Mission Grey Daily Brief - September 08, 2024

Summary of the Global Situation for Businesses and Investors

Algeria's presidential election, Libya's oil exports standstill, political tensions in France, and the possibility of Belarus' involvement in the Russia-Ukraine war are the key issues impacting the global situation today. In Algeria, the incumbent president is expected to win a second term despite concerns over deteriorating human rights and low voter turnout. Libya's oil exports are at a near standstill due to political tensions over the control of the nation's central bank, which manages oil revenues. Protests in France against the appointment of Michel Barnier as Prime Minister reflect political divisions in the country, as a left-wing coalition won the most seats in the lower house of parliament in the July elections. Meanwhile, Belarus' proximity to Ukraine and its relationship with Russia raise concerns about its potential involvement in the war.

Algeria's Presidential Election

Algeria held a presidential election on Saturday, with preliminary data showing a voter turnout of around 48%. The incumbent president, Abdelmadjid Tebboune, is expected to win a second five-year term despite concerns over deteriorating human rights and a history of embarrassing statements. Human rights groups and opposition figures have criticized the government for dissolving political parties, civil society organizations, and independent media outlets, as well as a spike in arbitrary arrests. The election took place against a backdrop of economic challenges, with the government failing to contain soaring inflation and meet export growth targets. Algeria's largest opposition party, the Rally for Culture and Democracy (RCD), has been a particular target of government crackdowns, with 60 of its activists arrested in August. The country has also never had a peaceful transition of power, and the military's influence remains strong. The election results are expected today.

Libya's Oil Exports Standstill

Libya's oil exports are at a near standstill due to political tensions over the control of the nation's central bank, which manages oil revenues. Forces aligned with eastern leader Khalifa Haftar halted production at major oil fields on August 26, slashing output by half. This disruption has sent ripples through global energy markets, causing a brief rise in world oil prices above $80 per barrel. While a recent agreement between rival governments has raised hopes for a resolution, industry analysts warn that the situation remains unsettled. Libya's oil production is critical to its economy, accounting for 98% of government income and 65% of its GDP. The National Oil Corporation has declared force majeure, seeking release from its contractual obligations. The situation has also impacted OPEC members' views on China's oil demand, which may be weaker than anticipated due to a transition to electric vehicles.

Political Tensions in France

Tens of thousands of demonstrators took to the streets of Paris and other French cities to protest the appointment of Michel Barnier as Prime Minister by President Emmanuel Macron. The protests reflect political divisions in the country, as a left-wing coalition won the most seats in the lower house of parliament in the July elections. Macron's decision to appoint a veteran conservative has been denounced as a "power grab" that undermines democracy. Surveys suggest that a majority of French voters believe Macron has "disregarded" and "stolen" the election results. The protests come just days before Denmark's vote in the European Union election, and in the context of an increasingly polarized political climate across Europe, as seen in the recent assassination attempt on Slovakia's Prime Minister.

Belarus and the Russia-Ukraine War

As the Russia-Ukraine war continues, attention turns to the situation along Ukraine's border with Belarus. Belarus has played a key supporting role in the war, with Russian troops and equipment positioned in Belarus before the invasion. Tensions have escalated in recent months, with Belarus positioning thousands of troops near the Ukrainian border. While backchannel negotiations led to their repositioning, there remains a concern that Belarus may come under pressure from Russia to become directly involved in the war. Ukraine has been fortifying its border with Belarus and does not seek a confrontation but cannot rule out the possibility. A potential Belarusian military intervention could involve a joint attack on Kyiv, forcing Ukraine to redeploy troops from frontline positions.

Recommendations for Businesses and Investors

Algeria: Businesses and investors should closely monitor the situation in Algeria, particularly regarding the protection of human rights and the potential for economic reforms. While political stability may be appealing, the country's history of arbitrary arrests and lack of respect for civil society organizations could pose risks.
Libya: The uncertainty surrounding Libya's oil exports underlines the risks of investing in countries with political instability and a heavy reliance on a single industry. Businesses and investors should be cautious about entering or expanding operations in Libya until the situation stabilizes.
France: Political tensions in France highlight the risks of investing in a country with a polarized political climate. Businesses and investors should monitor the situation and be prepared for potential policy changes if the left-wing coalition gains more influence.
Belarus: The potential involvement of Belarus in the Russia-Ukraine war underscores the dangers of doing business in or with countries that support or enable authoritarian regimes. Businesses and investors should avoid any involvement with Belarus to prevent reputational and ethical risks, as well as potential economic disruptions.

Themes around the World:

Trade Policy Uncertainty and Tariffs

Ongoing US tariff negotiations and underutilization of free trade agreements (FTAs) create uncertainty for exporters. Only 54% of eligible Thai firms use FTAs, and shifting US policies pose risks for trade-dependent sectors, requiring businesses to diversify markets and adapt strategies.

