When it comes to the beginning of the China-Iraq relationship, there are a number of starting points. Some are framed within the longue durée and civilizational discourse favored by the Chinese and cherished by the Iraqis. For instance, in his March 15, 2023, speech introducing the Global Civilization Initiative, Chinese President Xi Jinping invoked ancient cross-cultural exchange as the foundation of China’s modern outreach. Chinese officials talk about Iraq in similar terms. When Cui Wei, China’s ambassador in Baghdad, visited a local research center, he opened by recalling that “our ancestors—more than two thousand years ago—built the ancient Silk Road for friendly communication with the countries of the world . . . As for Iraq, it is a shining pearl on the Silk Road, which left China and Iraq with good memories.” In this narrative, Abbasid-era trade brought Chinese papermaking, gunpowder, printing, compasses, silk, porcelain, and tea to Iraq and, through Iraq, to the wider Middle East and Europe. In return, astronomy, calendars, medicine, spices, and arts moved eastward into China. This semi-mythical view of the Silk Road allows Beijing to distinguish itself from Western powers and present its presence in Iraq as rooted in deep history rather than modern geopolitics. 

Alongside this civilizational rhetoric sits an official diplomatic starting point, and these two stories are mutually enhancing. China recognized the Kingdom of Iraq in 1942, though ties remained limited. A substantive relationship emerged after the 1958 coup led by Abd al-Karim Qasim and the two countries formally established diplomatic relations on August 25, 1958. Beijing viewed Qasim’s coup as part of a broader anti-imperialist realignment and saw Iraq through the lens of Cold War polarization. The Iraqi Communist Party’s strength reinforced this perception. During this period, China’s embassy in Baghdad became a key hub for distributing Maoist literature, part of Beijing’s effort to export revolutionary ideology. 

A third foundation of the two countries’ relationship is personal and ideological, as demonstrated through figures such as former Iraqi President Jalal Talabani and, later, Adil Abdul-Mahdi. Talabani visited China in 1955 and met Premier Zhou Enlai, seeking support for the Kurdish national movement in Iraq. China declined, and Talabani later recalled realizing that Beijing’s stance on national questions was incompatible with Kurdish aspirations. Despite this refusal, he remained drawn to Maoist thought. Material links also emerged early: During the Great Leap Forward famine, Iraqi dates became an important ration for Chinese households, a memory now invoked in cultural exchanges pairing Iraqi dates with Chinese tea. These civilizational, diplomatic, personal, and material strands gave China a multilayered story about its presence in Iraq and prepared the ground for the more strategic phase that followed. 

The modern relationship: War, weapons, and debt 

The modern China-Iraq relationship took shape in post-Mao China, especially during the 1980s. By the onset of the Iran-Iraq War, China had begun prioritizing economic development and external markets—priorities later embodied in the Belt and Road Initiative (BRI). But Beijing’s approach to the two countries and their conflict was never purely economic. Deng Xiaoping saw an opportunity to counter Soviet influence as Moscow appeared to pivot toward Tehran. According to historian Pierre Razoux, China pursued three goals: containing the Soviet Union, expanding markets, and maintaining a balance between the two belligerents. 

In practice, Beijing discreetly armed Iraq while avoiding any outcome that might destabilize Iran. Chinese shipments included T-59 and T-69 tanks (copies of the Soviet T-55 and T-62), Type 59 towed field guns (copies of the 130-milimeter M-46), Type 56 assault rifles (copies of the Soviet Kalashnikov), and millions of shells and assorted munitions. Throughout the war, China became Iraq’s third-largest arms supplier, after the Soviet Union and France. This arms trade generated substantial Iraqi debt and Chinese claims became the largest portion of Saddam Hussein’s external war debt, including roughly $8.5 billion in commercial obligations. These debts later provided Beijing with leverage as Iraq reentered the international system after 2003. 

The 1990–2003 sanctions era further shaped the economic relationship. Iraq’s isolation created openings for Chinese firms willing to operate under sanctions. In 1997, the China National Petroleum Corporation (CNPC) signed a production-sharing agreement (PSA) for the al-Ahdab field in the southern Iraqi city of Kut—an uncommon contract model in Iraq, where service contracts had become the norm after the 1970s nationalization. Baghdad’s weakened negotiating position and China’s opposition to sanctions facilitated the deal. Although the PSA did not fully materialize in the 1990s, it laid the contractual groundwork for Beijing’s return in the post-Hussein era. 

Talabani turns to Beijing for debt relief

After 2003, Talabani’s long-standing ties with China became politically consequential. While serving with the US-run Coalition Provisional Authority in 2003, he traveled to Beijing. China reopened its Baghdad embassy in 2004. The decisive moment came in 2007, when Talabani, as Iraq’s president, returned to China to negotiate debt relief. Beijing agreed to cancel all Iraqi sovereign debt and 80 percent of commercial debt—roughly $6.4 billion. This forgiveness cleared the way for reviving pre-2003 energy contracts. 

When the Ahdab project was relaunched, its PSA was converted to a service contract aligned with Iraq’s post-nationalization model. Chinese officials cast the project as a flagship for renewed cooperation.  

China’s emergence as a major oil partner aligned with the preferences of Iraq’s new Shia-led political class. Reporting from 2008 indicated that Iran encouraged Iraqi authorities to steer contracts away from US oil majors. For many Shia actors, Western oil companies symbolized the risk of external interference—a view shaped partly by the legacy of the 1950s struggle over Iranian oil nationalization. Chinese firms, by contrast, were seen as politically neutral and commercially pragmatic. Their willingness to operate amid insecurity, corruption, and low margins further strengthened their position. 

As ties deepened, Iraqi leaders sought broader economic engagement with China. After Talabani’s visit, then Prime Minister Nouri al-Maliki traveled to Beijing in 2011 to solicit Chinese participation in infrastructure and power generation to “help Iraq restore its own industry.” The partial withdrawal of US forces then opened additional space for China. With much of Iraq’s oil revenue consumed by salaries and routine government spending, officials looked for alternative ways to finance major projects. Prominent Iraqi politician Ahmed Chalabi proposed borrowing from China for large-scale infrastructure—a concept that fed into the 2019 “oil-for-infrastructure” framework. 

Prime Minister Adil Abdul-Mahdi’s 2019 trip to Beijing marked the high point of this approach. He described China as a partner for rebuilding Iraq’s infrastructure and embraced an explicitly pro-China development narrative. In an op-ed for China Daily, he argued that “a new world is emerging as the old one disintegrates” and cast the BRI as an inclusive path to long-term mutual benefit. The delegation’s message—with its emphasis on speed, efficiency, and technology transfer—captured Baghdad’s hope that China could deliver what Western firms, in Iraqi eyes, had not. 

‘Everyday dependence’ leads to lasting ties

These elite choices reflect deeper social and economic shifts. Iraq’s 2024 population census revealed that the country is urbanizing rapidly: More than 70 percent of Iraqis now live in cities. Urban households demand appliances, cars, electronics, and clothing, but face limited purchasing power. Chinese products—cheaper and increasingly familiar—meet these households’ needs. Over time, this has created a form of everyday dependence on Chinese goods that reinforces the broader geopolitical relationship. Affordability has gradually translated into acceptance, and acceptance into trust. 

These economic dynamics intersect with a changing political discourse. Recent election cycles in Iraq have seen a sharp decline in the prominence of democratic norms—rule of law, human rights, institutional accountability—in party narratives. As Western states also appear less committed to these values, Iraqi elites increasingly feel less pressure and elevate other priorities. Concepts linked to China’s development model—service provision over rights, infrastructure over institutions, efficiency over process—have gained traction across the political spectrum. 

China did not originate these trends, but its model resonates with and, in some cases, strengthens them. Beijing offers investment without political conditions, engagement without democratization requirements, and diplomatic rhetoric emphasizing non-interference in domestic politics—particularly in places such as Iraq. For many Iraqi leaders, this combination is appealing. And for many Iraqi consumers, China’s presence is already embedded in daily economic life.

Together, these forces—historical narratives, wartime ties, debt diplomacy, energy cooperation, and structural shifts in Iraq’s society and political culture—have produced a relationship that is both durable and expanding. While Iraq’s future trajectory will depend on broader regional and global dynamics, China’s position in the country is now anchored in multiple layers of the Iraqi state and society, making it a long-term feature of Iraq’s economic and geopolitical landscape. 

Where China is most active in Iraq

China has established an expansive and multisectoral presence in Iraq, spanning energy, telecommunications, consumer markets, and education. Its strategy appears aimed at deepening Iraq’s economic reliance on China across vital sectors, thereby embedding Beijing’s influence within Iraq’s long-term development trajectory. Bilateral trade between the two countries amounted to $54 billion in 2024, and China is the major source of foreign direct investment in Iraq, contributing $34 billion in 2023. 

Energy dominance 

For decades, China’s interest in Iraq has centered primarily on its vast energy resources. This manifests in purchasing Iraqi oil and developing Iraq’s energy infrastructure—both of which are vital to China’s energy security and geopolitical ambitions. In 2024, China imported slightly more than 1 million barrels per day (bpd) from Iraq, or 10 percent of its total crude imports. 

Chinese state-owned firms dominate the oil sector in Iraq, which is the second-largest producer in the Organization of the Petroleum Exporting Countries (OPEC) after Saudi Arabia and home to the world’s fifth-largest reserves. Reports suggest Chinese companies manage about one-third of Iraq’s 145 billion barrels of proven reserves and hold direct shares in roughly 24 billion barrels. They produce two-thirds to three-quarters of Iraq’s output of slightly more than 4 million bpd, with CNPC alone accounting for half of total production. 

Initially limited to state firms, Chinese investment has recently expanded to include private energy companies attracted by Baghdad’s favorable contract terms. These firms were licensed in August 2025 to develop several new fields and plan to add 500,000 bpd to Iraq’s production by 2030, as Baghdad targets 6-million-bpd capacity. 

While Beijing’s role secures its energy interests, it also deepens Iraq’s tilt toward the East—an orientation encouraged by Shia political factions allied with Iran. These groups promote stronger ties with China (and, to a lesser degree, Russia) as a means of reducing dependence on Washington and circumventing US pressure. 

Mindful of the optics of deepening ties with China, Prime Minister Mohammed Shia al-Sudani sought to reengage US energy firms. During his April 2024 visit to the United States, he met oil executives in Houston and urged them to renew investment. The effort appeared to bear some fruit. In October 2025, Exxon Mobil signed an agreement to re-enter the Iraqi market and operate the Majnoon field in Basra, after its full exit from Iraq in January 2024 and subsequently handing over of the West Qurna 1 field to PetroChina. 

Telecommunications and digital infrastructure 

China’s involvement in Iraq’s telecom sector predates Hussein’s fall. Chinese company Zhongxing Telecom Co. first entered Iraq in 1999, when the country remained under international sanctions. Around the same time, Huawei began clandestinely building a fiber-optic network for Iraq’s military, which was later bombed during a 2001 US-UK air raid—an episode that led to Washington’s view of Huawei as a national security threat. 

In 2003, following the overthrow of the Baath regime by the United States and its allies, Huawei returned to Iraq’s emerging telecom market via Asiacell, the country’s leading carrier. In 2011, Robert C. Fonow, a US State Department adviser to Iraq’s Telecommunication Ministry, told the Washington Times that Huawei effectively “owned” Iraq’s telecom sector, alleging the firm had received more than six hundred contracts worth billions of dollars—some indirectly financed by US reconstruction funds.  

Today, Chinese technology firms remain central to Iraq’s digital expansion. In June 2025, Asiacell and China Mobile International (CMI) signed a memorandum of understanding (MoU) to expand enterprise-level digital services, billed as accelerating Iraq’s digital transformation through CMI’s global expertise. Huawei also partnered with Iraq’s Communication and Media Commission, Iraq’s top regulatory body in the field, to train personnel in cybersecurity. Iraqi officials have publicly encouraged deeper Chinese investment in telecommunications, signaling a sustained partnership in digital infrastructure. 

Consumer markets and renewable energy 

China’s commercial reach extends to Iraq’s consumer markets—from electronics to vehicles to solar energy. In the first half of 2025, Iraq imported eighteen thousand Chinese cars worth $639 million, a 30-percent increase over the same period in the previous year. The Kurdistan region accounted for the largest share, as consumers favored affordable yet feature-rich Chinese vehicles. For example, a 2025 MG GT sedan sells for about $8,850, compared with around $20,000 for comparable Asian or Western models. Similarly, a BYD hybrid sport utility vehicle (SUV) retails for $24,300, well below competitors’ SUVs. Local dealers report that “buyers who once paid more for American cars from Dubai now prefer Chinese cars with leather interiors, large screens, and panoramic roofs at a fraction of the cost.” 

Chinese solar panels have also surged. According to the Washington-based Attaqa Energy Research Group, Iraq ranked third in 2025 among Arab-majority states for Chinese solar imports. In the year’s first half, Iraq imported 0.9 gigawatts of solar panels—a nearly 600-percent increase in terms of solar generation capacity from 2024—driven by state-backed projects to install solar systems in homes, schools, and public buildings. 

Education, media, and cultural outreach 

Alongside its economic footprint, China has ramped up soft-power efforts to win Iraqi hearts and minds. Keen to counter critical media coverage of China, Chinese diplomats at times engage with Iraqi media—particularly to push back against criticism on issues such as the Uyghur crisis in Xinjiang. 

Chinese universities are offering around eighty scholarships to Iraqi students for the 2025–2026 academic year. The Chinese consulate in Erbil has backed the 2019 establishment of a Chinese language program at Salahaddin University in Erbil—one of only two such programs in the Middle East. It also helped create a China Studies Center at Sulaimaniyah University, which publishes a Kurdish-language magazine introducing China and supports translation of Chinese books.  

China’s exchange programs regularly bring Iraqi civil servants and professionals to Chinese institutions for technical training. The Chinese consulate in Erbil now plans to establish the Great Wall organization to strengthen bilateral relations by bringing together Iraqi Kurds who have visited China through various Beijing-sponsored exchange programs. Beijing has further expanded scientific cooperation by signing an agreement with Iraq in 2025 to develop a “peaceful nuclear technology program,” including construction of Iraq’s first nuclear training reactor for academic use in nuclear physics and radiological sciences. The initiative, led by Minister of Higher Education Na’im al-Abboudi—a senior member of the Iran-backed Asa’ib Ahl al-Haq movement—has drawn scrutiny in Washington for its potential geopolitical implications. 

Beijing has a distinct approach to Kurdistan 

China’s relationship with the Kurdistan Region of Iraq (KRI) differs in tone and texture from its engagement with federal Iraq, yet both align with Beijing’s broader strategy. Energy remains the core of China-Iraq relations, and China’s activities in the KRI ultimately reinforce that foundation. However, the China-Kurdistan relationship appears more diverse, shaped by the autonomous region’s social openness and China’s preference for a low-risk, apolitical presence. 

Historically, the relationship has two main strands. The first dates to Talabani’s 1955 visit to Beijing and his fascination with Maoism, which shaped aspects of his political worldview and indirectly influenced the early identity of his party, the Patriotic Union of Kurdistan (PUK). After 2003, the PUK became essential for rebuilding China-Iraq ties, and it is no coincidence that every Iraqi ambassador to China since 2003 has been from the PUK, reflecting both personal networks and political continuity. 

Another key moment in the relationship was China’s opening of its consulate in Erbil in 2014. At the ceremony, then Kurdistan Regional Government (KRG) Prime Minister Nechirvan Barzani described it as “the first step toward building a new phase in bilateral relations,” signaling opportunities in politics, culture, infrastructure, and commerce. As the KRG’s former foreign relations chief, Falah Mustafa, put it, China’s permanent seat on the UN Security Council gives its presence in Erbil symbolic and practical weight. Yet Beijing has remained cautious in its political engagement with Kurdish authorities, consistent with its 1991 abstention on UN Resolution 688 condemning Hussein’s repression of the Kurds. 

Despite this reticence, China has built a wide-ranging network of relationships. The Chinese consulate in Erbil regularly invites Kurdish political parties, universities, media outlets, and government ministries to short study programs in China. This resembles earlier US public diplomacy programs but is more ideologically neutral. Beijing makes a point of engaging all political currents, including leftist, nationalist, and Islamist parties. As a former KRG adviser noted in an interview with one of the authors, “During a trip to China, I met a member of the Kurdistan Communist Party and a cadre of an Islamic party attending the same course.” Kurdish officials appear increasingly attentive to China’s rise and its willingness to support development in Iraq and Kurdistan. This was reflected in comments by Sulaimaniyah Governor Haval Abubakr, who recently described China as “the America of the East.” 

China’s expanding activity in the KRI also intersects with the US-KRG relationship. As the United States has constructed a massive new consulate complex in Erbil, intended as a physical symbol of long-term commitment, China has also signaled interest in building a new consulate of its own. However, while the KRI has deep diplomatic and security ties with the United States, its relationship with China remains overwhelmingly concentrated in trade and cultural domains. Indeed, this is a deliberate choice on Beijing’s part. By avoiding security and identity questions, China cultivates what might be described as a “decaf” relationship—active and useful, yet stripped of political commitments. 

