Weekly Forecast Monitor: Nov. 8, 2024

Summary 

The Russia/Ukraine conflict trended toward military escalation and diplomatic de-escalation scenarios as North Korean troops began fighting Ukrainian forces alongside Russian troops in Kursk and South Korea considered providing Ukraine with lethal aid. Ukraine reacted with optimism to President-elect Donald Trump’s victory, while Russia expressed caution. Ukraine expressed interest in working with Qatari mediators to establish a deal with Russia to exclude energy infrastructure from airstrike target lists.

Forecast indicators 

Military escalation scenario 

• U.S. and Ukrainian officials have confirmed that North Korean troops battled Ukrainian troops alongside their Russian counterparts in Russia’s Kursk region. North Korean casualties were reported, although no numbers have been disclosed.
• South Korean President Yoon Suk Yeol expressed openness to providing weapons to Ukraine. Yoon said the decision would depend on the depth of North Korean cooperation with Russia.
• Russian attacks continued to target cities across Ukraine, as Ukrainian defense officials reported that over 2,000 Iran-provided Shahed drones entered Ukraine during October.

Hybrid escalation scenario 

• Western intelligence agencies uncovered a Russian intelligence plot to down commercial and passenger planes bound for the United States and Canada by placing incendiary devices in their cargo holds. Russian operatives succeeded in placing such devices on flights inside Europe in what is believed to have been a test run.
• Russia launched dozens of satellites, including two Iranian devices, into orbit. Russia’s space agency said the satellites are part of a program to monitor atmospheric conditions.
• During a visit to Kyiv, German Foreign Minister Annalena Baerbock said Germany will provide an additional $185 million to support Ukrainian energy infrastructure, which has been the repeated target of Russian bombardment.

Diplomatic de-escalation scenario 

• Ukrainian President Volodymyr Zelenskyy congratulated Trump on his election victory and expressed hopes of working with his administration to achieve a “just peace” in Ukraine. Meanwhile, the Kremlin expressed caution, calling the U.S. a hostile state. Trump has repeatedly claimed that if he won the election, he could end the war in Ukraine prior to taking office.
• Andriy Yermak, the head of Office of the President of Ukraine, said his country would be willing to work through Qatari mediators to negotiate an agreement with Russia wherein both sides would refrain from targeting one another’s energy infrastructure.

Summary

Conflict in the Middle East trended toward military escalation and diplomatic de-escalation scenarios as Israel continued military operations in Lebanon and announced an expansion of its ground campaign in northern Gaza. The United States deployed additional forces to protect Israel from potential Iranian attack. Israeli Prime Minister Benjamin Netanyahu reacted happily to Donald Trump’s election victory, while Iranian President Masoud Pezeshkian expressed indifference.

Forecast indicators 

Military escalation scenario 

• Israeli airstrikes killed dozens of Lebanese in the eastern city of Barja and across the western governorate of Baalbek-Hermel. Hezbollah conducted numerous rocket attacks against Israel, including a strike in central Israel that wounded 11.
• Israeli forces expanded their ground campaign to include the northern Gaza city of Beit Lahiya, which has been the focal point of clashes with Hamas in recent months. Israeli bombardment continued across Gaza, killing dozens of Palestinians. Most of the casualties resulted from airstrikes in Beit Lahiya.
• Israeli airstrikes and ground raids killed at least eight Palestinians in the West Bank cities of Qabatiya, Tammoun, and Jenin.
• The United States has sent F-15 aircraft to the Middle East to defend Israel and deter Iran from conducting retaliatory strikes, according to flight monitoring data. This follows the recent U.S. deployment of B-52 bombers to the region. The U.S. Department of Defense has not publicly confirmed any fighter jet deployment.
• Prime Minister Benjamin Netanyahu and Minister of Domestic Security Itamar Ben-Gvir expressed joy at Trump’s election victory. Iranian President Masoud Pezeshkian, meanwhile, said the result of U.S. elections are irrelevant to Iranian policies.

Hybrid escalation scenario 

• Iran detained Reza Valizadeh, a dual U.S.-Iranian citizen, according to the U.S. Department of State. Valizadeh was believed to have been initially detained several weeks ago as tensions increased between the United States and Iran.

Diplomatic de-escalation scenario 

• The United States and Saudi Arabia are in talks to sign a bilateral security deal that will not involve Israel. The potential deal falls short of the goals the White House held before the Oct. 7, 2023, attacks, which included a full defensive treaty between the United States and Saudi Arabia and the establishment of formal relations between Saudi Arabia and Israel.

Summary

Tensions in the Indo-Pacific trended toward a hybrid escalation scenario. Leaders from Taiwan and China congratulated President-elect Donald Trump on his victory and vowed to work closely with him on matters of mutual interest. Cyberattacks took official South Korean military and judicial websites temporarily offline. The U.S. conducted long-range bomber drills with Japan and South Korea. The Philippines held large-scale military exercises in the South China Sea. North Korea fired several short-range ballistic missiles into the Sea of Japan.

Forecast indicators 

Military escalation scenario 

• A Chinese tech company, Guangxi Xinhang Shengjie Emergency Industrial Park Management Company, signed a deal with Russia’s Ufa State Aviation Technical University agreeing to import aviation and counter-drone technology to China from Russia.
• North Korean Foreign Minister Choe Son Hui met her Russian counterpart, Sergey Lavrov, in Moscow to reaffirm the countries’ bilateral relations.
• The U.S., Japan, and South Korea participated in a trilateral drill involving a long-range bomber flight.
• The Philippines engaged in the first of two weeks of military drills in the South China Sea, involving more than 3,000 personnel from its army, navy, and air force, with a scenario focused on recapturing an island.
• The Japanese Defense Ministry reported that North Korea fired several short-range ballistic missiles into the Sea of Japan. The missiles reportedly traveled over 400 kilometers at a height of around 100 kilometers. South Korea responded by launching a ballistic missile into the Yellow Sea.
• Taiwan took part in the U.S.-led “Northern Strike” military exercise in August, involving over 1,000 troops from the U.S. military and its allies.
• Taiwan’s Ministry of National Defense tracked 116 Chinese aircraft and 33 naval vessels around the island this week, with 84 aircraft crossing the Taiwan Strait median line.

