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AI Summary:
Images source
Image source: High global food prices may be the best indicator of global unrest.
Image source: “The top risk for middle-income economies vulnerable to civil unrest risk is that protests not only derail economic recovery in 2022, but also reduce their appeal as investment destinations going forward. As ESG investors reward best performance and reduce exposure to jurisdictions where human rights and environmental risks are highest, the unintended consequence may be one of countries stuck in a vicious cycle. That is, economies that struggle to grow will leave cash-strapped governments less able to address social discontent, with unrest more likely to spark business disruption and trigger repressive state responses. As businesses become more exposed to unrest and the implications of poor human rights track records, investors will be less likely to choose these jurisdictions, reducing the probability of improvement in the two-three year horizon.”
Source: “The global implications of the Ukraine conflict are only just beginning to be explored fully but the immediate impacts of the crisis on global markets are already well-documented. In the first few days after Russia’s invasion, energy prices spiked, triggering further fertilizer price rises – as fertilizer production is highly energy intensive – which in turn is contributing to food price rises because fertilizer costs are an important factor in food production. Interruptions to shipping in the region around Ukraine – as well as globally – have impeded the flow of goods which pushed prices up even further, while economic sanctions on cross-border flows of goods and finance are further adding to market pressures. But this is just the start – these impacts will bring ripple effects which propagate far beyond their point of origin, known as ‘cascading risks’… Russia and Ukraine export around one-quarter of all traded wheat, more than three-quarters of traded sunflower oil, and one-sixth of traded maize… Russia produces around ten per cent of the world’s commercial energy with a concentration of sales in major regions such as the European Union (EU) and China… As the last decade richly illustrates, the cross-border flows of people impact those societies absorbing them – for example, contributing to a rise in nationalism – as well as increase the costs of supplying essential resources. Given many people are understandably fleeing this conflict, other countries may struggle to cope as the cost-of-living crisis and urgent efforts to bolster national security infrastructure may squeeze available public funds… The global spikes in energy and food prices resulting from these supply chain disruptions will see many countries struggle with rising food and energy insecurity as well as increased inequality. Taken together these conditions create many issues beyond immigration pressures and the associated politics, including increased inequality and civil unrest.”
Source: Good analysis of what to expect in the Russian invasion of Ukraine from a military perspective.
Number of nuclear weapons in the world.
Source: Fragile States Index Heat Map
Source: “More than 1 billion people face being displaced within 30 years as the climate crisis and rapid population growth drive an increase in migration with ‘huge impacts’ for both the developing and developed worlds, according to an analysis. The Institute for Economics and Peace (IEP), a thinktank that produces annual global terrorism and peace indexes, said 1.2 billion people lived in 31 countries that are not sufficiently resilient to withstand ecological threats. Nineteen countries facing the highest number of threats, including water and food shortages and greater exposure to natural disasters, are also among the world’s 40 least peaceful countries... Many of the countries most at risk from ecological threats, including Nigeria, Angola, Burkina Faso and Uganda, are also predicted to experience significant population increases, the report noted, further driving mass displacements. ‘This will have huge social and political impacts, not just in the developing world, but also in the developed, as mass displacement will lead to larger refugee flows to the most developed countries,’ Steve Killelea, the institute’s founder, said... In the absence of action, civil unrest, riots and conflict will most likely increase’... The report said 16 countries, Sweden, Norway, Ireland, and Iceland, faced no threat. The report said that the world had 60% less fresh water available than it did 50 years ago, while demand for food was predicted to rise by 50% by 2050 and natural disasters were only likely to increase in frequency because of the climate crisis, meaning even some stable states would become vulnerable by 2050.”
Source: “Rising fuel and food prices look set to stoke an ‘inevitable’ rise in civil unrest, with developing middle-income countries such as Brazil or Egypt particularly at risk… Three quarters of nations expected to be at high-risk or extreme risk of civil unrest by the fourth quarter of 2022 were middle-income countries… ‘Unlike low-income countries, they were rich enough to offer social protection during the pandemic, but now struggle to maintain high social spending that is vital to the living standards of large sections of their populations’… more than 50% of the almost 200 countries covered by the index have experienced an increase in civil unrest since the COVID-19 pandemic hit.”
Image source: Between 50% and 62% of all buildings (142,900-176,900 buildings) had been damaged or destroyed in Gaza between Oct. 7 and Jan. 17 (3 months)… Israeli use of force has made life impossible by making [it] uninhabitable… communities cannot return if they have no home to return to.
