Return to Homepage
Image

Mission Grey Daily Brief - December 18, 2024

Summary of the Global Situation for Businesses and Investors

The global situation remains complex and dynamic, with several significant geopolitical and economic developments unfolding. In the Middle East, the fall of the Assad regime in Syria has opened a new front for geopolitical competition, with Israel and Turkey seeking to advance their conflicting national and regional security interests. Meanwhile, North Korean troops are fighting alongside Russian forces in Ukraine, killing Russian troops and inflicting heavy casualties. In the Balkans, Russia is losing political influence, as Bosnia and Herzegovina seeks to reduce its dependence on Russian gas. Lastly, US-Iran relations are set to undergo a significant shift with the incoming Trump administration's return to a "maximum pressure" policy.

Geopolitical Competition in the Middle East

The fall of the Assad regime in Syria has opened a new front for geopolitical competition in the Middle East. Israel and Turkey are seeking to advance their conflicting national and regional security interests, with Turkey backing the Sunni rebel group Hayat Tahrir al-Sham (HTS) and Israel taking advantage of the power vacuum to advance its territorial and security ambitions. Turkey's support for HTS has backstabbed Syria's traditional allies, Iran and Russia, while Israel's actions have been denounced by Arab countries who demand Syria's sovereignty and territorial integrity be respected.

North Korean Troops in Ukraine

North Korean troops are fighting alongside Russian forces in Ukraine, killing Russian troops and inflicting heavy casualties. This development comes amid concerns over Russia's deployment of thousands of North Korean troops to retake territory lost to Ukraine, particularly in the Kursk border region. Russia has also deployed a lethal new intermediate-range ballistic missile, which US intelligence predicts could be used against Ukraine again soon.

Russia's Political Influence in the Balkans

In the Balkans, Russia is losing political influence, as Bosnia and Herzegovina seeks to reduce its dependence on Russian gas. The US Embassy in BiH has appealed for the construction of the Zagvozd – Novi Travnik gas pipeline, which would provide a link to the LNG terminal on Krk and serve as a branch of the future Adriatic-Ionian gas pipeline, supplying Bosnia and Herzegovina with gas from Azerbaijan. However, Dragan Čović, the leader of HDZ BiH, has conditioned the project on the establishment of a new company based in Mostar, which would be managed by the HDZ BiH.

US-Iran Relations

US-Iran relations are set to undergo a significant shift with the incoming Trump administration's return to a "maximum pressure" policy. This policy aims to confront Iran both directly and indirectly, through the marginalization of groups like the Houthis that allegedly receive support from the Iranian Revolutionary Guard (IRGC) and other organizations. The Houthis face an inevitable FTO redesignation and a renewed focus by the Trump administration, with Hezbollah in a severely weakened state due to the US-backed Israeli assault on Lebanon.


Further Reading:

A bitter rivalry is emerging in the Middle East between two old adversaries over the future of Syria - The Conversation

North Korean troops take heavy casualties fighting Ukrainian forces, says US - Financial Times

REMEMBER THIS YEAR AND THE NEXT: Russia Will Lose Its Political Satellites in the Balkans - Žurnal

Trump is bringing a hawkish Iran policy back in with him - The Independent

Trump slams Biden over Ukraine's use of US missiles to attack Russia - Euronews

Trump to Russia’s Rescue - The Atlantic

Ukraine-Russia war latest: North Korean forces kill Russian troops as Putin loses ‘1,000 soldiers’ in past day - The Independent

Themes around the World:

Flag

Currency Collapse and Hyperinflation

The Iranian rial has lost over 50% of its value in 2025, with inflation exceeding 42%. This volatility erodes purchasing power, destabilizes pricing, and increases operational costs for foreign businesses and investors.

Flag

Infrastructure Development

Ongoing investments in Thailand's infrastructure, including transportation and digital connectivity, are pivotal for enhancing trade efficiency and attracting investment. Improved infrastructure supports supply chain optimization and integration into global value chains.

Flag

Technological Innovation and Start-up Ecosystem

Israel's vibrant tech sector, known as the 'Start-up Nation,' drives substantial foreign investment and global partnerships. Innovations in cybersecurity, AI, and biotech attract multinational corporations, enhancing Israel's role in global supply chains and investment portfolios, while fostering economic resilience amid regional uncertainties.

