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
- Iran’s leadership is intensifying its crackdown on nationwide anti-government protests through mass arrests, asset seizures, and one of the most comprehensive internet blackouts in its history.
- The United States is continuing Operation Southern Spear, a series of military strikes in the Caribbean and Eastern Pacific.
- South Korea and China have pledged to strengthen trade ties and coordinate more closely on regional stability as tensions rise across northeast Asia.
- The M23 rebel group, backed by Rwanda, has been establishing a parallel administration in the vast areas of eastern Democratic Republic of Congo (DRC) that it currently controls following a broken peace deal.
Middle East & North Africa
- Iran’s leadership is intensifying its crackdown on nationwide anti-government protests through mass arrests, asset seizures, and one of the most comprehensive internet blackouts in its history. Even as internal unrest collides with escalating pressure from the United States, authorities say tens of thousands have been detained since demonstrations calling for leadership change erupted in late December. Senior officials in Iran are promising harsh punishments for what they label riots and foreign-backed sedition, while offering limited leniency to those are deemed “misled.” The near-total digital shutdown has cut off most of the population from the outside world, with human rights groups estimating thousands of deaths despite conflicting official figures, and reports that even satellite internet services are being effectively jammed. At the same time, Washington has raised the stakes by announcing sweeping tariffs on countries that continue doing business with Iran, a move designed to isolate Tehran economically and force its trade partners to choose between access to the US market and Iran. Iranian leaders have responded by blaming the unrest on American and Israeli interference.
- President Donald Trump has unveiled plans for a new Board of Peace. Initially framed as a mechanism to oversee the Gaza ceasefire, it is now revealed to have far broader ambitions that are stirring international controversy. Invitations have been sent to allies and rivals alike, including Canada, Britain, Saudi Arabia and Russia. A draft charter shows the body would seek authority to intervene in conflicts beyond Gaza, positioning it as a more nimble alternative to the United Nations. Backed by a US-drafted resolution at the United Nations Security Council, the board would help manage postwar Gaza reconstruction and recruit peacekeepers while granting Trump sweeping personal authority as chairman. Skepticism is mounting among key countries over the proposed one-billion-dollar fee for permanent membership as well as the absence of any Palestinian representatives. Israel has voiced alarm over the inclusion of Qatar and Turkey in related committees, underscoring concerns that the initiative could deepen diplomatic frictions. This initiative coincides with the launch of Phase 2 of the Gaza peace plan, which shifts from ceasefire to demilitarization, technocratic governance, and large-scale reconstruction. Key sticking points persist, particularly the return of the final Israeli hostage’s remains, Hamas’s disarmament, and the withdrawal of Israeli forces—each dependent on the others—while Hamas sends mixed signals about surrendering weapons. Despite the transition into Phase 2, ceasefire violations continue, highlighted by recent Israeli strikes in Deir el‑Balah that killed ten people, underscoring the fragility of efforts to stabilize and rebuild Gaza amid ongoing tension.
- A renewed wave of military action and political realignment in Syria highlights the fragile security landscape following the fall of Bashar al‑Assad, as US, European, and Syrian government forces pursue militant threats and manage internal rivalries. A recent US strike in northwestern Syria killed Bilal Hasan al‑Jasim, a senior Islamic State figure linked to the December ambush near Palmyra that killed two US service members and a civilian interpreter, prompting President Donald Trump to vow heavy retaliation, while Britain and France joined the campaign by bombing an underground ISIS weapons site. Meanwhile, Syrian government forces have advanced east of Aleppo after the Kurdish‑led Syrian Democratic Forces withdrew from dozens of towns as part of a tense US-brokered effort to fold Kurdish units into the state. Although civilians are returning to some government‑held areas and President Ahmed al‑Sharaa has offered limited recognition of Kurdish rights, clashes and accusations continue, underscoring an unsettled post‑war order. The situation gained new urgency as Washington publicly backed a Syria truce, with the US special envoy urging Kurdish forces to accept an integration deal that the Syrian government has now given them four days to accept, arguing the US military partnership with the SDF is less necessary as Damascus commits to combating ISIS.
