From commitments to implementation

This week in a brief

Several developments that have been building for months moved this week from statements and contacts to action. The Makkah Pact was invoked for the first time after the attacks on Saudi Arabia, Riyadh returned to a broad air campaign in Yemen, and the United States is still massing forces facing Iran, even as a mediation channel remains open. In Africa, the renewed war in Tigray has driven Ethiopia and Eritrea to cut ties. China is expanding its military presence in Laos, the European Union is escalating its trade dispute with Beijing, and governments are turning to new institutional measures to cope with energy prices and borrowing costs. On the political front, Brazil faces a tight runoff, Spain is heading for early elections, and France is grappling with nationwide protests.

Geopolitical Dynamics

The Makkah Pact is invoked for the first time: Meeting in Riyadh on October 5, ministers from Saudi Arabia, Turkey and Pakistan agreed to trigger the “collective deterrence measures” of the defense pact signed in August and to rapidly deploy forces and capabilities to Saudi Arabia. Turkey made clear that its support will be defensive and technical only, with no troops, and Pakistan, too, will play only a supporting role. This first activation turns the pact from a statement of intent into a working security mechanism against the Houthi attacks.

Ethiopia and Eritrea cut ties as war returns to Tigray: On October 1, hours after explosions in Addis Ababa, Ethiopia closed its embassy in Asmara and expelled ten Eritrean diplomats. Eritrea responded by severing all relations, and Ethiopia also expelled an Egyptian diplomat. The Ethiopian army reportedly retook Mekelle on October 5. The two countries fought side by side against Tigray in 2020–2022; they are now on opposite sides of the conflict. Eritrea borders Tigray, and Egypt, at odds with Ethiopia over the Grand Ethiopian Renaissance Dam, is being drawn into the crisis as well. That raises the risk of an internal war becoming a regional conflict in the Horn of Africa, close to vital Red Sea shipping lanes.

Washington tries to get Russia and Ukraine back to the table: According to Zelenskyy, the United States has proposed three-way technical talks before the end of October, possibly in the United Arab Emirates. They would cover a halt to strikes on energy infrastructure, as well as Black Sea shipping and humanitarian issues. Kyiv is on board; Moscow has yet to confirm. Chancellor Merz, meanwhile, visited Kyiv and announced roughly €1 billion in new military aid and €350 million for energy infrastructure, plus 15 agreements worth more than €8.5 billion covering air defense, radars and drone interception. All this comes as both sides keep stepping up the pressure on each other.

Chinese attack aircraft spotted at the joint military facility in Laos: Satellite imagery from September 30 shows eight JL-8/K-8 light attack aircraft and more than two dozen vehicles at the joint China–Laos training facility, about 50 kilometers north of Vientiane. Beijing says the site is used to train local pilots and is not directed at any third party, but the arrival of attack aircraft lends weight to assessments that China is building a more permanent military presence in Southeast Asia.

Security and Threats

Saudi Arabia returns to full-scale war in Yemen: On October 5, Saudi-backed Yemeni government forces launched Operation “Dawn of Yemen” along the Red Sea coast and retook Dhubab, near Bab el-Mandeb. The Houthis retaliated with strikes on the airports in Riyadh and Abha that killed three people, and fired missiles and drones at Aden airport. The Yemeni government claims to have regained control of the Bab el-Mandeb Strait and its coastline; the Houthis deny it.

Suspicious death at a plague research institute in Irkutsk: A 28-year-old lab worker at the Plague Research Institute of Siberia and the Far East has died of “pneumonia of unknown origin,” and around 200 contacts have been isolated or placed under monitoring. Russian media alleged exposure to pneumonic plague, but Moscow told the World Health Organization that no plague cases had been recorded and there was no evidence of a lab accident. The WHO judges the risk to the public to be low but is still seeking clarification, including on a report that a second worker has fallen ill. It is Russia’s concealment that is fueling international fears of a global pandemic.

Pakistan–Afghanistan border fighting enters its third week: Nuclear-armed Pakistan accuses Afghanistan’s Taliban government of harboring the Pakistani Taliban (TTP), which carries out attacks on Pakistani soil, and in recent weeks it has gone from threats to airstrikes inside Afghanistan. Islamabad says the strikes killed 22 militants; Kabul and the UN report civilian deaths. Afghanistan hit back with strikes in Balochistan, and Pakistan said it shot down eight drones near the border. Meanwhile, a car bomb claimed by the TTP killed at least 11 people at a police checkpoint in Dera Ismail Khan.

Economy, Technology and Trade

The G7 releases 100 million barrels from emergency stocks: The release, coordinated with the International Energy Agency, will be phased over four months, with most of the diesel delivered in the first 20 days. The countries involved have pledged not to impose export bans on one another.

The EU presses China over the trade imbalance: At the trade council in Beijing on October 8–9, China rejected a proposal for voluntary limits on plug-in hybrid exports, leaving the EU’s option of imposing a cap itself on the table. Brussels also wants predictable licensing for rare earths and an extension of China’s suspension of the restrictions, which expires on November 10. Europe’s trade deficit with China runs at roughly €1 billion a day.

The US shifts its pressure on Iran from sea to land: On October 1, the US Treasury sanctioned carmakers Iran Khodro and SAIPA and Iran’s railway authority, alongside sectoral sanctions determinations. With the naval blockade already hurting Iranian trade and aviation also hit by sanctions, Washington is now going after industry and overland transport.

The IMF warns global public debt is nearing its highest level since World War II: Ahead of the IMF and World Bank annual meetings in Bangkok, global public debt was projected to exceed 100% of world GDP before 2030. In other words, the world’s governments would owe more than the entire global economy produces in a year. The Fund’s managing director warned that the energy shock, massive investment in artificial intelligence and tariffs could rekindle inflation, and urged central banks not to rush into rate cuts. The bottom line: interest rates that stay higher for longer make debt more expensive to service and leave governments with less to spend on defense, welfare and crisis response.

The African Union launches its own credit rating agency: The agency is meant to offer an alternative to the Big Three rating agencies. Only three African countries currently hold investment-grade ratings, Botswana, Mauritius and Morocco, and a 2023 UN report estimated that unfair ratings cost the continent $24 billion in excess interest. The real test will be its independence, especially in a crisis.

Crises and Domestic Politics

Brazil heads to a tight runoff: Flávio Bolsonaro finished first with 47.03% to President Lula’s 45.16%, sending the race to a second round on October 25. The contest is being cast as a choice between Lula’s strategic autonomy and closer alignment with Trump.

Spain heads for early elections: Prime Minister Sánchez has called a snap election for November 29. With the center-right PP and the far-right Vox leading the polls, the vote could hand power in Madrid to the right-wing bloc. Separately, a court annulled the arrest warrant for Catalan separatist leader Carles Puigdemont, clearing the way for him to return to Spain for the first time in almost a decade.

France’s high school protests become a national crisis: More than 250,000 demonstrators took to the streets in 40 cities, and more than 6,500 were arrested. With the 2027 presidential election in sight, left-wing leader Mélenchon is backing the protesters while right-wing leader Le Pen condemns them, and the Lecornu government relies on the support of Le Pen’s party to pass a budget with some €54 billion in cuts.

“Surely goodness and mercy shall follow” (Psalm 23).

The G-Lab Team