From global think tanks
The analyses published here do not necessarily reflect the strategic thinking of The Global Eye
ASEAN – China
(Henry Storey – Lowy The Interpreter) Developed Western and East Asian economies are not the only countries dealing with the deleterious second-order consequences from China’s overcapacity affliction. The manufacturing sectors of Association of Southeast Asian Nations (ASEAN) countries are also grappling with intense pressures. This is an especially politically acute problem given that in most ASEAN countries, manufacturing still accounts for more than 20 per cent of GDP. – ASEAN countries confront Chinese export glut | Lowy Institute
Asia
(Maurizio Bussolo, Jonah Rexer, Margaret Triyana – World Bank blogs) “Empower to prosper.” It’s a simple but powerful idea. What would happen if women had access to job opportunities and gained more agency? Could this significantly boost growth in South Asia? Most countries in the region have ambitious development goals. However, even if the current rapid pace of economic growth were sustained, these goals would remain out of reach, at least within the planned timeframes. One possible solution is to harness an important source of the region’s untapped potential: women in the workforce. – Empower to prosper: women, jobs, and growth in South Asia
(IMF) Short-term prospects for Asia and the Pacific have improved slightly compared to the IMF’s April forecasts, even though growth is still expected to moderate in 2024 and 2025. The regional growth projection for 2024 has been marked up to 4.6 percent from 4.5 percent in April, largely reflecting the over-performance in the first half of the year, and the region is forecast to contribute roughly 60 percent to global growth in 2024. In 2025, more accommodative monetary conditions are expected to support activity, resulting in a slight upward growth revision to 4.4 percent from 4.3 percent in April. Inflation has retreated in much of the region. At the same time, risks have increased, reflecting rising geopolitical tensions, uncertainty about the strength of global demand, and potential for financial volatility. Demographic change will act increasingly as a brake on activity, though structural shifts into high-productivity sectors such as tradable services hold promise to sustain robust growth. – Regional Economic Outlook for Asia and Pacific, November 2024 | Resilient Growth but Higher Risks
(Chikako Baba, Rahul Giri, Krishna Srinivasan – IMF) Manufacturing has been the engine of growth in Asia, but a transition to modern, tradable services could be new source of growth and productivity. – Asia’s Economies Can Embrace Services to Boost Growth and Productivity
Australia
(Marina Yue Zhang, Roy Green, Mark Dodgson – East Asia Forum) Australia’s industrial policy is shifting significantly with the introduction of the Future Made in Australia Act, which aims to enhance local manufacturing and reduce reliance on commodity exports. But concerns have arisen regarding the potential inefficiencies of targeted investments and the risk of deepening regional disparities. Australia needs a broader and more balanced approach that invests in all states and sectors while forging collaborative global partnerships. – Promises and perils of the Future Made in Australia Act | East Asia Forum
BRICS
(Alicia García-Herrero – Bruegel) BRICS has grown – from five to nine official members since the beginning of 2024 – and the group’s summit in Kazan, Russia, from 22-24 October was revealing about its main intention: changing the global order for the benefit of the Global South, as represented by BRICS. The Kazan outcome was summarised in a twelve-point declaration that resonates as anti-Western rhetoric in a new cold war. Much of this, of course, arises from Russian president Vladimir Putin’s grievances with the West. However, Putin, who is increasingly dependent on China to continue with his war in Ukraine, cannot push the BRICS towards a more confrontational stance without the consent of China’s President Xi. – BRICS is becoming a more solid construction
China
(Tianlei Huang – Peterson Institute for International Economics) China’s current stimulus plan is still unfolding. The monetary easing announced by the People’s Bank of China (PBOC) in late September has already been carried out, but the fiscal part of the plan still lacks details. While the Ministry of Finance has already unveiled how the upcoming fiscal package will be used, its size will not be known until China’s top legislators meet and approve the plan in early November. Reportedly, Beijing is now considering announcing a RMB10 trillion fiscal package over multiple years at the upcoming legislature meeting. The actual size could be larger if Donald Trump, whose proposed tariff hikes on Chinese imports could inflict sizable damage on the Chinese economy if implemented, wins the US presidential election. – Will China’s stimulus be enough to get its economy out of deflation? | PIIE