Flag

Trade Relations and Regional Integration

South Africa's role in the African Continental Free Trade Area (AfCFTA) and its trade relations with key partners like China, the EU, and the US shape its trade dynamics. Shifts in trade agreements and tariffs impact market access and supply chain configurations for businesses.

Flag

Nusantara Capital City Attracts Investment

The Rp6 trillion state budget allocation and entry of new investors signal growing confidence in Nusantara (IKN) as Indonesia’s future economic hub. Development of commercial, office, and sports facilities is set to accelerate, impacting construction, real estate, and services.

Flag

Humanitarian and Corporate Social Responsibility

US companies operating in or with Venezuela face increasing pressure to address humanitarian concerns and ethical considerations. Corporate social responsibility initiatives influence brand reputation and stakeholder relations, shaping long-term business sustainability in the sector.

Flag

Investment Screening And Competition

Reforms in UK merger control and national security investment screening are intensifying, with stricter scrutiny of foreign investments and competition policy. This creates new compliance demands and could slow cross-border deals, affecting strategic investment planning.

Flag

Infrastructure Development Initiatives

Vietnam's accelerated infrastructure projects, including ports, highways, and industrial zones, improve logistics efficiency and reduce operational costs. Enhanced connectivity supports export growth and attracts multinational corporations seeking reliable supply chain networks, thereby boosting Vietnam's competitiveness in global markets.

Flag

Labor Cost Pressures in Urban Centers

Jakarta faces rising labor unrest over minimum wage levels, with demands to match the high cost of living. Wage disputes and protests may impact business operations, especially in technology, services, and international trade sectors concentrated in the capital.

Flag

Technological Innovation and Digitalization

Adoption of advanced technologies like AI, automation, and blockchain is transforming Australian industries. This digitalization enhances productivity and supply chain transparency but requires investment in skills and cybersecurity measures.

Flag

Defense Industry Expansion and NATO Relations

Turkey is rapidly expanding its defense sector, with over $7.1 billion in exports in 2024 and localization rates exceeding 80%. Ongoing disputes over F-35 and S-400 systems, and potential reintegration into NATO defense projects, directly impact foreign investment and technology transfer.

Flag

Supply Chain Shifts and ‘China Plus One’

Vietnam benefits from supply chain diversification as firms relocate from China, boosting manufacturing and exports. However, dependence on Chinese inputs persists, and a potential US-China trade deal could reverse some gains, challenging Vietnam’s move up the value chain and long-term competitiveness.

Flag

Shifting Alliances and Regional Influence

Turkey’s diplomatic activism, including advanced talks to join a Saudi-Pakistan mutual defense pact and mediation in regional conflicts, is reshaping its alliances. This evolving landscape influences trade policy, investment strategies, and the risk profile for multinational enterprises.

Flag

Labor Market And Productivity Gains

Labor productivity increased by 6.8% in 2025, supported by workforce upskilling and digital transformation. Vietnam’s young, tech-savvy population underpins growth in manufacturing and services, but ongoing skills development and social security reforms are vital for sustainable competitiveness.

Flag

Labor Market Constraints

Germany experiences skilled labor shortages amid demographic shifts and immigration policy challenges. This constrains productivity growth and innovation capacity, influencing foreign direct investment and operational expansion plans, particularly in high-tech and manufacturing sectors.

Flag

Political Stability and Governance

Political shifts and governance quality affect regulatory environments and policy predictability. Recent government initiatives and anti-corruption measures influence investor confidence and the ease of doing business.

Flag

Defense Industry Expansion and Localization

Turkey’s defense industry localization rate has surpassed 80%, with exports exceeding $7.1 billion in 2024. Ongoing investments in advanced military technology and joint production projects bolster its strategic autonomy, impacting foreign investment and international partnerships.

Flag

Currency Stability Amid Economic Pressures

The Egyptian pound has shown relative stability, with the dollar trading around 47.3–47.7 EGP. However, a rising current account deficit and reliance on foreign reserves signal underlying vulnerabilities, affecting import costs, profit repatriation, and business risk assessments for international firms.

Flag

Energy Supply Constraints

Chronic energy shortages and infrastructure deficits hinder industrial productivity and increase operational costs. Energy insecurity affects manufacturing output and deters investment in energy-intensive sectors critical to Pakistan's export capabilities.

Flag

Labor Market Dynamics and Workforce Skills

Turkey's young and growing workforce presents opportunities and challenges. Skill mismatches and labor market regulations affect productivity and operational costs. Businesses must navigate labor laws and invest in training to optimize human capital utilization.