- Despite a US-brokered ceasefire that ended the 2023-24 conflict between Hezbollah and Israel Defense Forces, peace on the Israel-Lebanon border remains tenuous with frequent clashes and deepening mistrust undermining diplomatic progress. Lebanon and Israel held direct talks in late 2025 for the first time in over 40 years, aimed at halting hostilities and securing the release of hostages. Beirut insists these are not peace negotiations, and normalization depends on a full cessation of violence and Israeli withdrawal from occupied territory. Amid ongoing Israeli air strikes that have killed civilians and repeatedly violated the ceasefire, with Israel launching around 25 attacks on Sunday alone, many Lebanese fear that Washington has signaled support for renewed escalation against Hezbollah to accelerate its disarmament, a process the Lebanese army says has completed its first phase south of the Litani River, but still faces resistance and pressure from the Iran-backed group. International mediation efforts are continuing, including planning for an upcoming conference to bolster the Lebanese Armed Forces and push broader disarmament, but the combination of persistent border violence, stalled negotiations over Hezbollah’s arsenal, and regional pressures suggests that durable peace remains elusive in the near future.
- Market Implications: MENA risk premia remain elevated as geopolitical tensions and episodic conflict continue to tighten financial conditions across the region. Heightened US scrutiny of Iran-linked transactions—amid renewed protests and threatened secondary tariffs—raises due‑diligence burdens for regional banks and traders while potentially increasing supply‑chain friction and energy‑market volatility. Fragile ceasefire diplomacy in Gaza, periodic Israeli operations, and unresolved tensions with Hezbollah keep a persistent war‑risk premium embedded in Israeli assets and Lebanon‑related credit. In Syria, intensified clashes, renewed counterterrorism operations by the US and France, and instability around key transit and hydrocarbon zones sustain negative pressure on insurers and reconstruction prospects. Meanwhile, Yemen‑related maritime threats continue to impose elevated shipping‑insurance premia and rerouting costs, weighing on Suez revenues and Gulf logistics margins. Regional markets in 2026 are likely to face persistent risks, with geopolitical flare-ups and compliance pressures keeping volatility elevated.
Latin America and the Caribbean
- The United States is continuing Operation Southern Spear, a series of lethal military strikes in the Caribbean and Eastern Pacific. Initiated by President Donald Trump, the campaign targets vessels operated by narco-terrorist organizations, primarily those linked to the Venezuelan cartel Tren de Aragua. As of early January 2026, the US has conducted at least 35 strikes on 36 vessels, resulting in at least 115 deaths. The strikes have drawn condemnation from Colombian President Gustavo Petro and raised tensions with other Caribbean nations, such as Trinidad and Tobago, where citizens were reportedly killed in the operations. Additionally, the US Navy continues to enforce a blockade on sanctioned Venezuelan oil exports and “dark fleet” tankers sailing disguised under neutral nations’ flags. Six oil tankers have been seized so far, including a Russia-linked vessel apprehended in the North Atlantic with the help of British forces. US officials state that they are selling the seized oil, thus far generating $500 million in sales.
- Colombian President Gustavo Petro is scheduled to visit the White House in early February, following recent diplomatic shifting after threats from Trump regarding drug trafficking. Trump had previously threatened action against Colombia over drug production, but invited Petro after a phone call where they discussed disagreements, leading to a sudden diplomatic improvement. The leaders aim to discuss drug policy, security, economic cooperation, and regional issues in an effort to overcome past tensions. Domestically, Petro has emphasized his long-standing fight against drug cartels and a “total peace” strategy, aiming to de-escalate violence through dialogue.
