Economics and Energy

The global economy operates under cyclical phases of monetary tightening and easing, often contrary to the business cycle. In periods when business activity reaches its lowest ebb and teeters on the edge of recession, expansionary monetary policy is implemented to redirect this downward trajectory, averting a slide into economic contraction. This approach prevents the economy from experiencing a sudden surge in growth, which could push it toward unsustainable heights. Conversely, contractionary monetary policy is deployed to rein in unchecked growth, preventing it from spiralling into inflationary pressures that could erode economic progress and deplete citizens' savings. By tempering both extremes, monetary policy strives to maintain a stable path of moderate growth that ensures long-term national economic health without tipping into volatility or stagnation.   Monetary policy tools tend to operate similarly across global economies, with one critical exception: the influence of the U.S. Federal Reserve. The Fed’s actions transcend the U.S. market, shaping global financial conditions. For instance, a decision to hike interest rates in the United States has far-reaching effects on consumer spending globally, even if these impacts manifest indirectly. This global ripple is acutely felt in African nations, where populations are particularly vulnerable to the consequences of U.S. monetary tightening, notably during interest rate hikes. This analysis, therefore, seeks to explore the relationship between the Federal Reserve’s tightening of monetary policy over the past three years and the subsequent waves of instability that have spread across the African continent. These effects continue to play out at the time of writing, despite recent signals that the Fed may shift once again toward a more expansionary stance.

The Russia-Ukraine war has now entered its 18th month, with neither side achieving decisive strategic or operational control, bringing the conflict closer to a protracted stalemate rather than a resolution at the negotiation table. This prolonged uncertainty suggests that the war may continue for several more months before either party considers a truce. A similar situation is unfolding in Gaza, where the war is now in its ninth month, making it one of the longest wars in the history of the Arab-Israeli conflict, rivalled only by the wars surrounding the establishment of Israel and the War of Attrition with Egypt. Here, too, there is little indication that a resolution or even a willingness to negotiate a truce is forthcoming from either side. The possibility of a decade marked by extended wars looms on the horizon, especially if a conflict were to break out between China and one of its neighbours, whether in the Taiwan Strait or the South China Sea. This scenario is increasingly plausible given the United States' (U.S.) involvement in regional and international political and economic skirmishes directly targeting Chinese interests.   The current and anticipated wars share two key characteristics, in addition to the fact that they have taken or may take longer to resolve than expected. Firstly, they are occurring or expected to occur in regions of immense strategic importance to the world, such as the Great European Plain—one of the world's most fertile areas and a major grain-producing region—or in the heart of the Middle East, a critical juncture for global trade and energy routes. Secondly, these wars are not merely between individual countries or parties but involve broader alliances. For instance, in the Russia-Ukraine War, North Korea and Iran are indirectly aligned with Russia, while NATO supports Ukraine. Similarly, in the Israel-Hamas War, the U.S., Britain, and France are aligned with Israel, whereas Iran, Hezbollah, the Houthis, and numerous Shiite militias in Iraq and Syria support Hamas.   These two characteristics have imparted the ongoing wars with traits that, to some extent, echo those of the First and Second World Wars, particularly in terms of the intense consumption of ammunition and the resulting high death rates among the warring parties, as well as the extended length of the engagement lines. As a result, both wars have begun to consume vast quantities of ammunition and conventional weapons, especially artillery shells, to the point where the stockpiles of the forces involved have been significantly depleted or are nearing exhaustion. This depletion has made the replenishment of supplies inevitable, transferring the pressure of the battlefield to the production lines in factories. However, these factories have frequently struggled to meet the front lines' demands or replenish stockpiles, leading to a severe shortage of ammunition on all fronts for all parties involved.   This scarcity has transformed the war into a series of industrial battles, where the side with greater industrial capacity gains the upper hand by supplying its forces with more ammunition, thereby securing a tactical advantage. As a result, industry has become a direct and critical component of national security in its most narrow sense. Consequently, this analysis examines the impact of industrial capacity on the Russia-Ukraine war, focusing specifically on the artillery capabilities of both sides.

The stock market dropped significantly on Aug. 5, 2024, following a period of high volatility. Concerning economic indicators from the United States (U.S.) and an unexpected interest rate hike by the Bank of Japan were major factors in this collapse. Major world indexes experienced a severe drop, but they recovered within 24 hours. Even with this rapid recovery, the incident may be a hint that the world economy is about to slow down.

