Renewable Energy Transition Partnerships

Indonesia is accelerating its energy transition through partnerships with global firms, notably China’s GCL, to develop renewable and waste-to-energy projects. These initiatives support emissions reduction targets and open new opportunities for clean energy investment.

Shifting Trade Partnerships and Flows

Traditional buyers like India and Turkey have reduced Russian oil imports due to sanctions, while China remains the top buyer. These shifts are altering established trade routes, impacting pricing, and increasing uncertainty for global importers and exporters.

Agricultural and Resource Export Diversification

Australia continues to diversify export markets and products, leveraging new trade agreements and investments in minerals, agriculture, and technology. However, exposure to external shocks—such as Chinese trade actions or global commodity price swings—remains a significant risk for international investors and supply chains.

Competitive Tensions and Strategic Alliances

Major French automakers, including Renault and Stellantis, are expanding their electrified portfolios but show reluctance to fully align on joint battery ventures. This rivalry shapes the pace of innovation, localization of supply chains, and the scope for international partnerships.

Political Stability and Investment Climate

Egypt’s government is implementing reforms to attract investment and maintain stability amid regional conflicts and economic pressures. Progress in regulatory frameworks, international partnerships, and infrastructure development is improving the investment climate, though risks remain from external shocks and domestic challenges.

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.

Energy Transition and Infrastructure Investment

Brazil is investing in energy transition projects, including renewable fuels and electric mobility, supported by public-private partnerships. These initiatives enhance supply chain resilience and sustainability, but execution risks and regulatory uncertainty remain.

Political Instability and Budget Deadlock

France faces acute political instability as the government struggles to pass the 2026 budget, risking no-confidence votes and potential snap elections. This uncertainty undermines investor confidence, complicates fiscal planning, and could affect France’s credit rating and business environment.

Environmental and Labor Standards Scrutiny

Foreign investment, particularly from China, faces increasing scrutiny over environmental and labor practices. Regulatory enforcement and community expectations are rising, making compliance with sustainability standards essential for maintaining social license and business continuity.

Inflation Moderation and Economic Stability

After peaking at 64% in 2023, inflation is projected to fall below 20% by end-2026. Economic growth continues, with GDP expanding 3.7% in early 2025. Stabilizing inflation and steady growth support a more predictable business environment for international operations and investment planning.

Semiconductor Industry Resilience and Expansion

Japan is rapidly expanding its semiconductor sector, attracting major investments such as TSMC’s Kumamoto plant and boosting domestic equipment and materials suppliers. This is part of a broader strategy to strengthen supply chain resilience, reduce China dependence, and capitalize on global AI and automotive demand.

Investment Bottlenecks and EEC Land Issues

Land shortages and outdated zoning regulations in the Eastern Economic Corridor (EEC) delay industrial projects and deter foreign investment. The government is fast-tracking reforms, but infrastructure and regulatory bottlenecks remain significant barriers to scaling up high-value manufacturing and technology clusters.

Labor Reforms and Cost Pressures

Mexico’s 2026 labor reforms include a 13% minimum wage increase, mandatory social security for platform workers, and a proposed reduction of the workweek. These changes raise labor costs and compliance requirements, affecting competitiveness and supply chain strategies.

Japan-China Relations and Geopolitical Tensions

Japan’s hardening stance on Taiwan and maritime disputes in the East China Sea have strained relations with China, resulting in economic retaliation and heightened security risks. These tensions complicate trade, investment, and supply chain operations for international businesses with exposure to both markets.

Sanctions Enforcement and Geopolitical Risk

France has escalated enforcement of Russia-related sanctions, including high-profile maritime interdictions. This raises compliance risks for energy, shipping, and finance sectors, and signals a stricter stance on trade with sanctioned entities, impacting supply chain security.

Security Risks and Regional Tensions

Persistent cross-border terrorism, especially from Afghanistan, and heightened tensions with India threaten supply chains, infrastructure, and investor sentiment. Security alliances with China and Saudi Arabia aim to mitigate risks, but instability remains a critical factor for international business operations.

Security Threats from Weapons Proliferation and Smuggling

The widespread availability of illegal weapons, fueled by smuggling from Iran and regional instability, poses a growing national security threat. This environment increases operational risks for businesses, complicates supply chain security, and demands heightened vigilance in risk management and compliance frameworks.

Surge in Foreign Direct Investment

Egypt attracted $12.2 billion in foreign investment in 2025, a 20% increase, reflecting improved investor confidence and economic reforms. The government targets further growth, aiming for $145 billion in exports by 2030 and robust annual export growth.

