Mission Grey Daily Brief - December 23, 2024
Summary of the Global Situation for Businesses and Investors
The global situation remains complex, with natural disasters, climate change, geopolitical tensions, and economic crises dominating the headlines. In South Sudan, flooding has displaced thousands, highlighting the vulnerability of the region to climate change. Meanwhile, Cyclone Chido has caused devastation in Mozambique and uncovered tensions between locals and migrants in France's Mayotte. Geopolitically, Russia's threat to European security remains a concern, with Italy's Prime Minister Giorgia Meloni calling for increased border protection and cooperation on broader security issues. In Syria, the fall of the Assad regime has led to delicate manoeuvring between Russia and Turkey, with broad implications for the region. Additionally, Russia's war in Ukraine and its relationship with North Korea continue to impact the Korean Peninsula, while Bangladesh's economic crisis and Thailand's indigenous sea nomads face unique challenges.
Russia's Threat to European Security
The threat posed by Russia to European security is a growing concern, as highlighted by Italian Prime Minister Giorgia Meloni at a meeting of European leaders in Finland. Meloni emphasised that the threat extends beyond the war in Ukraine and includes issues such as illegal immigration, critical infrastructure, and artificial intelligence. She called for increased border protection and cooperation on broader security issues. This comes as some EU members, including Finland and Estonia, have accused Russia of allowing illegal migrants from the Middle East and elsewhere to enter EU countries without proper checks.
Businesses and investors should monitor the situation closely, as it could impact the stability and security of the region. It is essential to consider the potential implications for supply chains, critical infrastructure, and the movement of goods and people.
The Fall of the Assad Regime in Syria
The fall of the Assad regime in Syria has triggered a new round of delicate geopolitical manoeuvring between Russia and Turkey. With Ankara backing the victorious rebels and Moscow suffering a blow to its international influence, the personal relationship between Putin and Erdogan will be tested, despite their shared economic and security interests. The two leaders have a history of both cooperation and competition, with Turkey emerging as Russia's key gateway to global markets after Western sanctions were imposed on Russia following its invasion of Ukraine.
Businesses and investors with interests in the region should closely monitor the evolving relationship between Russia and Turkey. The potential for further tensions or cooperation could significantly impact the political and economic landscape in Syria and beyond.
The Korean Peninsula and Russia's War in Ukraine
The ongoing war in Ukraine and Russia's relationship with North Korea are key factors in the Korean Peninsula's future. Russia has long been a significant player on the peninsula, but its war in Ukraine and North Korea's support for its war economy have complicated the situation. The Russia-North Korea Comprehensive Strategic Partnership Pact commits both countries to provide military assistance in the event of armed aggression, but Russia's credibility has been questioned due to its struggles in Ukraine.
Businesses and investors should remain vigilant as the situation on the Korean Peninsula remains fluid. The potential for a settlement is contingent on the outcome of the war in Ukraine, and any changes in the political landscape in South Korea and the United States could provide opportunities for progress.
Bangladesh's Economic Crisis and Thailand's Indigenous Sea Nomads
Bangladesh's economy is in a rapid nosedive, with over one million people becoming unemployed since August 5 and numerous commercial and industrial establishments shutting down due to an acute liquidity crisis. This hamstrings entrepreneurs from opening Letters of Credit for importing essential raw materials and other items required for sustaining businesses. Dozens of 'buying houses' that coordinated the procurement of readymade garments from local factories for large buyers—mostly in the United States, Britain, and EU nations—have closed their offices. This is primarily driven by mob anarchy, rampant extortion, threats, intimidation, and a hostile environment that discourages foreign nationals, particularly Indians, from remaining in the country.
Thailand's indigenous sea nomads, known as the Moken, are facing challenges to their traditional way of life. The Moken are one of the various tribal groups and indigenous communities not formally recognised by the Thai government. Activists from these communities have pushed for formal recognition with a bill that would help them hold on to traditions. The latest draft of this proposed bill, called the Protection and Promotion of Ethnic Groups’ Way of Life, was tabled by Parliament. The bill would legally guarantee these communities’ basic rights, such as health care, education and land, as well as government support to preserve their ethnic identities.
Businesses and investors with interests in Bangladesh and Thailand should monitor the situation closely and consider the potential impact on their operations. The economic crisis in Bangladesh and the struggles of the Moken community in Thailand could have significant implications for local and international businesses.