Cities
(Ming Zhang – World Bank blogs) As we mark World Cities Day, we are reminded that livable cities are key to a livable planet. For most of us, cities are our homes and workplaces. Today, nearly 60% of the world’s population lives in cities—a share that will rise to almost 70% by 2050. Cities are also a key driver of national growth and development, accounting for more than 80% of global GDP and almost 90% of private sector job creation. – How to build more livable cities for a livable planet
Climate Action, Energy Transition, and Sustainable Development
(World Resources Institute) The COP16 summit concluded in Cali, Colombia, with an outcome that includes a new fund for digital sequencing information and a new permanent body for Indigenous Peoples and local communities. The negotiations were suspended with numerous issues still to be resolved — including on finance and the monitoring framework —and will resume at a later date. – STATEMENT: COP16 Biodiversity Summit Concludes with Some Progress, but Major Work Remains | World Resources Institute
(Thu Nguyen, Marlon Joseph Apanada – World Resources Institute) Take a look at the sneakers on your feet, or the gadget in your pocket. There’s a good chance they were manufactured in Vietnam, one of the world’s largest manufacturing hubs for global brands like Nike, Adidas, Apple and Samsung. As these companies make sweeping commitments to reduce their carbon footprints, successfully meeting those targets hinges on decarbonizing the businesses along the supply chains they rely on, much of which are also in Vietnam. To illustrate, for fiscal year 2023, factories in Vietnam supplied 50% of Nike’s footwear and 29% of its apparel. As of mid-2024, Nike has 155 factories in Vietnam, 71 of which produce garments for its apparel line. There are also 13 factories making sporting equipment and another 13 that produce footwear. Across these factories, more than 530,000 Vietnamese residents are employed by supply chain partners. This large matrix of businesses is not unique to Nike, it can be seen across many large consumer product companies operating in Vietnam. – Vietnam’s Direct Power Purchase Agreement Helps Decarbonize Supply Chains | World Resources Institute
(Carla Walker, Titilope Akinade – World Resources Institute) Since President Joe Biden launched the Justice40 Initiative in January 2021, over $600 billion has been designated for more than 500 programs across 19 federal agencies. This funding supports climate-related infrastructure initiatives with a commitment to ensuring 40% of the benefits reach underserved communities. Through these programs and fueled by funds made available by the Inflation Reduction Act, money is directed toward clean energy and energy efficiency initiatives, improved public transit, affordable and sustainable housing, training and workforce development, remediation and reduction of legacy pollution, and the development of critical clean water and wastewater infrastructure. However, Justice40’s success hinges on the critical roles of local governments and community-based organizations that work to ensure its benefits reach those who need them most. – Empowering Justice40: How Community-Based Organizations Are Driving Environmental Justice Forward | World Resources Institute
(Serena Li, Willy Carlsen, Hannah Harasaki, Caroline Ribeiro – World Resources Institute) Carbon dioxide removal (CDR) is increasingly showing up in United States climate policy. While actively removing CO2 from the atmosphere is not a substitute for rapidly reducing emissions, it is an important part of the country’s broader strategy to reach net zero by 2050. Carbon removal will be needed to complement emissions reductions efforts and help balance out residual emissions that can’t be eliminated through other means. – How US States Can Lead on Carbon Removal Policy | World Resources Institute
(World Resources Institute) At COP16, World Resources Institute, Conservation International and more than twenty partners launched the Pan-Amazon Network for Bioeconomy. This new alliance is dedicated to promoting a locally-led, sustainable bioeconomy across the Amazon, with a focus on economic models that prioritize the preservation of standing forests, the region’s rich biodiversity and the well-being of its local communities. – RELEASE: Launch of Major Coalition to Drive a Locally-Led, Sustainable Bioeconomy in the Amazon | World Resources Institute
(Georgia Hammersley – Lowy The Interpreter) Azerbaijan, an oil-rich autocracy in Central Asia, has landed the task of hosting this year’s UN climate talks, known formally as the Conference of the Parties to the United Nations Framework Convention on Climate Change, or more commonly as COP29. With more than 90 per cent of Azerbaijan’s exports tied to planet-warming oil and gas, expectations for the nation’s leadership in the negotiations from 11–22 November are understandably limited. – What to watch for at COP29: Expectations and challenges | Lowy Institute
