Mission Grey Daily Brief - October 25, 2024
Summary of the Global Situation for Businesses and Investors
The world is witnessing a troubling rise in business bankruptcies, with Slovenia and Germany projected to experience significant increases. This trend reflects broader economic challenges affecting companies globally, including geopolitical tensions and a slow recovery from the pandemic. Meanwhile, Georgia is going to the polls in a critical election that could determine whether the country veers towards a more authoritarian, Russia-aligned path. The deployment of North Korean troops to Russia has raised concerns about a potential escalation of the conflict in Ukraine. Additionally, Israel and Iran-backed groups are engaged in a deadly conflict in the Gaza Strip and Lebanon, with rising civilian casualties and a growing humanitarian crisis.
Georgia's Election: A Tussle Between Russia and the West
On Saturday, Georgians will vote in a critical election that could determine the country's future trajectory. For the past three decades, Georgia has maintained strong pro-western aspirations, with polls showing up to 80% of its residents favour joining the EU. However, the government, led by the populist Georgian Dream (GD) party, has increasingly shifted away from the west in favour of Russia, showing reluctance to condemn Moscow for its invasion of Ukraine. The parliamentary elections are seen by many as the most important since independence from the Soviet Union in 1991, with the country's democratic future hanging in the balance.
North Korea's Involvement in the Ukraine War
North Korea has sent troops to Russia, raising concerns about a potential escalation of the conflict in Ukraine. The US has seen evidence of this deployment, and Belarusian leader Alexander Lukashenko has warned Russia against sending North Korean troops to war, stating that it would lead to escalation and the deployment of NATO troops to Ukraine. South Korea has threatened to arm Ukraine in response to North Korea's support for Russia, condemning the deployment of North Korean troops. Analysts say South Korean weapons could make a significant difference for Ukraine, but South Korea remains wary of getting involved due to its long-standing ban on sending military assistance to foreign countries at war.
Israel-Iran Conflict in Gaza and Lebanon
The Israel-Iran conflict in Gaza and Lebanon has resulted in rising civilian casualties and a growing humanitarian crisis. Israel has launched a withering offensive, with almost 43,000 people killed and virtually all of Gaza's 2.3 million people displaced. Israel has been under pressure from many allies, including the United States, for the rising number of civilian casualties and accusations of hindering aid supplies. Iran-backed Hezbollah has escalated its attacks on Israel, using "precision missiles" and new types of drones. The US has designated Hezbollah a terrorist organization, and Hezbollah's political party has seats in the Lebanese parliament.
Turkey's Airstrikes in Syria and Iraq
Turkish forces have launched airstrikes on suspected Kurdish militant targets in Syria and Iraq after an attack on a state aerospace company in Ankara killed five people. The strikes targeted sites linked to the Kurdistan Workers' Party (PKK), which is recognised as a terrorist group by the US, EU, and others. The Ankara attack came at a fragile moment in the decades-long conflict between Turkey and the PKK, coinciding with renewed discussions about a possible ceasefire. The deal would involve offering Abdullah Ocalan, the PKK's imprisoned leader, a chance to reduce his life sentence in exchange for dismantling the PKK's military wing. However, past peace efforts have collapsed and led to a surge in violence, with strong opposition to any agreement from factions on both sides.
Further Reading:
Harris Calls Trump a Fascist, and North Korea Has Sent Troops to Russia - The New York Times
If South Korea decides to get involved in Ukraine, it has powerful options - Business Insider
Turkey strikes northern Iraq and Syria after attack kills 5 near Ankara - The Independent
Turkish raids kill dozens in Syria and Iraq after Ankara attack - Financial Times
Watershed moment as Georgia goes to polls in tussle between Russia and west - The Guardian
Themes around the World:
Manufacturing and Supply Chain Diversification
India’s push for manufacturing, supported by PLI schemes and Make in India, is attracting global supply chains seeking alternatives to China. Electronics exports reached Rs 4 lakh crore in 2025, with mobile phones and semiconductors driving export and employment growth.
Weak Domestic Demand and Structural Imbalances
China’s economic growth remains export-driven, with domestic consumption and investment lagging. Despite 5% GDP growth in 2025, retail sales and fixed-asset investment declined, reflecting persistent property sector weakness and deflationary pressures, which may limit long-term growth and market opportunities.
Digital Sovereignty and Cybersecurity
France has launched a national cybersecurity strategy and a Digital Resilience Index, aiming to reduce technological dependencies and safeguard economic sovereignty. New regulations and investment in digital infrastructure will affect compliance, risk management, and competitive positioning for international firms.
