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.

Top News This Month

Israel and Hamas have agreed to the first phase of a ceasefire and peace roadmap, but peace remains fragile as early violations have been reported and the humanitarian crisis in Gaza deepens.
The Trump administration has sharply raised the stakes in Latin America, striking vessels off the coasts of Venezuela and Colombia, declaring that the United States is in a “non-international armed conflict” with drug cartels, and signaling military operations linked to Venezuela.
North Korea is actively seeking to strengthen diplomatic ties with Southeast Asian countries like Vietnam and Laos as part of a broader strategy to counter international isolation and sanctions. In the meantime, Pyongyang launched ballistic missile tests yesterday in what is being seen as an assertive move ahead of the APEC Summit next week and a rumored Trump-Kim meeting.
Madagascar has descended into political turmoil after President Andry Rajoelina fled the country following weeks of escalating protests and military defections.

Middle East/North Africa

Israel and Hamas have agreed to the first phase of a ceasefire and peace roadmap, marking the most significant diplomatic effort to bring an end to the conflict in Gaza since its outbreak in 2023. The 20-point, U.S.-brokered plan, coordinated with Qatar, Egypt, and Turkey, establishes a three-phase framework: an immediate ceasefire and hostage exchange within 72 hours, a partial Israeli troop withdrawal, and the creation of an internationally supervised reconstruction authority. The proposal also envisions Gaza governed by a technocratic administration backed by Arab state, though key questions about long-term sovereignty remain unresolved. Israeli Prime Minister Benjamin Netanyahu accepted the plan under significant pressure from Washington but has publicly insisted on maintaining Israeli security control and a buffer zone along Gaza’s borders. Hamas, while agreeing to the ceasefire, rejected clauses requiring disarmament and full demilitarization, raising doubts about implementation. On the ground, early violations have already been reported, with sporadic rocket fire and Israeli airstrikes near Rafah threatening to unravel the fragile truce. Meanwhile, the humanitarian crisis in Gaza continues to deepen as Israel continues restricting the entry of a sufficient level of aid, and the Rafah border crossing remains closed. This fragile peace highlights the urgent need for accountability and redress for all criminal injustices committed during the conflict. Without a transparent and impartial process to investigate and address violations of international law, prospects for lasting reconciliation and justice remain precarious.
Deadly fighting erupted along the Durand Line this month, marking the most severe confrontation between Afghanistan and Pakistan since the Taliban’s return to power in 2021. Afghan forces, aligned with the Taliban regime, launched strikes on Pakistani border posts at Chaman and Spin Boldak after Islamabad conducted air and drone strikes in Paktika Province against the militant Tehreek-e-Taliban Pakistan (TPP). Pakistan responded with heavy artillery, mortar fire, and claimed to score “tactical victories” against Taliban positions. Satellite imagery and local reports indicate dozens of civilian casualties and the closure of major crossings, including the Chaman “Friendship Gate”. A Doha-mediated ceasefire was reached on October 19th, facilitated by Qatar and Turkey, but deep mistrust persists. Islamabad demands Kabul deny sanctuary to the TPP; Kabul decries foreign strikes on its territory and insists it does not host attackers.