(Giovanni Sgaravatti, Simone Tagliapietra – Bruegel) Over the last five years, one of the mantras of the European Green Deal has been that the climate transition should be just, or it will not happen. This is true. Decarbonisation will affect households differently: increasingly tight climate regulations will be a heavy burden for low-income and even middle-income households, for which renovating a property or buying an electric car could require investment of about a year’s income. Policies that make these investments necessary could easily trigger political backlash if they are not properly designed. – Clean and fair: maximising the impact of the European Union’s Social Climate Fund
(Dirk Schoenmaker, Hesse McKechnie – Bruegel) Since the Paris Agreement on climate change was signed in 2015, its 195 signatories have seen financial instability resulting from the climate transition increase by approximately one third, in the context of still-increasing global emissions. In the European Union, emissions have fallen but banks have not fully internalised the costs of transitioning to net-zero. Banks continue to finance the expansion of the fossil-fuel industry. At the systemic level, this is trading a pretence of financial stability now for a more disorderly transition scenario with greater financial instability later. – What can central banks do to take the Paris Agreement seriously?
(Fiona Stewart, Erik Feyen, Martijn Regelink – World Bank blogs) Emerging market and developing economies (EMDEs) face higher risks from climate change than advanced economies. If not addressed, these risks could threaten their stability, negatively impact economic opportunities and development outcomes, and even set back decades of work to end extreme poverty and boost prosperity in these countries. In addition to these greater risks, EMDEs also face a significant gap in financing for climate investment opportunities. Just 14 percent of global climate finance flows reach EMDEs other than China, even though these countries represent about one-quarter of global gross domestic product. Adaptation is particularly underfunded— only 16% of domestic and international climate finance in developing economies (ex China) is channeled for adaptation. Out of this small share, 98% is either public resources or official financing. – Acting on climate through the banking sector
(Takayoshi Kato – East Asia Forum) Climate change exacerbates existing socio-economic challenges in developing nations. Adaptation challenges demand local solutions, supported by national authorities and non-state actors. Even in richer countries, institutional frameworks that promote local climate adaptation must be strengthened. Crucially, these initiatives must ensure that the costs and benefits of adaptation efforts are equitably distributed such that no vulnerable group is left behind. – Adapting together to climate change in developing nations | East Asia Forum
Europe
(Alexandr Burilkov, Guntram B. Wolff – Bruegel) Europeans might think that a Kamala Harris victory in the United States presidential election on 5 November would mean a return to business as usual in terms of US leadership in transatlantic security. This attitude would be wrong. Whatever the outcome, Europe stands increasingly alone on defence and must act on this urgently. The election matters less for European security than Europeans would like. Regardless of the outcome, the US is destined to disengage from the protection it granted Europe in the post-Cold War period of American military supremacy. President Trump and vice-presidential candidate J.D. Vance, along with conservative academics, have been clear: the US supports Israel first and confronts China second. Meanwhile, Harris has strongly and continually emphasised her commitment to Israeli security and to a hawkish Middle East policy. – Europe stands increasingly alone on defence production and needs to act
(IMF) Europe’s economy is recovering, benefiting from a strong crises’ response. Yet, the recovery is falling short of its full potential. Uncertainty about persistent core inflation, policy directions, and geopolitical conflicts, is dampening the near-term outlook. In the longer term, perennially weak productivity growth—a result of limited scale and business dynamism–-amid new headwinds from fragmentation and climate change are holding back growth potential. Steady macro policies are needed to navigate an uncertain environment. This requires transitioning to a neutral monetary policy stance and reducing fiscal deficits without jeopardizing the recovery. Policymakers also need to tackle barriers to higher potential growth. A larger and more integrated single market for goods, services, and capital will incentivize investment, innovation, and generate scale benefits. Deepening European integration will also strengthen economic resilience by insulating businesses and labor markets from global fragmentation pressures. These are formidable policy challenges, but now is the time to bring Europe to its full potential. – Regional Economic Outlook for Europe: A Recovery Short of Europe’s Full Potential
