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Mission Grey Daily Brief - October 26, 2024

Summary of the Global Situation for Businesses and Investors

The war in Ukraine continues to dominate global affairs, with North Korean troops moving towards the frontline and Russian forces suffering record casualty rates. Elon Musk is accused of having close ties with Vladimir Putin, withholding Starlink access from Taiwan as a favour to China. US Treasury Secretary Janet Yellen announced new sanctions targeting secondary entities in countries supplying Russia with critical items for its military. Belarusian President Alexander Lukashenko threatened war if Russia attempts to annex Belarus. South Korea is threatening to arm Ukraine in response to North Korea's support for Russia. Putin hosted the BRICS summit in Russia, praising its role as a counterbalance to the West's "perverse methods", and pushing for the creation of a new payment system as an alternative to the SWIFT network. Israel launched a retaliatory strike on Iran.

Russia's War in Ukraine

The war in Ukraine continues to be a major concern for businesses and investors, with the conflict entering its 975th day and Russian forces suffering record casualty rates. North Korean troops are moving towards the frontline, posing a significant threat to Ukraine's defence. Vladimir Putin is pulling Kim Jong Un deeper into the war, revealing a weakness in the Kremlin's ability to recruit troops at home. North Korea's infusion of fresh soldiers will remain practically risk-free for Pyongyang, unless the United States returns to its aggressive sanctions posture against the Kim regime. Russia is no stranger to employing foreign armies, with Cossack warriors famously fighting for the tsars in centuries past and the Red Army bolstering its ranks with Mongolian troops when it invaded China at the end of World War II. Today, the "TikTok soldiers" of Chechen warlord Ramzan Kadyrov are scattered across Ukraine's front lines.

After nearly three years of fighting, Putin is running low on cannon fodder. The Kremlin is finding it difficult and expensive to entice more of Russia's poor and desperate to sign up for the war, even with promises of bonuses and good pay. In theory, Moscow could force millions of its fighting-age men into the Ukrainian meat grinder through conscription, but this option is politically perilous. The Putin regime discovered the dangers of the draft when it briefly attempted a "partial mobilization" in September 2022, with Russians responding with howls of opposition. The government quickly backed off of the effort, informing many that their call-up orders were issued by "mistake". Since then, Russia has relied on mercenary groups and lucrative payouts to make the "golden handshake" in exchange for military service in Ukraine. Even these enticements are proving to be insufficient for the Kremlin's manpower needs.

By providing fresh troops to Russia, North Korea will likely help to backfill some, but not all, of Moscow's gaps. US Defense Secretary Lloyd Austin warned the news is a "very, very serious issue", but cautioned that the precise contribution of Pyongyang's troops remained unknown. For the Kim regime, support for Russia has many strategic benefits and few risks. First, protection from United Nations sanctions. Russia has used its Security Council veto to repeatedly shield North Korea from international monitoring and penalties for its prohibited missile tests and nuclear weapons development. Second, a security guarantee from the world's largest nuclear power. This summer, Moscow and Pyongyang agreed to a NATO-style mutual defense pledge, promising to aid each other in the event of war. Third, North Korea's troops will gain valuable combat experience if they survive. Finally, and perhaps most importantly, the Kim regime will likely benefit from Russian technology transfers that could greatly accelerate its missile and nuclear programs.

In exchange, the costs to North Korea are a pittance. An expeditionary force of roughly 12,000 soldiers is small potatoes compared to Kim's million-man army. His related shipments of around three million artillery shells to Russia is also a small fraction of his total stockpile. The danger to Ukraine is great, however, with a senior Ukrainian official stating that the addition of North Korean artillery on the battlefield has been "much worse than the Shaheds", the Iranian-designed kamikaze drones that Russia is using to pound Kyiv's troops and infrastructure.

Elon Musk's Alleged Ties with Vladimir Putin

Elon Musk is accused of having close ties with Vladimir Putin, withholding Starlink access from Taiwan as a favour to China. The Wall Street Journal reported that Putin asked Musk to withhold Starlink from Taiwan as a favour to China's Xi Jinping, with unnamed officials stating that Musk has been in regular contact with Putin since 2022. The Journal reported that in late 2023, Musk received his first request from the Kremlin to refrain from activating Starlink over Taiwan, citing a former Russian intelligence officer. The request was made for Beijing's sake, as Moscow increasingly relied on trade from China. Based on The Journal's findings, it's unclear exactly how many times Putin or his administration asked Musk for the favour.