UK as a Stable Investment Destination

UK leaders are leveraging global volatility to position the country as a haven for investment, emphasizing regulatory stability, financial sector strength, and innovation in AI and tech. This narrative aims to attract capital and talent, but is tested by ongoing geopolitical shocks.

Eastern Economic Corridor Bottlenecks

Land shortages and zoning constraints in the Eastern Economic Corridor (EEC) are delaying major industrial projects. The government is fast-tracking reforms, but prolonged regulatory processes and infrastructure gaps may hinder investment and supply chain expansion.

Regional Integration and Trade Bloc Leverage

South Africa leverages its role in the African Continental Free Trade Area and regional infrastructure to position itself as a gateway to Africa. This enhances supply chain diversification and trade opportunities, but also requires continued investment in logistics and regulatory harmonization.

Bioenergy and MSME Supply Chain Challenges

India is promoting bioenergy adoption in MSMEs to decarbonize industrial heat and reduce fossil fuel reliance. However, fragmented biomass supply chains and technology gaps present challenges, requiring policy support and international collaboration for scalable, reliable solutions.

FDI Reforms and High-Value Sector Focus

Thailand is shifting its investment strategy to attract FDI in high-tech, green infrastructure, and wellness tourism. Legal and regulatory reforms, infrastructure upgrades, and anti-corruption initiatives aim to reposition Thailand as a regional hub for future industries, but execution remains critical.

Energy Independence and Downstreaming Push

Indonesia is accelerating its drive for energy independence, targeting a five-year timeline to reduce fuel imports through new refineries, solar energy, and downstream projects. This policy shift will reshape energy supply chains, investment flows, and local sourcing requirements.

Rafah Crossing and Border Controls Impact Trade

The partial and conditional reopening of the Rafah crossing with Egypt, under strict Israeli oversight, restricts the flow of goods and people. These controls hinder humanitarian aid, economic recovery, and cross-border trade, directly affecting supply chain resilience and regional business operations.

Currency Volatility and Financial Innovation

Pakistan’s rupee remains vulnerable amid external deficits and debt pressures. The government’s partnership with World Liberty Financial for a dollar-pegged stablecoin aims to boost remittance flows and financial inclusion, but regulatory, ethical, and geopolitical risks remain for cross-border transactions and digital finance.

Infrastructure Investment and Supply Chain Resilience

South Africa is increasing investment in energy, transport, and digital infrastructure to support industrialization and supply chain resilience. However, execution risks, funding gaps, and slow project delivery continue to limit the effectiveness of these initiatives in boosting productivity and attracting foreign capital.

Infrastructure Expansion and Regional Hub Ambitions

Massive investments in transport, ports, and logistics are positioning Egypt as a regional trade and manufacturing hub. Projects like the Suez Canal Economic Zone and logistics corridors aim to enhance supply chain resilience and attract multinational manufacturers seeking regional access.

Infrastructure and Logistics Modernization

Investment in logistics and infrastructure is accelerating, with Mexico’s 3PL market projected to grow from $14.4 billion in 2024 to $26.8 billion by 2033. Nearshoring, e-commerce, and public works like the Tren Maya drive demand for advanced warehousing, cross-border transport, and digital supply chain solutions.

Reshoring And Supply Chain Security

Major US industrial policy now prioritizes reshoring advanced manufacturing, especially in AI and semiconductors. Large-scale investments aim to reduce supply chain vulnerabilities and create middle-class jobs, but higher costs and regulatory hurdles challenge implementation and global competitiveness.

Suez Canal Revenue Volatility

The Gaza conflict caused Egypt to lose $9 billion in Suez Canal revenues over two years, as shipping was rerouted, impacting foreign exchange earnings and global supply chains. Ongoing regional instability continues to threaten this vital trade artery.

Critical Minerals Supply Chain Diversification

The US is urging allies to reduce reliance on China for critical minerals, which dominate supply chains for technology and energy. Recent Chinese export controls have accelerated US-led efforts to secure alternative sources, affecting costs and strategic planning for manufacturing and tech sectors.

Moderate Economic Growth, High Inflation

Brazil’s economy is projected to grow around 1.7% in 2026, with inflation remaining high at 12-12.75%. Fiscal stimulus and strong agriculture support growth, but high interest rates and external risks require cautious planning for investment and supply chain strategies.

Escalating US-China Trade Tensions

Trade tensions between China and the US remain elevated, with renewed tariffs and retaliatory measures. Despite a 19.5% drop in exports to the US in 2025, China posted a $1.2 trillion trade surplus, highlighting its resilience but also the ongoing risk of further escalation and global supply chain disruptions.

Deepening Property Crisis Threatens Stability

China’s property downturn, the longest in modern history, has led to a surge in foreclosed assets and falling prices, especially in rural regions. This crisis undermines banking sector health, limits stimulus options, and poses systemic risks for economic and financial stability.