European Union – China
(Alicia García-Herrero, Abigaël Vasselier – Bruegel) The European Union-China relationship has deteriorated markedly since the EU introduced a three-part strategy in 2019 based on partnership, competition and systemic rivalry. Th e relationship has been undermined by China’s support for Russia’s aggression in Ukraine and its increasingly anti-Western foreign policy that aims to alter the international rules-based system. Meanwhile, the economic relationship is changing because of China’s structural deceleration and increasing self-reliance, coupled with the EU’s growing critical dependence on China, especially for digitalisation and decarbonisation. Europe must accept that relations with China will not return to their pre-pandemic state. – Updating the EU strategy on China: co-existence while derisking through partnerships
Geostrategies
(Samir Saran – World Economic Forum) The start of the year will see governments across the world at the beginning of new terms, forced to respond swiftly to mounting economic, social, security, environmental and technological challenges. These issues would be difficult to address at any time, but today they come amid a turbulent geopolitical context—one that is seeing a disintegration of the post-war international order. As a result, leaders will not only need to address specific challenges but do so while finding agreement to build a global framework for promoting peace and prosperity in place of the aggression and economic uncertainty we are now experiencing. What, then, are the dynamics that should inform leaders’ actions? – 5 geopolitical questions for 2025 | World Economic Forum
Global Commodity Prices
(World Bank) Global commodity prices are set to tumble to a five-year low in 2025 amid an oil glut that is so large that it is likely to limit the price effects even of a wider conflict in the Middle East, according to the World Bank’s latest Commodity Markets Outlook. Even so, overall commodity prices will remain 30% higher than they were in the five years before the COVID-19 pandemic. – Oversupply Could Mute Effects of Wider Middle-East Conflict on Oil Prices
Global Education
(Luis Benveniste, Stefania Giannini – World Bank blogs) We know that investing in education pays off in the long run—for individuals over their entire lives and for entire societies. But we also know that when it comes to financing education, the devil is in the details: governments need to invest in education adequately, efficiently and equitably to get the most value from what they spend. The latest Education Finance Watch (EFW) report from the World Bank and UNESCO shows that during the last decade, total education spending by governments, households and donors globally has increased steadily. But this rise has not led to major increases in allocations per child, especially in poorer countries with growing populations. Indeed, globally, total education spending per child has not increased. – 2024 Education Finance Watch Highlights the Need for More Adequate, Efficient, and Equitable Education Spending
India
(Balachander Palanisamy – East Asia Forum) The Hathras tragedy in July 2024, where 121 people died during a religious congregation led by godman Bhole Baba, sheds light on the enduring influence of godmen in India. Politicians from across party lines continue to exploit their large followings for political gain, while godmen offer lower-caste followers, particularly Dalits, a sense of belonging and economic opportunity. Despite legal protections, caste inequalities persist, leaving the underprivileged to seek alternatives in charismatic leaders like Bhole Baba, whose power over his devotees remains unchallenged even amid such tragedies. – India’s godmen cast a shadow on society | East Asia Forum
India – Germany
(Harsh V. Pant, Shairee Malhotra – Observer Research Foundation) The Indo-German strategic partnership, dating back to 2000, has remained lacklustre, especially when compared with India’s dynamic ties with other Western partners like France and the US. Yet recent efforts are fundamentally altering this status quo. – The Delhi-Berlin Entente
Japan
(Purnendra Jain – East Asia Forum) Japan faces political uncertainty after the 27 October 2024 election produced a hung parliament. The Liberal Democratic Party suffered major losses over recent scandals, while opposition parties gained significantly. Prime Minister Ishiba’s position remains precarious as he seeks coalition partners. The outcome threatens policy implementation and raises concerns about Japan’s domestic reforms and international standing. – Japanese politics faces uncertainty after electoral deadlock | East Asia Forum