In early October 2025, Syria held its first parliamentary vote since the fall of the Bashar al-Assad regime, selecting two-thirds of the seats in a new 210-member People’s Assembly under the country’s interim governance framework. The remaining one-third of seats will be appointed by interim President Ahmed al-Sharaa, per the March 2025 interim constitution, replacing the dissolved Baʿath-era legislature. Though authorities tout the election as a milestone in Syria’s transition, the process has drawn criticism: major regions (notably Kurdish-controlled northeast and portions of Suwayda) postponed voting, independent parties were excluded, and voter participation remains heavily restricted. With reconstruction looming and millions displaced, the new governing body faces a tight timeline to draft an electoral law and pave the way for full presidential and constitutional elections – yet deep structural imbalances and external sanctions risk undermining the credibility and durability of the transition.
Beginning late September 2025, Morocco witnessed some of its largest and most sustained demonstrations in years, as young people – organized via social-media collectives like GenZ 212 – rallied across cities such as Casablanca, Rabat, and Agadir to protest mounting frustration over stalled public services and perceived government mispriorities. The protests began after the death of eight women during childbirth at a hospital in Agadir and quickly expanded into broader demands: more investment in health care and education, fewer mega-sports stadiums tied to the 2030 FIFA World Cup, job creation and an end to corruption. In one city, Lqliâa, the situation turned deadly when security forces opened fire during clashes at a gendarmerie station — fatalities have been reported, and authorities said over 400 protesters were detained. With youth unemployment above 30% and spending on sporting infrastructure increasingly criticized, the movement poses a serious challenge to the government of Prime Minister Aziz Akhannouch and raises questions about Morocco’s development model under King Mohammed VI, who in an address, urged “speedy reforms” but stopped short of meeting the demonstrators’ immediate demands.
On October 18th, Iran officially announced the termination of its participation in the Joint Comprehensive Plan of Action (JCPOA), formally ending the decade-old nuclear agreement. This declaration came shortly after the expiration of the 30-day countdown triggered by the “snap-back” mechanism, which led to the United Nations reimposing sanctions that had been lifted in 2015. The reinstated measures include a comprehensive arms embargo, asset freezes, and a ban on ballistic-missile-capable exports to Iran. The snap-back process had been initiated by France, Germany, and the UK on August 28th, in a coordinated escalation of multilateral pressure. In response, the U.S. Treasury imposed sanctions on Iranian weapons-procurement networks. Tehran condemned the move as “illegal” and warned of a “proportionate” response, while its currency plummeted amid growing fears of renewed economic isolation.
Market Implications: MENA markets are navigating heightened geopolitical tensions and reform risks. A fragile Israel–Hamas ceasefire remains in place but is strained by renewed clashes, keeping risk premiums elevated. However, the EU’s push to expand its role and funding in Gaza offers a potential path to reconstruction, alongside U.S. commitments, if diplomacy holds. Tensions eased after Pakistan and Afghanistan agreed to a ceasefire in Doha, providing relief to Gulf economies reliant on remittances and trade. Progress in Syria following elections could reopen regional trade corridors, though risks around inclusivity and timing persist. Morocco faces instability after youth-led protests turned deadly, threatening investment and tourism ahead of the World Cup. Meanwhile, UN sanctions on Iran are being reinstated, raising compliance and shipping costs, with oil prices hinging on enforcement and diplomatic developments.