Kurdistan’s openness to the world enables this strategy. Travel is highly valued socially, and China’s invitations arrive at times when economic hardship—such as salary delays by Baghdad—limits mobility. “I managed to have a trip in a time of salary crises,” a Sulaymaniyah lecturer interviewed for this report noted after joining a Chinese study program. This openness has provided fertile ground for Beijing’s soft-power outreach. 

China’s public diplomacy is more developed in the KRI than in the rest of Iraq. It promotes familiarity with Chinese institutions, culture, and political narratives through sustained engagement. This has shifted public perceptions and increased interest among Kurdish students and professionals. As noted earlier, Beijing has supported institutions such as China in Kurdish, the China Studies Center in Sulaimaniyah, and the Chinese Department at Salahaddin University, with plans for additional language programs. Events like Chinese Film Week and commemorations of the “80th Anniversary of the Victory of the Chinese People’s War of Resistance Against Japanese Aggression” give China cultural visibility and institutional depth. Collectively, these centers make cultural programming and exchanges smoother and more consistent. 

This network also supports China’s commercial aims. The long-standing Asiacell-Huawei partnership is illustrative. Asiacell, headquartered in Sulaymaniyah, is Iraq’s largest telecom company, and its relationship with Huawei began on the eve of the 2003 US invasion. In February 2003—anticipating conflict—Huawei scouted opportunities in Kurdistan. When Washington issued its ultimatum to Hussein in March, Huawei moved Asiacell staff to Shenzhen for emergency training. In 2023, the two firms celebrated the twentieth anniversary of their “precious partnership,” outlining plans to integrate artificial intelligence into Iraq’s telecom services. Today, Huawei is the primary equipment provider to all major Iraqi telecom operators, a position rooted partly in its early foothold in the KRI. 

China’s presence also shapes Kurdistan’s sociopolitical landscape. Chinese goods—from household items to solar panels to electric vehicles—dominate local markets. As a Sulaymaniyah trader interviewed for this paper explained, “You cannot produce anything in Kurdistan, as the Chinese make it cheaper, even if it’s a pillow cover.” This economic dependency affects local production and, over time, influences political imagination. Concepts associated with China’s governance model—especially centralized party control and the importance of family connections—mirror existing patterns and appeal of China in Kurdistan and federal Iraq. 

It is important to note that when it comes to strategic economic sectors, the KRG is not linked to China in the same way the federal government and the areas under its control are. For example, while the federal government’s energy sector is dominated by Chinese firms, there is only one Chinese-owned company—Addax Petroleum, owned by Sinopec—operating in the Kurdistan region’s oil sector.

How this growing closeness affects US policy  

As China prioritizes securing new markets abroad and ensuring energy security at home, Iraq has become integral to Beijing’s geoeconomic ambitions and economic statecraft in the Middle East region. Over the past two decades, China’s expanding presence has begun to shape Iraq’s economic future, regional role, and relations with the United States. Baghdad now faces the delicate task of balancing ties with both powers to avoid alienating either side. There is an economic and geographical logic driving Iraq’s relationship with China. China is the world’s largest energy importer, and Iraq—one of the world’s top oil producers—naturally falls within Beijing’s orbit of interest. Iraq’s infrastructure gaps and development needs also make Chinese capital and expertise attractive, if not indispensable, while Chinese consumer goods remain affordable for most Iraqis. 

However, the broader implications of this relationship cannot be understood solely through economics. China’s increasing footprint unfolds against the backdrop of intensifying US-China rivalry and the global drift toward multipolarity. Iraq is gradually emerging as a site of subtle competition between these two powers—particularly in areas such as infrastructure (especially energy), digital networks, and potential land-based transit corridors. Yet, given the deeply interconnected nature of today’s global economy and Iraq’s heavy reliance on external actors for technology, investment, consumer products, and security, it is unrealistic to expect Iraq to de-link from either China or the United States. 

Beyond economic logic, Iraq’s deepening engagement with China reflects political calculations and rationale at the domestic, regional, and global levels. Globally, China’s ascent since the mid-2010s has offered states like Iraq an alternative pole through which to diversify partnerships and reduce dependence on the West. Engagement with Beijing thus forms part of Baghdad’s broader hedging strategy—maintaining ties with multiple global actors to avoid overreliance on any single one. 

Domestically, this orientation intensified as Shia parties consolidated unprecedented control of the Iraqi state, particularly after the war against the Islamic State of Iraq and al-Sham (ISIS) and the weakening of Kurdish autonomy and political influence in Iraqi politics after the unsuccessful Kurdish independence bid in 2017. Many among Iraq’s new Iran-backed power brokers view China as a politically neutral strategic partner—one that provides investment without demanding reforms or pressing governance conditions. At the elite level, China appears to have the upper hand in the soft-power contest with Washington concerning the appeal of the two countries and their approaches to Iraq. While Washington’s retreat from democratization and aid has eroded its image, China’s cultural outreach, development model, and messaging resonate with many Iraqis.  

The Iran factor

Regionally, openness toward China has grown since the early 2010s, amid the rise of the Iran-led Shia axis. Many dominant Iraqi Shia parties maintain deep ties with Tehran, and their affinity for China aligns with Iran’s own pursuit of a closer relationship with Beijing. Aware of the risks of being perceived as leaning too heavily toward China—and also Iran, particularly in the aftermath of the October 7, 2023, conflict between Israel and Gaza and the gradual weakening of the Iranian-led axis—Baghdad has recently sought to rebalance its approach by inviting more US investment in its energy sector. 

Iraq’s recent deals with US energy companies such as ExxonMobil, Chevron, and others reflect the recognition among the dominant Shia political class that excessive dependence on China risks political backlash and economic vulnerability, particularly as Washington intensifies efforts to contain Beijing’s global influence. This dynamic highlights the limits of hedging for resource-rich countries like Iraq that lack the structural leverage to shape regional outcomes or reduce dependence on the United States. 

It remains unclear whether Iraq’s renewed outreach to US companies signals a genuine attempt at balanced relations or a tactical effort to ease US pressure determined to squeeze Iraq as part of its maximum pressure campaign against Iran. What is clear is that China’s expanding economic role in Iraq is a growing concern for Washington. Greater Chinese market share means shrinking space for US businesses and, more broadly, a potent erosion of US influence that is more than symbolic. Given that the post-2003 Iraqi order was created through US intervention—and later saved from ISIS’s existential threat through a massive US-led coalition—China’s growing role in Iraq reflects a deeper transformation in the landscape of external influence shaping the country. 

Beijing’s digital infrastructure deals, including telecommunications and cybersecurity, could create new vulnerabilities for US-Iraq security cooperation not unlike Huawei’s engagement with Iraq under Hussein. The use of Chinese companies in strategic sectors—ports, refineries, and data networks—risks limiting the space for US and Western governments and companies’ engagement with Iraq. Crucially, Iraq’s ambitious Development Road Project (DRP) connecting the Gulf to Turkey and Europe could also intersect with China’s BRI, particularly its sea route portion, and diversify Beijing’s options for trade with the Middle East and from there to Europe. Despite a cool initial reception, Beijing now appears open to supporting the Iraqi DRP, perhaps recognizing its value in shortening overland trade routes with Europe. This all fits into China’s geoeconomic strategy, expanding trade, increasing access to critical energy resources, and creating new markets for Chinese companies. 

However, this is not the entire story. Iraq appears to follow a compartmentalized approach to relations with both the United States and China, whereby Baghdad has cultivated deeper ties with China in trade, energy, and telecommunications while remaining heavily dependent on the United States in finance, security, and diplomacy. Revenue from Iraq’s oil exports flows into the Federal Reserve Bank of New York, from which the Central Bank of Iraq withdraws regularly. Iraq’s monetary and financial systems thus remain deeply tethered to the US financial system and Washington’s oversight. Any disruption in this relationship—such as sanctions or delayed clearances—could trigger liquidity crises in Iraq’s fragile economy. 

Iraq’s security dependence on Washington also remains quite firm for now. The Iraqi security forces rely on US intelligence, equipment, and training for operations against ISIS and for broader defense needs. Advanced systems such as F-16s and Abrams tanks further anchor this relationship. Iraq sits at the intersection of three core US priorities: countering Iranian influence, stabilizing global energy markets, and—after the transformations set off by October 7, 2023—rebuilding a regional order friendly to Washington. As part of this broader regional reality security links remain important for both sides, particularly as Iraq’s Shia ruling class feel threatened by the developments over the past couple of years.  

Diplomatic asymmetry is even deeper: Iraqi prime ministers routinely seek White House invitations as symbols of legitimacy and international recognition. Since 2003, Iraqi leaders at the presidential, prime-ministerial, and foreign-ministerial levels have visited Beijing on numerous occasions, yet the only senior Chinese official of comparable rank to visit Iraq during that period was Foreign Minister Wang Yi in February 2014. Iraq invests in the relationship far more than China does. 

This produces a paradox: Iraq remains reliant on US protection but is increasingly integrated into China’s commercial ecosystem. Unless the United States expands its economic engagement, its influence will continue to erode. For much of the Shia elite, China—not the United States—is the preferred long-term partner. Yet Iraq cannot function without engagement with both in some form. Historically, Iraqi attempts to shift too far toward one camp produced destabilization, including coups during the Cold War. The country’s social, economic, and security needs, along with its geopolitical position, require a diversified and compartmentalized approach to major global powers—though not one that entails equal reliance across all sectors. 

Energy is a key arena. China is a major importer of Iraqi oil while increasingly serving as Iraq’s primary supplier of solar panels and renewable technologies. At the same time, China’s domestic energy consumption is shifting. The International Energy Agency (IEA) notes that China’s use of gasoline, jet fuel, and diesel—totaling 8.1 million bpd—declined slightly in 2024 and stood 2.5 percent below 2021 levels. As global oil demand plateaus and buyers gain greater leverage, Iraq has become increasingly anxious not to lose China as a primary customer. 

Demographic and economic trends inside Iraq are particularly important as they further push the country toward China. Rapid urbanization, high birth rates, and low incomes make Iraqi households dependent on inexpensive imported goods. China is often the only viable supplier. As Iraqi society and consumption patterns evolve, so will its economic and political tilt toward Beijing. By contrast, the United States has lost most of its non-military leverage—aside from sanctions and coercive tools—partly due to years of inconsistent engagement. Moreover, the nature of Iraq’s rentier economy, and its governance model built on patron-client relations and the informal patronage networks that sustain it, requires the rapid development of oil resources as the main pillar supporting this system. For the reasons outlined above, Chinese firms represent a more reliable option for Iraq to ensure the continued expansion of its oil sector and the conversion of those revenues into political power. 

Against this backdrop, Iraq’s trajectory suggests an ongoing use of hedging as its primary policy, albeit an uneasy one. Hedging is a strategic behavior through which a state avoids clearly aligning vis-à-vis two powerful actors, maintaining instead an in-between, ambiguous, flexible position. Over the past couple of years, the Shia Coordination Framework-led government under Sudani has noticeably embraced this posture. Yet Iraq’s hedging exercise remains constrained by internal and external pressures, particularly Iran’s influence. Tehran’s networks—militias, political allies, and economic ties—limit Baghdad’s freedom of maneuver. Other constraints include anti-normalization legislation in the Iraqi Parliament targeting Israel, which prevents Iraq from joining the Abraham Accords and expanding ties with US allies. The outcome of recent Iraqi parliamentary elections will likely reinforce this dynamic. Although Sudani’s coalition performed strongly, Iran-aligned militias and parties performed far better, ensuring that hedging will continue—but in a narrow and contested space at least for the foreseeable future. 

Sardar Aziz, PhD, is a researcher, columnist, and adviser, and a nonresidential affiliate at the IRIS center at the American University of Iraq, Sulaimani. He is a former senior adviser to the Kurdistan Parliament in Iraq. He has worked extensively on China and Iraq.

Mohammed A. Salih is a nonresident senior fellow in the Foreign Policy Research Institute’s National Security Program and a researcher and journalist based in the United States. He holds a PhD from the University of Pennsylvania and has written extensively for more than two decades on Iraq, Kurdish, and regional affairs.

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Energy & Environment Energy Markets & Governance

MENASource Oct 6, 2025

Can Iraq and Kuwait transform the Khor Abdullah waterway dispute into a regional diplomacy model?

By Rami Alkhafaji and Safwan Al-Amin

The dispute underscores the complexities of post-conflict border demarcation— and how legal disputes may multiply into geopolitical ones.

Iraq Maritime Security

The Iraq Initiative is driving policy-oriented programs and analysis that advance Iraq’s stability and sovereignty, regional integration, and democratic and economic development. It also aims to promote a strengthened US-Iraq partnership.

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The post In Iraq, China’s long game unfolds appeared first on Atlantic Council.

At the heart of this dialogue was the global energy agenda. Delegates from around the world debated how to reconcile energy security, market stability, climate objectives, and economic competitiveness—all while navigating intensifying geopolitical pressures, divergent national strategies, and the risks and opportunities posed by new technologies. 

What is the path forward for global energy security? Our experts weigh in with key takeaways from the energy conversations at Davos. 

Click to jump to an expert analysis:

Lisa Basquel: The transatlantic energy fault line at Davos 2026

Amy Drake: Under an energy security imperative, global leaders find common ground in nuclear energy expansion

Elina Carpen: Carney positions Canada as a reliable, middle power partner with vast energy resources to offer

Alexis Harmon: At Davos, global leaders treated critical mineral cooperation as economic realism

The transatlantic energy fault line at Davos 2026

Against the backdrop of US-EU tensions over Greenland and trade, Davos 2026 revealed that the transatlantic energy divide is as much about trust as it is about climate targets or fuel choices. Energy policy emerged as a proxy for deeper disagreements over how each side strengthens economic competitiveness, safeguards strategic autonomy, and asserts their authority in an increasingly fractured global order. 

From Washington’s perspective, energy was framed as a source of economic strength and geopolitical influence. US officials emphasized market scale, energy abundance, and affordability. US President Donald Trump pointed to surging oil and gas production and a renewed embrace of nuclear power as evidence of America’s energy dominance, while criticizing Biden-era climate policies as the “Green New Scam.” He singled out wind power as inefficient and expensive, reflecting a broader concern that Europe’s reliance on renewables had weakened its competitiveness. US Energy Secretary Chris Wright echoed these concerns, arguing that global investment in renewables is underdelivering on growth and affordability, calling for a doubling of global oil production and warning that European environmental regulations risk discouraging US exports and limiting market access for American producers. 

Europe, by contrast, spoke the language of strategic autonomy. European Commission President Ursula von der Leyen was explicit that geopolitical shocks should be used to build “a new form of European independence.” Her emphasis on energy security, nuclear power, and homegrown renewables was not just about resilience and climate objectives, but about limiting exposure to external volatility. Her reference to ending “manipulation” in energy markets was a pointed signal: autonomy is no longer aspirational—it is a direct response to Europe’s diminishing trust in transatlantic energy cooperation. 

What emerged most clearly from Davos’ energy debates was that this divide is no longer about hydrocarbons versus renewables. The United States sees energy as leverage; Europe sees it as sovereignty. Energy was just one thread in Davos’ crowded agenda, but it laid bare a deeper recalibration in the transatlantic relationship, with Europe preparing for a future less anchored in US leadership.

—Lisa Basquel is a program assistant with the Atlantic Council Global Energy Center. 

Under an energy security imperative, global leaders find common ground in nuclear energy expansion 

Set against shifting geopolitical tensions and diverging geoeconomic priorities, this year’s WEF annual meeting concluded with a unifying consensus among several world leaders: nuclear energy will play a crucial role in bolstering a diverse and resilient global energy system.   

In his address last Wednesday, Trump praised nuclear energy’s safety and affordability, reiterating the administration’s staunch support of nuclear energy and its role in expanding America’s energy dominance agenda. Trump’s sentiments build on significant actions taken by the administration over the last year to reinvigorate the US nuclear energy industry, including four executive orders to build out the US nuclear fuel supply chain, enhance nuclear reactor testing, streamline reactor licensing, and enable the use of advanced nuclear technologies to support national security objectives.   

Trump’s address marks the latest step in the administration’s strategy to reinvigorate US competitiveness in the nuclear export market while establishing energy independence. Earlier this month, the US Department of Energy announced a $2.7 billion investment to strengthen domestic uranium enrichment, another significant step toward meeting anticipated demand from new nuclear projects and shifting away from US reliance on imported Russian uranium.   

Support for deploying nuclear reactors to secure energy independence was echoed by leaders from across Europe as the region urgently seeks to establish affordable, resilient energy systems. Price volatility and supply shocks continued to play a central role in energy discussions and were key drivers in remarks by von der Leyen, who highlighted nuclear energy’s role in lowering prices and cutting dependencies. Sweden’s energy minister Ebba Busch emphasized Sweden’s plans to orchestrate a “nuclear renaissance” to meet the country’s need for reliable, dispatchable energy, while Romania’s Minister of Energy Bogdan Ivan cited economic competitiveness as a driving factor behind Romania’s planned nuclear energy expansion.   

In addition to government figures, international business leaders shared commonalities in their projections of the future nuclear energy landscape, attributing the success of prospective projects to “coalitions of the willing.” Progress in deploying nuclear reactors to strengthen nations’ energy independence will likely occur through regional and bilateral alliances, such as the EU nuclear alliance, Nordic-Baltic cooperation, renewed Japanese investment, and civil nuclear cooperation between the United States and Canada.  