(Ko Maeda – East Asia Forum) On 27 October, Japan’s ruling LDP–Komeito coalition lost its parliamentary majority while opposition parties made substantial gains. While the main opposition Constitutional Democratic Party is unlikely to be able to form government itself, the result does raise questions about how Prime Minister Shigeru Ishiba will form a new government that receives the support of the Diet. And should a government be formed, there is no guarantee Ishiba’s leadership will now endure. – Political earthquake throws Japan’s politics into uncharted territory | East Asia Forum
Kenya
(Pascaline Wanjiku – World Bank) Kenya loses more than 0.9% of its GDP to lack of access to water. About 34 million Kenyans have no access to basic sanitation, 20 million lack access to basic drinking water, and 33 million to basic hygiene services. To deal with these shortcomings, the Government of Kenya has launched an ambitious National Water and Sanitation Investment Plan (NAWASIP) whose goal consists in achieving universal access to WASH (Water, Sanitation and Hygiene) by 2030. – In Kenya, enhancing creditworthiness is key to bridging the water sector financing gap
Mediterranean, Middle East, and the Gulf
(Institute for the Study of War) West Bank: The Israeli Defense Minister emphasized that Iran is “pouring everything [it] can” into the West Bank, indicating that Iran will very likely attempt to pursue a different strategy when rebuilding Hamas to fight Israel again – Syria: The IDF captured a Syrian man who was collecting intelligence on Israeli border arrangements during a ground raid in southern Syria. This Iranian-led intelligence effort is likely an attempt to gather information on Israeli border security that Iranian-backed militias could use to undertake small-scale infiltrations into the Golan Heights – Israeli Ground Operations in Lebanon: The Israeli prime minister stated that Israel needs to push Hezbollah north of the Litani River “with or without an agreement” to achieve Israel’s stated war aims, which is to return residents of northern Israel to their homes under safe conditions. Current Israeli operations in southern Lebanon are unlikely to achieve these war aims, though it does not follow that future Israeli operations will fail to achieve the Israeli objectives – Iranian Retaliation against Israel: UK-based Saudi outlet Elaph reported that Israel warned the Iraqi government that if Iranian-backed Iraqi militias continue to attack Israel from Iraqi territory, Israel may strike predetermined targets in Iraq – US Diplomatic Efforts: The United States warned Iran against launching another attack on Israel in retaliation for Israel’s strikes into Iran on October 25 because the United States will not be able to restrain Israel’s response – US Posture in the Middle East: US Central Command (CENTCOM) announced that B-52 strategic bombers arrived in the Middle East on November 3. US CENTCOM Commander General Michael Kurilla met with IDF Chief of Staff Lieutenant General Herzi Halevi in Israel between November 2 and November 3 – Saudi Arabia: The Islamic Resistance in the Land of the Two Holy Mosques, an Iranian-backed militia claiming to operate in Saudi Arabia, claimed its second attack since announcing its existence. – Iran Update, November 3, 2024 | Institute for the Study of War
Middle East and Central Asia
(IMF) Economic growth in the Middle East and North Africa and Caucasus and Central Asia regions is projected to strengthen in the near term, but only to the extent that current challenges abate. Ongoing conflicts and oil production cuts are dampening economic performance, and medium-term growth prospects have weakened over the past two decades. Moreover, high uncertainty looms, with key risks including escalating conflicts, increased geoeconomic fragmentation, and commodity price volatility. To boost growth and create jobs—especially for women and youth—reform priorities include strengthening governance, encouraging private sector investment, and advancing financial development. – Regional Economic Outlook for the Middle East and Central Asia, October 2024: Navigating The Evolving Geoeconomic Landscape
Russia – North Korea
(Yeji Chung – East Asia Forum) Russia’s use of North Korean ballistic missiles in its invasion of Ukraine has drawn attention to the strengthened bilateral ties between Russia and North Korea, marked by a notable security pact signed in June 2024. The lack of focused international intervention and discrepancies in arms trade intelligence sharing between the United States and South Korea raise concerns, suggesting a need for a policy shift focusing on disrupting the arms trade rather than complete denuclearisation in order to effectively pressure North Korea. – Countering the Russia–North Korea alliance requires a policy shift in Washington | East Asia Forum
Russia’s War on Ukraine
