Key Takeaways

1. The war between Israel and Hamas will have tremendous second order effects across the Middle East and will halt, if not rollback, the stabilizing influence of the Abraham Accords. 
2. The political uncertainty, onset of civil conflict, and increase in jihadist activity have resulted in Global Guardian downgrading Niger, Mali, and Sudan in Africa from High to Extreme Risk.
3. Africa remains the world’s focal point of Jihadist activity. It is the only region where the territory held by and the geographic reach of terror groups is on the rise.
4. The belt of contiguous countries ranging from Mali through Ethiopia represents the highest concentration of risk, globally. The Sahel is the world's most unstable subregion.
5. In Latin America, we downgraded both Peru and Ecuador from Medium to High Risk due to instability and in Ecuador's case, a marked increase in gang-related violence.  
6. El Salvador has become markedly safer, moving from High to Medium risk. Mexico remains at high risk as small changes in the dynamics of the narco-war could threaten the current balance of power and lead to an uptick in violence.
   
   

Key Takeaways

Americas

• In North America, the United States (U.S.) would be most impacted by a Taiwan Strait Crisis, owing to the globalized nature of its economy and its relative political fragility. The second-order economic effects on Central America and the Caribbean would be more muted owing to less economic connection with East Asia.
• South America — which features several already politically fragile states — would see a severe shock owing to its heavy, commodity-based reliance on East Asian markets.

Europe

• Europe would be the least adversely impacted region.
• Europe’s main exporting nations could be faced with severe economic shocks atop the increased energy costs stemming from the War in Ukraine.

Middle East & North Africa (MENA)

• High current state fragility amplifies the risk of instability, particularly in energy-exporting countries, including Algeria, Saudi Arabia, Iraq, and Iran.
• The most recent region-wide shock—the “Arab Spring,” which resulted in the toppling of four regimes and a series of conflicts, many still ongoing— is indicative of the underlying state fragility and ease with which political instability can spread beyond borders.

Sub Saharan Africa

• High current state fragility and exposure to China pose serious challenges to the region.
• The potential exists in the long term for many of these nations to economically pivot and find other markets for critical raw materials to blunt the impacts of a major demand shock.

Asia Pacific (APAC)

• The APAC region, specifically East and Southeast Asia would be the focal point of a Taiwan Strait Crisis. Due to the pervasive state fragility across much of Southeast Asia, this sub-region would be ground zero for the fallout of a Taiwan Strait Crisis.

General

• The global macroeconomic impact from a Taiwan Strait Crisis would be the most extreme shock since WWII.
• The Global South would be severely, and disproportionately impacted by a Taiwan Shock.
• Pakistan is by far the most vulnerable country to the second-order impacts of a Taiwan Strait Crisis
• A large basket of critical commodities would see rapid price spikes and short-term access to processed rare earth metals could be severed.
• The green energy transition in its current form would be upended.
• Companies engaged in joint ventures with state-owned Chinese firms or in strategic industries should consider planning for future legal and regulatory issues.