Latin America & the Caribbean

The Trump administration has sharply raised the stakes in Latin America, declaring that the United States is in a “non-international armed conflict” with drug cartels and signaling military operations linked to Venezuela. A confidential presidential notification to Congress framed cartel networks as “unlawful combatants,” paving the way for lethal strikes, which have included the sinking of multiple vessels off the Venezuelan coast that the U.S. claims were trafficking narcotics. Washington has also directed covert CIA operations in Venezuela and deployed naval assets to the Caribbean, actions viewed by analysts as both a counter-narcotics effort and a possible tilting toward regime-change in Caracas. Venezuela’s government denounces the moves as violations of sovereignty and a precursor to U.S. intervention, even as the Trump administration is preparing to “look very seriously at cartels coming by land.” This week, the U.S. also announced it carried out additional strikes off the coast of Colombia, prompting Colombian President Petro to denounce the attacks as a violation of Colombian sovereignty and the resulting casualties as an act of “murder”. The incident has intensified diplomatic tensions between Bogotá and Washington, with Colombia recalling its ambassador to Washington.
The U.S. Treasury has intervened directly in Argentina’s currency crisis, purchasing Argentine pesos and finalizing a $20 billion currency-swap agreement with the Central Bank of Argentina as the country heads into mid-term legislative elections on October 26th. The move, while couched as support for Argentina’s market-friendly reforms under President Milei, marks one of Washington’s rarest foreign interventions in a foreign exchange market. Critics warn the policy veers toward a bailout for an ideological ally, and some U.S. lawmakers have proposed legislation to block the rescue unless strict repayment terms are met. President Trump has indicated the bailout is contingent upon Milei remaining in power. For Milei, the infusion offers a short-term boost to his reform agenda and electoral prospects, but analysts caution that Argentina’s underlying vulnerabilities – inflation, debt burden, and external imbalances – remain unresolved, meaning the peso’s recovery may prove fragile.
Bolivia’s 2025 general election marked a dramatic political shift, ending nearly 20 years of socialist rule under the MAS party. Centrist candidate Rodrigo Paz Pereira of the Christian Democratic Party won the presidency in a runoff this month against right-wing former president Jorge “Tuto” Quiroga, securing 54.9% of the vote. The MAS party, founded by Evo Morales, suffered a historic collapse, retaining only two seats in the Chamber of Deputies and none in the Senate, largely due to internal divisions and Morales being barred from running. Paz inherits a country in economic crisis, facing fuel and dollar shortages, long gas lines, and soaring black market exchange rates. His agenda includes gradual reforms such as ending the fixed exchange rate, phasing out fuel subsidies, and auditing lithium contracts, while maintaining some social protections to avoid unrest. Politically, his win signals a centrist shift, and although his party holds a slim majority in Congress, significant reforms will require compromise.
Opposition leader María Corina Machado was awarded the 2025 Nobel Peace Prize for “her tireless work promoting democratic rights in the people of Venezuela and for her struggle to achieve a just and peaceful transition from dictatorship to democracy.” The announcement triggered mixed responses: within Venezuela, President Nicolás Maduro denounced the award, calling Machado a “demonic witch” and rejecting what he described as foreign interference under “the guise of peace.” Meanwhile, international backers of Machado celebrated the prize as a powerful signal of global support for Venezuela’s pro-democracy forces. The laureate dedicated her prize to the “suffering people of Venezuela” and acknowledged U.S. President Donald Trump for his support of her cause. With Machado still operating in hiding under threat of arrest, the Venezuelan government’s decision to shutter its Oslo embassy in reaction underscores the deepening diplomatic rift – raising the stakes for any forthcoming transition or rapprochement.
On October 10th, Peru’s Congress voted unanimously (124-0) to remove President Dina Boluarte on grounds of “permanent moral incapacity,” making her the fifth Peruvian leader removed via this mechanism since 1914. Her removal came amid surging violent crime – extortion cases rose by roughly 25% this year – and a series of corruption allegations, including the so-called “Rolexgate” scandal over luxury watches despite a modest official salary. She was swiftly replaced by José Jerí, the head of Congress, who promised a transition government focused on national reconciliation and a “war on crime”. The rapid turnover underscores Peru’s deep political instability – this marks the seventh president in less than a decade – and raises serious questions about governance ahead of legislative and presidential elections scheduled for April 2026.
The Brazilian Development Bank (BNDES) and the Export‑Import Bank of China (CEXIM) announced the creation of a bilateral investment fund of up to $1 billion, set to begin operations in 2026. The fund will focus on Brazil-based equity and debt investments across strategic sectors, including energy transition, infrastructure, mining, agriculture, artificial intelligence, and the digital economy. Brazil will contribute approximately $400 millio,n and China about $600 million. The initiative not only signals Beijing’s deepening economic footprint in Latin America but also aligns with Brasília’s aim to diversify investment sources amid rising U.S. trade tensions. It will test Brazil’s ability to channel Chinese capital into productive, inclusive growth rather than enclave investments, and represents a milestone in South–South financial cooperation.
Market Implications: Latin American markets are navigating a volatile mix of geopolitics and shifting policy signals. U.S. escalation against Venezuela-linked cartels is keeping sanctions and shipping insurance costs high, especially around the Caribbean, which weighs on Andean energy and logistics sectors. Argentina saw a temporary boost as the U.S. finalized a $20 billion swap and bought pesos, easing rollover pressure and sparking a rally in its currency and sovereign bonds, though sustainability depends on pre-election policy clarity. Peru’s abrupt presidential transition raises policy and protest risks, likely widening bond spreads and weakening the sol. In Bolivia, investors are likely to welcome Paz’s commitment to transparency, fiscal discipline, and private-sector growth. Early signs point to potential foreign investment inflows, especially in energy and infrastructure. Meanwhile, Brazil’s climate investment push with China supports green infrastructure and EV supply chains, offering a medium-term offset to external headwinds. Latin American markets, as tracked by the S&P Latin America 40 Index, lost some ground over the last month but remain up more than 32% year-to-date.