- Following the capture of Nicolás Maduro, Cuba has been effectively cut off from its primary supply of energy in Venezuelan oil. After the US government implemented a blockade on Venezuelan oil shipments, President Trump vowed that “no more oil or money” would go from Venezuela to Cuba. Previously, Venezuela supplied roughly 30,000 to 35,000 barrels per day, covering about one-third to one-half of Cuba’s energy needs; shipments have since virtually ceased. Experts describe Cuba’s economy as being in “free fall”. The island is facing catastrophic fuel shortages, with residents waiting months for gasoline and enduring prolonged blackouts. Since then, Cuba has sought aid from other countries, but support has been limited. Mexico has sent approximately 85,000 barrels in mid-January and Russia has provided limited amounts, but both are insufficient to meet the island’s daily demand of 100,000 barrels. Cuban President Miguel Díaz-Canel has rejected any deal with the US and maintains that Cuba is a sovereign nation that will “resist until the end.”
- Mercosur signed a landmark trade agreement with the European Union on January 17th during a ceremony in Asunción, Paraguay, creating one of the world’s largest free trade zones across Argentina, Brazil, Paraguay, and Uruguay and covering more than 700 million people and roughly 25% of global GDP. The deal is set to eliminate approximately €4 billion in annual export duties for EU companies in sectors such as vehicles, machinery, pharmaceuticals, and chemicals. Several EU members—including France, Poland, Austria, Hungary, and Ireland—voted against the agreement over concerns about unfair competition for farmers and environmental standards, while Italy reversed its planned “no” vote after securing a $52 billion subsidy package for its agricultural sector. Opposition members requested a European Court of Justice (ECJ) review, and the European Parliament has now voted to formally send the agreement to the court, seeking clarity on provisions such as one that would allow Mercosur to challenge EU laws. This judicial review could take up to two years, delaying ratification, with the Interim Trade Agreement able to take effect after European Parliament approval, but the full Partnership Agreement still requiring ratification by all 27 EU national parliaments.
- Market Implications: US strikes and tanker seizures tied to Washington’s Venezuela strategy have kept war‑risk premiums high in the Caribbean, pushing up shipping insurance, tightening regional fuel supplies, and raising logistics costs for Andean energy exporters and Caribbean shippers into early Q1. Colombia’s rapid White House visit, coming just after President Trump’s threat of military action, introduces two‑way market risk: if things calm down, Colombia’s currency and government borrowing costs would improve, while renewed hardline rhetoric would widen them and push investors toward safer banks and consumer staples. Cuba’s worsening energy shortage is deepening as Venezuelan oil shipments stall, increasing the risk of blackouts and demand shocks across the island and nearby tourism hubs, even as some sanctioned flows seek workarounds. In contrast, the signing of the EU‑Mercosur trade accord offers medium‑term support, especially for Brazil and Argentina’s agriculture and logistics sectors. The S&P Latin America 40 Index has already gained nearly 7% since the beginning of the year, despite regional volatility. Overall, 2026 is set to feature elevated geopolitical and energy‑logistics risks.
Asia & Pacific (ex-Chine/India/Japan)
- China and South Korea have pledged to strengthen trade ties and coordinate more closely on regional stability as tensions rise across northeast Asia, following talks in Beijing between President Xi Jinping and South Korean President Lee Jae Myung. The meeting came against a backdrop of fresh ballistic missile launches by North Korea and growing friction between China and Japan over Taiwan, underscoring the security challenges facing the region. Both leaders said they would explore ways to ease tensions on the Korean Peninsula, with Beijing reaffirming its intent to play a constructive role, even as it continues to shield Pyongyang from tougher United Nations sanctions. Lee, a liberal leader seeking to rebalance Seoul’s diplomacy, emphasized that South Korea’s alliance with the United States should not come at the expense of stable relations with China, while Xi urged cooperation rooted in shared historical experiences and economic interdependence. The visit also highlighted the depth of bilateral commerce, with trade exceeding $270 billion last year and the signing of multiple cooperation agreements spanning technology transportation and environmental protection, signaling that economic pragmatism remains a central pillar of the relationship despite mounting geopolitical strain.
