United Arab Emirates: Freight forward.
Also: Iran, Iraq, energy, Armenia, France and China.
UNITED ARAB EMIRATES. Freight forward.
Dubai increases its foothold in African and Russian freight.
Tanzania signed a 30-year deal with UAE maritime firm DP World on Sunday to manage two-thirds of the port of Dar es Salaam. Russian nuclear agency Rosatom announced a joint venture with DP on Tuesday to develop Arctic shipping.
INTELLIGENCE. The Tanzania deal is worth just $250 million but has caused huge domestic concern, with protests and legal action on the basis it would endanger Tanzania’s national sovereignty. The Russia deal doesn’t have a figure attached but likewise has a geopolitical dimension. As sea ice reduces and the reliability of the Suez Canal – 100 miles from Gaza – comes into doubt, routes via Russia and East Africa look more attractive for east-west trade.
FOR BUSINESS. In Tanzania, DP wants to triple revenue and expedite clearance times from 12 hours to one. The UAE is a huge investor in Africa – the fourth largest after China, the EU and the US. Freight is a big part of this and DP has operations in Egypt, Morocco, Senegal and Somalia, among others. Business is likewise brisk with Russia, though the UAE recently told the US it would consider restricting trade in Western-sanctioned goods, including semiconductors.
Written by former diplomats and industry specialists, Geopolitical Dispatch gives you the global intelligence for business and investing you won’t find anywhere else.
IRAN. IRAQ. Danger zone.
For Gaza escalation, look to Baghdad, not Beirut.
Two more rockets landed on Tuesday inside the Ain al-Asad air base, which hosts US and international forces west of Baghdad. US forces in Iraq and Syria had been attacked 13 times in the past week, the Pentagon said on Tuesday.
INTELLIGENCE. Shiite militia Hezbollah is generally seen as the likeliest vector of escalation in the Israel-Hamas war. But with Hezbollah facing constraints within a fracturing Lebanon, and afraid of being overwhelmed by the Israeli Defense Force, look instead to Iraq, whose Iran-backed militias have a freer hand and a more vulnerable Western foe. Tens of thousands of hostile forces surround Baghdad’s Green Zone, still home to hundreds of Western officials.
FOR BUSINESS. US special forces and intelligence assets play a low-key but vital role in holding the remnants of Islamic State in check in Iraq and Syria. Baghdad's pro-Iran elite begrudgingly tolerate their presence – testament to the US’s effectiveness. But if push comes to shove, the US troops stationed there are fair game. This week’s needling is a glimpse of the lethal asymmetric force that could be brought to bear by the shadowy groups on Tehran’s payroll.
With the brevity of a media digest, but the depth of an intelligence assessment, Daily Assessment goes beyond the news to outline the implications.
ENERGY. Winds of change.
Amidst a Middle East crisis, the shift to renewables gathers pace.
An International Energy Agency report on Tuesday predicted demand for fossil fuels would likely peak before 2030, ahead of previous estimates. Renewable energy will likely supply 50% of total energy needs by 2030, up from 30%.
INTELLIGENCE. The annual World Energy Outlook noted the transition to renewable energy was moving quicker than previously forecast. Geopolitics is partly driving the transition as wars in Ukraine and Gaza create energy insecurity. China’s slowdown, as the largest consumer of fossil fuels, is another big factor. As the report notes, growing investment in renewables has similarities to 1970s efforts to conserve oil when faced with supply and price shocks.
FOR BUSINESS. While oil and gas will continue to play a role, and further greenfield investment is still needed after years of neglect, ultimately businesses and consumers want reliable supplies – and fossil fuels no longer guarantee this. As renewable production costs decline, the competitiveness of fossil fuels is also under threat. Potential solid-state battery breakthroughs could further tip the balance, as could cost-effective modular nuclear reactor designs.
ARMENIA. FRANCE. The best form of offence.
France’s defence industry finds a new client.
France announced the sale of air defence assets to Armenia on Monday as Azerbaijan launched drills with Turkey. Emmanuel Macron visited Jerusalem on Tuesday to meet with Benjamin Netanyahu and President Isaac Herzog.
INTELLIGENCE. Armenia will purchase three Ground Master 200 radar systems from French group Thales, according to Defense Minister Sebastien Lecornu. This is a system already used in Ukraine to detect incoming aerial threats. While the move supports French defence exports, there is a political element involved – France has one of the largest Armenian diasporas in the world, and the sale increases Western ties with Armenia as it shifts away from Russia.
FOR BUSINESS. As with the Armenia sale,Macron’s Jerusalem visit was a show of French leadership. It also doesn’t hurt its domestic defence industry, which remains one of the world’s largest exporters but has suffered from a series of cancelled contracts from Australia to Romania. Between 2018 and 2022, France sold arms to around 65 countries and made up around 11% of world arms exports. It is a closing in on Russia but remains a distant third from the US.
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CHINA. Disappearing act.
A senior party member is formally sacked.
Chinese Defence Minister Li Shangfu was removed from his position on Tuesday after months of absence. He was due to host foreign defence representatives at the Xiangshan Forum in just a few days, including a delegation from the US.
INTELLIGENCE. Li’s unsurprising removal follows the sacking of then-Foreign Minister Qin Gang in July. In both cases, the men were conspicuously absent from the public eye for weeks prior. While Li was under US sanctions for having overseen the purchase of Russian weapons, the move is likely related to internal loyalty. The timing is symbolic ahead of the defence forum next week, which Li was due to host. The US has confirmed it is sending a delegation.
FOR BUSINESS. China’s economy is in a slump and it faces challenges in international trade, with export restrictions, investment blocks and moves to lock down IP theft contributing to the economic downturn. And China’s transition to an economy led by domestic consumption is not straightforward. Xi reportedly opposes such a move, fearing it will lead to an unmotivated population. As the moves against Li and Qin show, instability is what China fears above all.