What We're Watching Today, September 6, 2024

Overview

What We’re Watching Today is 1,698 words and an 11-minute read.

Global: US Space Force prepares for risk of space war

The Wall Street Journal profiles the US Space Force, the new military branch that is preparing for potential threats to American military and civilian satellites.

Our Take: The Space Force is part of the Pentagon’s preparation for next generation warfare, defending US assets in space from attack. Those assets include military, scientific and commercial surveillance, reconnaissance and communication satellites, and perhaps offensive space weapons. The Space Force mission is to “deny, disrupt and degrade” enemy space systems if deterrence fails. The US has identified China and Russia as the primary threats to US assets in space. These countries are developing technologies for attacking space systems, reportedly including nuclear-space based anti-satellite capabilities. India, Iran and North Korea also have growing space and counterspace capabilities. While these risks might sound rather futuristic, CSIS’s Space Threat Risk Assessment 2024 reports that jamming and spoofing of global navigation satellite systems and satellite communications signals are occurring regularly, increasing risks to public safety and commercial activity.

Europe: German elections place focus on refugee and asylum policy

Calls for Germany to tighten refugee and asylum policy are no longer limited to far-right political parties. Free Democratic Party leader Christian Linder, one of the three parties that form the government in Berlin, acknowledged that people believe the state has lost control of immigration and asylum policy.

Our Take: Anger in Germany over immigration has been growing, galvanizing support for opposition parties who are staking out hard line policies of stopping migrants at the border and adopting automatic deportation against unauthorized migration. At the end of 2023, there were 3.2 million refugees in Germany, with more than one million Ukrainians. The Federal government has announced stricter migration policies, but Berlin’s actions are constrained by EU law, which, under the Dublin Regulation, requires member states to process migrants at the border where they land. A new EU policy was approved in April 2024 and went into force incrementally starting in June for a two-year transition period. The EU Pact on Migration and Asylum, three years in the making, is intended to establish a common asylum system so member states more equitably share migration responsibilities (“solidarity”), while strengthening security and expediting procedures. The speed of the response is unlikely to match the demand for action, not just in Germany, but other members states experience popular backlash against immigrants through an increasingly zero-sum lens.

Middle East: Red Sea attack impacts on shipping “intensifying”

Global shipping giant Maersk said that the impact on global shipping from attacks in the Red Sea is intensifying.

Our Take: Attacks by the Iran-backed Yemeni militia group the Houthis on shipping vessels in the Red Sea has forced global commerce to reroute shipments away from the sea (a conduit for 30% of the world’s container traffic), resulting in higher freight rates, congestion at ports in Europe and Asia, and even higher emissions resulting from the longer routes. In July, Maersk warned of a “cascading impact” on global shipping; in mid-August, freight rates were more than double what they had been prior to the onset of Houthi attacks, and while they have declined somewhat over the summer, the problem is likely to persist, and could add .7 percentage points to global core goods inflation, by one measure.

Read More: JP Morgan, World Bank, Reuters

Americas: US calls for elections in Haiti dominated by gang violence

In a visit to embattled Haiti, US Secretary of State Blinken told leaders that he hoped to see an electoral council established to organize elections in the coming year. The country is currently led by a UN-appointed prime minister while the country seeks to end devastating gang violence.

Our Take: Holding credible elections in the country’s current state – almost entirely dominated by violent gangs, which international peacekeepers from Kenya have managed only slight progress against – would be complex and potentially impossible, although certainly a good outcome. The US and other Haitian partners worry that prolonged periods without elections could further destabilize and delegitimize the government, pushing the country – currently in the throes of a new migration crisis – further towards failed statehood.

Read More: Reuters, France 24, Foreign Policy [paywall]

Asia-Pacific: Japanese PM Kishida to begin two-day visit to South Korea on Friday

Japanese Prime Minister Fumio Kishida on Friday will make a two-day visit to South Korea and hold a summit with President Yoon Suk Yeol, according to South Korea’s presidential office.

Our Take: The upcoming summit between Kishida and Yoon highlights ongoing efforts to strengthen bilateral relations between two key players in East Asia. The visit, part of their resumed “shuttle diplomacy,” reflects improved cooperation, particularly in areas such as trade, security, and historical reconciliation, with key achievements like resolving disputes over wartime forced labor. As generational attitudes shift, particularly among younger citizens in both countries, economic and cultural ties are becoming more robust, even as historical grievances remain sensitive. The summit holds potential for enhancing regional stability and cooperation, particularly as both nations navigate complex dynamics with North Korea and China.

