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Global Power Tensions – Middle East, Climate and More

Much like DC’s supervillain Harvey Dent, the world this past week also appears to have two faces. One face showcases the resumption of conflict, highlighting how fragile the world we live in is, and the other showcases hope where collaboration could lead to a promising climate future.

In the Middle East, the truce between Israel and Hamas ended with civilian casualties rising once again. This is despite the US urging Israel to exercise caution in its offensive to avoid civilian casualties mounting, risking a further reduction in public support for Israel.

Three commercial ships in the Red Sea were also targeted by Houthi missiles, prompting retaliation by the US warship USS Carney. While Iran may not be directly involved in the conflict, its support of rebel groups in the region is stirring tensions even more with the US.

Further away from the Red Sea in the GCC, COP28 has had some successes since kick-off.

The UAE is set to launch a $30bn climate investment fund, with at least $5bn earmarked for the Global South. The UAE also vowed $150mn towards water security and Masdar, Abu Dhabi’s green energy pioneer led by COP28 chair, Sultan Al Jaber, signed accords with the Hellenic Republic to invest in Greek green infrastructure projects. The COP season has also heralded investments in West Africa, where the OPEC Fund for International Development is set to provide $54.4mn loans to support SMEs for green energy projects.

However, questions still remain on the effectiveness of climate negotiations when they are mired by feuds. While the US has pledged $3bn to a global climate fund, President Biden’s new ruling has left American EVs using Chinese made components ineligible to receive government subsidies. Critics note that this will slow down the transition from petrol to electric powered vehicles.

Tensions are also prevalent between Venezuela and Guyana over the Essequibo region ever since ExxonMobil’s oil discovery in the region. So, while the purported need of the hour is green energy, the transition is not going to be easy if conflict continues.

Global power tensions also emerged in the in the realm of AI. The US, in its bid to lead global regulation of AI, has forced a Saudi-backed fund to pull its investments out of a major AI chip startup backed by Sam Altman, co-founder of OpenAI. This comes as an impact of America’s concerns over China being able to access American technology through its alliances in West Asia.

After a session between President Biden and President Xi Jinping where the two leaders tried to break the rivalry cycle and focus on cooperation, the closed-door rivalry still continues.

At Confluence, we routinely organize geo-political sensitization sessions to enable C-suite to understand the business impact (opportunities and risks) of global power rivalries, regional conflicts and emerging ‘Global South’ economies and partnerships. Get in touch with us on shraddha@confluenceservices.com for more information.

Image Source: Creative Commons/Junktuners

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