Israel, Saudi Arabia: Tours de force.
Also: the US, China, Poland, Costa Rica and the Korean Peninsula.
Please note that Geopolitical Dispatch will take a break on Thursday and Friday this week. Our usual weekend Not in Dispatches will be published on Saturday.
ISRAEL. SAUDI ARABIA. Tours de force.
Seemingly routine visits hold a deeper significance.
Israel’s tourism minister arrived in Saudi Arabia on Tuesday for a UN conference. Saudi Arabia's first ambassador to Palestine arrived on Tuesday, saying a land-for-peace offer would be needed for Riyadh to normalise ties with Israel.
INTELLIGENCE. Although the visits hardly tackle any of the difficult issues needed for Israel and Saudi Arabia to establish diplomatic relations, they are significant. Haim Katz is the first Israeli minister to officially visit Saudi Arabia. Nayef Al-Sudairi, while non-resident, is Riyadh's first official envoy to Ramallah and has also taken the designation of "consul-general in Jerusalem". Netanyahu told the UN last week Israel was “on the cusp” of a deal with Saudi Arabia.
FOR BUSINESS. As part of a possible deal, Saudi Arabia is asking the US for a mutual defence pact, as well as Israeli concessions on Palestine. These will be hard to agree, but normalisation could release a flurry of investments in both directions, unlocking vast Saudi capital for Israel and Israeli know-how for Saudi Arabia. It could also push along Washington’s vaunted economic corridor from India to Europe, including rail through Saudi Arabia, the UAE and Israel.
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UNITED STATES. CHINA. Labouring the point.
Further enforcement of supply chain rules.
Washington imposed further restrictions on three Chinese exporters on Tuesday based on allegations of forced labour of Uyghurs and other minorities in Xinjiang. The UN on Tuesday criticised China for forced assimilation in the province.
INTELLIGENCE. The move is part of an ongoing effort by the US Department of Homeland Security to improve the standards of US supply chains and clamp down on forced labour. Three companies based in Xinjiang, in China’s far west, were added to the Uyghur Forced Labor Prevention Act entity list. The companies allegedly worked with provincial authorities to recruit or transport workers, including Uyghurs, Kazakhs, Kyrgyz, and other Muslim minorities.
FOR BUSINESS. There are now 27 entities on the entity list, following an August listing of two additional Chinese-based companies. Businesses are likely to see increasingly more onerous rules on supply chains and greater obligations to compile supply chain information and train staff. Canada also recently implemented rules that come into effect next year, on the back of similar legislation recently passed by Australia, France, Germany, and the UK.
With the brevity of a media digest, but the depth of an intelligence assessment, Daily Assessment goes beyond the news to outline the implications.
UNITED STATES. POLAND. Seesaw.
Washington wants to keep Warsaw in its corner.
The US gave Poland a rare offer on Monday for a $2 billion loan to upgrade its military. Under nationalist pressure, Warsaw on Tuesday sought to extradite a 98-year-old Ukrainian Nazi Ottawa and Kyiv inadvertently honoured on Friday.
INTELLIGENCE. Poland’s equipment is largely Soviet-era and Warsaw is looking for the latest available from South Korea and the US. A recent spat with Ukraine about the provision of arms to fight Russia is more than likely pre-election rhetoric, but the US is not taking chances, with a recent surge for far-right nationalist party Confederation, which may be less keen on the war. Poland has been one of Ukraine’s surest partners, with aid exceeding $4.5 billion.
FOR BUSINESS. The loan comes with an extra $60 million for costs, including administration, to support the procurement of defence services and equipment from the US, representing a direct boon for Poland, as well as US defence firms. Poland wants to spend 4% of its GDP this year on defence, which is twice the commitment required from NATO. This would put it first among NATO allies on spending as a share of GDP, ahead of Greece and the US.
COSTA RICA. Migration patterns.
Refugee numbers cause a new state of emergency.
Costa Rica ordered a state of emergency on Tuesday as the number of migrants passing through the Central American nation rose 55% over the previous month. The president on Saturday said he would visit Panama to discuss the crisis.
INTELLIGENCE. The International Organization for Migration estimates 84,490 people entered Costa Rica in August, passing through the southern border town of Paso Canoas, shared with Panama, which is normally home to just 20,000. So, far Costa Rica has seen around 250,000 migrants pass through in 2023. The rising numbers has caused heightened tension, including recent riots usual for the relatively peaceful state. Homicides are also at record highs.
FOR BUSINESS. Violence, poverty, and unstable regimes, particularly in Venezuela, have driven the surge, with the destination usually an attempt at the US. But for transit countries like Costa Rica, the movements have also brought gangs and political unrest. The problem is expected to worsen following Washington’s announcement last week of temporary protection status for thousands of Venezuelan migrants, after pressure from mayors and business groups.
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KOREAN PENINSULA. Rain on your parade.
South Korea responds to the North in a common language.
South Korea held a rare military parade on Tuesday, displaying tanks, weapons, and artillery, as part of the biggest Armed Forces Day ceremony in ten years. Nearly 7,000 troops took part, in addition to 340 pieces of military equipment.
INTELLIGENCE. President Yoon Suk Yeol is taking a firmer stance on South Korea’s approach to the North. The celebrations included joint flyovers by US and South Korean air forces, in a show of solidarity. Additionally, more than 300 American troops joined the parade. The show of force comes on the back of Pyongyang’s appearance at the UN last week, where it denounced Seoul and said Washington had made 2023 an extremely dangerous year.
FOR BUSINESS. North Korea continues to assert its need to build up self-defence capabilities to prevent an attack from the US. But Washington is well aware of the deep economic impact a conflict on the Peninsula would have on its own economy. South Korea remains one of the largest importers of American agriculture, and South Korea is still one of the largest suppliers of specialised intermediate parts for the US auto and technology sectors.