Hybrid escalation scenario

• South Korean military and judicial system websites were targeted by cyberattacks that temporarily brought them down. While the source of the attack was not attributed, the country’s Cyber Operations Command noted that cyberattacks originating from North Korea had increased in recent years and said Russia might now facilitate them.
• Philippine President Ferdinand Marcos Jr. signed two laws enshrining into domestic law the country’s territorial demarcations in the South China Sea and its right to resources, drawing strong condemnation from Beijing, which summoned the Philippine ambassador to the foreign ministry.
• China sanctioned Skydio, a U.S. drone manufacturer, earlier in October after the U.S. made a proposal to sell exploding drones to Taiwan.
• Zhang Qizai, deputy director of the Institute of Industrial Economics at the Chinese Academy of Social Sciences, has warned Chinese policymakers they should learn from the Russian response to U.S. sanctions against it and take preemptive steps to ensure self-sufficiency in grain and energy.
• Taiwanese Economy Minister Kuo Jyh-huei said the government would help Taiwanese companies relocate their production bases out of China in light of Trump’s threat to impose 60% tariffs against imports from China during his presidential campaign.
• Canada sent a cybersecurity attaché to its representative office in Taiwan to advise and cooperate on countering cyber threats from China.
• China’s exports grew at an accelerated rate in October as the threat of a trade war with the EU and possible tariffs by a Trump White House weighed on Beijing’s policymakers.
• The U.S. admonished China and Russia at the U.N. Security Council, accusing them of protecting North Korea despite its violations of U.N. sanctions following Pyongyang’s announcement that it would accelerate development of its nuclear weapons capabilities.

Diplomatic de-escalation scenario

• The China Chamber of Commerce of Import and Export of Foodstuffs, Native Produce and Animal Byproducts signed a memorandum of understanding with the Australian avocado trade association, advancing the chances of Australian avocados being sold on the Chinese market in an example of warming trade ties following years of strained bilateral relations.
• China has blamed an “unspecified obstruction” for the incursion of a Chinese military aircraft into Japanese airspace in August. The statement comes ahead of the upcoming meeting between Chinese President Xi Jinping and Japanese Prime Minister Shigeru Ishiba.
• Chinese Premier Li Qiang announced at the annual China International Import Expo that China would its free trade zones and would be open to explore further investment opportunities with more countries in order to enhance the supply chain efficiency in key sectors including tech and electric vehicles.
• After a meeting in Beijing with , the leader of Myanmar’s ruling junta, Li said China supports that country’s political reconciliation plans and its promised elections next year.

United States

• Former President Donald Trump won the 2024 presidential election with majorities in both the Electoral College and the popular vote. In a speech conceding victory, Vice President Kamala Harris, the unsuccessful Democratic nominee, congratulated Trump The Republican Party secured a majority of U.S. Senate seats. Results are still being tabulated in several races that will determine control of the House of Representatives.
• Significance: Trump’s victory marks what is likely to be a strong overhaul of many aspects of U.S. policy. Among his campaign promises were efforts to limit access to asylum for migrants and mass deportations of people found to have entered the country illegally. He promoted additional U.S. fossil fuel production through increased drilling and pipeline construction. He also touted tax cuts and limits on federal regulation while increasing tariffs on imported goods. He will likely overhaul the federal government, ensuring employees adhere to his views; he has stated he would “punish” dissenting voices.

Venezuela

• The U.S. Department of Justice has alleged that a Turkish national attempted to circumvent U.S. sanctions against Venezuela by helping state oil company Petróleos de Venezuela S.A. illegally transport oil through a complex network that concealed the identities of tankers.
• During a meeting with Venezuela’s transportation minister, Iranian Minister of Communications and Information Technology Seyyed Sattar Hashemi offered to share AI technology and expertise with Venezuela.
• Significance: The introduction of AI in Venezuela could bring significant changes to the economy and workforce. While AI may boost the job market, it could also be used to monitor citizens’ activities. Additionally, the disruption of the illicit oil operation, ongoing since 2020, may deal a substantial economic blow to PDVSA, further impacting an already struggling economy.

South Africa

• Trump’s decisive victory in the U.S. presidential election is alarming South African businesses and exporters who must now confront an uncertain economic relationship with the U.S. Trump’s historical disdain for The African Growth and Opportunity Act (AGOA) and the 2015 AGOA amendment that enables a party to restrict, withdraw, or suspend AGOA benefits for an African member could threaten South African access to U.S. markets.
• The threat of being removed from AGOA comes in the wake of already fragile U.S.-South African relations. The future Trump administration will likely make this relationship more tense, considering that Trump’s isolationism, his focus on countering China, and a strong pro-Israel stance could see the U.S. take a more punitive stance toward Pretoria, specifically regarding South Africa’s relationship with China and its accusations of Israeli-perpetrated genocide in Gaza.
• Significance: Trump’s electoral victory and the uncertainty surrounding the AGOA points to signs of economic destabilization. Pretoria will therefore have to delicately navigate these dynamics to ensure AGOA benefits continue as the U.S. presidential administration transitions.