Further Reading:
Bangladesh stirring trouble to hide crisis - The New Indian Express
Cyclone Chido death toll rises to 94 in Mozambique - Northeast Mississippi Daily Journal
How overflowing River Nile is forcing thousands to survive on edge of canal - The Independent
Thailand’s ‘sea nomads’ forced to switch life on the ocean for land - The Independent
Themes around the World:
Supply Chains Strained by Workforce Loss
Widespread displacement, conscription, and casualties have reduced Ukraine’s workforce and damaged logistics infrastructure. These factors contribute to ongoing supply chain disruptions, limiting service coverage and production capacity, with a challenging outlook for 2026.
EU-US Trade Deal at Risk
The tariff dispute jeopardizes the recently negotiated EU-US trade agreement. Suspension or collapse of the deal would undermine market access, investment flows, and regulatory cooperation, with broad negative implications for Finnish and European businesses.
US Foreign Investment Scrutiny Rises
Foreign investment in the US faces heightened scrutiny, particularly in strategic sectors and from Chinese investors. Regulatory barriers and national security reviews are increasingly shaping cross-border M&A, technology transfers, and capital flows.
Domestic Economic Policy and Inflation Management
Turkey’s central bank continues cautious monetary easing as inflation falls to 30.9% in late 2025, with targets of 16% for 2026. Policy predictability, declining inflation, and supportive infrastructure investments are expected to foster a more stable business environment, though volatility remains a concern.
FDI Attraction And Industrial Ecosystems
Vietnam ranks among the world’s top 15 FDI destinations, leveraging administrative reform, ESG-compliant infrastructure, and integrated industrial parks. Enhanced support services and financial incentives are driving sustainable industrial development and long-term investor retention.
Continental Infrastructure and African Integration
Egypt prioritizes infrastructure-led economic integration across Africa, leading projects like the Lake Victoria-Mediterranean corridor. These initiatives enhance intra-African trade, create new supply chain routes, and position Egyptian firms as key players in continental development.
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.
CUSMA’s Uncertain Future and Renegotiation
The Canada-US-Mexico Agreement faces an uncertain future, with President Trump calling it ‘irrelevant’ and considering separate bilateral deals. The upcoming review could disrupt established trade flows, regulatory certainty, and investment strategies for firms operating in North America.
Infrastructure Expansion and Social Conflict
Major infrastructure projects, such as the Santos-Guarujá tunnel and Amazon waterways, are advancing, attracting foreign investment and improving logistics. However, these projects face social resistance, especially from Indigenous groups, due to environmental and land rights concerns.
Cybersecurity Regulation and Investment Surge
Israel is advancing comprehensive cyber laws and attracting significant investment in cybersecurity startups. New regulations will require real-time reporting of attacks, affecting hundreds of critical companies and shaping compliance, risk management, and business continuity strategies.
Major Overhaul of Investment Laws
Thailand is implementing sweeping reforms to business, visa, and property regulations, including opening select sectors to 100% foreign ownership, easing expat entry, and legalizing same-sex marriage. These measures aim to attract global talent and investment, boosting Thailand’s competitiveness as an international business hub.
Geopolitical Tensions and Regulatory Risks
Canada’s evolving trade strategy heightens exposure to geopolitical risks, including US-China rivalry, cybersecurity concerns, and regulatory divergence. Businesses must navigate shifting alliances, compliance challenges, and potential retaliatory measures as Canada balances economic pragmatism with security and values.
SME Vulnerability and Integration Challenges
Small and medium-sized enterprises, contributing 35% of GDP, remain exposed to global disruptions due to limited access to technology and finance. Adapting to new trade rules and integrating into global supply chains are critical challenges for sustaining SME growth and broader economic resilience.
Escalating US-China Trade Tensions
Renewed tariffs, technology restrictions, and currency disputes have intensified US-China trade friction, disrupting global supply chains and investment flows. Businesses face rising costs, regulatory uncertainty, and increased risk of retaliation, impacting international operations and strategic planning.
Anti-Corruption Reforms Under Scrutiny
High-profile corruption investigations, such as those involving Yulia Tymoshenko, highlight both progress and ongoing challenges in Ukraine’s anti-corruption drive. These efforts are crucial for EU accession but create short-term uncertainty for international investors and partners.
EU Retaliation and Trade ‘Bazooka’ Threat
The EU is preparing over €93–107 billion in retaliatory tariffs and may activate its Anti-Coercion Instrument against the US. This unprecedented step risks a full-scale transatlantic trade war, disrupting UK-EU-US supply chains, investment flows, and undermining the rules-based trade order.
Fiscal Deficit and Tax Policy Changes
Russia’s budget deficit reached 2.6% of GDP in 2025, the highest since 2020, as energy revenues fell. The government raised VAT and other taxes to offset losses, increasing the fiscal burden on businesses and consumers and creating uncertainty for investors and multinational corporations.