The Chinese embassy in Washington told The Journal that it was not aware of the specifics of this arrangement, and did not respond to a separate request for comment sent outside regular business hours by Business Insider. Taiwan does not have official Starlink access because its laws require satellite services to be provided through a joint venture with a local operator that maintains majority ownership. The New York Times reported that SpaceX was unwilling to accept such an arrangement, and the self-governed island is thus creating its own low-earth orbit satellite network. Musk's reported conversations with Putin coincide with his apparent shift in rhetoric toward Ukraine in late 2022. Until that point, the billionaire had vocally supported Kyiv, providing it with 15,000 Starlink terminals.

In October of that year, he began seeking funding from the Pentagon to continue the free services, tweeting that they were taking a financial toll. Musk also tweeted a poll that month about a peace plan reflecting some of Russia's war demands at the time, including Russia's formal obtaining of Crimea and a guarantee of Ukraine's neutrality. The billionaire's post drew the fury of pro-Ukrainian accounts, but he added that he only suggested those measures to avoid further death in Ukraine and the risk of nuclear war. "Obviously, we are pro-Ukraine", he tweeted, saying that SpaceX had spent about $80 million on free Starlink for Ukraine. Two weeks later, Ian Bremmer, a political scientist who founded Eurasia Group, wrote in an email to his subscribers that Musk had spoken with Putin before tweeting this controversial peace plan. Per Bremmer, Putin had told Musk that if he could not accomplish his goals in Ukraine, he would turn to "major escalation". Musk and the Kremlin said Bremmer's report was untrue.

The allegations present awkward implications for the US, with Musk's SpaceX holding defense and space contracts with the Pentagon and NASA. An analysis published on Monday by The New York Times reported that the company has $3.6 billion in contracts with the Defense Department — primarily for launching American satellites into orbit — and $11.8 billion with NASA. Russian forces were reported to be buying up Starlink terminals earlier this year to help their invasion of Ukraine. The system has been vital to Ukrainian forces over the two-year conflict. But Russian agents are reportedly now using 'intermediaries' in Dubai in order to get their hands on the terminals, circumventing western sanctions imposed on Russia. House Democrats warned that Russia's use of the system in Ukraine could raise national security concerns in March. In a letter to SpaceX, two Democrats on the House Oversight Committee demanded information about Russia's potential illegal acquisition of the satellite-enabled terminals, according to the Washington Post. The letter cited recent allegations from Ukrainian intelligence officials, who say that Russian troops are using Starlink terminals to coordinate war efforts in eastern Ukraine, in potential violation of US sanctions.

As founder of SpaceX, Musk has cultivated close ties with US military and intelligence, with access to sensitive information. The company is the primary rocket launcher for both NASA and the Pentagon. Starlink has said it does not do any business in or with Russia, and Musk has branded claims of association with Putin "absurd". Dmitry Peskov, spokesperson for the Kremlin, insisted neither Putin nor the Kremlin were in regular contact with Musk. Musk has not yet commented on the claims published in the WSJ. The Kremlin today slammed the claims in the WSJ report as "not true" and "absolutely false". While Beijing remains officially neutral on the conflict between Russia and Ukraine, it has supported Putin's claims that the war was provoked by western aggression. The US this month imposed its first sanctions on Chinese firms for making weapons for Russia, accusing them of collaborating with Russian defence firms to produce drones vital to the war effort.

US Treasury Secretary Janet Yellen Announces New Sanctions

US Treasury Secretary Janet Yellen announced new sanctions targeting secondary entities in countries supplying Russia with critical items for its military. Yellen told world financial leaders gathered in Washington for annual meetings of the International Monetary Fund (IMF) and World Bank that "We will unveil strong new sanctions targeting those facilitating the Kremlin's war machine, including intermediaries in third countries that are supplying Russia with critical inputs for its military". The IMF and World Bank meetings mark the last major international finance gathering to be held during President Joe Biden's administration and come as the state of the economy and inflation are top concerns for American voters. The presidential election between the Republican party nominee, former President Donald Trump, and Democratic party nominee Vice President Kamala Harris is slated to be decided on November 5, with the outcome expected to have an enormous impact on global finance and the world's economy.