Shadow Fleet and Sanctions Evasion
Russia has developed a ‘shadow fleet’ of old tankers and parallel logistics to circumvent Western sanctions, shifting trade toward India, China, and Turkey. This opaque system increases operational risks and regulatory scrutiny for international businesses.
Green Transformation and Regulatory Burden
Germany’s ambitious green policies have increased regulatory complexity and compliance costs for businesses. While supporting climate goals, these measures contribute to capital flight, slower investment, and concerns about overregulation, particularly for small and medium-sized enterprises.
Geopolitical Tensions and Regional Risks
Rising tensions with Iran and the UAE, along with broader Gulf instability, pose risks to business continuity, investment security, and supply chain reliability. Strategic risk management and contingency planning are essential for international firms operating in the region.
Collapse of the Iranian Rial and Hyperinflation
Iran’s currency has plummeted to over 1.4 million rials per USD, with annual inflation around 40%. This has eroded purchasing power, raised import costs, and destabilized local operations, making pricing and payment settlements highly unpredictable for international businesses.
Logistics and Port Inefficiencies
Severe congestion and operational failures at major ports, particularly Cape Town and Durban, have led to export delays and substantial losses for key sectors. These structural weaknesses in logistics undermine South Africa’s competitiveness and disrupt global supply chains reliant on South African goods.
Israel’s Strategic Expansion in the Red Sea
Israel’s recognition of Somaliland and moves to secure maritime access in the Horn of Africa signal a major strategic shift. This enhances Israel’s security and logistics options but risks regional backlash, complicates relations with China, Turkey, and Arab states, and introduces new geopolitical uncertainties for international business operations.
Home Battery Subsidy Rush and Market Impact
Australia’s federal subsidy scheme for home batteries has spurred over 200,000 installations, driving rapid market growth. Imminent changes to subsidy rules are prompting a rush for larger systems, impacting energy storage business models and influencing consumer and commercial investment decisions.
Agricultural Supply Chain Vulnerabilities
Railway grain shipments fell 27.3% in 2025, and wheat exports dropped 25% in December due to Russian strikes on ports and logistics. These disruptions, along with delayed harvests and market competition, threaten Ukraine’s role as a global food supplier and heighten risks for agribusiness investors.
US-China Trade Tensions Escalate
Renewed US tariffs, including a 25% levy on countries trading with Iran, have reignited trade frictions. Despite a 19.5% drop in US-bound exports, China posted a record $1.2 trillion trade surplus in 2025, highlighting resilience but also raising risks of further escalation and global supply chain disruptions.
Global Supply Chain Realignment
China’s supply chains have reallocated through third-party countries like Vietnam and Mexico, maintaining effective access to US and Western markets despite tariffs. This rerouting complicates compliance, origin tracing, and risk management for international businesses.
Currency Collapse and Hyperinflation
Iran's rial has plunged to record lows, now trading at 1.4–1.5 million per US dollar, with inflation nearing 50%. This currency crisis, driven by sanctions, mismanagement, and corruption, has triggered mass protests, eroded purchasing power, and created severe import and operational challenges for businesses.
Supply Chain Resilience and Diversification
The US-Taiwan deal includes mechanisms for ongoing consultation on tariff and supply chain issues, supporting resilience against shocks. Taiwan’s strategy emphasizes global diversification, advanced packaging, and maintaining technological leadership amid rising global competition.
Regional Security and Military Risk
US and Israeli military actions, including strikes on Iran’s nuclear facilities, and threats of further intervention, heighten regional tensions. The risk of conflict escalation or disruption of the Strait of Hormuz threatens global shipping and energy flows.
Hamas Disarmament and Demilitarization Unresolved
Efforts to fully disarm Hamas and demilitarize Gaza remain contested, with Israel insisting on complete disarmament before reconstruction. This impasse delays aid, infrastructure rebuilding, and business re-entry, creating persistent uncertainty for supply chains and investment planning.
Energy Sector Reform and Security Challenges
Brazil’s 2025 energy regulatory reform modernized the sector, focusing on renewables, grid expansion, and tariff moderation. Yet, unresolved issues around natural gas, transmission bottlenecks, and blackout risks persist, impacting industrial competitiveness and energy-intensive investment decisions.
Regional Geopolitical Volatility
The Gaza war and broader regional tensions have directly affected Egypt’s economy, trade, and supply chains. Egypt’s diplomatic efforts for regional stability remain critical, but ongoing volatility poses persistent risks for international business operations.