While the promises and pitfalls of artificial intelligence (AI) were at the center of this year’s WEF agenda, AI’s need for reliable, 24/7 power dominated energy conversations. Meta is the latest of several tech companies that have signed historic partnerships with US nuclear reactor developers to meet data centers’ exponential energy demand. Last March, major tech companies joined a pledge to support the goal of at least tripling global nuclear capacity by 2050. As the global race for AI leadership intensifies, industry leaders acknowledged a key convergence in nuclear technology’s potential to provide secure, baseload power and to establish AI competitiveness.

This year, Davos hosted its first panel focused on nuclear energy in Africa, exemplifying the global momentum surrounding the sector and its potential to meet rising electrification demands. Leaders from countries considering new nuclear energy projects, such as Paraguay and India, expressed intentions to pursue domestic civil nuclear programs, displaying a shared recognition of nuclear energy’s role in catalyzing sustained economic growth and competitiveness in emerging markets. 

The conversations at Davos reveal a growing consensus and a clear market signal—nuclear energy has emerged as an imperative across national energy agendas as nations’ shared visions materialized on the global stage. The successful deployment of nuclear energy technologies at scale rests on dedicated policies, investments, and cooperation to ensure a secure and sustainable energy system.

—Amy Drake is an assistant director with the Atlantic Council Global Energy Center. 

Carney positions Canada as a reliable, middle power partner with vast energy resources to offer  

Amid a series of remarks from global leaders at Davos 2026, Canadian Prime Minister Mark Carney’s address captured international attention. Carney’s speech, “Principled and pragmatic: Canada’s path,” outlined a new course forward for Canada and other middle power countries, pointing to energy as a critical enabler for strengthening emerging bilateral and multilateral partnerships.  

Carney’s address offered a striking assessment of the current rules-based international order, positing that the conventional group of great power countries have taken advantage of their influence over financial mechanisms and global supply chains to coerce their smaller and more vulnerable counterparts into zero-sum relationships. In response, to other middle power countries, Carney offers collaboration with Canada as an alternative to the current global framework. In line with the theme, “A Spirit of Dialogue,” Carney marketed Canada as a stable partner that is looking to redefine its foreign partnerships and establish a new standard for international cooperation. Carney outlines a new strategy of “variable geometry”—creating different coalitions for distinct issue sets—that aims to reduce the economic and security exposure of middle power countries.  

Energy, it appears, will play a key role in Canada’s diversification process. Carney pointed to Canada’s status as a self-proclaimed energy superpower and outlined its ambition to fast track over a billion dollars of domestic investment in critical minerals, AI, and energy development. With vastcritical mineral reserves and energy resources, partnerships with Canada offer a multitude of opportunities for new foreign partners to build on their own domestic energy security initiatives. New agreements already formed with China and Qatar on electric vehicle imports and energy infrastructure projects underscore that Carney’s rhetoric is backed by action.  

As we move forward from Davos, Canada’s prospective realignment away from great power allies raises questions about the future of its traditional trade partnerships. This pivot could play a critical role in the upcoming review of the US-Mexico-Canada Agreement and will shape the future of US-Canada trade and energy cooperation.

—Elina Carpen is an associate director with the Atlantic Council Global Energy Center. 

At Davos, global leaders treated critical mineral cooperation as economic realism 

At Davos 2026, minerals and materials were a common thread underpinning conversations ranging from the expansion of AI to the deployment of additional energy capacity. Overall, discussion clustered around two intertwined themes: scale and cooperation. 

First, there was a recognition of the sheer material scale required to build the future energy and digital economy. Conversations around AI, electrification, and clean energy deployment repeatedly circled back to the physical reality underpinning these ambitions. While policy debates often fixate on niche critical minerals, Davos speakers emphasized that the challenge is far broader, encompassing massive, sustained demand for foundational materials like copper. It was clear that leaders increasingly see the energy transition and AI boom not just as technological revolutions, but industrial ones—and that they recognize current mining and processing pipelines are nowhere near aligned with projected demand. 

Second, and more unexpectedly, Davos 2026 leaned heavily into cooperation on minerals, reflecting the Forum’s theme, “The Spirit of Dialogue.” Despite familiar rhetoric around strategic competition and US–China tensions, many leaders framed collaboration as pragmatic rather than idealistic. Carney pointed to discussions around a G7 critical minerals buyers’ club to reduce volatility and coordinate demand, while Saudi Minister of Industry and Mineral Resources Bandar Alkhorayef described international collaboration on mineral supply as simply the “rational thing” to do. 

Together, these discussions suggest a subtle but important shift from viewing minerals exclusively as a zero-sum geopolitical asset toward seeing them as a shared constraint on global economic growth. With the Trump administration’s inaugural Critical Minerals Ministerial set for February 4, this emphasis on collaboration appears poised to deepen.

—Alexis Harmon is an assistant director with the Atlantic Council Global Energy Center. 

Staff

Lisa Basquel

Program Assistant, European Energy Security

Global Energy Center

Energy & Environment Europe & Eurasia

Staff

Elina Carpen

Associate Director

Global Energy Center

Americas Energy & Environment

Staff

Amy Drake

Assistant Director

Global Energy Center Nuclear Energy Policy Initiative

Energy & Environment Energy Transitions

Staff

Alexis Harmon

Assistant Director

Global Energy Center

Critical Minerals Geopolitics & Energy Security

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EnergySource Oct 30, 2025

A unified call for G7 cooperation on energy security

By David L. Goldwyn, Lee Beck

Ahead of the G7 energy ministerial, energy stakeholders at the Atlantic Council’s Summit on the Future of Energy Security showed optimism but also had a message for G7 leaders on the path to greater progress.

Energy & Environment Geopolitics & Energy Security

EnergySource Sep 11, 2025

What von der Leyen’s call to ‘fight’ means for European energy and climate goals 

By Atlantic Council experts

Atlantic Council experts provide their take on von der Leyen’s vision for energy as laid out in her State of the Union speech.

Energy & Environment Europe & Eurasia

EnergySource Jun 18, 2025

Energy security is only achievable through global partnerships

By Elena Benaim, Paddy Ryan

The Atlantic Council’s flagship Global Energy Forum concluded its programming in Washington, DC, today. What emerged as a central theme throughout was the undeniable need for any single country to engage in international partnerships to achieve energy and national security, whether speakers were discussing divergent transatlantic views, nuclear power, or critical mineral supply chains.

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The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

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The post Davos underscored how leaders are navigating global energy crossroads  appeared first on Atlantic Council.

If the trends evident in 2025 persist into the year ahead, then Western Balkan countries may increasingly need to assume greater agency in shaping their own trajectories. What follows is an overview of key developments in the past year and the issues to watch in the year ahead in this important region.

Bosnia and Herzegovina

For Bosnia and Herzegovina, 2025 was in part about looking to the past, as leaders marked the thirtieth anniversary of the US-brokered Dayton Peace Agreement that ended the Bosnian War. There were several notable commemorations of the anniversary, including in Dayton at the NATO Parliamentary Assembly Spring Session, as well as in Sarajevo and Washington. These events were marked by gratitude but also uncertainty over the country’s future. The agreement was never intended to be Bosnia and Herzegovina’s lasting constitutional framework, but it has served that function for the past three decades.

The past year also raised questions about the future, with the White House and Congress bringing a sense of uncertainty to this region by sending mixed and, at times, conflicting signals. Take, for example, the Western Balkans Democracy and Prosperity Act, which was attached to the Fiscal Year 2026 National Defense Authorization Act and signed into law in December. The act calls for sanctions on those who have “undertaken actions or policies that threaten the peace, security, stability or territorial integrity of any area or state in the Western Balkans.” But just weeks earlier, the US Treasury lifted sanctions on Milorad Dodik, Republika Srpska’s Kremlin-friendly former leader, as well as his associates, even though he has long threatened secession from Bosnia and Herzegovina.

More broadly, the 2025 US National Security Strategy (NSS) cast doubt on the US commitment to Europe going forward. If the United States reduces its engagement and presence in Europe, then Bosnia and Herzegovina, which has relied on international support since the 1990s for its institutional stability and capacity for effective governance, could be affected. Furthermore, the NSS created more than slight anxiety in Europe with the veiled threat of US intervention in domestic European politics.

As it adjusts to any US changes in the year ahead, Bosnia and Herzegovina should also advance its own agenda. Sarajevo should, for example, aim to advance major constitutional reforms and demonstrate its ability to complete major infrastructure projects. One such project that will test Bosnia’s capacity for governance is a proposed US-Bosnia southern interconnector pipeline, which would reduce the country’s dependence on Russian energy by importing gas via Serbia, terminating in Croatia. The pipeline is perhaps the best near-term example of a project that, if properly structured, can strengthen Bosnia’s institutions and take account of ethnic minority concerns but not be beholden to their demands. 

Serbia

Serbia has been rocked by student protests since November 2024, when a railway station canopy collapsed in Novi Sad, killing sixteen people in what the protesters view as a preventable tragedy resulting from state corruption. Whether the protesters will be successful in their demand for early elections is uncertain, though President Aleksandar Vučić has publicly alluded to the possibility.

While the EU has long shown greater patience with Vučić than many in Serbia may have hoped, the bloc’s statements in 2025 were increasingly stern regarding Belgrade’s arguably antidemocratic handling of the protests. Expect this European concern to continue in 2026 should Vučić fail to meaningfully address these protests and their underlying causes. However, Washington’s perspective toward Belgrade may diverge from that of Brussels, as the Trump administration in September 2025 committed to a new US-Serbia strategic dialogue, which signals a willingness to find common ground and work together.

Another key issue to watch in 2026 is Serbia’s move to force Russian state oil company Gazprom to divest from the Naftna Industrja Srbje (NIS) refinery in Pančevo after it became the target of US energy sanctions on Russia in October 2025. Removing Gazprom’s control from NIS is critical for Serbia’s energy and security agenda. Failure to divest would allow Russia to continue its effective control of Serbian energy and keep Serbia in US and European crosshairs when it comes to energy sanctions. Washington gave Serbia until March 24 to find an alternate owner; Hungary’s MOL Group on January 19 reached a provisional agreement to buy Gazprom Neft’s majority stake.

Albania

Albania will likely continue to make headlines in 2026 as one of the frontrunners for EU accession alongside Montenegro, and hopes are high in Tirana that it could finish negotiations by 2027. Albania is also preparing to host the 2027 NATO Summit.

However, corruption scandals among Albania’s governing elite threaten to stall the country’s accession progress. Last year, Tirana Mayor Erion Veliaj was convicted of corruption and money laundering, and corruption charges against former Deputy Prime Minister Belinda Balluku led to her temporary removal from office. Further, the National Agency for Information Society (AKSHI), the government’s main digital and information technology body, is under investigation for allegedly rigging public tenders.

These developments underscore Albania’s corruption challenge and the deepening contest between the country’s anti-corruption institutions and its entrenched political and economic interests. While Prime Minister Edi Rama’s negotiations with the EU have been effective, these recent scandals will put his government under more pressure from Brussels and could potentially slow the country’s accession timeline.

Kosovo

Prime Minister Albin Kurti has presided over an increasingly calcified caretaker government and worsening relations with Washington. In September 2025, the United States suspended the US-Kosovo strategic dialogue, the key platform for US engagement with Pristina. According to the Trump administration, it suspended the dialogue for two reasons: First, Kurti’s government failed to make measurable progress toward creating an Association of Serb Municipalities in northern Kosovo, one of the terms of the 2023 EU-brokered Ohrid Agreement between Pristina and Belgrade. Second, Kurti has proved unable to form a governing coalition after his party’s electoral victory last February.

In the aftermath of snap parliamentary elections this past December, Kurti’s Vetevendosje party will still need the support of coalition partners to form a government, but his increased share of seats in the new parliament will make this easier than after the parliamentary election in February 2025. The upcoming presidential election in March of this year will be another opportunity to help end the political paralysis in Pristina. The incumbent president, Vjosa Osmani, who is known for her positive efforts to align and cooperate with the international community, is running for reelection.

Montenegro

In 2025, Montenegro drew closer to Europe, expanded economic development, and strengthened its security and defense posture. It closed multiple EU accession chapters, welcomed a European Investment Bank office, and contributed to NATO and European efforts to push back on Russian aggression in Ukraine.

Among Western Balkan countries, Montenegro is widely seen as the frontrunner for the next EU accession. While the European Commission’s reports on the Western Balkans in 2025 highlighted more challenges than cause for praise, Montenegro continues to advance structural reforms, increase investment opportunities, and modernize its military capabilities. The next EU Enlargement Package, expected in late 2026, will be another opportunity for Brussels to assess Podgorica’s progress.

Looking ahead, Montenegro will likely continue to project a European and regional leadership role. In June, it will host the EU-Western Balkans Summit, which focuses on EU enlargement and accession. And throughout 2026 Montenegro will chair the meetings and events for the Berlin Process, the German-led initiative advancing economic integration in the Western Balkans. Beginning in November, it will also chair the Committee of Ministers of the Council of Europe, an influential post enabling Montenegro to set the Council of Europe agenda, promote initiatives, and provide leadership on sensitive political issues.

North Macedonia

North Macedonia made incremental, if limited, progress toward EU accession in 2025. According to the 2025 Enlargement Package report, North Macedonia made some gains in rule of law, public administration reform, and the functions of democratic institutions. However, Skopje continues to hold an understandably pessimistic view of the EU accession process as driven more by political leverage than technical sufficiency.

In 2019, the country implemented the Prespa Agreement, changing its official name to the “Republic of North Macedonia” in exchange for Greece dropping its threat to veto Skopje’s accession. But North Macedonia is still bound by a 2022 agreement levied by the French adding additional requirements to overcome Bulgarian concerns by amending its constitution to recognize the Bulgarian minority in the country.

The results of the municipal runoff elections in late 2025, including in Skopje, solidified the political momentum behind Prime Minister Hristijan Mickoski. Given this momentum, Skopje is unlikely to make the unpopular changes to its constitution in the year ahead. While the political instability in Bulgarian does not help, as snap parliamentary elections will be held in early 2026 for the eighth time in five years, there is little prospect of significant changes or willingness to move on this issue in North Macedonia.

The post 2026 will be a big year in the Western Balkans. Here’s what to watch. appeared first on Atlantic Council.

An unusual stop in Jordan

Of the three countries on Wang’s itinerary, Jordan stands out as unusual. Chinese leaders frequently engage with countries in the Gulf, but Jordan isn’t a typical destination for Beijing’s officials. While in Amman, he met with King Abdullah II, Crown Prince Hussein, and Deputy Prime Minister and Foreign Minister Ayman Safadi.

At the bilateral level, the message was that China wants to enhance the strategic partnership signed during the king’s 2015 visit to Beijing. This elevated partnership would focus on increased economic and investment cooperation and deeper political trust. As Wang conveyed to Safadi, “China will remain Jordan’s most reliable strategic partner in its development and revitalization process.”

This is an odd description of the China-Jordan relationship, which is not especially strategic. There has been little in the way of political or security cooperation between the two; Jordan is deeply tethered to the United States, limiting opportunities for China to make serious inroads. The economic side of the relationship has also been modest. Data from the American Enterprise Institute’s China Global Investment Tracker shows relatively insignificant engagement, with $1.96 billion in investments over the past twenty years and $5.54 billion in construction contracts for Chinese companies in Jordan since 2005. Trade has also been muted. Data from 2023 shows China exported $5.44 billion to Jordan, while Jordan exported $986 million to China.

Given the limited political and economic relations at the bilateral level, the likely reason for the Amman stop in Wang’s Middle East trip was to discuss diplomatic efforts on the Palestine issue. Beijing has been making efforts to be a more significant actor on the Israel-Palestine conflict, and with no influence with the Israelis, working with the Palestinians is China’s only access point. In July 2024, Beijing hosted a delegation of fourteen Palestinian political groups, releasing the Beijing Declaration in which these factions pledged to end their divisions and form an interim national unity government. Since then, Chinese diplomacy has been active but not particularly effective, although to their credit, they continue to advocate for Palestine, regularly voicing support in the United Nations and offering Beijing as a potential mediator.

In Wang’s talks with the king and crown prince, the focus was on the humanitarian crisis in Gaza, “the need for cooperation between China and the Jordan Hashemite Charity Organization,” the cease-fire in Gaza, and the urgency of stopping attacks on West Bank Palestinians. 

The week before Wang’s trip, the third round of China-Saudi-Iran trilateral talks were held in Tehran, and discussions significantly focused on regional security issues—including on Israel-Palestine. Clearly, Chinese diplomats are working to enhance their profile on the issue. 

With the China-Arab States Summit scheduled for June 2026, regional analysts should expect more coordination between China and the Arab League on Palestine. And Wang’s visit to Jordan might indicate King Abdullah’s presence at the summit. If so, it would be his first trip to China since 2015, when the strategic partnership was announced.

Engagements with the Gulf

The Saudi visit was not at all surprising given the depth of relations between Beijing and Riyadh. Chinese capital has been flowing into the kingdom at a higher rate in recent years, with Saudi media noting a 29 percent gain in the stock of Chinese investment in Saudi Arabia from 2023 to 2024. Trade continues to surge, with China ranking as Saudi Arabia’s top trade partner. 