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

Japan is looking to strengthen ties with South Korea following the election of Prime Minister Sanae Takaichi. Following comments where Tokyo referred to Seoul as an “important neighbor,” the South Korean prime minister publicly stated that his government hopes to maintain positive momentum in relations. The two East Asian nations have signaled intent to increase economic, cultural, and security ties. This is underscored by trade woes from a protectionist United States, but only appears to be trouble economically; all three governments remain committed to the trilateral alliance cemented between them at Camp David in ’23. South Korea and Japan have also begun ministry-level talks regarding coordination on regional threats, such as North Korea, and increased military exchanges.
Taiwan has formally rejected a proposal from the United States that would have shifted half of its semiconductor manufacturing to the U.S. The proposal, championed by U.S. Commerce Secretary Howard Lutnick, would have required U.S. firms to source half of their chips stateside. The push from Washington comes from increasing concerns about supply chain dependence on foreign manufacturing. However, Taiwan sees its importance to global supply chains as deterrence from Chinese aggression, believing that threats against it would increase if Taiwanese chip manufacturing were offshored.
North Korea is actively seeking to strengthen diplomatic ties with Southeast Asian countries like Vietnam and Laos as part of a broader strategy to counter international isolation and sanctions. During the 80th anniversary of its ruling party, Pyongyang hosted high-level delegations from these nations, securing agreements on cooperation in defense, health, and aviation. Laos also agreed to allow North Korean workers to operate within its borders, providing a source of revenue for the regime. While countries like Vietnam maintain ideological ties, they differ economically, and broader regional engagement remains cautious due to concerns over reputational risks. Nonetheless, Southeast Asia’s generally neutral stance makes it an appealing target for North Korea’s outreach.
North Korea launched several short-range ballistic missiles yesterday, marking its first such test in five months and the first since South Korean President Lee Jae-myung took office in June. The launch, which flew about 350 km from North Hwanghae Province, comes just days before U.S. President Donald Trump is set to visit South Korea for the APEC summit. Lee, who has pledged to restore peace on the peninsula, convened a National Security Council meeting in response. The test is seen as a strategic move by Pyongyang to assert its military presence ahead of potential diplomatic engagements, including a rumored Trump-Kim meeting.
Former Prime Minister Paetongtarn Shinawatra resigned as leader of Thailand’s Pheu Thai Party on Wednesday, in a move framed as both an act of sacrifice and a bid to “revamp” the once-dominant political force ahead of elections expected in March 2026. In a written statement, the 39-year-old daughter of former premier Thaksin Shinawatra said her resignation was intended to “let the party be freely and perfectly rebuilt,” pledging to remain a member and “head of the Pheu Thai family” as the group reorganizes. Her exit follows her August dismissal from the premiership by the Constitutional Court for a “serious violation of ethical standards” tied to a leaked phone call with former Cambodian leader Hun Sen, in which she appeared to side against the Thai military during a border dispute. That scandal triggered mass defections from Pheu Thai and fueled petitions to dissolve the party entirely. Former secretary-general Sorawong Thienthong described her resignation as a “sacrifice to save the party,” intended to prevent her case from becoming a political weapon for rivals. Meanwhile, Prime Minister Anutin Charnvirakul has pledged to dissolve parliament within four months, setting the stage for a volatile campaign season in which Pheu Thai must reinvent itself or risk fading from its decades-long prominence in Thai politics.
Market Implications: Asian markets outside of China, Japan, and India are balancing geopolitical developments with supply-chain clarity. South Korea and Japan are strengthening ties, with leaders reaffirming cooperation on security and trade, which supports Korea’s defense exports and offers modest valuation support for exporters—though the Korean won remains sensitive to U.S. tariff shifts. Taiwan rejected a U.S. proposal to relocate chip production, preserving its domestic scale advantages but risking future trade friction; local capital expenditure visibility remains strong, while U.S. fab projects face execution risks. Markets are cautiously optimistic where supply-chain clarity and regional cooperation improve, but remain vulnerable to external tariff shocks and domestic unrest. Expect cautious investor sentiment across the region, with risk premiums rising in markets closely tied to Korean Peninsula developments or U.S. strategic interests. The MSCI Emerging Markets Asia Index gave up some gains this month but remains nearly 24% higher year to date.