Flag

Geopolitical Risks and Strategic Autonomy

Heightened US-China tensions and US assertiveness in Latin America create uncertainty for Brazil’s trade and investment environment. Brazil’s strategy of balancing relations with both powers, while leveraging its energy and mineral resources, is critical for business resilience.

Flag

Accelerating Foreign Direct Investment Inflows

Vietnam’s FDI surged 8.9% in 2025, reaching $23.6 billion, driven by high-tech manufacturing and green industries. Continued reforms and digital transformation are attracting global investors, but heavy reliance on foreign capital exposes Vietnam to external shocks and geopolitical risks.

Flag

Widespread Unrest and Political Instability

Nationwide protests over economic hardship, corruption, and governance have resulted in at least 15 deaths and hundreds of arrests. The unrest signals rising political risk, threatening business continuity and investor confidence.

Flag

Labor Market Dynamics

A young and growing workforce presents opportunities for labor-intensive industries. However, skill mismatches and labor regulations pose challenges. Companies must navigate labor laws carefully to optimize operational efficiency and maintain compliance.

Flag

Supply Chain Vulnerabilities and Adaptation

Global supply chain disruptions, especially maritime rerouting and energy shortages, have exposed Egypt’s vulnerabilities but also its strategic importance. Companies are reconfiguring logistics and sourcing, with Egypt emerging as a key gateway in the evolving global supply chain landscape.

Flag

Cybersecurity Threat Landscape

As a global cybersecurity hub, Israel faces sophisticated cyber threats that can disrupt business operations and supply chains. Proactive cybersecurity measures and public-private partnerships are critical to safeguarding assets and maintaining investor trust in the digital economy.

Flag

Nusantara Capital City Development

The government allocated Rp6 trillion for the new capital, Nusantara, focusing on transparent governance and strategic infrastructure. This project attracts global investors, reshapes regional logistics, and creates new opportunities for construction, services, and technology firms.

Flag

Foreign Direct Investment Surge

FDI in Vietnam rose 8.9% to $23.6 billion in 2025, with manufacturing accounting for 82.8%. High-tech, green industries, and logistics attract multinational corporations, reinforcing Vietnam’s role as a strategic hub in global supply chains and boosting long-term investment prospects.

Flag

Financial Sector Stability and Regulation

France's robust financial sector, underpinned by regulatory reforms, supports international banking and investment activities. Stability in this sector is crucial for capital flows and risk management for multinational enterprises operating in Europe.

Flag

Geopolitical Positioning within EU and NATO

France's strategic role in EU policymaking and NATO shapes defense spending and international partnerships. This geopolitical stance affects defense industry investments, cross-border collaborations, and stability perceptions critical for business operations and international trade relations.

Flag

Infrastructure Development and Connectivity

Turkey's ongoing investments in infrastructure, including ports, logistics hubs, and transportation networks, enhance its role as a trade corridor. Improved connectivity facilitates supply chain efficiency but requires businesses to monitor project timelines and political support to leverage these advantages fully.

Flag

Organizational Transformation and Innovation

Korean companies are accelerating organizational transformation to stay competitive globally, especially in tech and manufacturing. Consulting demand is high for change management, digitalization, and governance reforms, impacting cross-border M&A and operational strategies.

Flag

Rapid Export Growth And Surplus

Vietnam achieved an 18% year-on-year trade growth in 2025, with exports reaching $475 billion and a trade surplus over $20 billion. This robust export performance, led by processed goods, strengthens macroeconomic stability and investor confidence, supporting supply chain resilience.

Flag

Energy Export Dependencies

Russia's economy heavily relies on energy exports, especially oil and gas. Fluctuations in global energy prices and geopolitical tensions affecting pipeline routes influence international supply chains and energy security strategies, impacting global markets and investment decisions in energy infrastructure.

Flag

Currency Volatility and Inflation

The Iranian rial experiences significant volatility and inflationary pressures, undermining economic stability. This environment complicates financial planning and risk assessment for foreign investors and companies conducting business in Iran.

Flag

Regulatory Reforms and Ease of Doing Business

Recent government initiatives to simplify regulations, improve transparency, and streamline business processes have improved India's ease of doing business rankings. These reforms reduce operational risks and costs for foreign investors, facilitating smoother market entry and expansion.