During the visit, Wang met with Crown Prince Mohammed bin Salman and Foreign Minister Faisal bin Farhan. The foreign ministers jointly held the fifth High-Level Joint Committee (HLJC) meeting, a mechanism developed after Chinese President Xi Jinping’s 2016 state visit, which resulted in the China-Saudi comprehensive strategic partnership agreement. Since then, the HLJC has been used to chart the course for bilateral cooperation, with regular senior meetings that coordinate trade, investment, contracting, and diplomatic efforts.

Wang emphasized the increasing depth of the partnership while meeting with the Saudi crown prince, telling him that “China is ready to be the most trustworthy and reliable partner in Saudi Arabia’s national revitalization process.”

Contrasting the United States on trade

That Wang focused on trustworthiness and reliability in both Amman and Riyadh was clearly carefully chosen messaging. In his meeting with Gulf Cooperation Council (GCC) Secretary-General Jasem al-Budaiwi, Wang tried to position China’s reliability as a reason to jump back into talks for the long-negotiated China-GCC free trade agreement. Wang noted that “the talks have lasted for more than twenty years, and conditions for all aspects are basically mature, it is time to make a final decision.” Claiming that free trade is “under attack,” he described a China-GCC free trade agreement (FTA) as “a strong signal to the world about defending multilateralism.” All of this served as a not-particularly-subtle means of comparing China as a defender of trade in the face of US tariffs. 

The FTA was also a focus in Wang’s talks with UAE Foreign Minister Sheikh Abdullah bin Zayed. Wang expressed hope that the UAE could play a role in moving the FTA towards a conclusion, while his counterpart responded that he’s willing to play a positive role in the matter.

Despite Wang’s positioning of Beijing as a reliable trade partner, the China-GCC FTA talks have been stalled for nearly a decade. During Xi’s 2016 visit to Riyadh, he said he wanted a deal done within a year. Four rounds of talks that year didn’t get the FTA finished, and the GCC rupture from 2017 to 2021 put negotiations on hiatus. Since then, every meeting between senior Chinese and Gulf officials has included Chinese statements about the need to conclude the agreement as soon as possible. 

It’s worth pointing out that since 2023, the GCC initiated six anti-dumping investigations against China, while Saudi Arabia has launched four of its own and Oman recently launched one as well, citing the need to “safeguard the local market from price distortions caused by imported products sold at unfair prices that do not reflect actual production costs.” UAE Minister of Foreign Trade Thani al-Zayoudi said at the World Economic Forum in October that “we are seeing huge dumping coming from China to our local markets,” and “we must make sure we are protecting our industries.” 

As Gulf countries look to develop local manufacturing, free trade with China isn’t an easy sell. Yes, China is a global trading superpower, but it is very much a one-sided trader, pursuing a mercantilist growth model that floods other countries’ markets while decreasing its own imports. Unfettered Chinese imports look more like a threat than an opportunity for Gulf countries at this stage in their development.

In any case, Wang’s visit did highlight the many areas of cooperation between China, the Saudis, and Emiratis. Talks included cooperation on oil and natural gas, renewable energy, technology, research and science, education, tourism, and security. China may not have reached the status of most reliable and trustworthy, but it is clearly signaling its ambition to be a more serious partner. 

Jonathan Fulton is a nonresident senior fellow for the Atlantic Council’s Middle East programs and the Scowcroft Middle East Security Initiative. He also serves as an associate professor of political science at Zayed University in Abu Dhabi. 

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Shortly thereafter, Saudi Arabia’s minister of finance approved the kingdom’s 2026 borrowing plan, projecting total financing needs of $57.9 billion. The proceeds are intended to fund a projected fiscal deficit of $44 billion, equivalent to 3.3 percent of Saudi Arabia’s gross domestic product (GDP).

This financing was highly successful, but as detailed in this report, the markets do not price Saudi Arabia as AA credit. In fact, Saudi Arabia trades at a discount to single A-rated sovereign debt, suggesting that the kingdom has work to do to build confidence in the country’s ambitious economic transformation plans, while showing the marketplace that this nation has the ability to generate accretive value generating returns.

Notably, while the Saudi Ministry of Finance constructed the 2026 budget on assumptions of slowing aggregate global demand for crude oil, the revenue outlook embedded in the projections implies a more constructive view on oil prices. As detailed in the table below, oil revenue, captured within “Other Revenue,” is budgeted at 64 percent of total revenue in 2026, unchanged from 2025. This suggests that hydrocarbons remain the dominant fiscal pillar, even as diversification accelerates. 

By contrast, Goldman Sachs, in a December 2025 report titled “Saudi Arabia: FY2026 Budget Targets Significant Consolidation,” takes a more skeptical view of the kingdom’s fiscal outlook, driven largely by oil revenue assumptions. Goldman estimates a budget deficit of 6 percent of GDP, compared with the government’s projection of 3.3 percent, implying that Saudi Arabia may ultimately need to borrow additional capital to finance its growth ambitions.

Saudi Arabia’s widening fiscal deficit, alongside a growing current account deficit, reflects an economy firmly in investment-led growth mode. This is simply a function of a government that is spending more on expenditures than revenues, the definition of an expansionary fiscal policy. In addition, a widening current account deficit is by definition an economy investing more than it has in savings. Taken together, this showcases the government’s commitment to funding growth. Sustaining this trajectory will require continued access to both domestic and external financing markets. During the first week of January, the kingdom demonstrated precisely that access by issuing $11.5 billion of senior unsecured bonds, drawing reported demand in excess of $20 billion from global fixed-income investors, particularly for longer-duration tranches.

The transaction underscored Saudi Arabia’s strong market standing, supported by moderate debt levels, manageable debt-service ratios, and substantial foreign reserve buffers. In addition, Saudi Aramco’s partial public listing has created an additional channel through which the state can access and monetize future oil cash flows, enhancing fiscal flexibility alongside sovereign borrowing. Assuming borrowing remains aligned with economic growth and fiscal discipline, access to capital markets should remain durable.

The diversification of the Saudi economy over the past decade has been significant. Non-oil GDP has risen from approximately 56 percent of total GDP in 2016 to roughly 65 percent in 2026, according to data compiled by the Saudi General Authority for Statistics and International Monetary Fund estimates. Nonetheless, oil revenues remain the primary fiscal driver, and any assessment of Saudi Arabia’s budget outlook is incomplete without considering global energy market dynamics.

In its Global Energy Perspective 2025, McKinsey & Company notes that while fossil fuels are likely to retain a meaningful share of the global energy mix beyond 2050, demand is expected to plateau between 2030 and 2035.

Neal Shear, founder of Morgan Stanley’s commodities platform and former global head of sales and trading, observes that “it is hard to accurately predict peak global demand for energy.”

“However, it is much easier to come to a consensus that the secular trend line for fossil fuel demand is downward over the next decade,” he told me.

Shear further argues that today’s crude oil market is increasingly demand-driven rather than supply-driven, rendering global supply dynamics closer to a zero-sum game. Incremental barrels from countries such as Venezuela may displace production elsewhere, rather than expand overall consumption. Over time, absent commensurate supply discipline, a downward-shifting demand curve implies secular downward pressure on prices.

The year 2026 marks the tenth anniversary of Vision 2030, Saudi Arabia’s ambitious economic transformation strategy. The program’s core objective of diversification away from hydrocarbons into sectors such as petrochemicals, tourism and hospitality, mining, healthcare, manufacturing, retail, construction, and finance has materially reshaped the kingdom’s economic landscape over the last decade.

Looking ahead, policymakers could further strengthen market confidence in two key areas. First, financial markets and more broadly investors would welcome greater fiscal transparency, particularly a clearer breakdown of oil-related revenue assumptions and the treatment of Saudi Aramco dividends within the budget framework. As it stands, the Saudi budget does not delineate this dividend in full, so it is not readily transparent to investors how much of the budget is being driven by oil revenues. Second, as investment scales, there should be a stronger emphasis on capital efficiency and risk-adjusted returns. Transparency around outcomes, including those that underperform, would likely enhance, rather than diminish, investor confidence.

The chart below shows that Saudi sovereign bonds trade at wider spreads than those of AA-rated peers, consistent with the kingdom’s split credit ratings. More notable, however, is that spreads also exceed those of single-A sovereign benchmarks, suggesting that markets continue to apply a degree of caution beyond what headline ratings alone would imply. Part of this reflects technical factors, including index inclusion, but it also points to a broader question of confidence as Saudi Arabia advances its Vision 2030 agenda. As the scale of public investment rises, sustained fiscal transparency, clearer articulation of oil-revenue assumptions, and demonstrable capital efficiency will be critical in translating economic transformation into tighter sovereign risk premiums.

Source: Vaneck, JPM Indices (Saudi Arabia Sovereign Spread JPGCSASS Index, EMBIGD A Spread JPSSGDCA Index, EMBIGD AA Spread JPSSGDAA Index)

Markets do not demand perfection; they value clarity, discipline, and resilience. Saudi Arabia’s long-term strategy is coherent, ambitious, and increasingly credible. If executed with continued transparency and fiscal prudence, it has the potential not only to transform the kingdom but to reshape the broader region. The US debt capital markets, for now, appear to agree.

Khalid Azim is the director of the MENA Futures Lab at the Atlantic Council’s Rafik Hariri Center for the Middle East.

The post Why US markets are betting on Saudi Arabia  appeared first on Atlantic Council.

Fourteen years after the 2011 uprising and NATO-led military intervention that toppled Muammar Gaddafi, Libya remains divided. While the internationally recognized Government of National Unity (GNU) rules the northwest, the Libyan National Army (LNA), led by military leader Khalifa Haftar, controls most of eastern Libya—with both factions backed by competing foreign militaries.

For years, the situation on the ground seemed frozen. Yet two recent developments mark a shift: Oil majors are returning to the country, and the United States is stepping up its military engagement. The visits by the top leadership from US Africa Command (AFRICOM) in October and December last year and the announcement that Libya will join Exercise Flintlock—AFRICOM’s largest annual special operations exercise historically focused on West Africa—signal that the US administration now views Libya’s trajectory as inseparable from broader regional stability.

Against this backdrop, the United States has a narrow—but real—opportunity to reset conditions in Libya by combining carefully calibrated security engagement with strategic investment. Taking this opportunity is urgent, especially as Russia and other foreign powers seek to cement their influence over the southern Mediterranean’s political future.

Libya’s geostrategic significance for energy, Europe, and the Sahel

Libya straddles Europe and Africa. While its coastline faces Italy, its southern expanse feeds directly into the Sahel, where al-Qaeda-aligned groups such as Jama’a Nusrat ul-Islam wa al-Muslimin and Islamic State (IS) affiliates operate. What happens in Libya affects US and European energy security, regional counterterrorism efforts, and global migration flows. Moreover, the country produces between 1.2 and 1.4 million barrels of oil per day and aims to reach two million by 2030. With Western sanctions tightening on Russian energy, Europe increasingly views Libyan crude oil as a pressure-valve alternative.

In November, Shell, Chevron, Eni, TotalEnergies, and Repsol* were all pre-qualified to participate in Tripoli’s first exploration auction in eighteen years. However, instability in southern Libya continues to amplify extremist mobility and arms flows from the Sahel, directly threatening these investments. That risk is further compounded by the expansion of Russia’s Africa Corps—the successor to the paramilitary Wagner Group—in the east and south. Meanwhile, the Central Mediterranean migration route remains a sensitive domestic political issue for Italy. Rome’s Mattei Plan is explicitly built around stabilizing Libya’s energy production and migration management.

Navigating fragmentation and proxy competition to unlock investment

Progress in Libya’s hydrocarbons sector remains contingent on a minimum threshold of stability and predictability in governance, which is still fractured between the Tripoli-based GNU—backed by Turkey and Qatar—and Haftar’s LNA in the east, supported by Russia (via the Africa Corps), Egypt, and the United Arab Emirates.

The signing of a 2019 maritime boundary treaty with the GNU has given Turkey de facto veto power over Libya’s western security sector and offshore zones. Meanwhile, Russia has entrenched itself in eastern Haftar-controlled areas since 2023. Instead of relying on the Wagner Group, however, Moscow has transitioned to formal involvement via the Ministry of Defense. Russia now controls airbases, logistics hubs, and key desert routes into the Sahel, with personnel positioned near critical oil fields and terminals—the same assets the Tripoli government is attempting to license to Western firms.

The result is that Libya has become the Mediterranean’s most active proxy chessboard, with foreign powers positioning themselves to capture future revenues from hydrocarbons and reconstruction. Absent a credible US counterweight, decisions on energy access, migration management, and political transition will be made in Moscow or elsewhere—but not in Washington or Brussels.

A new window for US reengagement

Two developments suggest a modest but meaningful upward trend in US reengagement. First, building on the US Navy ship visit to Libya in April (the first in fifty years), AFRICOM’s deputy commander visited GNU-controlled Tripoli and LNA-held Sirte in October. Inviting Libya to Exercise Flintlock was deliberate signaling: The US government seeks to pull Libya into a broader Western security network—rather than cede the field to other countries with stronger influence, such as Russia. This trajectory continued in early December, when Prime Minister Abdul Hamid Dbeibah met AFRICOM’s commander to expand cooperation on training, equipment, and force professionalization. The GNU’s public request for deeper US support in professionalizing Libya’s security forces marks a notable shift after years of strategic hedging between Washington, Ankara, and Doha.

Second, there has been a surge of activity around Libya’s energy sector. Since 2023, oil output has stabilized, front lines have frozen, and neither the LNA nor the GNU has achieved decisive military or political dominance. This stalemate has created political space for external influence. Energy-sector momentum has been reinforced by high-level diplomatic traffic in both directions. The US special envoy for Africa and Arab Affairs, Massad Boulos, traveled to Tripoli and Benghazi in July, followed by a GNU delegation visit to Washington in August. That trip signaled the GNU’s intent to re-anchor Libya with Western stakeholders and request US assistance in pushing Russia out of eastern military bases to restore unified territorial control.

That momentum was further reinforced by a joint statement on November 26 from the United States, major European partners, Gulf states, Turkey, Egypt, and the United Kingdom. The statement backed a renewed mandate for the United Nations Support Mission in Libya (UNSMIL), endorsed a political roadmap by UNSMIL head Hanna Tetteh, and explicitly called for deeper east-west military and economic coordination—a rare moment of alignment among Libya’s external powerbrokers. For the US administration, this sent the strategic signal that Libya’s unification is now within reach. The window of opportunity, however, is closing fast—and another conflict cycle, election breakdown, or foreign miscalculation could shut it indefinitely.

The energy-security nexus: Why investment alone will fail

The return of oil majors represents the most consequential shift in Libya in a decade. But investment without security is unlikely to endure. In March last year, Libya launched its first licensing round for oil exploration in eighteen years, signaling a bid to attract Western technology, capital, and expertise. Shell, BP*, TotalEnergies, and Eni have reopened channels with the National Oil Corporation (NOC)—and ExxonMobil* signed a memorandum of understanding in August for offshore exploration in the Sirte Basin.

Yet these developments do not change the fact that some of Libya’s most valuable reserves remain under Russian influence. Western firms cannot scale operations without predictable access, enforceable contracts, and baseline security guarantees.

An intentional presence to protect investment

To consolidate recent political and economic gains—and protect sizable Western energy investments—the United States should deliberately expand its diplomatic, military, and economic presence in Libya, in close coordination with allies.

The March 2024 announcement that the United States will reopen an embassy in Libya is a critical step toward sustained engagement across military and economic channels. It will also enable closer coordination with key partners—including Italy, Egypt, Turkey, and the UN—whose objectives overlap with US interests.

As the multi-year process to open the embassy inches forward, AFRICOM and its components should pursue near-term, high-impact initiatives. US special operations forces should help build and professionalize vetted Libyan special forces units across both western and eastern factions, units that would pursue shared security interests, no matter the progress toward an eventually possible unification. Additionally, maritime partnerships should be expanded rapidly to strengthen Libyan Navy and Coast Guard capabilities, particularly in interdiction, offshore asset protection, and port security. At the same time, the United States could leverage its convening power to establish a technical deconfliction cell in Sirte, allowing GNU and LNA representatives to coordinate security around oil infrastructure and prevent escalation. Such mechanisms could also support counterterrorism cooperation, including targeting IS remnants and blocking spillover from the Sahel.

Layered US engagement can unlock stability

However, military engagement alone will not be sustainable without economic development. Given the complex legacy of US involvement—from the economically devastating sanctions of the 1980s to the 2011 NATO intervention and the overthrow of the Muammar Gaddafi regime—the United States must work through partners to advance both economic and counterterrorism objectives. The US International Development Finance Corporation and the Export-Import Bank could prioritize export credits for pipelines, gas processing, and power generation, explicitly linking financing to transparency and anti-corruption benchmarks.

US and partner foreign assistance could also support long-overdue reforms at the NOC, including modern contracting practices, environmental standards, and shared revenue frameworks. These efforts should extend beyond governments: Western energy companies involved in Libya should participate in coordinated infrastructure planning, rather than simply launching isolated investments.

Layering diplomatic, military, and economic tools would allow the United States to establish a modest but coherent posture capable of unlocking outsized stabilization effects—and preventing any country that works against US interests from having dominance over Libya’s future. For the United States, Libya offers a proving ground for a new model of engagement—one built on security assistance that enables Western investment instead of substituting for it. AFRICOM’s renewed presence and the surge of Western energy interest create a rare opportunity to reintegrate Libya into a Western orbit. If the United States seeks stability in the Mediterranean, resilience in the Sahel, and credible alternatives to Russian energy, now is the time to make coordinated security and economic investments in Libya.