Labor Market and Immigration Policy Uncertainty
US labor market tightness and evolving immigration policies continue to affect talent mobility and operational planning. Businesses face challenges in workforce recruitment, retention, and compliance, with implications for productivity and international assignments.
Targeted Sectoral Trade Actions
Beyond country tariffs, the U.S. is signaling sector-focused measures (autos, steel/aluminum, aerospace certification disputes) that can abruptly disrupt specific industries. Companies should expect episodic shocks to cross-border flows, inventory strategy, and after-sales service for regulated products.
ESG and Sustainability Standards Tighten
Germany’s modular building sector is increasingly shaped by strict ESG and sustainability requirements, including CSRD implementation. Compliance with green building standards and lifecycle emissions reporting is now essential for market access, financing, and supply chain integration.
Critical Minerals and Green Transition Partnerships
Brazil and the EU are advancing cooperation on lithium, nickel, and rare earths, vital for the digital and clean energy transitions. This positions Brazil as a key supplier in global critical minerals value chains, attracting investment but also requiring adherence to high transparency and environmental standards.
Transatlantic Trade Deal Uncertainty
The UK-US trade agreement, partially ratified in 2025, faces delays and possible suspension due to tariff disputes. This uncertainty undermines business confidence, complicates market access, and may stall UK export growth, especially in high-value sectors like digital services and agriculture.
Structural Economic Challenges and Reform Agenda
Thailand faces its lowest economic growth in a decade, driven by high household debt, corruption, and an aging workforce. Political parties are prioritizing SME support, anti-corruption, digital infrastructure, and EEC revitalization, but structural reforms remain critical for sustainable long-term growth.
Shadow Economy and Sanctions Evasion
Iran’s reliance on shadow fleets, barter trade, and crypto channels to bypass sanctions has grown. US Treasury actions against crypto exchanges and shipping networks highlight enforcement risks for counterparties and the need for enhanced due diligence in all Iran-linked transactions.
UK’s Pragmatic Engagement With China
Prime Minister Keir Starmer’s visit to Beijing signals a strategic effort to revive UK-China trade ties despite domestic criticism and security concerns. The UK aims to balance economic interests with national security and values, reflecting a pragmatic diversification strategy.
High Unemployment and Labor Market Shifts
Finland’s unemployment rate has reached 10.6%, the highest in the EU, driven by weak domestic demand and structural changes. While tech and green sectors are hiring, traditional industries face layoffs, affecting consumer demand and workforce availability for international investors.
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.
Semiconductor Supply Chain Reshoring
The agreement aims to relocate up to 40% of Taiwan’s semiconductor supply chain to the US. TSMC and peers will build multiple advanced fabs in Arizona, backed by $250 billion in credit guarantees, reducing US reliance on Taiwan and mitigating geopolitical risks.
Resilience and Diversification of Manufacturing
TSMC and other Taiwanese firms are accelerating overseas expansion, notably in the US, Germany, and Japan, to mitigate geopolitical and operational risks. While Taiwan remains the core hub, a gradual shift in advanced manufacturing capacity abroad is underway.
Regional Security Tensions and Military Posturing
US military deployments, threats to the Strait of Hormuz, and Iran’s support for regional proxies elevate the risk of conflict. Any escalation could disrupt global energy flows and insurance costs, directly impacting supply chains and investment risk assessments.
Rising Poverty and Socioeconomic Instability
With poverty rates approaching 45% and unemployment at 7.1%, Pakistan faces severe socioeconomic challenges. This environment increases operational risks, affects consumer demand, and may trigger policy shifts or social unrest impacting business continuity and investment strategies.
Russia-China Trade Faces Headwinds
Bilateral trade between Russia and China dropped 6.5% in 2025, ending a five-year growth streak. Lower oil prices, reduced Chinese demand, and Russian import tariffs on cars contributed. This signals increased vulnerability to commodity price swings and policy shifts for cross-border ventures.
Energy Transition and Power Security
Eskom’s reforms and renewable energy expansion have reduced load shedding, but high electricity costs and grid vulnerabilities persist. Recent tariff relief for energy-intensive industries aims to prevent deindustrialization, yet long-term competitiveness depends on sustainable pricing and infrastructure modernization.
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.
Massive Infrastructure Reconstruction Drive
Ukraine’s large-scale reconstruction, backed by EU and international finance, is creating significant business opportunities in transport, energy, and urban development. However, risks from ongoing conflict and corruption concerns complicate project execution and investment returns.
Energy Transition Investment Challenges
Canada’s energy transition investment fell 8.8% to $33.4 billion, losing its top 10 global ranking. Policy uncertainty and declining EV spending threaten competitiveness. Integrated strategies for renewables, grids, and electrified transport are critical for future growth and investor confidence.