Nile, namely Egypt and Sudan. Egypt, which derives 90% of its potable water from the Nile, has denounced the dam as an “existential threat” due to downstream effects. Reactions from Sudan have been similar but muted, as the GERD can reduce wear on Sudanese dams and risk of flooding.
Despite signing a peace deal in July of 2025, the Democratic Republic of the Congo (DRC) and the Rwanda-backed M23 rebel group have resumed fighting. The war between the DRC and Rwanda originally lasted from 2022 to 2025, but centered on Rwandan support for the M23 rebel group, DRC’s alleged backing of Hutu militias. The struggle for control over mineral-rich eastern provinces of the DRC has resulted in large-scale violence and displacement across the region. The current conflagration destabilizes not only eastern DRC but risks triggering broader regional conflicts reminiscent of the First and Second Congo Wars. This is at least partly due to the involvement of regional actors sending peacekeeping task forces, such as Burundi, Kenya, Uganda, South Africa, and Tanzania, which are directly or indirectly involved. A preliminary peace agreement brokered by the U.S. and Qatar in June 2025 called for Rwanda to withdraw its troops and for the DRC to end all support for FDLR, but implementation stalled, and Rwandan troops have remained in the DRC. Control of critical minerals is central to the conflict, with both rebels and state actors vying for access. Thus, the conflict could potentially affect global supply chains and attract foreign attention, notably from the U.S., EU, or China.
Elections in Malawi have polarized the country, winding down to two candidates: Incumbent Lazarus Chakwera and former president Peter Mutharika. This is the fourth consecutive presidential election in which the two candidates have faced off against one another; tensions have been compounded by both sides having declared themselves victorious. While the country’s reform potential could attract U.S. investment, concerns over corruption on both candidates’ sides undercut potential gains; already, eight election officials have been arrested for suspected election fraud. Depending on how the outcome impacts Malawi’s national stability, the results of this election could affect southern Africa’s regional economies and trade dynamics. If the election winner is not perceived as legitimate by international spectators, Malawi runs the risk of losing access to international investment and aid.
The United States, Saudi Arabia, the United Arab Emirates and Egypt issued a joint statement calling for a truce in Sudan. These four countries, collectively known as the “Quad,” hold the most sway over both the Sudanese army and the Rapid Support Forces (RSF). The proposed humanitarian ceasefire would allow for the delivery of aid and lay the foundations for the establishment of a civilian government. The call for truce was accepted by the Sudanese government and army, which has been backed by Egypt, but was rejected by the RSF, nominally supported by Iran. The RSF, the paramilitary group that began fighting in 2023, controls the southern region of the country.
Market Implications: Sub-Saharan Africa saw a mix of tension and opportunity, with Ethiopia inaugurating the GERD, boosting its power export potential but intensifying Nile-related disputes. Conflict in the DRC continues around M23 zones, threatening mining operations and regional supply chains. Malawi faces economic instability ahead of elections, with inflation, currency shortages, and an expired IMF program clouding its fiscal outlook. Meanwhile, a new peace roadmap for Sudan by the U.S. and regional powers could ease humanitarian and geopolitical pressures, though implementation risks remain high.

Top News This Month

Middle East/North Africa

Latin America & the Caribbean

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

Sub-Saharan Africa

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