Rose Lopez Keravuori is a nonresident senior fellow at the Atlantic Council’s Africa Center, an associate director at Strategia Worldwide, and chair of the board of advisors of GCR Group. She previously served as the director of intelligence at the US Africa Command.

Maureen Farrell is a nonresident senior fellow at the Atlantic Council’s Scowcroft Center for Strategy and Security and vice president for global partnerships at Valar, a Nairobi-based strategic advisory and risk firm. She previously served as the deputy assistant secretary of defense for African affairs and director for African affairs at the US National Security Council.

Note: Several companies mentioned in this article—Shell, BP, Chevron, Eni, TotalEnergies, Repsol, and ExxonMobil—are donors to the Atlantic Council but not to this article series.

The Africa Center works to promote dynamic geopolitical partnerships with African states and to redirect US and European policy priorities toward strengthening security and bolstering economic growth and prosperity on the continent.

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The GeoStrategy Initiative, housed within the Scowcroft Center for Strategy and Security, leverages strategy development and long-range foresight to serve as the preeminent thought-leader and convener for policy-relevant analysis and solutions to understand a complex and unpredictable world. Through its work, the initiative strives to revitalize, adapt, and defend a rules-based international system in order to foster peace, prosperity, and freedom for decades to come.

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The post The US is reengaging with Libya—and it’s the right call appeared first on Atlantic Council.

Bottom lines up front

• Greenland has substantial reserves of rare earth elements, uranium, and other strategically important minerals.
• Yet there are substantial obstacles to mining and processing these minerals, including Greenland’s limited infrastructure, its harsh climate, and local opposition to mining.
• A unilateral approach by the United States risks limiting its ability to engage productively with Greenland’s mineral sector; a better option is for Washington to collaborate with partners to help de-risk projects for investors.

WASHINGTON—Greenland is a land of stark contrasts. Larger than Mexico and Saudi Arabia but home to only 56,000 people, this autonomous Danish territory has an economy traditionally built on fishing and substantial subsidies from Denmark. Yet beneath its ice and rocky coasts lies mineral wealth that has attracted growing international attention—including from US President Donald Trump. Greenland has firmly rejected notions of being “for sale,” and European allies have responded with alarm at US overtures about seizing the territory. Regardless of the rhetoric, the United States has compelling opportunities for commercial and diplomatic partnerships with Greenland.

As a mineral frontier, Greenland offers clear advantages: Its geological endowment is significant and comparatively unexplored, and it presents relatively low above-ground investment risk as a stable democracy aligned with Western institutions. However, these advantages come with major caveats. With fewer than one hundred miles of road on the entire island and significant local resistance to mining, Greenland lacks both the basic infrastructure and social license needed for large-scale mining operations. As a result, the path from exploration to production is likely longer, riskier, and more expensive than in more developed mining jurisdictions.

Yet, as US Secretary of State Marco Rubio prepares to meet with Danish officials in the coming days, these challenges inform how the United States can most effectively engage: through collaboration rather than confrontation.

What critical mineral reserves does Greenland have?

Greenland’s mineral wealth presents a geographical puzzle. The country’s ice-free area, which is nearly double the size of the United Kingdom, represents less than 20 percent of the island’s total surface. Vast areas of the interior remain unexplored beneath ice that can exceed a mile in thickness. 

Nonetheless, Greenland possesses an impressive array of critical minerals, from traditional commodities such as copper, lead, and zinc that have been mined on a small scale in ice-free coastal areas since 1780, to modern critical minerals essential for energy and defense technologies.

Greenland’s most geopolitically significant resources include:

• Rare earth elements (REEs): Greenland is estimated to hold approximately 36 million tonnes of rare earths, though only 1.5 million tons are currently considered proven, economically viable reserves. Greenland is generally ranked around eighth globally in reserves, placing it among the most significant undeveloped REE holders; with further exploration and feasibility studies, it may be proven to contain the world’s second-largest reserves after China. 
• Uranium: Greenland has one of the largest uranium deposits in the world, which is notably co-located with major REE deposits. However, Greenland reinstated a ban on uranium mining in 2021 following sustained local opposition. This prohibition has had direct implications for projects where uranium is present alongside other minerals.
• Other strategic minerals: Greenland holds known deposits of copper (essential for electrical infrastructure), graphite (key to battery production), gallium, tungsten, zinc, gold, silver, and iron ore. It also holds various specialty metals with high-tech and defense applications, including platinum, molybdenum, tantalum, and vanadium. While many of these resources are geologically promising, few have progressed beyond early exploration.

To date, exploration activity has focused primarily on coastal and southern Greenland, where logistics are more feasible. The latter half of the 2010s saw an explosion of exploration permits in this region; by early 2020, exploration permits had been granted across almost the majority of southern Greenland. Despite this explosion of interest, there are only two active mines on the entire island, Nalanuq (a gold mine) and White Mountain (an anorthosite mine). To date, no rare earth, uranium, or other high-profile critical mineral projects have entered commercial production.

Though further exploration and feasibility studies may foster additional interest, the sites currently receiving the most attention include:

• The Kvanefjeld project on Greenland’s southern tip, one of the world’s most significant deposits of both rare earths and uranium.
• The Tanbreez mine in the same fjord network, which contains substantial deposits of eudialyte ore rich in rare earth elements (in particular heavy rare earths) and gallium.

What are the main obstacles to developing Greenland’s mineral resources?

Greenland’s mineral deposits are globally significant, particularly for rare earth elements. However, unlike established mining regions in Australia, Canada, or even emerging sources in Africa and South America, Greenland has minimal production infrastructure and no large-scale operating critical mineral mines.

From a supply perspective, Greenland’s reserves are largely theoretical. Though it represents a substantial reserve in a politically stable, Western-aligned jurisdiction, bringing that potential online faces several notable challenges:

Infrastructure deficits: Outside of Greenland’s few small cities, roads and railroads simply do not exist. Transport depends almost entirely on ships and aircraft, greatly increasing costs and complexity. This infrastructure gap extends the typical decade-long timeline from discovery to production and dramatically increases capital requirements. While mining projects can spur infrastructure development, the initial infrastructure investment represents a significant barrier to entry—especially since it is generally too cold in Greenland to construct durable roads from concrete and asphalt. This poses a significant challenge to project economics. Transportation of minerals can sometimes be even more expensive than the mining process itself, and Greenland’s remoteness, limited economies of scale, and harsh Arctic conditions make it one of the world’s most expensive mining jurisdictions.

Social and political opposition: Though the government has periodically promoted mining as a tool for economic development, mining remains politically contentious. All land in Greenland is publicly owned and administered, making closed, privately controlled mining sites culturally unfamiliar and politically sensitive. Local opposition reflects deeper concerns about environmental impacts, changes to traditional ways of life, and the terms under which mining would proceed. Most significantly, in 2021, Greenland’s parliament passed legislation prohibiting uranium exploration and limiting uranium content in mined resources, effectively halting rare earths development at the Kvanefjeld project given the presence of uranium. 

Geopolitical complications: Recent US rhetoric about acquiring or annexing Greenland has naturally generated diplomatic friction and intensified local sensitivities around sovereignty, complicating social license for mining. At the same time, broader US-China competition has played out in Greenland’s mining sector. In one notable example, US officials reportedly successfully lobbied the Tanbreez mine CEO to sell to American bidders for less than Chinese-linked competitors. The Kvanefjeld project is owned by Australian company Energy Transition Minerals (formerly Greenland Minerals Limited)—but China’s Shenghe Resources is its second-largest shareholder, raising concerns in Washington, which sees the mining sector as a backdoor for Chinese encroachment in the Arctic. Though Shenghe only holds a 6.5 percent stake, a nonbinding 2018 MOU reflects the intent to have Shenghe “acquire all rare earth output produced at the Project,” positioning it as the primary prospective offtaker and downstream processing partner.*

What are viable paths for US engagement?

Greenland’s strategic value lies in its role as a long-term diversification partner in a concentrated global market, rather than an opportunity for immediate production. While annexation rhetoric has drawn attention to Greenland’s resources, a unilateral US approach would limit their potential value. More effective alternatives include:

Strategic partnerships with Greenland and Denmark: Rather than pursuing ownership, American companies and the US government could support mining development through direct investment, financing mechanisms, and technical assistance—tools well suited to institutions such as the US Development Finance Corporation and Export-Import Bank. Coordination with European partners could amplify these efforts, as seen in the Lobito Corridor, where European capital helped bridge infrastructure gaps. Diplomatically bundled investment could help de-risk projects that might otherwise fail to attract private capital, an approach far less viable under a confrontational strategy.

Competing effectively with Chinese investment: The Tanbreez case demonstrates that US diplomatic engagement can influence ownership and investment outcomes, but effective competition requires more than lobbying against Chinese involvement. It demands credible alternatives such as competitive financing, technical expertise, market access, and partnership structures that align with project needs—all of which are more successful in concert with a wide pool of partners. One complementary step could be the development of an investment screening mechanism in Greenland, akin to a Committee on Foreign Investment in the United States–style review, to assess national security and strategic risks associated with foreign capital. Such a framework would strengthen Greenland’s own security and governance while providing greater assurance to US and allied markets that upstream assets are not vulnerable to strategic capture. However, even with successful mining development, rare earth ores from Greenland would likely still be processed in China absent expanded allied processing capacity, underscoring the need for parallel, collaborative investment in downstream infrastructure.

Supporting responsible development: Projects that lack local legitimacy are unlikely to succeed. Emphasizing environmental safeguards, indigenous rights, and meaningful benefit-sharing is both ethically and commercially essential. Greenlanders have consistently expressed a much stronger interest in independence than in joining the United States. An overly aggressive US approach would likely further complicate social license for mining.

Greenland’s mineral wealth will take a decade or more to translate into meaningful supply. Its greatest value lies not in rapid extraction but in long-term diversification within a trusted political framework. For the United States and its allies, the challenge is clear: securing access to critical minerals and strategic space without undermining the very alliances and norms that underpin long-term stability. Patient, partnership-based engagement that respects Greenland’s autonomy and international law will not generate immediate headlines, but it offers the only credible path through a period in which intensifying competition over critical resources threaten to upend the established geopolitical order.

Note: This article was updated on January 29 to more accurately reflect Shenghe Resources’s role in mining operations in Greenland.

The post Greenland’s critical minerals require patient statecraft appeared first on Atlantic Council.

Led by Kazakhstan and Uzbekistan, the five Central Asian states—which also include Kyrgyzstan, Tajikistan, and Turkmenistan—are eager to develop their wealth of critical minerals and rare earths. But without careful management, this push risks further straining already dwindling water reserves, particularly as temperatures in the region rise twice as fast as the global average.

Undoubtedly, new mining projects will initially add more pressure to Central Asia’s stressed water systems. However, with smart policies, states in the region can capture a net “water dividend”: By reinvesting mining revenues in water-saving infrastructure and technologies, they can ensure that the water conserved or newly secured ultimately exceeds the amount consumed by mining itself.

Resource wealth meets climate pressure

To avoid further exacerbating water shortages, the Central Asian states will need to navigate two public policy challenges. First, they must attract high-quality foreign investment in mining partnerships, ensuring firms from all countries can compete on a level playing field. Second, they must use mining revenues to modernize aging infrastructure, experiment with cutting-edge precipitation enhancement technologies, and fund a long-term strategy for regional water security cooperation.

Central Asia’s critical minerals and rare earths have drawn major commercial and geopolitical interest from the United States, China, Russia, and the European Union. Companies and governments alike view access to these resources—key to the production of complex electronics, renewable power sources, high-grade defense systems, and more—as essential to competing economically and militarily in the decades ahead. Kazakhstan and Uzbekistan, in particular, are rich in rare earths as well as critical minerals such as uranium, copper, and tungsten.

At the same time, the region appears to be careening toward a water crisis. Central Asia uses approximately 127 billion cubic meters of water per year. Of that, 100 billion cubic meters flow into the region’s highly inefficient agricultural sector, which loses half of this water supply before it even reaches the fields.

As many as twenty-two million of the roughly eighty million people living in Central Asia already lack secure access to safe water—and the region’s total population may increase to 110 million by 2050, intensifying demographic pressure on scarce water resources. Rising temperatures are rapidly melting the glaciers in Kyrgyzstan and Tajikistan that provide much of the fresh water for downstream countries such as Uzbekistan and Turkmenistan. Meanwhile, water levels in the Caspian Sea are projected to drop by up to 60 feet by 2100, exposing dry land roughly the size of Portugal.

Critical minerals could power the region’s growth

Mining operations are notoriously capital-intensive to launch and water-intensive to run, but the industry can still become a net revenue and resource boon to Central Asia. Western firms have begun investing in new critical mineral projects across the region. These firms have proven much more eager to do so when they are backed by their governments. In November, US-Australian firm Cove Capital agreed to a $1.1 billion deal with Kazakhstan’s state mining company to develop the Upper Kairakty and North Katpar tungsten deposits in central Kazakhstan—among the largest known tungsten deposits in the world. Cove Capital’s feasibility studies suggest the project could produce eighty billion dollars’ worth of the resource over the mine’s lifespan.

Crucially, the project is set to be backed by $900 million in financing from the US Export-Import Bank (EXIM), making it the most high-profile example to date of concrete Western government and private-sector engagement in Central Asian critical minerals development.

Water intensity varies widely across metals mining depending on ore grade, depth, dispersion, recycling rate, and management, but tungsten and other rare earth elements may be among the more water-efficient metals to extract. Almonty Industries’ Sangdong tungsten mine in South Korea—a much smaller operation in terms of annual output—uses roughly 500,000 cubic meters of fresh water per year, a drop in the proverbial bucket compared to Central Asia’s agricultural water consumption. Cove Capital believes ore grades at Upper Kairakty and North Katpar may exceed those at Sangdong, potentially further reducing water requirements for tungsten processing.

If early exploration proves accurate, Kazakhstan could hold the third-largest rare earth reserves globally. The Kazakh government has signaled that it aims not only to mine rare earths but also to move up the minerals value chain. Studies estimate that developing rare earth processing capacity alone could add up to 7.1 percent of gross domestic product (GDP), on top of revenues from raw mineral production. Such investments could ultimately make mining more valuable than Kazakhstan’s oil and gas sector, which currently accounts for about 16 percent of GDP, compared to roughly 12 percent (around thirty billion dollars) from mining today. This additional revenue would be especially valuable for a country whose real GDP growth is expected to slow beginning in 2026.

Uzbekistan has also signed agreements with the US government to partner on mining investments with significant potential, particularly in tungsten and other rare earths. While the country’s mineral wealth has not been surveyed as extensively as Kazakhstan’s, Tashkent is investing billions of dollars in exploration it believes could unlock as much as three trillion dollars in total economic value. Achieving this ambitious target will depend on maximizing transparency during exploration and reducing investor risk through continued rule-of-law reforms—turning memoranda of understanding into bankable projects.

Turning mining revenues into modern water infrastructure

Both Kazakhstan and Uzbekistan should therefore pass favorable subsoil and export-tax legislation to attract investment. Astana and Tashkent should also work with EXIM and the US Development Finance Corporation to support investments in processing capacity tied to projects involving US investors. Given China’s dominance in critical mineral and rare earth processing, the US government has a strategic interest in facilitating regional processing capabilities alongside US mining investments.

Kyrgyzstan and Tajikistan also possess economically viable mineral resources, but uncertain regulatory environments and Chinese dominance in their mining sectors make large-scale Western investment unlikely in the medium term. Among the five Central Asian states, Turkmenistan may stand to gain the most from a water dividend—and could leverage its substantial natural gas revenues to fund smarter water conservation practices.

Most importantly, governments must reinvest new revenue streams in technologies that directly mitigate water insecurity.

First, agricultural irrigation infrastructure across the region is largely outdated and inefficient and should be replaced by modern systems to reduce water loss to seepage and evaporation. Efficiently collecting mining revenues and procuring water-saving technologies will require greater governmental agility and technical capacity.

Second, Central Asian states should explore increasingly efficient cloud-seeding technologies, pioneered in the United States and the Gulf, as a means of increasing precipitation in agricultural zones—particularly in steppe and mountain valley regions. Early studies suggest that localized cloud-seeding programs can increase precipitation by up to 15 percent per year. While some have raised questions about cloud seeding’s environmental impact, communities and local governments that employ cloud seeding have empirically found negligible risks.

Third, a region-wide water security strategy, backed by interstate conservation and infrastructure projects, is essential for long-term stability. For decades, competition over water and strained neighborly relations created a vicious cycle of mistrust and tension in Central Asia. That dynamic can be gradually reversed through people-to-people engagement and shared infrastructure projects designed to conserve and distribute water more effectively in service of regional welfare and stability—rather than narrow domestic interests.

Modernizing irrigation infrastructure is expensive but can be made affordable by diverting a modest share of future mining revenues. Experts estimate that Kazakhstan will spend $515 million on irrigation upgrades between 2026 and 2030. The proposed Cove Capital tungsten mine alone could eventually generate around $125 million in annual tax revenue, assuming production and price targets are met over its fifty-year lifespan. Cloud seeding in the west of the United States has repeatedly proven more cost-effective than water metering and other indirect conservation measures, and costs could fall further as companies such as California-based Rainmaker deploy drones to seed clouds more precisely.