The term “unification of arenas” emerged in the discourse of the Arab-Israeli conflict following the 2021 Sword of Jerusalem Battle. This military and ideological strategy is primarily linked to Iran’s regional proxies within the “axis of resistance.” This coalition includes Hezbollah, Hamas, the Houthis, and various Iranian-backed militias in Syria and Iraq. Its objective is to enhance operational coordination among these groups to counter Israel and diminish American influence in the region, aligning with Iranian strategic interests. The approach involves launching simultaneous actions across different fronts, including Lebanon, Gaza, and Yemen, to orchestrate a unified battle against common adversaries, particularly Israel and the United States (U.S.).   While this strategy had been employed on a limited scale prior to October 7, it achieved unprecedented levels of coordination following these operations. The execution involved dividing targets within Israel, with coordinated attacks from Gaza, Lebanon, Iraq, Syria, and Yemen. This meticulous synchronisation and sequence of missile and drone strikes overwhelmed Israeli air defences, with some attacks originating from Yemen and reaching targets in Tel Aviv.   These agents, particularly the Houthis, did not limit their actions to threatening Israeli facilities. Their strikes extended to disrupting navigation in the Bab El Mandab Strait off the Yemeni coast. The Houthis conducted numerous attacks on ships they claimed had ties to Israel, whether through state ownership, ownership by individuals with Israeli citizenship, or simply passing through Israeli ports. This broad targeting strategy encompassed a significant portion of the traffic in this crucial strait for global trade, particularly affecting Arab oil-exporting countries and Egypt, which relies heavily on the Suez Canal for its maritime traffic. As a result, shipping routes have shifted from the Suez Canal to the Cape of Good Hope, prompting long-term strategic transformations and immediate economic repercussions for the Arab countries involved. This analysis aims to assess the Bab El Mandab Strait's importance for Arab countries and explore the strategic implications of its disruption on their economies.

With GDP of more than $1 trillion USD, Saudi Arabia is the largest economy in the Middle East. A country well-known for its enormous oil reserves has been making significant steps to alter its position in the global economy. These reforms are part of a bigger plan to diversify the country’s economy and lessen its dependency on oil revenues. Consequently, the evolving economic landscape of Saudi Arabia will be explored, with a focus on its diversification efforts, investment strategies, and the obstacles it must overcome to emerge as a global leading economy.

With solid inflows from the United Kingdom (U.K.) and Europe, the United Arab Emirates (UAE) has become the top global destination for wealth, attracting businesses, investors, and high-net-worth individuals (HNWIs) for the third year in a row. The UAE’s strategic blend of political stability, a welcoming cultural environment, a thriving real estate market, favourable tax regulations, and economic stability accounts for its resurgence as the top destination for affluent individuals in 2024. Strengthening its position as a leading hub for investment and wealth migration, the country’s forward-thinking vision and dedication to innovation and development ensure its sustained appeal to global wealth. The UAE is expected to gain significant economic advantages as more wealthy individuals and their families relocate there, thereby increasing the country’s appeal and influence on a worldwide scale.

On June 19 and 22, Hezbollah released two recordings showing high-resolution aerial images, catching Israeli security authorities and regional observers off guard. Apparently captured by a drone flying at medium to low altitudes, the footage highlighted security and strategic sites, including fuel storage facilities, thermal power stations predominantly located in Haifa, and the city's docks. This move underscored the potential reach of Hezbollah's missiles and drones to critical Israeli energy infrastructure.   The release triggered widespread speculation about Hezbollah’s missile capabilities, with analysts suggesting these missiles could directly strike the highlighted facilities. Such an attack could further destabilise Israel's economy, which is already experiencing significant challenges. The current economic situation is considered one of the worst in Israel's history, rivalled only by the first two decades after the state's founding and the Yom Kippur War.   On the other hand, many of these analyses have overlooked the Israeli electrical grid's distribution of generation stations, electrical load, maximum voltage, and generation sources, leaving the assessment incomplete. Even if Hezbollah’s missiles were to reach these stations and hit their targets with enough power and accuracy to disable them, it does not necessarily mean the entire electrical grid would be taken out of service or significantly reduce its capacity to produce electrical energy, which could impact daily life in Israel.   This analysis aims to review the generation stations, their capabilities, and their locations within Israel to investigate the potential impact of Hezbollah’s anticipated attacks on these facilities.