Currency Controls and Ruble Transactions Rise

Over 85% of Russia’s foreign trade is now settled in rubles or other non-dollar currencies, reducing exposure to Western financial systems. International businesses face increased currency risk, limited convertibility, and compliance challenges in cross-border transactions with Russian entities.

Belt and Road Initiative Expansion

China signed a record $213 billion in new Belt and Road deals in 2025, focusing on energy, mining, and infrastructure in Africa and Central Asia. This expansion strengthens China’s global economic footprint but raises debt and dependency concerns in partner countries.

Regulatory Reforms and Business Environment

Ongoing economic reforms target improved investment climate, streamlined licensing, and expanded digital and physical infrastructure. The government is enhancing free zones, logistics corridors, and industrial clusters, notably in the Suez Canal Economic Zone, to boost exports and attract diversified FDI, especially in manufacturing and green energy.

Defense Build-Up and Asymmetric Deterrence

Taiwan is investing $40 billion in drones, AI-based defense systems, and advanced weaponry to counter China’s military threat. This defense modernization, heavily reliant on US support, is integral to business risk assessments and supply chain continuity planning.

US Trade Scrutiny and Visa Restrictions

The US has suspended immigrant visa processing for Thai nationals and imposed stricter origin verification on Thai exports. These measures heighten compliance risks, potentially disrupt trade flows, and complicate market access for Thai businesses in the US.

Trade Policy Uncertainty and EU-Mercosur Tensions

Strong domestic opposition to the EU-Mercosur trade deal, especially from French farmers and parliament, has led to protests and political crises. This uncertainty affects market access, supply chains, and investment strategies for global agribusiness and exporters.

Divergent Energy Policies Reshape Markets

US policy now prioritizes fossil fuel expansion, including efforts to control Venezuelan oil, while China accelerates its clean energy transition. This divergence increases geopolitical risk, affects global energy prices, and may shift long-term investment toward regions with stable green policy frameworks.

Energy Sector Reform and Investment

Mexico is opening its energy sector to private and foreign investment through mixed contracts and partnerships, especially in oil and power generation. However, Pemex’s financial instability and regulatory uncertainty persist, impacting energy costs, supply reliability, and long-term investment decisions.

Infrastructure Expansion and Logistics Modernization

India’s 2026-27 budget prioritizes accelerated investment in highways, ports, and digital infrastructure. Initiatives like Gati Shakti have reduced logistics costs below 10% of GDP, improving supply chain efficiency and global competitiveness, and supporting the goal of becoming a $5 trillion economy.

Labor Shortages Drive Immigration Policy Shifts

Persistent skilled labor shortages are prompting Germany to expand ethical pathways for foreign workers, notably from India. This trend is vital for modular sector growth, affecting project delivery, wage structures, and operational scalability for international investors.

Geopolitical Tensions with China

Rising military pressure and large-scale drills by China around Taiwan heighten the risk of conflict, threatening global supply chains and investment stability. Any escalation could disrupt semiconductor flows, impacting industries worldwide and potentially causing a severe global economic downturn.

Export Diversification Amid Tariffs

China’s exports to the US fell by nearly 20% in 2025 due to tariffs, but overall exports grew 3.2% as China rapidly diversified to Southeast Asia, Africa, and Latin America. This shift is reshaping global supply chains and trade flows, challenging US trade leverage.

High-Tech Sector Investment and AI Leadership

Israel’s high-tech sector remains a global innovation leader, attracting significant venture capital and multinational investment, including major projects from companies like Nvidia. Government-backed funds and private capital continue to drive growth, though the sector faces talent shifts and must navigate global competition and regulatory scrutiny.

Digital, AI, and Talent Integration

Mexico is emerging as a strategic AI and digital infrastructure hub for North America, with major investments in data centers, advanced manufacturing, and tech talent. Integration with US firms and regulatory alignment under USMCA enhance regional competitiveness, resilience, and innovation in technology-driven sectors.

Coal Phase-Out Delays and Grid Reliability

The planned closure of major coal power stations, such as Eraring, has been delayed to 2029 to support grid reliability during the energy transition. This extension reflects market uncertainties and underscores the challenges of balancing decarbonization goals with energy security for business operations.

Technology Export Controls and Decoupling

The US maintains and expands technology export controls, particularly targeting China and sensitive sectors like semiconductors and AI. These measures drive supply chain decoupling, compliance complexity, and strategic realignment for technology firms and global investors.

Current Account Deficit and Financing

Brazil’s current account deficit reached US$68.8 billion in 2025 (3.02% of GDP), financed mainly by long-term foreign investment. While trade balances remain positive, deficits in services and primary income require ongoing capital inflows to sustain external stability.

New Capital City (IKN) Investment Momentum

The IKN project continues to attract new investors, with recent agreements covering culinary, commercial, and office developments. This signals growing business confidence in IKN’s role as a future economic hub, with implications for real estate, infrastructure, and supporting industries.