(Institute for the Study of War) Incumbent Moldova President Maia Sandu has claimed victory in the Moldovan presidential runoff election held on November 3, 2024 – Moldovan authorities reported extensive Russian interference and sabotage efforts during the runoff presidential elections held on November 3, 2024, in a likely effort to favor pro-Kremlin Stoianoglo – The Russian Ministry of Defense’s (MoD) efforts to centralize control over informal Russian drone operation units may degrade the effectiveness of Russian drone capabilities – Ukrainian Human Rights Ombudsman Dmytro Lubinets refuted a Russian information operation about prisoner of war (POW) exchanges aimed at destabilizing Ukrainian society and undermining Ukrainians’ trust in their government – Ukrainian Human Rights Ombudsman Dmytro Lubinets refuted a Russian information operation about prisoner of war (POW) exchanges aimed at destabilizing Ukrainian society and undermining Ukrainians’ trust in their government – Russian forces recently advanced near Siversk, Pokrovsk, Kurakhove, and Vuhledar in Donetsk Oblast – A Ukrainian official reported that Russian naval infantry units cannot be considered “elite” due to a lack of specialized training for new recruits and because Ukrainian forces have destroyed the main core of the Russian professional army since the start of the Russian full-scale invasion. – Russian Offensive Campaign Assessment, November 3, 2024 | Institute for the Study of War
Singapore
(Jean-Paul Rodrigue – East Asia Forum) Despite facing growing competition and uncertainty due to geopolitical events, Singapore has maintained its prominence in maritime shipping, with its status as a primary transshipment hub evident in its sizeable port activity. The 2023 Red Sea crisis resulted in a temporary surge in Singapore’s traffic, but also underlined its vulnerability to geopolitical events. Though its future prospects remain solid, particularly with its geographical advantages and the development of the Tuas mega container port, the city-state will need to adapt to a constantly changing international environment. – Singapore stuck between a shipping hub and a hard place | East Asia Forum
Southern Ocean
(Elizabeth Buchanan – ASPI The Strategist) A new element of strategic competition is emerging in the Southern Ocean—in Australia’s backyard—in the form of Beijing’s push to control and exploit fisheries. The situation demands that we bolster capability while also cultivating consensus on the need to revise agreements to match the strategic realities of today. Last week, the 43rd meeting of the Commission for the Conservation of Antarctic Marine Living Resources (CCAMLR) failed to establish either new fisheries agreements, or new protected marine zones in the Southern Ocean. CCAMLR hasn’t established a new marine conservation area since 2016. Worse, the meeting failed even to renew management agreements already in place. – China’s fishy behaviour demands a rethink on Southern Ocean | The Strategist
Sub-Saharan Africa
(IMF) Sub-Saharan African countries are implementing difficult and much needed reforms to restore macroeconomic stability, and while overall imbalances have started to narrow, the picture is varied. Policymakers face three main hurdles. First, regional growth, at a projected 3.6 percent in 2024, is generally subdued and uneven, although it is expected to recover modestly next year to 4.2 percent. Second, financing conditions continue to be tight. Third, the complex interplay of poverty, scarce opportunities, and weak governance–compounded by a higher cost of living and short-term hardships linked to macroeconomic adjustment–are fueling social frustration. Within this environment, policymakers face a difficult balancing act in striving for macroeconomic stability while also working to address development needs and ensure that reforms are socially and politically acceptable. Protecting the most vulnerable from the costs of adjustment and realizing reforms that create sufficient jobs will be critical to mobilize public support. – Regional Economic Outlook for Sub-Saharan Africa, October 2024 | Reforms amid Great Expectations
USA
(Loren Voss – Stimson Center) In August 2022, at the direction of Secretary of Defense Lloyd J. Austin, the Department of Defense (DoD) released the Civilian Harm Mitigation and Response Action Plan (CHMR-AP), which reflected an unprecedented commitment to overhauling US policies around preventing, mitigating, and responding to civilian harm resulting from US military operations. The CHMR-AP lays out over a hundred concrete actions, organized by thematic objectives and fiscal year (FY), to steadily improve and build upon DoD civilian harm policies and practices. While the plan itself is expansive, ensuring comprehensive implementation amid competing Department priorities will require sustained attention, resources, and constructive engagement between the Department and civil society. As the CHMR-AP entered implementation, Center for Civilians in Conflict and the Stimson Center developed an assessment framework to track and evaluate yearly implementation progress across the four phases of the Action Plan (representing FY 2022-2025). This framework indicates whether the DoD‘s progress is on track, ahead, or behind in its CHMR-AP implementation, and, when possible, includes qualitative information around identified challenges, needs, innovations, and lessons learned. This report is intended to inform DoD implementation and public oversight by evaluating progress, recommending technical solutions to implementation challenges, and ensuring public awareness of this important effort. – Tracking Implementation of the Civilian Harm Mitigation and Response Action Plan (CHMR-AP) • Stimson Center