- The Philippines has signed its first trade agreement with the United Arab Emirates, marking a major step in Manila’s push to diversify economic ties beyond Asia and deepen engagement with the Gulf region. President Ferdinand Marcos Jr. finalized the comprehensive economic partnership agreement during a visit to the UAE. The agreements aim to lower tariffs and expand market access for Philippine exports such as agricultural products, electronics and processed foods. The deal comes as both countries seek to buffer their economies from global trade uncertainty linked to new US tariff policies and complements their shared interest in broader trade liberalization.. Alongside the trade pact, Manila and the United Arab Emirates signed a memorandum of understanding on defense cooperation focused on advanced technologies such as unmanned systems, underscoring a parallel effort to strengthen security ties. With bilateral trade nearing $2 billion and the UAE serving as a key destination for Filipino workers and remittances, the agreements signal a widening strategic and economic partnership as the Philippines navigates shifting global trade dynamics.
- Malaysia and Indonesia have become the first countries to block Grok, the artificial intelligence chatbot developed by Elon Musk’s company xAI, citing failures to prevent the creation and spread of sexually explicit and nonconsensual images, including content involving women and minors. Regulators in Indonesia and Malaysia said existing safeguards were insufficient to stop users from generating manipulated images based on real photos, raising concerns over privacy human rights and child safety, and ordered access to Grok suspended until stronger protections are implemented. The chatbot, which is accessed through Musk’s social media platform X Corp., has faced mounting scrutiny globally, with regulators in Europe, India, and the United Kingdom examining whether it violates laws on illegal and abusive content.
- The United Nations’ top court has opened a landmark case accusing Myanmar of committing genocide against the Rohingya minority, marking the first full genocide trial at the International Court of Justice in more than a decade. The case, brought by The Gambia, centers on Myanmar’s 2017 military campaign that drove about 750,000 Rohingya into Bangladesh amid allegations of mass killings, rape, and village burnings, which a UN fact‑finding mission described as involving genocidal acts. As hearings begin in The Hague, prosecutors argue the violence was aimed at destroying the Rohingya as a group, while Myanmar’s military continues to deny the charges and frame the operation as counterterrorism. The proceedings are expected to set important legal precedents on how genocide is defined and proven, with implications for other high‑profile cases before international courts. Myanmar remains engulfed in conflict following the 2021 military coup, even as the opposition National Unity Government has acknowledged past failures and accepted the court’s jurisdiction, and the country now progressing through a tightly controlled election that many observers say is unlikely to ease its political crisis.
- Market Implications: South Korea’s effort to warm up relations with China could help its exporters, support its currency, and slightly boost its stock market if China opens up more to Korean products and culture again. The Philippines’ push for a trade deal with the UAE is good news for long‑term investment, large infrastructure projects, and consumer spending tied to overseas workers, which should benefit local logistics, utilities, and construction companies. Meanwhile, tech companies in Southeast Asia are facing more regulatory scrutiny after Indonesia and Malaysia briefly blocked Musk’s Grok app for harmful deepfakes, meaning platforms may face higher compliance costs and more oversight. International court hearings on the Rohingya crisis increase pressure on companies connected to Myanmar, keeping financial and supply‑chain risks high until legal decisions and humanitarian access become clearer. Overall, 2026 is likely to see gradual support from improving trade ties, while tech platforms and digital‑economy names remain the main areas facing ongoing regulatory and compliance pressure. The MSCI Emerging Markets Asia Index has surged year-to-date, gaining nearly 6% since the start of the year.
Sub-Saharan Africa
- The M23 rebel group, backed by Rwanda, has been establishing a parallel administration in the vast areas of eastern Democratic Republic of Congo (DRC) that it currently controls. Since an escalation in early 2025, M23 rebel movement has made significant military gains, capturing Goma in January 2025 and Bukavu in February 2025. In December 2025, M23 briefly seized the strategic city of Uvira before a partial withdrawal under US pressure, though plainclothes militants reportedly remain in the area and fighting continues nearby. The US has previously brokered peace efforts but agreements have failed to hold due to continued fighting and a lack of trust between parties. M23 has also held direct talks at Doha with the Congolese government, but progress stalled after a perceived lack of sincerity.