Central Asia should leverage its vast mineral wealth to secure a net water dividend and reduce risks to regional security and stability. Trusted partnerships, high-quality investment, good governance, private-sector dynamism, and creative diplomacy will all be crucial to addressing the region’s escalating climate and water challenges. By maximizing shared benefits from mineral development, Central Asian states can transform mining revenues into long-term water security.

Andrew D’Anieri is associate director of the Atlantic Council’s Eurasia Center. Find him on X at @andrew_danieri.

The post Rare earth mining could solve, not worsen, Central Asia’s water troubles appeared first on Atlantic Council.

In the good scenario, Delcy Rodríguez, the new leader of the Chavismo regime, serves as a transitional figure on Venezuela’s path to democracy, capitalism, the rule of law—and prosperity largely financed from the country’s substantial oil reserves. In this scenario, Secretary of State Marco Rubio’s apparent plan of stabilization, recovery, and transition succeeds. In tandem, Venezuelan oil production and exports would rise sharply. Still, most analysts hold that oil production challenges will persist even in this best-case scenario.

In the ugly variant, the Chavismo regime largely stays in power but undertakes policies meant to bolster oil production, in line with Washington’s preferences. Markets seem to view this modified status quo as most likely: crude oil prices have modestly fallen while share prices for pure-downstream players like Valero—which could process more heavy crude volumes—have risen. Indeed, if the raid quickly leads to political stability and other supportive conditions, Venezuelan oil production could rise. Still, a renaissance for Venezuelan oil and gas will be difficult to achieve. Even if Washington maintains a single-minded focus on oil extraction, political risks and uncertainty will remain acute, likely ensuring that US companies will remain deeply reluctant to commit huge amounts of capital for “decadal projects.”

Alternatively, in a bad scenario, the raid could trigger significant convulsion in Venezuelan politics and foreshadow a longer and larger military intervention, which would likely send Venezuela’s crude oil production sharply lower. In this case, the loss of Venezuelan crude oil—which is highly suitable for middle distillates like diesel­­—could reverberate throughout global and US energy and food prices. The data suggest that, in the United States, the trucking sector and rural areas are disproportionately exposed to diesel markets and will face affordability pressures if a large-scale military intervention doesn’t go well. While the Trump administration’s seizure of 30 million to 50 million barrels of Venezuelan oil (equivalent to about one to two months of Venezuela’s crude oil exports) will provide some buffer against short-term disruptions, long-duration outages could prove damaging.

As we’ve written previously, Venezuela is less influential in global crude oil markets than it used to be due to declining production, but it nevertheless retains a somewhat more important role in diesel markets. That’s because Venezuela (and Colombia, where the conflict could escalate horizontally) exports heavier crude oil grades that are highly suitable for diesel, while US Gulf Coast complex refineries are configured to process these grades.

The diesel “crack spread”—the difference in price between crude and diesel—indicates that while crude oil prices currently account for 41 percent of diesel prices, other factors also matter, like suitable crude grade availability. The energy consultancy RBN finds that diesel crack spreads are rising to their highest level since early 2024. Internationally, the International Energy Agency reports that global middle distillate markets are already facing price pressure on limited supplies. Accordingly, persistent disruptions to Venezuelan (and potentially Colombian) oil could hold significant impacts for US diesel and trucking markets.

Who will feel the pinch

Given the potential for a diesel price uptick and its effects on the affordability crisis, it’s worth examining how the fuel is consumed. In the United States, diesel consumption is overwhelmingly tilted to transportation, which accounted for over 75 percent of US middle distillate consumption in 2023, by volume. 

Sources: Energy Information Administration, Author’s Calculations.

Accordingly, the more than 3.5 million professional truck drivers would be disproportionately impacted if diesel prices rise. Unsurprisingly, this market and workforce skew away from metropolitan areas, as about 48 percent of truck vehicle miles traveled occur in rural areas. 

But rural areas wouldn’t be the only places affected. A jump in diesel prices would also be felt across much of the United States. State-level distillate fuel oil consumption correlates with population and energy consumption. Texas is the largest distillate fuel oil consumer in absolute terms, followed by California, New York, Pennsylvania, and Florida.

Viewed through the lens of per capita consumption, or distillate intensity, Wyoming’s was the highest at about 983 gallons (assuming that every barrel of distillate holds about 42 gallons). Other distillate-intensive states include North Dakota, Alaska, Nebraska, and New Mexico. While these states do not directly import crude oil from Venezuela (or Colombia), they will nevertheless be impacted if shortages propagate through diesel markets. 

Some of the most distillate-intensive states are surprising. Some reasons for their elevated diesel consumption include their geographic scale, coupled with large rural areas and large industrial sectors. Other reasons relate to fuel economy: diesel consumption, especially on trucks, can rise due to winter weather, high cross-winds, or hilly terrain.

Accordingly, if distillate prices rise due to major, sustained outages in Latin America arising from the US intervention in Venezuela, diesel-reliant states, trucking markets, and rural areas will face disproportionate costs. The initial raid against Maduro was an undeniable tactical success, but the economic costs and strategic tradeoffs of a long-duration and large-scale military intervention in Latin America could prove high.

Joseph Webster is a senior fellow at the Atlantic Council Global Energy Center and the Indo-Pacific Security Initiative; he also edits the independent China-Russia Report. This article represents his own personal views.

Staff

Joseph Webster

Senior Fellow, Global Energy Center

Global Energy Center Indo-Pacific Security Initiative

Central Asia China

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Dispatches Jan 4, 2026

Venezuelan oil was the enabler, not the prize

By Landon Derentz

It will likely take years to rehabilitate the country’s energy sector and achieve a sizable increase in oil exports.

Energy & Environment Oil and Gas

Dispatches Jan 3, 2026

Experts react: The US just captured Maduro. What’s next for Venezuela and the region?

By Atlantic Council experts

What does the future hold for Venezuela following the US raid that removed Nicolás Maduro from power? Atlantic Council experts share their insights.

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He also emphasized that Venezuela can “no longer cozy up to Hezbollah and Iran in our own hemisphere.” 

There are clear implications of the Maduro arrest with respect to US-Iran policy and President Donald Trump’s calculus on strategic action against Washington’s adversaries. The US president has indicated he is weighing “very strong” options on Iran as demonstrations there escalated and the death toll rose sharply over the weekend, according to rights groups.

And as Rubio indicated, the operation could also have a more immediate impact on Tehran’s interests and operations abroad—with Venezuela serving as a foothold for Iran and its proxies in the Western Hemisphere.

Our experts break down Iran’s ties to Venezuela and the impact Maduro’s capture could have on Tehran’s interests both in and outside of Iran’s own borders.

Iran-Venezuela relations: From oil to resistance axis

Venezuela-Iran relations have strengthened in recent years: Both countries are oil producers, both have struggled under a robust Western sanctions regime, and as Tehran upgraded its relationship with Caracas, its proxies, such as Hezbollah, have established themselves inside Venezuela’s borders—creating a strategic foothold in the Western Hemisphere. 

Both countries are founding members of the Organization of the Petroleum Exporting Countries (OPEC) and had an official relationship before the 1979 revolution in Iran that saw the overthrow of the shah. As the Iranian revolution unfolded and the Islamic Republic came to power in Tehran, Venezuela was one of the first countries to recognize the new Iranian government.

This relationship intensified, however, when Maduro’s predecessor, the late Venezuelan leader Hugo Chavez, became president in 1999.

Between 2001 and Chavez’s death from cancer in 2013, Chavez and his Iranian counterparts engaged in dozens of diplomatic visits, and “the two countries signed an estimated three hundred agreements of varying importance and value, ranging from working on low-income housing developments to cement plants and car factories,” according to analysis from the Center for Strategic and International Studies (CSIS). 

Under Chavez, Tehran’s development projects in Venezuela “boosted Chavez’s image and advanced his anti-imperialist agenda throughout the region.” And through Venezuela, Tehran leveraged the partnership to bolster its posture in South America, including in Bolivia and Nicaragua. 

By the tail-end of Chavez’s rule in 2012, Iran’s investments and loans in Venezuela were valued at $15 billion, according to CSIS. 

Beyond oil and diplomatic agreements, gold smuggling has also shaped the relationship model between Tehran and Caracas. Venezuela holds the largest gold reserves in Latin America (just counting Central Bank reserves, and without including geological gold resources, which would place the country in the fifth place for gold reserves worldwide). Additionally, reports indicate that gold has been smuggled to Iran for years as a mode of payment for Iranian assistance to revive Venezuela’s oil sector. 

A base for Hezbollah and the IRGC 

Joze Pelayo, associate director for strategic initiatives and policy at the Atlantic Council’s Scowcroft Middle East Security Initiative, explains

Against this backdrop, Iranian-backed Hezbollah and its affiliates have used Venezuela as a strategic hub in the Western Hemisphere. The country has served as a sanctuary for Hezbollah to evade sanctions, a center for operations and money laundering, and a base for its transnational criminal and drug trafficking network. 

Hezbollah has flourished in key locations in Venezuela—establishing itself within business networks such as Margarita Island and the Paraguaná Peninsula, both with coastal access and a significant Lebanese diaspora community.  

Iran also used the gold market in Venezuela to finance Hezbollah’s operations.  

In 2022, a seizure order signed by former Israeli Defense Minister Gallant and published by the National Bureau for Counter Terror Financing in the Ministry of Defense exposed a smuggling ring involving gold being transported on sanctioned Iranian flights with proceeds directed to Hezbollah.

In addition to all these exchanges, Iran’s Quds Force (the external arm of Iran’s Islamic Revolutionary Guard Corps responsible for asymmetric warfare, cover operations, and intelligence) maintains a robust presence in Venezuela to support Maduro in times of crisis, according to a report from December 2025.  

The hierarchical structure in Venezuela is headed by Ahmad Asadzadeh Goljahi, who oversees operations and heads the “Department 11000,” a Quds Force subunit linked to international terrorist plots, and “Department 840,” involved in overseas assassinations. It is then no surprise that the Iranians attempting to abduct US journalist Masih Alinejad from her home in New York were supposed to make a stop in Venezuela before taking her to Iran.  

Maduro’s capture and the potential realignment of Venezuela with the United States represent a major setback for the Quds Force operations and financing. Such a shift could significantly disrupt the group’s transnational criminal and drug-trafficking networks, oil-smuggling scheme, and other illicit activities tied to Hezbollah and the Islamic Republic of Iran.  

One potential silver lining: Under US custody and influence, Maduro (and possibly Acting President Delcy Rodriguez) could provide critical intelligence as witnesses and cooperators, assisting to expose the extent of these networks, how to properly root out these toxic elements from the country, and key figures the United States could go after next.

A US signal to Tehran 

Kirsten Fontenrose, nonresident senior fellow at the Scowcroft Middle East Security Initiative, explains

The Maduro case is strategically relevant less as a template than as a signal. It suggests a US willingness to act decisively against leaders already criminalized and sanctioned, rather than allowing standoffs to persist on the assumption that the risk of escalation alone will deter action.

The Trump administration framed Maduro’s capture as a law-enforcement arrest rather than a military campaign. The United States did not invoke humanitarian intervention, collective self-defense, or congressional authorization for interstate hostilities. Instead, it relied on longstanding criminal indictments and sanctions authorities. Maduro has been under US indictment since March 26, 2020, for narcotics trafficking and narco-terrorism, and he has been subject to comprehensive Treasury sanctions well before the January 2026 operation. The legal basis for such extraterritorial law-enforcement action rests on domestic authorities rather than the law of armed conflict—a distinction that is controversial but not unprecedented in US practice. 

For Tehran, the relevance is not the legal argument itself but the political signal embedded in its use. Iranian strategic planning has long assumed that US concern about escalation—particularly actions that could be interpreted as leadership targeting—would impose practical limits on Washington’s behavior. The Maduro episode complicates that assumption. It also reinforces a second point: US leverage does not depend exclusively on military operations. In this case, years of sanctions enforcement, financial pressure, indictments, and diplomatic isolation preceded the arrest, demonstrating that decisive outcomes can be pursued through non-military instruments even in high-risk contexts. 

That sequencing intersects with current thinking about the timing of pressure on Iran. Analysis by Rapidan Energy Group Chief Executive Officer Scott Modell published in late 2025 argues that early 2026 presents unusually favorable market conditions for intensified pressure on Iranian oil exports. The analysis points to soft global demand growth, rising non-OPEC supply, spare capacity among OPEC+ producers, and subdued price expectations, suggesting that concerns about oil-price spikes—often a key political constraint on US action—would be less binding in the first quarter of 2026. If that assessment holds, market considerations would be unlikely to restrain US policymakers contemplating additional economic pressure on Iran during this period. 

Trump’s public statements following the Venezuela operation reinforce this interpretation. He framed the action in terms of accountability and deterrence, not regime change or nation-building. His emphasis on speed and decisiveness is consistent with earlier US decisions favoring limited, time-bound uses of force—particularly in counterterrorism and retaliatory contexts—over extended military campaigns. 

This posture aligns with the policy orientation of figures shaping the administration’s approach. Homeland Security Advisor Stephen Miller has emphasized coercive clarity; Special Envoy to the Middle East Steve Witkoff has advocated transactional diplomacy backed by leverage; Vice President JD Vance has expressed skepticism toward open-ended military commitments. Reporting also suggests a US Central Intelligence Agency leadership preference for intelligence-driven, more aggressive collection and disruption posture. 

Recent US actions elsewhere provide additional context. Strikes against Iran-aligned militias in Iraq following attacks on US personnel in 2024, and counter-ISIS airstrikes conducted with host-nation consent in Nigeria in December 2025, illustrate a preference for responding quickly to defined threats without prolonged warning or phased escalation. These cases do not establish a doctrine, but they reinforce the impression of a US approach that favors early, bounded action over incremental response. In this context, Operation Absolute Resolve is meaningful because it unsettles a core assumption within Tehran—that leadership insulation and escalation risk reliably constrain US action. 

The core implication for Iran, then, is strategic rather than operational. The Maduro seizure suggests that the United States is prepared to act decisively against leaders who are already criminally indicted, comprehensively sanctioned, and politically isolated, and that it may do so during periods of internal strain rather than waiting for those pressures to resolve. 

None of this implies imminent leadership targeting in Iran. But it does suggest that Washington is reassessing assumptions about timing, leverage, and leadership vulnerability. 

The post The Venezuela-Iran connection and what Maduro’s capture means for Tehran, explained  appeared first on Atlantic Council.

Bottom lines up front

• A Trump-promised renaissance for Venezuelan oil and gas will be difficult to achieve.
• International oil companies are unlikely to make major new investments in the country without greater legal and regulatory certainty, but it may be possible to modestly raise production through immediate steps.
• Without real change from within, the Venezuelan industry will not be able to support the survival of the current regime or address entrenched humanitarian problems.

Within hours of the astonishing US intervention in Caracas this past weekend that captured Venezuelan strongman Nicolás Maduro, the Trump administration framed it as, among other things, a boon to its US “energy dominance” agenda. Citing Venezuela’s vast hydrocarbon resources—arguably the largest oil reserves in the world—President Donald Trump repeatedly promised that the next phase for Venezuela will involve US energy companies helping to restore the country’s failing oil and gas production, benefiting global oil markets with expanded supply. 

But the pathway from promises to meaningful production increases is likely to be a fraught one. The Trump administration seems to recognize this, as indicated by the administration seizing two oil tankers and quickly announcing an opaque arrangement wherein the United States will acquire thirty-to-fifty million barrels of already available Venezuelan crude oil. These fast wins might help justify the expenditure of US resources to continue its naval blockade and pursue further intervention, as the administration has hinted. But these moves do not fundamentally change the dynamics above or below the ground that have wrecked the Venezuelan industry. Nor do they alter the long path to a major recovery.

Indeed, a Venezuelan oil and gas production renaissance would require, among other factors, meaningful renewed interest and investment from US and international oil companies (IOCs). This will be difficult. As the Venezuelan people look ahead to a murky future and an uncertain US-led transition, leveraging their valuable energy resources to secure the country’s democratic future may prove easier said than done. 

How an industry fell apart

Decades ago, Venezuela’s oil and gas industry was a powerhouse that promised to drive the country forward. The country boasts 17 percent of global oil reserves, with an estimated 303 billion barrels of producible crude oil. In 2000, Venezuelan oil production reached a peak of 3.2 million barrels per day, enabled by joint ventures and effective partnerships between the national oil company Petróleos de Venezuela, SA, or PDVSA, and a host of IOCs.

In the early 2000s, however, the Chávez administration oversaw a nationalization of the Venezuelan oil sector that dramatically changed the terms of engagement for foreign companies. The nationalization resulted in asset seizures, international arbitration, and marked investment decline in Venezuela’s oil-producing regions by most Western companies. Following Chávez’s administration, Maduro and his officials then faced a punishing and ever-accelerating slate of US sanctions. Beginning in 2017, the first Trump administration targeted Venezuela’s oil and gas sector as the primary engine for the Maduro regime’s deepening authoritarianism.