European Parliament (EP) elections have historically garnered less interest from European voters,* as domestic issues have typically dominated their concerns. Consequently, topics such as defence and security have seldom been central to European election campaigns. However, this situation has changed dramatically in recent sessions. The influx of refugees arriving on European shores and the ominous threat of war looming over the continent have shifted the focus. As a result, Europe now finds itself precariously close to a crisis that threatens to undermine the development and reconstruction efforts of the past seventy years.   Therefore, regional issues began to be politicised and exploited in European Parliament elections as security and defence issues became more urgent. Parties shifted away from discussing the Union's broader policies, focusing instead on these pressing issues, which started to play a significant role in shaping voter preferences. Consequently, these topics became more influential in determining electoral outcomes at various local government levels, ultimately impacting decisions at the level of the European Union (EU).   This analysis examines the positions and attitudes of the main groups within the European Parliament on crucial defence issues facing the EU and how these positions are reflected in the political formulation of their policies.

China, despite being the second-largest economy globally, encounters challenges such as a distressed real estate sector, reduced domestic consumption, and high debt levels. In response to these obstacles, the government is enacting policies aimed at encouraging domestic spending, mitigating the real estate downturn, and cultivating innovation to ensure sustainable development. The way these measures are implemented will not only impact the economic trajectory of China, but also that of the entire world.

The world economy is at a turning point, with a visible tendency to reverse the integration that was seen in the last decades of the 20th century. Growing scepticism about the benefits of globalisation, particularly in developed countries, accompanied the sluggish recovery after the Global Financial Crisis (GFC). This uncertainty led to a purposeful policy change away from integration known as geoeconomic fragmentation (GEF). A variety of policies impacting capital flows, worker mobility, and trade are included in GEF. GEF policies are motivated by a variety of factors, such as correcting internal economic inequities, economic competition, and national security concerns. Foreign direct investment (FDI), which has been declining recently, particularly in emerging countries, is another indication of how this trend toward GEF has affected FDI and the need for quick action to reverse it.

The Iranian Revolutionary Guard's Air Force made a historic move by launching a direct assault on Israel in an operation dubbed "The True Promise," marking the first instance of such an attack originating from Iranian territory. Late on Saturday, April 13, 2024, Israeli cities were subjected to a relentless barrage of drones and ballistic missiles, signalling a significant escalation in tensions between the two nations. This offensive action follows Iran's earlier pledge to retaliate against Israel for its targeting of the Iranian consulate in Damascus, an incident that resulted in the deaths of seven Revolutionary Guard members, including two high-ranking leaders, on April 1.   This calculated escalation underscores Iran's unwavering commitment to defending its sovereignty and national interests while bolstering regional security. The global spotlight now shifts to the scale, sophistication, and broader implications of Iran's strike against Israel.   The Iranian assault on Israeli soil marks a pivotal moment in the ongoing conflict between the two adversaries, thrusting their hostilities from the shadows into the open arena of direct confrontation.   Against this backdrop, the Israeli response hinges on several key factors. Firstly, the extent to which Iranian proxies, such as the Houthis and Hezbollah, may actively participate in the conflict will influence Israel's strategic calculus. Secondly, the response will be shaped by the presence or absence of casualties among Israeli forces, as well as the effectiveness of its defence systems, bolstered by support from the United States, in mitigating potential damage. Lastly, how Israel opts to retaliate will be of paramount importance in determining the trajectory of the conflict.   Consequently, this analysis aims to elucidate the attack's ramifications and its economic repercussions on the parties involved in the conflict.

The dynamics between the Haredi Jewish community and the state of Israel are intricate and peculiar, shaped by many complex factors. Despite their historical opposition to the state's establishment and its Zionist underpinnings, they have emerged as prominent beneficiaries within Israeli society. Despite their active involvement in politics, with dedicated parties and ministerial representation in successive Israeli governments, the Haredi community seeks to diminish government authority over them. They maintain superficial compliance while preserving their self-organised societal structures.   These contradictions have been a continual source of critique within Israeli society since the State's inception. Successive Israeli administrations have consistently granted numerous privileges to the Haredi Jewish community, influenced by their political and religious sway. Chief among these privileges is their exemption from mandatory conscription, unlike other societal groups, accompanied by various financial incentives. However, the landscape is poised for significant transformation following the Gaza war.   This analysis aims to delve into the economic traits of the Haredi Jewish community and explore their broader economic impacts on Israeli society.