Yellen touched on the use of the proceeds from frozen Russian sovereign assets to provide loans for Ukraine. As she spoke, the European Parliament approved a loan of up to 35 billion euros ($38 billion) for Ukraine's defense and reconstruction that will be repaid using future revenues from Russian central bank assets frozen abroad. Yellen referred to the overall $50 billion loan package being negotiated by the Group of Seven and EU allies, saying the United States expects to be able to contribute $20 billion. The U.S. Treasury Department is "working tirelessly to unlock the economic value of frozen Russian sovereign assets to aid Ukraine", Yellen said. Earlier on October 22, Britain announced its readiness to provide Ukraine with a loan of<co: 2>Earlier on October 22, Britain announced its readiness to provide Ukraine with a loan of


Further Reading:

As North Korea, Iran and China support Russia’s war, is a ‘new axis’ emerging? - CNN

If South Korea decides to get involved in Ukraine, it has powerful options - Business Insider

Israel launches retaliatory strike on Iran - Financial Times

Lukashenko warns of war if Russia attempts to annex Belarus - RBC-Ukraine

MEPs Denounce Azerbaijan's Rights Violations Ahead Of Key Conference - Radio Free Europe / Radio Liberty

North Korea’s troops reveal Putin’s Ukraine pickle — no more cannon fodder - New York Post

Putin 'asked Elon Musk to switch off internet over Taiwan as a favour to China' - Daily Mail

Putin hosts growing BRICS alliance in Russia, touting it as an alternative to the West's "perverse methods" - CBS News

Putin once asked Elon Musk to not activate Starlink over Taiwan as a favor to Xi Jinping: report - Business Insider

Russo-Ukrainian War, day 975: Russian forces suffer record casualty rates as North Korean troops move towards the frontline - Euromaidan Press

Ukraine calls on North Korean soldiers to surrender and promises safety, food and medical care - Euronews

Vance says it is Ukraine's decision to end the war - NBC News

Vladimir Putin signals North Korean troops are in Russia - Financial Times

Themes around the World:

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Semiconductor Investments Move Upstream

Samsung is considering chip testing and packaging investment, reportedly including a possible $4 billion northern Vietnam project. This would deepen Vietnam’s electronics ecosystem, raise demand for skilled labor and utilities, and improve its position in higher-value technology supply chains.

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Mining Rules Tighten Renewals

New mining empowerment rules preserve “once empowered, always empowered” for existing rights, but renewals or extensions must maintain at least 26% black ownership. The coming legislative shift raises structuring, refinancing, and regulatory-planning complexity for miners and long-horizon investors.

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Freight Costs and Port Rebalancing

U.S. container imports reached 2,353,611 TEUs in March, up 12.4% from February, as shipping disruptions and trucking shortages lifted transport costs. Cargo is shifting toward East and Gulf Coast ports, while diesel prices, fraud, and constrained driver capacity increase logistics risk for importers and exporters.

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Labor Shortages and Productivity Pressure

Military mobilization, school closures and security restrictions are tightening labor supply across sectors. Nearly 48% of surveyed tech firms said over a quarter of staff were unavailable, while the central bank cited absences and reserve duty as key constraints on output and services.

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Policy volatility in energy

Government intervention in fuel and refining policy is increasing uncertainty. Lula moved to annul a Petrobras LPG auction after prices jumped 100% and reiterated interest in repurchasing Mataripe refinery. This raises questions over price-setting, state influence, and investment predictability in Brazil’s energy value chain.

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Defensive Trade Powers Emerging

Britain is developing anti-coercion powers to counter pressure from major economies, including possible sanctions, export controls, import restrictions and investment limits. For multinationals, this signals a tougher trade-security environment, especially regarding exposure to China and potentially the United States.

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Resilience Spending and Drills Expand

Taiwan is increasing anti-blockade planning, including escort drills for energy shipments and efforts to keep corridors open toward Japan, the Philippines and the United States. These measures support continuity planning, but also highlight rising operational risk for shipping, insurers and critical infrastructure operators.