Today, Venezuela’s oil and gas industry is in disarray. Production fluctuates below one million barrels per day, while the wider industry reels from years of underinvestment, neglect, lack of maintenance, and limited access to the engineering and technological prowess of Western IOCs. Improving this situation will require a sea change both for the Venezuelan oil and gas industry and its governing institutions; the former cannot proceed without the latter. By extension, the next steps taken by the country’s remnant Maduro-era leadership, the Trump administration, and the Venezuelan democratic opposition movement are of paramount importance to the future of the country’s energy industry. 

A stable, secure transition

The ideal first step in returning Venezuela’s industry to its former heights would be enabling a democratic transition, leading to a government that would then pass new legislation, revamp supervisory institutions, and operate in accordance with the rule of law. As of now, however, it is unclear that such a transition is the goal of either the Trump administration or Venezuela’s remaining powerbrokers. 

This concern is not a matter of idealism but rather of hard business realities. For any major corporation to engage in a foreign industry, especially in the oil and gas sector, that corporation must know who it is negotiating with. Contract designs and terms can vary considerably, but they must be developed by reliable partners who each understand the other’s roles and responsibilities. After all, a major factor that presaged the decline of Western companies’ engagement with Venezuela (and jump into arbitration proceedings) was Caracas’s reneging on contracts governing how the Venezuelan oil and gas assets were managed in terms of investment and eventual profits. Under the framework in place today, PDVSA has a majority stake in joint ventures. But in its bankrupt condition, it would be impossible for it to meet its capital commitment for nearly any project.

At this stage, it remains unclear who is actually in control of Venezuela and for how long. The Trump administration has indicated, for example, that the United States will remain in control of Venezuelan oil and gas assets for the foreseeable future, perhaps adjusting US licensing and sanctions policy to legitimize US-controlled sales of oil stored in tankers. It’s unclear how willing the Venezuelan regime will be to tolerate this. Moreover, US control is necessarily a short-term strategy. Selling off Venezuela oil stored in tankers and depositing those funds into blocked accounts controlled by the US government will avoid forcing PDVSA to shut in existing production, ensure useful supply to US Gulf Coast refiners, and provide the US government with a significant supply of funds it can manage. But volumes of floating storage are finite, and the Rodríguez government will not remain in power if it seems to be agreeing to sell off the government’s primary source of funds for the sole benefit of the United States or American creditors. 

In addition to legal considerations, the physical risk and security outlook is crucial for any industry that requires intensive on-site, day-to-day operations. These operations must be managed by crews of skilled laborers, geologists, and engineers, to say nothing of the initial construction teams and costly repairs that will be necessary throughout Venezuela’s oil and gas regions. The Trump administration has yet to detail its plan for Venezuela’s transition process apart from the acceptance of Delcy Rodríguez, Maduro’s former vice president, as the acting president. But even as Trump praised Rodríguez on Saturday, he also warned her that a failure to cooperate with a US-led transition could result in another action from US forces. 

Meanwhile, the democratic Venezuelan opposition, led by María Corina Machado, has found its role and potential future influence downplayed, with Trump saying that her movement lacks sufficient legitimacy among the Venezuelan people to be a realistic alternative. Yet another factor is the vast, complex networks of substate and illicit organizations—including violent militias and their overlords—that operate freely throughout Venezuela, have their own assets to protect, and will assuredly have opinions on who should run the country. These same stakeholders—and their foreign allies, who include geostrategic adversaries of the United States—may likewise take a dim view of the acting president’s apparent complicity in passing Venezuelan crude oil along to the United States if there are not immediate, tangible benefits for doing so outside of the remnant regime’s top brass. 

Any rational business leadership would think carefully before committing itself to new investment under these conditions. For a genuine oil sector renaissance to commence, the Venezuelan government must prove that it possesses stability, legitimacy, and resilience. US promises that a conciliatory administration in Caracas (for now) can ensure these conditions will be met with justified skepticism. 

Attracting private investment

Regulatory and financial certainty are essential factors for major international oil businesses when making significant investment decisions. This is especially true when oil and gas prices are already soft, at around sixty dollars per barrel, and most outlooks predict a global oversupply throughout the coming year. In other words, for Venezuelan oil and gas investment to make fiscal sense, IOCs will require a return on investment in a reasonable timeframe. Moreover, such businesses will need reasons to believe that long-term engagement (possibly thirty years or longer) in the country will ultimately be profitable based on global oil and gas market outlooks for the next decade or more. 

The United States removing or making major adjustments to existing sanctions on Venezuela will be crucial to expanding oil production over the short run, as well as attracting new large scale private investment to the country. At present, both the Venezuelan government and its oil and gas sector (principally PDVSA) face a punishing tranche of US sanctions that have cut them off from money, credit access, partnerships, and technology essential to running the country’s oil and gas industry. As of now, any transactions between Venezuelan entities and any foreign company are subject to US restrictions, US Treasury sanctions designations, and lost access to the US financial system. This state of affairs makes the immediate reentrance of US or other Western companies impossible.

Ideally, IOCs would like to see a scenario where most sanctions are lifted or significantly eased, along with reassurance that a reversal would not occur anytime soon. In addition, they are looking for a revamped Venezuelan regulatory framework for its energy sector, including changes to regulations governing operations, trading and exports, terms for joint ventures, asset ownership, and legal rights. Lastly, the Trump administration has hinted at measures that would enable the repayment of companies that previously exited the country in compensation for their prior losses.

A revamped licensing process that allows existing investors to expand their operations could potentially lift production by 300,000 barrels a day over the course of a year, industry experts have suggested. Allowing smaller companies to invest in production sharing, including through productive participation contracts, could likewise incentivize participation. These adjustments could enable another 200,000 to 300,000 barrels a day in new production over the course of the next twelve to eighteen months, the industry experts estimate. Funds from that production could go into a blocked account, which would realistically need to be dedicated to humanitarian benefits in Venezuela, with perhaps a share reserved for repayment of US creditors. 

For now, the Trump administration has not signaled that a major softening of the existing sanctions slate is imminent and the oil blockade remains in place. The Rodríguez leadership likewise has not signaled that a reshaping of its oil and gas regulatory framework is incoming at the behest of the United States or anyone else. Instead, the administration’s new plan for selling up to fifty million barrels of Venezuelan crude oil suggests that its focus is on growing near-term, low-hanging fruit production opportunities to prevent the industry from total collapse and shut-in of its existing production.

A positive financial and investment signal might encourage buy-in and engagement from IOCs and smaller companies. One means of doing so would be creating a new escrow account, under US control but presumably with some percentage of profits reverting back to the Venezuelan government. Such a fund could serve as the deposit site for new oil and gas profits over the near-term, ahead of a full lifting of sanctions and/or successful national elections in the future. This account could be enacted through adjustments to the existing sanctions slate, and it could provide a vehicle for early seed funds to be fed into any new Venezuelan governing institutions as a revamped regulatory design is developed. Optimistically, this fund could also serve as a test run for a new sovereign wealth fund, which could help prevent a reversion to the illegitimate use of Venezuela’s resource wealth that had been a hallmark of the Maduro regime.

For now, the Trump administration is hoping that it can deliver a strong enough signal to private oil and gas companies that there can be some compensation and long-term gains to reengagement with Venezuela, if only to enable immediate, easy repairs and infrastructure salvaging. The attractiveness of that offer, and its long-term durability and legality, are yet to be seen. 

However, much more political and regulatory change will be necessary to revive the Venezuelan energy industry. Such changes will be far more difficult to achieve than handshake deals to split revenues for a handful of oil sales; moreover, these modest steps forward are far from sufficient to address the depth of the political challenges ahead. Lifting production in the neighborhood of half-a-million barrels per day might preserve what is left of Venezuelan production capacity, but it will not be enough to keep Maduro’s remnant leadership stable or meet the population’s profound humanitarian and economic needs. As a result, the entrenched challenges of migration, drug and other illicit trafficking, intensified substate violence, and perhaps de facto Balkanization of the country by various strongmen (and their domestic or foreign backers) remain palpable risks. The Trump administration, focused on resource management in Venezuela, has so far shown little interest in resolving these issues. But they will not go away, and they could derail the administration’s vision for a more stable energy industry and country.

The post What it takes to revive Venezuela’s oil and gas industry appeared first on Atlantic Council.

On January 7, Atlantic Council vice president and Scowcroft Center senior director Matthew Kroenig was interviewed on DW News about the US seizure of a Russian flagged oil tanker carrying Venezuelan oil. He contends that the move signaled US resolve in quarantining the Venezuelan regime and adopting a firmer approach toward Russia in the Western hemisphere.

Staff

Matthew Kroenig

Vice President and Senior Director, Scowcroft Center for Strategy and Security

Scowcroft Center for Strategy and Security

China Defense Policy

The post Kroenig on DW News on US oil tanker seizures in the Caribbean appeared first on Atlantic Council.

On December 19th, 2025, Global China Hub Assistant Director Caroline Costello appeared on the China in Africa Podcast to discuss China’s outsized role in West Africa’s illegal resource trade.

The post Caroline Costello in the China in Africa Podcast appeared first on Atlantic Council.

On September 9th, 2025, Global China Hub Assistant Director Caroline Costello published an op-ed in Foreign Policy about China’s role in fueling illegal logging in Africa.

The post Caroline Costello in Foreign Policy appeared first on Atlantic Council.

Bottom lines up front

• Venezuelan oil supply is unlikely to meaningfully move global energy markets in the near term.
• Oil may help pay the costs of US intervention in Venezuela, but Trump is likely more motivated by securing the Western Hemisphere.
• The operation to remove Maduro signals Trump will take action when it advances US interests but does not burden the American public.

Based on how prominently Venezuela’s vast oil reserves featured in President Donald Trump’s Saturday press conference about the military strike that captured Nicolás Maduro, oil does appear to have played an important role in shaping the administration’s will to advance the audacious mission. Yet it would be misguided to claim that gaining access to supplies of heavy crude oil was the impetus for the operation.

Venezuelan oil supply is unlikely to move global energy markets meaningfully in the near term. For now, the country remains under an oil embargo imposed by the Trump administration. Even under optimistic assumptions, it will take years to rehabilitate the country’s energy sector and achieve a sizable increase in oil exports. Saturday’s operation didn’t hinge on nuanced assessments of crude grades or the US refining sector’s appetite for heavy supply. Energy was the enabler of a much bolder manifestation of Trump’s foreign policy as laid out in the administration’s recently released National Security Strategy. 

The United States is now practicing an enhanced version of the two-hundred-year-old Monroe Doctrine. What Trump described Saturday as the “Donroe” doctrine seeks a Western Hemisphere free from hostile external influence and aligned with US political and economic interests. This makes political realignment in Latin America relevant to the president’s vision for the region. Trump also is likely keen on aligning his removal of Maduro and approach to Venezuela with US domestic interests. That includes not saddling American taxpayers with the price tag of another conflict, as well as stemming the recent high levels of migration to the United States from Venezuela. It also includes reducing the violence caused by cartels trafficking illegal narcotics and making whole US companies whose assets Venezuela expropriated under Maduro’s predecessor Hugo Chávez. Here, oil is the enabler that may help pay for the execution of the policy, not the ultimate prize. 

In his address from Florida on Saturday, Trump correctly sized up the state of Venezuela’s oil economy: For a country with the largest oil reserves in the world, production is a “total bust” and the full potential of those assets has not been realized. Under Maduro’s rule, production declined from around 2.5 million barrels per day to less than one million barrels a day. If there is an orderly transition of power in Venezuela, then US companies will benefit from the political transformation. 

At the same time, the United States is the world’s number one oil and gas producer. It is energy secure. This explains why Trump emphasized that revitalizing Venezuela’s oil patch will make the people of Venezuela—not the United States—“rich, independent, and safe.” Consider the example of neighboring Guyana, where the public is benefiting from oil extraction by US companies. Ensuring Venezuela stands strong alongside the United States will help achieve the president’s domestic policy goals and lessen the influence of Russia, China, and Iran in the Western Hemisphere, all while avoiding economic costs to the American public. 

The policy that the Trump administration pursued on Saturday offers insight into the president’s decision-making and the impulses driving his administration. For those countries at odds with the United States, it’s a clear signal that Trump will take decisive action when US interests can be advanced without burdening the American public.

The post Venezuelan oil was the enabler, not the prize appeared first on Atlantic Council.

Nicolás Maduro is out. But who’s in? Early on Saturday morning, the US military removed the Venezuelan strongman from power, transporting him to New York to face narcoterrorism charges. President Donald Trump said the United States will now “run” Venezuela and that Maduro’s former vice president, Delcy Rodríguez, has assumed the presidency for now. What does it all mean for the United States, the Venezuelan people, and the country’s oil? Our experts have the preliminary answers.

• Jason Marczak (@jmarczak): Vice president and senior director at the Atlantic Council’s Adrienne Arsht Latin America Center 
• Iria Puyosa (@NSC): Senior research fellow at the Atlantic Council’s Democracy+Tech Initiative and a native of Venezuela 
• Alexander B. Gray (@AlexGrayForOK): Nonresident senior fellow with the GeoStrategy Initiative at the Atlantic Council’s Scowcroft Center for Strategy and Security, and former deputy assistant to the president and chief of staff of the White House National Security Council 
• David Goldwyn (@Dlgoldwyn): Chairman of the Atlantic Council Global Energy Center’s Energy Advisory Group and former US State Department special envoy and coordinator for international energy affairs 

Changing the regime

• “This is the most consequential moment in recent Venezuelan history—and for the broader Latin American region,” Jason tells us. “This operation goes beyond a simple extradition: It is a regime-change effort.” 
• For now, Rodríguez—who was very much a part of the Maduro regime—is in power, though she “does not appear to have the backing of all factions within the ruling party,” Iria notes.  
• “Rodríguez cannot guarantee the stability required for” the Venezuelan economic revival that Trump is calling for, Iria adds. “Chavismo no longer enjoys the widespread popular support it had two decades ago.” 
• Jason points out that Rodríguez is constitutionally obligated to call new elections within thirty days, but even that step would in effect come from the same regime that stole an election rightfully won by the opposition in 2024. Trump called for a “safe and judicious transition,” but Jason notes that “many entrenched actors are likely to resist meaningful change,” even though “real change is fundamental to US interests and to the Venezuelan people.” 

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The Trump Corollary

• Trump’s 2025 National Security Strategy outlined a “Trump Corollary” to the Monroe Doctrine, with a focus on securing the Western Hemisphere. This operation tells us the Trump Corollary “is officially in effect,” Alex says. “Washington has demonstrated a long-overdue commitment to hemispheric security.” 
• And US adversaries are watching. The operation “will be seen in Beijing and Moscow as an unambiguous sign of the Trump administration’s commitment to a security order compatible with American interests,” Alex explains. 
• The operation, Alex adds, “creates a once-in-a-generation opportunity for Washington to translate its security preferences into strategic reality” by “ensuring extra-hemispheric powers like China and Russia are excluded from meaningful influence in Caracas.” 
• Trump also sent a message to other leaders in the region. “Trump mentioned Colombia and Cuba as countries whose leaders should now know the consequences of not cooperating with the United States,” Jason points out. 

Oil outcomes

• Trump spoke of bringing back US oil companies that were booted out by Venezuela’s 1976 nationalization of the oil industry. But “few US companies are likely to return to the country until there is a reliable legal and fiscal regime and stable security situation,” David tells us. “Companies that have existing operations are much more likely to revive and expand them if the environment is secure.” 
• The United States has plenty of policy options at its disposal, David says. For example, the administration “could allow oil currently on tankers to be exported, expand licensing, and permit Venezuela to sell oil at market prices, all for the purpose of maximizing national revenue.” 
• But, David adds, “until there is clarity on sanctions and licensing and more information on who is actually managing the central bank and ministry of finance, the prospects for Venezuelan oil production and exports will remain uncertain.” 

The post What to watch in a post-Maduro Venezuela appeared first on Atlantic Council.

So, what’s next for Maduro, Venezuelans, and US efforts in the region? Below, Atlantic Council experts share their insights.

Click to jump to an expert analysis:

Jason Marczak: The US needs to remain committed to a democratic transition

Matthew Kroenig: A win for regional security, the Venezuelan people, and the US military

Alexander B. Gray: This operation sends a signal to Beijing and Moscow

David Goldwyn: Opening up Venezuela’s energy industry will come down to the details 

Celeste Kmiotek: The US strikes most likely fall afoul of international law

Iria Puyosa: Delcy Rodríguez cannot guarantee the stability Trump wants

Geoff Ramsey: The mission is not accomplished until Venezuelans get free and fair elections

Nizar El Fakih: Multilateralism failed Venezuela. But it failed long before today.

Tressa Guenov: Success will require years-long US diplomatic and economic efforts in Venezuela

Kirsten Fontenrose: Watching Venezuela from Tehran

Thomas S. Warrick: Maduro’s ouster will cause shock waves in the Middle East

Alex Plitsas: Three scenarios for what could come next 

The US needs to remain committed to a democratic transition 

Many Venezuelans are hopeful that today marks the beginning of a new era. The removal of Nicolás Maduro from power is a reality that Venezuelans in the country and the nearly eight million forced to flee under his regime have long sought.