USA – China
(Cullen S. Hendrix – Peterson Institute for International Economics) Chinese export controls on gallium, germanium, and graphite were intended to hit US green energy and semiconductor supply chains where it hurts by starving them, or at least complicating the sourcing, of these critical minerals. But as blows in the emerging US-China tech war go, so far, they have been closer to a jab than a haymaker. Analysis of US Customs data indicates that China’s shares of total US imports of these commodities haven’t moved much, if at all. – China’s export controls on critical minerals aren’t starving the United States—at least so far | PIIE
USA – Iraq
(Fuad Shahbazov – Stimson Center) Iraqi mass media confirmed recently that the Biden administration had delivered heavy artillery to the Iraqi Kurdistan Regional Government (KRG) despite objections from Iraqi authorities in Baghdad. The U.S. called the delivery of two dozen 105 mm M119 howitzers to the KRG a “long-planned transfer” meant to build capacity for Kurdish Peshmerga forces. But in Baghdad, there were calls from some to seize the artillery and concern that the new U.S. support could exacerbate already tense relations between Baghdad and Erbil, threatening efforts by Iraqi Prime Minister Muhammad Shia al-Sudani to improve ties with the KRG and preserve good relations with Washington despite the anticipated withdrawal of U.S. troops from central Iraq next year. – US Supply of Heavy Weapons to the KRG Worries Baghdad • Stimson Center
USA – Middle East – China
(Christopher Preble, Will A. Smith – Stimson Center) Fears of China replacing the United States in the Middle East have emerged as a driving force of U.S. policy in the region. However, China’s ambitions in the Middle East remain modest and pose little threat to the United States. As deepening China-Middle East ties reflect an increasingly multi-aligned region, Washington is unlikely to succeed in forcing regional states to choose sides. Approaching the Middle East through the lens of great power competition risks derailing a necessary recalibration of the U.S. role in the region. – Great Power Competition Shouldn’t Drive US Policy in the Middle East • Stimson Center
Western Hemisphere
(IMF) After successfully weathering a series of shocks, most countries in the region are converging to their (tepid) potential. Growth is expected to moderate in late 2024 and 2025 while inflation is projected to continue easing, although gradually. With output and inflation gaps mostly closed but monetary policy still contractionary and public finances in need of strengthening, a further rebalancing of the policy mix is necessary. Fiscal consolidation should advance without delay to rebuild buffers while protecting priority public investment and social spending. This would support the normalization of monetary policy and strengthen credibility and resilience of policy frameworks. Most central banks are well placed to proceed with monetary easing, striking a balance between fending off the risk of reemerging price pressures and avoiding an undue economic contraction. Medium-term growth is expected to remain close to its low historical average, reflecting long-standing, unresolved challenges—including low investment and productivity growth—and shifting demographics. Worrisomely, the ongoing reform agenda is noticeably thin and could lead to a vicious circle of low growth, social discontent, and populist policies. Avoiding this requires pressing on with reforms. Improving governance—by strengthening the rule of law, enhancing government effectiveness, and tackling crime—is a priority that cuts across all areas of growth. Boosting capital accumulation requires improving the business environment, fostering competition, and increasing international trade. Greater and more effective public investment is also needed. Maintaining a dynamic labor force and increasing productivity requires tackling informality and making formal labor markets more flexible, including to adapt to new technologies. Increasing female labor participation can help boost the labor force and offset demographic shifts. – Regional Economic Outlook, Western Hemisphere, October 2024: Rebalancing Policies and Pressing on with Reforms