Read More: Nikkei Asia [paywall], The Economist [paywall], United States Institute of Peace

Africa: South African president says Chinese investments in Africa are not a debt trap

On the sidelines of a China-Africa summit in Beijing this week, South African President Cyril Ramaphosa said that he did not believe Chinese investments were pushing Africa into a “debt trap,” but instead are mutually beneficial for the continent.

Our Take: Ramaphosa’s defense of Chinese investments in Africa, particularly during this week’s China-Africa summit, highlights the complex and evolving relationship between the continent and Beijing. While concerns about a “debt trap” persist, Ramaphosa views China’s pledge of $51 billion in new funding for Africa as part of a mutually beneficial partnership, with infrastructure projects playing a critical role in Africa’s development. However, the lack of transparency and concerns over collateral agreements in Chinese loans remain issues that could strain financial sovereignty and increase geopolitical risk for African nations. The intensification of competition between global powers could risk worsening Africa’s debt crisis, further complicating the region’s economic progress and stability.

Trade and Compliance: US-sanctioned Serbian official meets Putin, says Belgrade will not join Western sanctions against Moscow

Serbia’s Deputy Prime Minister Aleksandar Vulin, a former intelligence chief who is under US sanctions, said during a meeting with Russian President Vladimir Putin on Wednesday that Serbia is a Russian ally and will never impose sanctions on Moscow or join NATO.

Our Take: Serbia’s continued alignment with Russia, as reaffirmed by Vulin, poses a growing challenge to Western efforts to stabilize the Balkans and integrate the region into the European Union. Despite recent steps like Serbia’s purchase of French fighter jets, the country’s refusal to impose sanctions on Moscow and resistance to NATO exemplify its delicate balancing act between Western influence and longstanding ties with Russia. This duality could further complicate Serbia’s EU accession process and exacerbate tensions within the region, particularly as Western countries view Serbia’s ties to Russia as a conduit for malign influence. For businesses operating in or with interests in the Balkans, this entrenched geopolitical divide presents a risk of political instability and strategic uncertainty in the region.

Disruptive Technology: North Korean spies are taking IT jobs to infiltrate US companies

The Wall Street Journal covers a growing trend of North Koreans being hired for hundreds to potentially thousands of low-level information technology jobs and other roles to help Pyongyang steal intellectual property, using stolen identities of foreigners.

Our Take: North Korea’s shift from cyber espionage to embedding operatives as remote IT workers represents a substantial evolution in its strategy to evade sanctions and fund its regime. By exploiting the rise in remote work and AI technologies, North Korean operatives are securing jobs in Western companies, funneling revenues back to Pyongyang while also opening potential security vulnerabilities within corporate networks. This development poses a multifaceted risk to organizations, combining financial fraud, intellectual property theft, and potential cyberattacks, all under the guise of legitimate employment. Companies may face increased pressure to enhance background checks, cybersecurity protocols, and verification processes to address this emerging threat, which has broad implications for both corporate security and international sanctions enforcement.

Read More: Wall Street Journal [paywall], 38 North

Climate Change: AI and Machine Learning to boost weather forecasting techniques

NOAA is investing $100 million for a new high-performance computer system, named Rhea, after the Greek goddess, to power the agency’s physics-based models and provide training data for its AI and machine learning efforts for weather, climate, ocean and ecosystem research to advance climate resiliency.

Our Take: NOAA states that the added computing capacity will advance capacity for weather forecasting and modeling of specific phenomena such as atmosphere rivers, fire weather and hurricane intensification and drought, flood and wildfire prediction. Big tech companies are also investing in private forecasting startups. These emerging forecasting data tools will provide data, that if proven trustworthy over time, can help local governments identify high risk/high impact risk areas to inform decision-making on investing in climate resiliency and safety.

ESG: California forges ahead with 2026 deadline for emissions reporting

California’s legislature rejected a bid by Governor Newsom to delay the implementation of greenhouse gas emissions reporting by two years. Companies must still meet the 2026 deadline to report Scope 1 and 2 emissions data from 2025, with Scope 3 data required in 2027.

Our Take: As the world’s fifth-largest economy and the US’ traditional leader in climate and ESG-related laws, California’s policies often affect corporate behavior nationwide and presage policies in other states. California’s Saturday vote to maintain the 2026 deadline – which will require companies to develop reporting processes for the 2025 fiscal year – could create significant costs for California businesses, but demonstrate the value that some states see in increasing reporting. The two laws that create this requirement are facing ongoing legal challenges.

Read More: Wall Street Journal [paywall], Bloomberg [paywall], Associated Press