Soheir El Sherbiny‏‏

Geopolitical conflicts have long shaped the behavior of global financial markets. During periods of heightened uncertainty, investors typically shift toward assets considered safe havens, such as gold and government bonds. These assets help preserve the value of investors’ holdings and reduce exposure to market volatility. With the rapid development of financial technology in recent years, however, digital currencies, most notably Bitcoin, have emerged as a new asset class. They are increasingly attracting investors’ attention as a potential option within risk-management strategies and portfolio diversification.

How Do the Consequences of Wars Spill Over into the Cryptocurrency Market?

Contagion of Crises:

The global financial system is undergoing significant transformations, driven by U.S. President Donald Trump’s erratic trade policies as well as the widening U.S. budget deficit, and doubts questioning the independence of the Federal Reserve. Amid this turbulent landscape, China finds a strategic opportunity to consolidate the yuan's position within the international trade and financial system. China is gaining momentum as one of the leading powers seeking to reshape the international currency landscape. While the U.S. dollar has maintained its dominant position since the end of Second World War, Beijing is emerging with an ambitious strategic project aimed at internationalizing the yuan.

Could the Yuan Erode the U.S. Dollar’s Dominance?

Possible Trajectories:

On the evening of 13 April 2024, Iran launched a wide-scale attack on Israel, using a barrage of drones and missiles, in response to an Israeli airstrike on the Iranian consulate in Syria that killed several Iranian leaders. This is the first time that Iran has directly targeted Israel. This escalation follows six months of near daily exchanges of fire between Israeli and Hezbollah forces in Lebanon. Other Iranian proxies in Iraq, Syria, and Yemen have launched missiles and drones against Israel amid Israel’s war in Gaza. In this vein, questions abound regarding the economic cost of the escalation between Israel and Iran.

What Are the Repercussions of Iran’s Attacks Against Israel on the Global Economy?

The Cost of Escalation:

On 2 February 2024, the EU member states unanimously approved the Artificial Intelligence Act, following extensive negotiations among representatives of the Council of the European Union, European Parliament, and European Commission. Despite concerns in recent years about this type of law stifling European innovation, the EU member states gave the green light to the final text of the European AI Act. The AI Act was proposed by the European Commission in April 2021 to help address the challenges of rapid technological progress and the potential risks associated with AI, and to prevent its misuse through various unethical practices. However, the process of developing the law encountered major disruptions in December 2022 after ChatGPT was developed. This made it necessary to change the draft law and to establish guidelines specific to generative AI. Debate continued up until the adoption of the act, which is scheduled to be put to an official vote on 10-11 April 2024.

Understanding Europe’s New AI Act

Ethics of Technology:

The push to develop AI technologies gained significant momentum in late 2022, with the emergence of US-based ChatGPT, which uses generative AI technology. ChatGPT’s impressive ability to engage in conversations with people and professionally generate content has spurred Russia to embark on its own journey to develop AI technology. This comes at a time when Russia has been blocked from accessing Western technologies and critical computer components, including semiconductors, due to Western sanctions following Russia’s war on Ukraine since early 2022. Russian President Vladimir Putin has stated on many occasions that achieving "technological sovereignty" is important for Russia. Putin has made AI development a national security issue in light of the major challenges that Russia faces in this sector.

What Drives Russia Interest in Developing AI Technologies?

GigaChat:

Sanya Abdelqader‏‏

The COP28 Climate Conference in the UAE is gaining major importance amid growing international interest in climate change issues, especially with the increasing global environmental challenges of recent years. In this regard, the UAE is working toward a successful conference, whether in terms of the initiatives it has launched to reduce the nation’s carbon footprint, or in terms of contributing to climate action in line with the global trend aimed at achieving net carbon emissions.

How Has the UAE’s Interest in Climate Action Increased?

COP28 Opportunities:

Interest in carbon markets has recently spiked worldwide. Approximately 83 percent of nationally-determined contributions (NDCs) include intent to use international carbon market mechanisms to achieve climate agreement targets. Through limiting emissions, countries aim to prevent global warming from crossing the threshold of 1.5 degrees Celsius.

Will Carbon Trading Succeed in Mitigating Climate Change?

Reducing Emissions:

The Middle East, which is the center of the conflict between Hamas and Israel, holds a large part of the world’s oil reserves and is a major source of oil and natural gas. The region boasts 31% of global oil production, 18% of gas production, 48% of proven oil reserves, and 40% of proven gas reserves, making it a crucial player in global energy markets. Thus, any regional instability would result in an interruption of energy supplies followed by fluctuating energy prices throughout the world. Historical events may demonstrate the true role the region plays in supporting the stability of global energy markets, driven by expectations regarding the potential effect of the conflict on Middle Eastern energy production.

How Does the War in Gaza Affect Global Energy Security?

Supply Threat:

Two decades ago, Asia’s labor scene was extremely different. Finding young workers to work in factories was simple, involving little effort or obstacles. But over time, the attitudes of new generations of young people in Asia have changed. Asian youth no longer want to work in factories, and Asian companies and factories have trouble recruiting and retaining young workers. This poses a serious threat to the competitive advantage that factories in Asia have long enjoyed—namely cheap and abundant labor.

Soheir El Sherbiny‏‏

Soheir El Sherbiny‏‏

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