Source: Military Leaders Urge Trump to See Climate as a Security Threat
Source: “More than 5 billion people would die of hunger following a full-scale nuclear war between the U.S. and Russia, according to a global study led by Rutgers climate scientists that estimates post-conflict crop production… Building on past research, Xia, Robock and their colleagues worked to calculate how much sun-blocking soot would enter the atmosphere from firestorms that would be ignited by the detonation of nuclear weapons. Researchers calculated soot dispersal from six war scenarios—five smaller India-Pakistan wars and a large U.S.-Russia war—based on the size of each country's nuclear arsenal… Under even the smallest nuclear scenario, a localized war between India and Pakistan, global average caloric production decreased 7% within five years of the conflict. In the largest war scenario tested—a full-scale U.S.-Russia nuclear conflict—global average caloric production decreased by about 90% three to four years after the fighting. Crop declines would be the most severe in the mid-high latitude nations, including major exporting countries such as Russia and the U.S., which could trigger export restrictions and cause severe disruptions in import-dependent countries in Africa and the Middle East. These changes would induce a catastrophic disruption of global food markets, the researchers conclude. Even a 7% global decline in crop yield would exceed the largest anomaly ever recorded since the beginning of Food and Agricultural Organization observational records in 1961. Under the largest war scenario, more than 75% of the planet would be starving within two years… researchers already have more than enough information to know that a nuclear war of any size would obliterate global food systems, killing billions of people in the process… Banning nuclear weapons is the only long-term solution. The five-year-old UN Treaty on the Prohibition of Nuclear Weapons has been ratified by 66 nations, but none of the nine nuclear states.”
Source: “NATO proposed that it ‘should become the leading international organization when it comes to understanding and adapting to the impact of climate change on security.’ It intends to do this by ‘investing in the transition to clean energy sources and leveraging green technologies, while ensuring military effectiveness and a credible deterrence and defense posture.’ In NATO’s new climate framework, the energy transition has effectively been co-opted into an imperial project… Given what American legal scholar Cass Sunstein calls ‘the dark cloud that now looms over the administrative state,’ and the nonpartisan nature of the US defense spending, it is likely that climate finance will in future be folded into the US Department of Defense budget. At first glance, NATO’s ‘militarized adaptation’ appears to be an immaculate solution to otherwise delayed climate action. It can also be understood as an outcome of the normalization of emergency powers during the pandemic… In fact, climate activists pushed Biden to declare a climate emergency and to deploy emergency powers to enact a Green New Deal. Biden responded with a June 6 executive order, the Defense Production Act For Clean Energy, which bypasses electoral gridlock to expand green infrastructure such as wind farms on federal land. The order also states that it will mandate fair labor practices to build America’s clean energy arsenal. In terms of foreign relations, this new legislation simultaneously rolls back tariffs on Asian solar technology imports (critical to US solar manufacturing capacity) while avowing to ‘friend-shore’ green supply chains between Allies… rising prices at the pump are a significant driver of voter dissatisfaction in the US. Forecasts that Democrats would hemorrhage votes in the upcoming US midterm elections propelled an urgent bid by the Biden administration to tamp down gasoline prices. It conducted its first onshore oil-lease sales on public land, released a plan for offshore oil drilling, and supplicated a tarnished Saudi monarch to produce more oil, all U-turns from its former clean energy promises… Progressives have jumped on the bandwagon. Recent proposals by left-leaning think tanks in the US include state-backed funding for new domestic drilling and nationalizing US oil refineries. The American stance is that building new fossil-fuel infrastructure is preferable to drawing down Russian sanctions in exchange for a political settlement and continued Russian energy exports to the West…
Weaponizing financial and trade infrastructures has compounded both the energy and economic crises, which are now engulfing large parts of the world economy. The confluence of inflation, interest-rate hikes, and relentless dollar appreciation has led to debt distress (or high risk of debt distress) in sixty percent of all low-income economies… Germany’s new rearmament commitments and the push for a new joint European armed force run parallel to the European Central Bank’s commitment to stabilize its sovereign bond markets. Member states have proposed reforms to the EU’s Stability and Growth Pact that will remove military and green spending from deficit and debt strictures. The drive for renewables in Europe is inextricably tied to energy independence from Russia. The energy shock has prompted the European Central Bank—unlike the Federal Reserve and the Bank of England—to commit to greening its asset purchases. With the euro hitting a twenty-year low against the dollar in the fall, the perceived threat to European sovereignty is not only coming from Russia, but also from American monetary and military encroachment… In Pakistan, militarized adaptation means having the army deliver food and tents to millions of newly homeless people. For those of us under NATO’s nuclear umbrella—which, according to the organization, spans thirty nations and 1 billion people—militarized adaptation increasingly looks like fortification against a sea of climate migrants, especially from Africa to Europe. The American defense contractor Raytheon, lauded by the US Environmental Protection Agency for its climate leadership, has touted the demand for military products and services in the face of climate emergency. The same set of military assets may be deployed to control an influx of climate refugees. The war in Ukraine has crystallized the emergence of two distinct energy, economic, and security blocs—one coalescing around the North Atlantic (NATO) and the other around the large developing economies or BRICS (Brazil, Russia, India, China, South Africa). In a weaponized world economic order, foreign policies are simultaneously operating along different geopolitical axes… The most powerful multilateral lenders and core countries continue to eschew their responsibility to provide greater financial relief via a comprehensive debt restructuring mechanism or via rechanneling SDRs to multilateral development banks. Meanwhile, in the face of severe external financing difficulties, large developing economies like Egypt and Pakistan are expanding their reliance on bilateral creditors such as China and the Gulf states, somewhat ironically with the IMF’s encouragement. These attempted paths out of the crisis indicate the new ‘non-alignments’ across low- and middle-income countries.”