Sub-Saharan Africa

Madagascar has descended into political turmoil after President Andry Rajoelina fled the country following weeks of escalating protests and military defections. Demonstrations that began over allegations of election rigging and corruption within the president’s inner circle have now spread nationwide, paralyzing Antananarivo and other major cities. The army – long a key pillar of Rajoelina’s rule – fractured last weekend when several commanders publicly called for his resignation and pledged loyalty to an interim “national unity council.” Reports indicate that Rajoelina departed for Mauritius under the pretext of a medical visit but has not returned, fueling speculation that he is seeking asylum. The opposition, led by former president Marc Ravalomanana, has demanded immediate elections under international supervision, while the African Union and United Nations have urged restraint and offered to mediate. The unrest has disrupted vital vanilla and nickel exports, key sources of foreign revenue, and prompted widespread shortages of fuel and food. Analysts warn that without a rapid political settlement, Madagascar risks sliding into a prolonged power vacuum reminiscent of the 2009 crisis that first brought Rajoelina to power.
Zambia reached a long-awaited agreement this week to restructure roughly $6.8 billion of debt owed to Chinese lenders, marking a major breakthrough in its protracted effort to stabilize public finances. The deal—negotiated with the Export-Import Bank of China and several state-linked creditors—extends repayment timelines by up to 20 years and significantly reduces near-term interest obligations. It follows months of tense talks under the G20’s Common Framework and comes after Lusaka’s recent default in 2020 made it a test case for China’s evolving approach to debt relief in Africa. Finance Minister Situmbeko Musokotwane described the agreement as a “critical milestone” that will allow Zambia to unlock new IMF and World Bank disbursements while prioritizing spending on infrastructure and social programs. Chinese officials framed the deal as “mutually beneficial” and a model for other developing nations, though Western creditors privately worry that Beijing’s bilateral terms remain opaque and could set uneven precedents. Economists note that Zambia’s restructuring provides short-term breathing room but caution that fiscal discipline, mining revenue reform, and diversification will be essential to ensure lasting recovery.
In a dramatic comeback, former President Peter Mutharika secured a clear victory in Malawi’s September 16th presidential election with approximately 56% of the vote, defeating incumbent Lazarus Chakwera, who recorded around 33%. The transition marks the second consecutive election in which power changed hands peacefully in Malawi, underscoring the country’s growing democratic resilience. Mutharika inherits an economy under severe strain—high inflation, food and fuel shortages, and a shrinking foreign-exchange reserve amid climate-related shocks and donor cuts. His campaign foregrounded promises to restore stability and crack down on corruption, though critics point to his previous tenure’s unresolved graft allegations and question his capacity to enact reform at age 85. Observers warn that despite the change in leadership, Malawi’s longer-term political and economic recovery will depend on strengthening institutions, restoring public trust, and unlocking investment rather than relying on symbolic turnover alone.
The European Union announced a $638 million financing package to support renewable energy development in at least eight African countries, part of its broader Global Gateway initiative aimed at countering China’s infrastructure influence on the continent. The funding—focused on Kenya, Nigeria, Senegal, South Africa, Namibia, Zambia, Ghana, and Mozambique—will back solar, wind, and hydroelectric projects, along with investments in battery storage and transmission infrastructure. Brussels framed the initiative as a cornerstone of its Africa-Europe Green Energy Partnership, emphasizing “sustainable growth through equitable energy access.” The EU’s development commissioner stated that the program is designed to help African economies transition away from fossil fuels while expanding electrification to rural communities. African leaders, while welcoming the funds, urged the EU to streamline disbursement and localize project management to avoid delays that have hampered earlier aid packages. Analysts view the pledge as both a climate-focused investment and a strategic bid to strengthen Europe’s energy and diplomatic ties with key African partners amid intensifying global competition for critical minerals and renewable supply chains.
Market Implications: Sub-Saharan Africa is experiencing a volatile market with some opportunities. In Madagascar, Gen-Z-led protests forced the president to flee, prompting an army takeover and elevating political risk premiums until a credible transitional roadmap emerges. Zambia made progress on bilateral debt restructuring with Chinese lenders, improving prospects for market normalization and currency stability, though further IMF benchmark implementation is key. Malawi’s election of former president Peter Mutharika reduces short-term uncertainty but raises questions about FX policy and liquidity management. Meanwhile, the EU’s $638 million renewable energy package targeting grid upgrades and clean power access across multiple African nations offers a structural boost to green infrastructure, supporting future project pipelines and green bond issuance.

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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