- Uganda’s post‑election tensions deepened as opposition leader Bobi Wine—speaking from hiding after what he described as a security raid on his home—urged supporters to peacefully protest what he called “fake” election results that delivered President Yoweri Museveni a seventh term in office this past Saturday. Wine said his movement was gathering evidence of fraud but would not challenge the outcome in court, arguing that Uganda’s judiciary is not independent. African Union election observers criticized the military’s involvement in the electoral process and condemned the government‑ordered internet shutdown, which hindered opposition communication around the vote.
- The provisional results of the election held in late 2025 show the Central African Republic (CAR)’s incumbent President Faustin-Archange Touadéra winning a third term. Touadéra was able to run for a third term following a controversial 2023 constitutional referendum that removed the two-term limit. The main opposition coalition, the BRDC, boycotted the election, claiming the political environment was unequal and unfair. Additionally, runner-up Anicet-Georges Dologuélé rejected the results, alleging “methodical manipulation” and widespread fraud, and proclaimed himself the winner on January 2, 2026. The CAR’s Constitutional Court has until January 20, 2026, to adjudicate challenges and declare the definitive official results.
- Botswana has announced plans to open an embassy in Moscow as part of a strategy to deepen diplomatic and economic relations with Russia, particularly in the mining sectors. The plan was announced in early January 2026 by Botswana’s Minister of Foreign Affairs, who indicated that the embassy would open “as soon as possible;” no specific opening date has been given. Botswana aims to attract Russian investors and leverage Russia’s expertise in large-scale mining projects, particularly for rare earth minerals and diamonds, to diversify its economy and reduce dependence on traditional Western partners. The decision comes as Russia seeks to strengthen its influence in Africa amidst confrontation with Western nations.
- American-South African relations have continued to worsen, leading to significant disputes in areas of diplomacy, economics, and security. Last year, the US boycotted the G20 summit in Johannesburg, and South Africa’s ambassador to the US was expelled after vocal criticism of President Trump. This month, South Africa hosted the “Will for Peace” naval exercises off Cape Town, involving Russia, China, and Iran. The US Embassy condemned the move, stating South Africa “cannot lecture the world on justice while cozying up to Iran”. The US House of Representatives approved a three-year extension of the African Growth and Opportunity Act (AGOA) this month, but South Africa’s continued inclusion makes its passage in the Senate highly uncertain due to Republican opposition.
- Market Implications: Conflict in the Great Lakes region and broader geopolitical tensions pushed up investor risk premiums across Sub‑Saharan Africa, even as a few countries saw policy developments that could help in the long run. In eastern DRC, M23 is tightening control over key border areas, which complicates the tracing of minerals like cobalt and raises transport and insurance costs. Botswana’s plan to open an embassy in Moscow and seek Russian investment in rare earths and diamonds may attract new project funding but also brings added sanctions‑related scrutiny and higher financing hurdles. Meanwhile, US–South Africa relations remain fragile, with Washington simultaneously advancing sanctions‑review tools and extending trade benefits under AGOA, leaving South African exporters—and government bonds—highly sensitive to US political signals. 2026 is likely to bring elevated geopolitical and supply‑chain risk across the region, with performance diverging between countries facing conflict‑driven pressures and those benefiting from clearer policy or trade‑related tailwinds.
Suggested Reading
What Iran’s Protests Mean for Countries in the Middle East
Council on Foreign Relations
Venezuela’s Generational Democratic Opportunity
Susan Segal, Americas Quarterly
South Korea Can Stand Up to China
Victor Cha, Foreign Affairs
As Uganda Girds for Another Violent Election, a Succession Crisis Looms
Michael Mutyaba, World Politics Review
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