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Vision 2030 project reprioritization

Fiscal pressure and weaker foreign capital are forcing reviews and scaling adjustments across flagship projects, including Neom and Red Sea developments. Reported war-related losses above $10 billion raise execution risk for contractors, suppliers, investors, and firms targeting Saudi demand linked to megaproject pipelines.

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Rapid FTA Network Expansion

India is accelerating market diversification through new or imminent agreements with the UK, Oman, New Zealand and others, while EU talks advance. These pacts improve tariff access, reshape sourcing options, and strengthen India’s attractiveness as an export and manufacturing base.

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Labour shortages and migration policy

Germany’s labour market remains constrained by demographics and weaker immigration, while debate over large-scale Syrian returns risks worsening shortages. Syrians hold more than 266,000 social-insurance jobs, many in shortage occupations, making workforce policy increasingly material for operations and expansion planning.

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Export Controls Drive Tech Decoupling

US policy increasingly links trade to national security through tighter controls on semiconductors, advanced technology, and strategic investment. For multinationals, this accelerates technology bifurcation, complicates market access, licensing, R&D collaboration, and supplier qualification across electronics, AI, and industrial sectors.

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Reconstruction Capital Deployment Accelerates

Reconstruction financing is becoming more operational despite wartime constraints. The U.S.-Ukraine Reconstruction Investment Fund has received over 200 applications, selected 22 projects, and built an estimated $1.2 billion pipeline, signaling investable opportunities in energy, infrastructure, dual-use manufacturing, and critical minerals.

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LNG Leverage and Volatility

Higher LNG prices and disrupted Qatari supply have strengthened Australia’s regional energy leverage, but cyclones and domestic policy uncertainty complicate the outlook. Exporters benefit from elevated prices, while manufacturers and energy users face spillover cost pressures and supply volatility.

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Reformas operativas y laborales

Empresas enfrentan cambios regulatorios simultáneos en aduanas, trabajo y gobernanza electoral. La reforma aduanera exige más digitalización y responsabilidad operativa; la laboral obliga a recalibrar turnos, contratos y costos. En conjunto, aumentan la carga de cumplimiento y la complejidad operativa.

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Interest Rate and Inflation Volatility

The Bank of Canada held its policy rate at 2.25%, but warns geopolitical shocks could still lift inflation and weaken growth. Economists now see 2026 inflation at 2.4%, unemployment at 6.7% and growth at 1.1%, complicating financing, pricing and capital-allocation decisions.

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Industrial Overcapacity Trade Frictions

Beijing’s growth model still favors industrial upgrading and export reliance, deepening concerns over overcapacity in sectors such as EVs, batteries, and clean technology. This raises anti-dumping, tariff, and subsidy-response risks across major markets, pressuring investment returns and export-oriented production planning.

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Export Deregulation and Faster Licensing

New trade regulations effective 1 April simplify export rules for tin, oil and gas, coal, and selected agricultural goods, removing some permit requirements and sanctions. Expanded electronic licensing through the national single window should reduce administrative delays and improve shipment efficiency.

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Expansionary Budget and Debt Pressure

Japan passed a record ¥122.31 trillion fiscal 2026 budget, funded partly by ¥29.58 trillion in new bonds. While supportive for demand, the mix of high debt, rising yields and possible extra energy relief may increase fiscal sustainability and financing concerns.

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US-China Strategic Economic Decoupling

Washington is deepening restrictions on China through Section 301 probes, tougher export controls and investment limits, while Beijing pursues countermeasures. Bilateral goods imbalances are shrinking, but trade is being rerouted through Mexico, Vietnam and Taiwan, complicating sourcing and market access.

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Transnet Logistics Reform Momentum

Freight rail and port reform is the most consequential operational theme. Transnet is opening rail access to private operators, pursuing major concessions and targeting freight volumes of 250 million tons by 2029, easing export bottlenecks that have constrained mining and manufacturing competitiveness.

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Hormuz Transit Control Risk

Iran’s selective control of the Strait of Hormuz is the dominant business risk, with daily ship movements reportedly down about 90-95% from normal levels, raising freight, insurance and inventory costs across oil, LNG, chemicals and containerized trade.

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FDI Surge Reshapes Manufacturing

Registered FDI rose 42.9% year on year to $15.2 billion in Q1, with disbursed FDI reaching a five-year high of $5.41 billion. Manufacturing captured over 70% of total capital, reinforcing Vietnam’s role in electronics, industrial supply chains, and regional production diversification.