Energy Crisis and Industrial Competitiveness
Pakistan’s energy sector faces high tariffs, under-utilized capacity, and inefficient contracts, which act as a tax on industry and exports. Efforts to privatize distribution and reform generation contracts are ongoing, but structural inefficiencies remain a major constraint on manufacturing and supply chains.
Dual-Base Manufacturing and Talent Challenges
TSMC’s dual-core strategy—expanding advanced manufacturing in both Taiwan and the US—raises concerns about talent shortages, operational costs, and logistical complexity. Engineering talent recruitment, energy, and water supply remain critical constraints for sustained growth.
Energy Transition and Nuclear Expansion
South Korea’s commitment to build two new nuclear reactors by 2038 reflects a strategic pivot toward clean energy and carbon neutrality. This policy shift impacts energy-intensive industries, investment in renewables, and long-term infrastructure planning.
Ongoing Government Restructuring and Reform
President Zelenskyy continues to overhaul key ministries and security agencies, aiming to align governance with wartime needs and anti-corruption standards. These changes are critical for maintaining Western support but add short-term uncertainty to regulatory and business environments.
US-Israel Strategic Aid Recalibration
Recent US legislative debates and Israel’s stated intent to reduce military aid dependence signal a shift in the bilateral relationship. The $38 billion aid package expiring in 2028 and negotiations for a new 20-year deal impact Israel’s defense sector, technology partnerships, and investor risk assessments.
Strengthened Strategic Partnerships and Trade Alliances
Japan is deepening economic and security ties with partners such as the EU, India, and Italy, focusing on critical minerals, technology, and defense. These alliances support resilient supply chains, market access, and shared innovation, reinforcing Japan’s role as a stable anchor in the Indo-Pacific and global economy.
Privatization and Investment Facilitation Initiatives
The government’s focus on privatizing state assets and the creation of the Special Investment Facilitation Council have attracted over $2 billion in new FDI. However, bureaucratic inefficiencies and inconsistent implementation continue to challenge the business environment.
Political Uncertainty and Border Tensions
Thailand faces heightened political uncertainty ahead of the February 2026 elections, compounded by border tensions with Cambodia. These factors increase operational risks, impact investor confidence, and may disrupt cross-border trade and supply chains.
Renewable Energy Expansion and Export Plans
Eskom is expanding its renewable energy portfolio, aiming to integrate nuclear and gas by 2030 and sell excess capacity to neighboring countries. This transition supports industrialization, energy security, and new export opportunities for South African businesses.
Legal Uncertainty and Corruption Risks
Persistent legal unpredictability, high-profile corruption scandals, and slow reforms deter foreign direct investment. Recent parliamentary bribery cases and anti-corruption investigations highlight systemic governance challenges, which international investors view as a greater risk than the ongoing war itself.
Vision 2030 Drives Economic Diversification
Saudi Arabia’s Vision 2030 reforms are transforming the business landscape by reducing oil dependence, opening new sectors, and attracting record foreign investment. Over $400 billion in investment volume and a fivefold increase in FDI since 2017 underscore the scale and momentum of economic diversification.
Labor Reform and Compliance Pressures
Sweeping labor reforms—including a reduced 40-hour workweek, higher minimum wages, and stricter inspections—are reshaping Mexico’s labor market. These changes increase compliance costs and operational complexity, particularly for manufacturing, logistics, and digital platform employers, with direct implications for competitiveness and labor relations.
Political Risk and 2026 Election Uncertainty
Brazil’s presidential election in October 2026 is a major source of uncertainty for investors. Market sentiment is sensitive to potential shifts in economic policy, fiscal reforms, and institutional stability, with volatility expected in currency and asset prices as the election approaches.
Critical Minerals and Rare Earths Geopolitics
Brazil’s vast reserves of lithium and rare earths are now central to EU and US supply chain strategies, as both seek to reduce dependence on China. New agreements position Brazil as a key supplier for the global energy transition, but value addition and local benefit remain challenges.
Energy Transition and Renewable Mandates
Indonesia is mandating a 10% ethanol blend in fuel by 2028 and accelerating coal-to-gas projects. These policies drive investment in renewables and biofuels, impact automotive and energy sectors, and align with decarbonization and energy security goals.
Regulatory Uncertainty and National Security
China’s regulatory environment has become more unpredictable, with heightened enforcement on national security, technology, and data. Foreign businesses face stricter compliance requirements, greater scrutiny, and potential exposure to sudden policy shifts, impacting investment and operational planning.
Green Energy Transition Accelerates
South Korea is rapidly advancing its green energy agenda, including large-scale investments in green ammonia and retrofitting coal plants for ammonia co-firing. These initiatives are reshaping the energy sector, creating new opportunities and compliance requirements for international investors.