Robust Public Investment and Infrastructure

The 2026 Investment Program allocates 1.92 trillion TRY to nearly 14,000 projects, prioritizing transport, energy, health, and earthquake resilience. Major railway, logistics, and energy infrastructure upgrades will shape Turkey’s competitiveness and regional supply chain integration.

US Tariffs Spark Transatlantic Crisis

President Trump’s imposition of 10–25% tariffs on UK goods over the Greenland dispute marks a severe escalation in US-UK trade relations. The move threatens UK exports, supply chains, and could trigger recessionary pressures and retaliatory action from the EU, heightening business uncertainty.

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.

Renewable Energy Transition Accelerates

Major projects like the 2 GW Tathra wind, solar, and battery development highlight Australia’s rapid shift from coal to renewables. Fast-tracked approvals and grid investments are transforming the energy landscape, creating opportunities in clean technology but also raising questions about grid reliability and transition costs.

Geopolitical Tensions and Security Risks

China’s persistent claims over Taiwan and frequent military exercises in the Taiwan Strait heighten regional instability. Any escalation could disrupt global electronics, automotive, and defense supply chains, making Taiwan a critical flashpoint for international business risk.

Clean Energy and Green Hydrogen Push

India is emerging as a top destination for clean energy investment, targeting nearly $300 billion by 2030 and aiming for 5 million metric tons of green hydrogen annually. This transition supports economic growth, cost reduction, and supply-chain opportunities in renewables and green tech.

Infrastructure Investment and Bottlenecks

Vietnam plans to secure $5.5 billion in foreign loans for infrastructure in 2026 and aims for $38 billion by 2030. However, persistent bottlenecks in land clearance, project approval, and disbursement threaten timely delivery, impacting logistics, FDI, and supply chain efficiency.

Trade Diversification and Supply Chain Security

Saudi Arabia is intensifying efforts to diversify trade and secure supply chains, especially for critical minerals. New bilateral agreements, regional logistics infrastructure, and upstream partnerships in Africa and Asia are positioning the Kingdom as a strategic connector in fragmented global trade, reducing reliance on single-country suppliers.

Energy Security and Transition Challenges

Vietnam’s drive for double-digit growth faces critical energy constraints. While LNG, offshore wind, and nuclear projects are prioritized, slow project execution, regulatory complexity, and grid integration issues risk power shortages, directly affecting industrial output and supply chain reliability.

Infrastructure Investment and Northern Growth

The UK government’s commitment to £1.1bn in Northern Powerhouse Rail and broader regional development aims to boost productivity, connectivity, and economic growth. However, delivery timelines and funding gaps remain, with business impact contingent on execution and regional coordination.

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.

Financial System Risks and Capital Mobilization

Vietnam’s credit-to-GDP ratio reached 146% in 2025, among the highest globally. Economic growth relies heavily on bank credit and FDI, while domestic private investment remains weak. Authorities stress the need to diversify capital channels, manage inflation, and ensure financial stability to support sustainable long-term growth and investment confidence.

Labor Market Transformation and Demographic Advantage

Vietnam’s young population and rising labor productivity underpin its competitiveness. The government is prioritizing workforce upskilling, digital transformation, and social equity, aiming to sustain productivity growth above 8.5% annually (2026-2030) and maintain its position as a leading manufacturing hub.

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.

Labor Market Reforms and Demographic Pressures

Japan’s aging population and persistent labor shortages are driving new policies to attract foreign workers and accelerate automation. Recent regulatory changes aim to ease immigration and support workforce renewal, directly impacting operational costs, talent strategies, and investment decisions.

Trade Diversification and New Markets

With exports to the US and China declining, Germany is actively pursuing trade agreements with India, Mexico, Australia, and the UAE. This diversification aims to reduce reliance on traditional markets, mitigate geopolitical risks, and unlock new growth opportunities for German exporters.

Retaliatory Tariffs and Trade War Risks

The EU is preparing a €93bn retaliatory tariff package and considering activating its ‘trade bazooka’ anti-coercion instrument. A tit-for-tat tariff spiral could significantly disrupt UK supply chains, raise costs, and depress cross-border investment, with global recession risks rising.

Rising Construction and Compliance Costs

The Shelter Act’s imprecise technical guidelines and lack of clear state subsidies shift the financial burden to developers and buyers. This raises the cost of new projects, complicates financial planning, and may slow new investments, affecting supply chains for shelter materials and construction services.