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Vancouver Bottlenecks Threaten Exports

A February failure at Vancouver’s 57-year-old Second Narrows rail bridge disrupted roughly $1 billion in daily port trade. With 170.4 million tonnes handled last year, infrastructure fragility is raising supply-chain risk for oil, grain, potash, coal, and broader Indo-Pacific export strategies.

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Energy Investment and Hub Strategy

Cairo is reducing arrears to foreign energy partners from $6.1 billion to about $1.3 billion and targeting full settlement by June. New gas discoveries, Cyprus linkages, and upstream incentives support Egypt’s ambition to strengthen its role as a regional energy and LNG hub.

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Semiconductor and Technology Controls Tighten

US policymakers are moving to intensify semiconductor export controls, including proposed restrictions on DUV lithography tools, parts, and servicing for Chinese fabs. This would deepen technology bifurcation, pressure allied suppliers, and complicate electronics investment, customer access, and long-term innovation planning.

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Sanctioned LNG Discounts Distort

Russia is offering LNG from sanctioned projects such as Arctic LNG 2 and Portovaya at discounts of about 40% to spot prices. This creates opportunistic buying incentives for Asian importers while exposing traders, terminals and financiers to secondary-sanctions and traceability risks.

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Selective but Slower Investment Momentum

First-quarter 2026 investment is forecast at Rp497 trillion, up 6.9% year on year, with downstream sectors still attracting capital from China, Japan, and South Korea. Yet weaker business expectations and geopolitical risk point to more selective, slower foreign direct investment decisions.

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Trade Corridor Realignment Opportunity

Disruption in the Strait of Hormuz is accelerating Turkey’s role in alternative regional logistics. New transit arrangements with Saudi Arabia and a Turkey-Syria-Jordan corridor could reduce maritime dependence, reroute freight flows, and strengthen Turkey’s importance in Middle East supply chains.

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Hormuz Selective Transit Regime

Iran has turned the Strait of Hormuz into a permission-based corridor, with daily traffic falling from roughly 135 vessels to as few as six. Selective access, proposed tolls, and route controls are reshaping shipping economics, contract certainty, and regional market power.

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Carbon Border Levy Frictions

France is pressing Brussels to pause the EU carbon border levy on imported fertilisers, but the Commission has resisted. The dispute highlights rising compliance costs for carbon-intensive sectors and uncertainty for agrifood, chemicals, steel, and import-dependent supply chains.

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Inflation, Rates, Currency Pressure

Urban inflation rose to 15.2% in March, the highest since May, while the pound weakened to about 53.3 per dollar and policy rates remain at 19%. Import costs, pricing strategies, wage pressure, and financing conditions therefore remain challenging for operators.

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Tax Pressure Squeezes Domestic Suppliers

Rising VAT and stricter enforcement are worsening conditions for small and midsized enterprises that support local supply chains. VAT increased from 20% to 22%, and some analysts warn up to 30% of small businesses could close or shift into the shadow economy.

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Reindustrialisation and tariff debate

Calls for broader tariffs on Chinese imports and a tougher review of the China-Australia trade framework signal growing pressure for industrial policy. Even without immediate policy change, companies should monitor rising risks of protectionism, localization incentives, and sector-specific import restrictions.

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Settlement Expansion External Pressure

Approval of 34 new West Bank settlements has intensified criticism from the EU and other partners. This raises medium-term risks of diplomatic friction, selective sanctions, ESG scrutiny, and compliance complications for firms with exposure to Israeli entities or contested territories.

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Defense Spending And Procurement Uncertainty

Political deadlock over a proposed NT$1.25 trillion special defense budget clouds procurement, resilience planning, and business sentiment. Delays in US weapons deliveries and debate over burden-sharing affect perceptions of deterrence credibility, which directly shapes long-term investment risk premiums.

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Extreme Energy Flow Disruption

Hormuz disruption has sharply curtailed rival Gulf exports while Iran’s own shipments continue, largely to China. Reports show Iraqi exports down more than 80 percent, Saudi flows materially lower, and Brent up about 60 percent, creating major sourcing, hedging, and margin risks.