Here are three key takeaways from the operation:

First, this is the most consequential moment in recent Venezuelan history—and for the broader Latin American region. Trump’s Saturday announcement made it clear that this operation goes beyond a simple extradition: It is a regime-change effort. Maduro is now en route to New York City to face criminal charges, but the United States intends to “run the country” until “a safe and judicious transition” takes place. That means Delcy Rodríguez, Maduro’s vice president, cannot simply take power and continue his policies. In assuming the presidency, she is constitutionally obligated to hold elections within thirty days. But remember, there was a prior election in July 2024 which opposition leader Edmundo González won, according to released vote tallies.

Second, the US military operation is the start—not the end—of a new level of direct US engagement in Venezuela. Trump confirmed that a team has been designated to run Venezuela, with key figures such as Secretary of State Marco Rubio engaging with Rodríguez. While US forces are expected to provide security around critical infrastructure, broader public security and the protection of citizens remain pressing challenges in a country plagued by gangs, paramilitary groups, guerrillas, and transnational cartels. Hundreds of political prisoners still remain locked up, with their fate of top importance.

Third, today’s actions are the first concrete deliverables of Trump’s new National Security Strategy with its heavy emphasis on the Western Hemisphere. And the president has made it clear that future US operations in the region are fair game as well. Trump mentioned Colombia and Cuba as countries whose leaders should now know the consequences of not cooperating with the United States.

Fourth, the United States now bears responsibility for the eventual outcome in Venezuela. The challenge will be ensuring a “safe and judicious transition” in a country where many entrenched actors are likely to resist meaningful change, but where real change is fundamental to US interests and to the Venezuelan people.

​Some commentators are arguing that the strike is illegal under international law. I am not a legal expert, but it’s worth noting that even though heads of state do enjoy immunity from prosecution under international law, few world leaders recognize Maduro as a legitimate head of state. Since 2019, the Organization of American States, the premier multilateral body for the hemisphere, has refused to recognize Maduro as president following that year’s stolen elections.

—Jason Marczak is vice president and senior director at the Atlantic Council’s Adrienne Arsht Latin America Center.

A win for regional security, the Venezuelan people, and the US military 

There are five winners of the successful US operation to remove Maduro from power in Venezuela: 

1. US, regional, and global security. The world is better off without an anti-American dictator who traffics narcotics, prompts irregular migration flows, and provides a foothold to the “axis of aggressors” (China, Russia, and Iran) in the Western Hemisphere.
2. The Venezuelan people. They now have the opportunity for a better government and a freer and more prosperous future.
3. US military power. This shows that the US military is still the finest fighting force in the world and may help Washington find its confidence and get over its Iraq-Afghanistan hangover.
4. Special operations forces. They have been eager to show higher-level officials in Washington that they are still relevant after the war on terror—and indeed even more so now.
5. Trump’s foreign policy. This is a dramatic foreign policy victory, among the top three of the first year in Trump’s second term, alongside degrading Iran’s nuclear program and increasing NATO defense spending.  

—Matthew Kroenig is vice president and senior director of the Atlantic Council’s Scowcroft Center for Strategy and Security and the Council’s director of studies. 

This operation sends a signal to Beijing and Moscow 

The “Trump Corollary” to the Monroe Doctrine, as outlined in the 2025 National Security Strategy, is officially in effect. Just days after the Chinese People’s Liberation Army was reported to be war-gaming combat operations in the Western Hemisphere, and a new official Chinese strategy for Latin America refused to recognize the region as of special significance to US security, Washington has demonstrated a long-overdue commitment to hemispheric security.

The Trump administration’s removal of Maduro from power in Venezuela is not simply a message to antagonistic regimes in the hemisphere, like Cuba and Nicaragua; it is a global reestablishment of deterrence that will be seen in Beijing and Moscow as an unambiguous sign of the Trump administration’s commitment to a security order compatible with American interests.

Going forward, the administration has a unique opportunity to build upon the success of its pressure campaign against Maduro to reestablish overwhelming US strategic predominance in the hemisphere, including by tacitly shaping a post-Maduro settlement that ensures extra-hemispheric powers like China and Russia are excluded from meaningful influence in Caracas. The success of this operation creates a once-in-a-generation opportunity for Washington to translate its security preferences into strategic reality.

—Alexander B. Gray is a nonresident senior fellow with the GeoStrategy Initiative at the Atlantic Council’s Scowcroft Center for Strategy and Security. Gray most recently served as deputy assistant to the president and chief of staff of the White House National Security Council.

Opening up Venezuela’s energy industry will come down to the details 

From an energy perspective the key questions will be who governs the country, the timeline and nature of a transitional government, the security situation in the country at large and in the oil production sites and ports, and if the US government modulates the sanctions regime and the blockade to financially support a potential transitional government. At this writing, Trump has declared that the United States will run the country until the situation is stabilized, and he declined to endorse González. Trump also asserted that US oil companies would return to Venezuela. 

It remains to be seen whether there will be resistance from loyalists of the regime and remaining members of Cuban intelligence. Few US companies are likely to return to the country until there is a reliable legal and fiscal regime and stable security situation. Companies that have existing operations are much more likely to revive and expand them if the environment is secure.

It is highly uncertain how the US administration will approach exports and management of those revenues. It could allow oil currently on tankers to be exported, expand licensing, and permit Venezuela to sell oil at market prices, all for the purpose of maximizing national revenue. It is also possible that those revenues would go into a blocked account for the benefit of a new Venezuela government.

But for now, we have no details about how these fiscal and legal arrangements will evolve. Until there is clarity on sanctions and licensing and more information on who is actually managing the central bank and ministry of finance, the prospects for Venezuelan oil production and exports will remain uncertain.

—David Goldwyn is president of Goldwyn Global Strategies, LLC, an international energy advisory consultancy, and chairman of the Atlantic Council Global Energy Center’s Energy Advisory Group.

The US strikes most likely fall afoul of international law

Maduro oversaw a brutal regime engaged in violent human rights violations against Venezuelan citizens. Regardless of this, the US strikes on Venezuela were illegal under international law.

The United Nations (UN) Charter forbids use of force against a state’s “territorial integrity or political independence,” with exceptions permitted for self-defense and Security Council authorizations. Self-defense requires that the force used be necessary and proportional, and that the threat be imminent. None of these conditions appear to have been met. As such, the attacks appear to fall under Article 3(a) of the UN General Assembly’s definition of the crime of aggression. This provision is customary, meaning it is binding and applies regardless of US arguments that the actions are legal under domestic law.

The use of force also marked the onset of an international armed conflict between the United States and Venezuela, triggering the applicability of international humanitarian law. While so far most targets appear to have been military, Trump threatened a second “and much larger” attack “if needed.” Trump’s announcement that the United States will “run” Venezuela and may deploy forces also raises alarms around potential occupation.

Finally, as sitting head of state, international law affords Maduro full personal immunity under domestic courts—including in the United States. Since 2019, the United States and other countries have not recognized Maduro as head of state, in response to widespread election fraud, and he is widely considered an illegitimate ruler. However, as argued by the French Cour de Cassation, this immunity should apply regardless of whether a state recognizes a head of state’s leadership—precisely to prevent politically motivated arrests.

While Maduro must be held accountable for the human rights violations he has inflicted, the United States’ unlawful actions must be condemned. Allowing such precedents to go unchallenged will further undermine respect for international law, state sovereignty, and civilian protections.

—Celeste Kmiotek is a senior staff lawyer for the Strategic Litigation Project at the Atlantic Council.

Delcy Rodríguez cannot guarantee the stability Trump wants

The US decapitation operation against the autocratic regime that ruled Venezuela for over twenty-five years—first led by Hugo Chavez, then by Maduro—marks the beginning of the restoration of democracy in the country. The regime was unable to mount any effective defensive military actions. Its usually strong communication apparatus failed catastrophically during the first twelve hours following the US operation to take Maduro from his residence inside Fuerte Tiuna, the principal military base of the Venezuelan army. The military command-and-control chains were clearly disrupted.

Venezuelans are eager to reclaim their country and restore democracy. There is hope that González—who was rightfully elected president in 2024—will soon take the oath, and many trust that María Corina Machado will successfully lead the transition process, which may take months or even years. The second-in-command figure in the regime, Rodríguez, who was sworn in today to take Maduro’s place, does not appear to have the backing of all factions within the ruling party. Rodríguez cannot guarantee the stability required for the business operations Trump emphasized several times during his remarks on the operation. Chavismo no longer enjoys the widespread popular support it had two decades ago.

The Venezuelan people who have fought nonviolently against a highly repressive regime for over two decades will continue their struggle until freedom and democracy are fully restored.

—Iria Puyosa is a senior research fellow at the Atlantic Council’s Democracy+Tech Initiative. Puyosa was previously an associate professor at the College of Social Sciences at the Central University of Venezuela.

The mission is not accomplished until Venezuelans get free and fair elections 

With Rodríguez appearing on state television Saturday afternoon and convening a “National Council in Defense of the Nation” made up of every heavyweight in the ruling party, it seems likely that she is indeed serving as the country’s de facto leader—for now.

While she claimed that Maduro remains “the only president,” called for his release, and said that Venezuela would never be “a colony of any empire,” she also noted that the Supreme Court will be reviewing a national emergency decree signed by Maduro as his last executive act. This points to further announcements to come, in which Rodríguez will almost certainly claim that she is now the country’s interim leader.

Whoever emerges on top of the power struggle in Caracas, it is fundamental that the United States use its considerable leverage to incentivize a roadmap for a transition. It is essential that the Venezuelan people are presented with a credible plan for free and fair elections, the release of political prisoners, and a path toward economic recovery. The United States can help pave this path by offering gradual, phased sanctions relief in exchange for verifiable progress toward democratization.

It is logical for the United States to advance its own energy, migration, and broader geopolitical interests in Venezuela, but US policymakers should not consider their mission accomplished until Venezuelans’ fundamental right to elect their own leaders is restored.

—Geoff Ramsey is a nonresident senior fellow at the Atlantic Council’s Adrienne Arsht Latin America Center.

Multilateralism failed Venezuela. But it failed long before today.

Many today are emphasizing the importance of multilateralism and warning about its erosion as a result of the unilateral US actions in Venezuela. But the reality is different: Multilateralism in the face of the Venezuelan crisis did not fail today—it failed years ago.

That failure—resounding, stark, and undeniable—is measured in millions of exiles, many now undocumented or living in precarious conditions across dozens of countries, constituting one of the largest forced displacements in the world without a conventional war or internal armed conflict. It is measured in millions of families torn apart by a regime that systematically destroyed its own society: opposition parties dismantled, dissidents disappeared, deaths under custody, widespread torture, the mass closure of independent media, expropriations that crippled the productive economy (years before any international sanction), hyperinflation that impoverished millions of working families, and sustained repression.

Meanwhile, diplomacy and multilateral institutions proved unable to deliver a single effective negotiation process leading to an orderly, peaceful, and negotiated transition—despite years of appeals by millions of Venezuelans who voted, protested, and exhausted every available civic mechanism at enormous personal cost.

And international justice? The International Criminal Court, with an investigation open since 2021, has yet to issue a single indictment—despite extensive documentation of crimes against humanity by the United Nations Fact-Finding Mission on Venezuela, Human Rights Watch, Amnesty International, and hundreds of victims. Their testimonies provided detailed accounts of a sophisticated, systematic, and nationwide apparatus of repression designed to crush dissent that has been operating in the country for several years under this regime.

Looking ahead, a central concern among Venezuelans—both inside and outside the country—is whether stability will follow, and what political order will emerge from the vacuum left by Maduro, particularly given the competing factions within the former regime. What is clear is that Venezuelans expressed their will at the ballot box: In the July 2024 presidential election, the opposition—led by González and Machado—won decisively, a result the Maduro government refused to recognize, further deepening the crisis that culminated in today’s events.

Any sustainable transition will require that this legitimate leadership, with broad and demonstrable support inside Venezuela, be empowered to lead a democratic transition through a credible and legitimate process.

—Nizar El Fakih is a nonresident senior fellow with the Strategic Litigation Project at the Atlantic Council.

Success will require years-long US diplomatic and economic efforts in Venezuela

While it’s far too soon to know Venezuela’s ultimate disposition following today’s operations, we do know that Trump says that the United States will essentially “run” the country for now. Trump has prided himself on touching many conflicts around the world—from those between Rwanda and the Democratic Republic of the Congo and Azerbaijan and Armenia to Gaza and Ukraine—quickly claiming several as resolved. But one thing the administration has yet to prove in nearly all cases, especially Venezuela, is whether it has the sustained attention span for the years-long diplomatic and economic efforts required to bring societies out of chaos and repression.

Even a short-term endeavor of running Venezuela will cost significant US military and taxpayer resources. It will also require real diplomatic finesse to ensure that the United States remains a credible leader in the region, which has now become the centerpiece of US national security strategy. Meanwhile, China will likely continue its lower-key but serious commitment to economic development in Latin America and elsewhere around the world.

Venezuela will be a test of Trump’s strategy for US dominance in the region and whether his collective peace and security efforts—from Caracas to Kyiv—can result in real strategic advantages for the United States. The alternative would be a stack of unfinished US projects that leave real lives affected in the wake.

—Tressa Guenov is the director for programs and operations and a senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. She previously served as the principal deputy assistant secretary of defense for international security affairs in the Office of the Under Secretary of Defense for Policy.

Watching Venezuela from Tehran

From a technical and military standpoint, the US operation in Venezuela signals to Iran that Washington is increasingly confident operating against Russian-derived, layered air-defense architectures without needing to dismantle them through a prolonged, overt suppression of enemy air defenses (or SEAD) campaign. Venezuela’s inventory—anchored by S-300VM, Buk-M2, and point defenses such as Pantsir-S1, supported by Russian and Chinese radars—closely resembles the architecture Iran fields around critical sites. Yet the US operation appears to have achieved its objectives without forcing visible air-defense engagement.

Available reporting suggests the US operation evaded detection and engagement by leaning on standoff effects; persistent intelligence, surveillance, and reconnaissance (ISR); electronic attack; and compressed timelines. Under such conditions, systems like Buk and Pantsir may never generate a usable firing solution, while high-value S-300-class assets become difficult to employ without sustained targets, clear attribution, and political authorization. The issue is not only theoretical capability, but whether layered defenses can meaningfully influence outcomes during brief, tightly sequenced operations.

This reinforces a broader pattern Iran will recognize. Russian air defenses have struggled to impose decisive effects in other theaters—including Syria, where Israeli strikes have repeatedly penetrated layered systems, and Ukraine, where Pantsir, Buk, and S-300 variants have suffered attrition under modern ISR-strike cycles. 

Equally relevant is the diplomatic dimension. In Venezuela, as with Iran, US military action coincided with standing diplomatic offers—sanctions relief, normalization steps, and elements of proposed deals—kept on the table before and during the use of force. The combined signal to Tehran is that neither reliance on Russian air defenses nor the slow-rolling of US proposals necessarily alters the pace or structure of US action.  

Recent US strikes in Nigeria send a reinforcing signal. There the United States acted without prolonged warning or phased escalation, using remote airstrikes supported by the Nigerian government. These operations underscore a reduced tolerance for drawn-out escalation dynamics and a preference for short-duration, outcome-oriented use of force.  

For Iran, the relevance lies not in the specific targets or theaters, but in the demonstrated willingness of the United States to move decisively once thresholds are crossed. 

—Kirsten Fontenrose is a nonresident senior fellow at the Scowcroft Middle East Security Initiative in the Atlantic Council’s Middle East Programs. She was previously the senior director for the Gulf at the National Security Council.

Maduro’s ouster will cause shock waves in the Middle East

The success of Trump’s bold operation to remove Maduro will cause global shock waves, including in the Middle East. Saturday’s successful operation puts Trump’s “locked and loaded” message on Friday to Iran’s leaders in a different perspective. However, the Venezuelan operation took months of planning, and there are no signs that the United States has the capability, or the intention, to pull off something similar in Iran.

Still, as a demonstration of Trump’s willingness to back months of rhetoric against Maduro with dramatic—and effective—action, Saturday’s operation should concern Iran’s leaders. Those who know their history—and the Trump administration has some like Sebastian Gorka who do—will remember that in 1956 the United States failed to follow up on its encouragement of Hungarian protesters against Soviet rule. The Trump administration ought to be aware of the dangers of vague rhetoric that cannot be followed up with action. Trump’s words to Iran and the Middle East in the coming weeks need to be made with steely-eyed capability and intention.

—Thomas S. Warrick is a nonresident senior fellow in the Scowcroft Middle East Security Initiative and a former deputy assistant secretary for counterterrorism policy in the US Department of Homeland Security.

Three scenarios for what could come next 

The US operation to capture Maduro and transfer him to stand trial in the United States on criminal charges dating back to 2020 marks a decisive inflection point for Venezuela. What follows will hinge less on Washington’s next move than on the calculations of the regime’s remaining power brokers, military commanders, intelligence chiefs, and political enablers who are now confronted with a stark choice: negotiate an orderly exit or risk annihilation alongside a collapsing system.

In the best-case scenario, Maduro’s arrest catalyzes elite defection. Faced with legal exposure, sanctions, and loss of patronage, regime underlings could seek guarantees for safe passage, limited amnesty, or third-country exile in exchange for transferring authority to the legitimately elected opposition. Such a negotiated handover would avert mass violence, stabilize institutions, and open a narrow but viable path toward economic recovery and international reintegration. 

Another scenario is that the United States has been working secretly with elements of the Venezuelan government who will take over. 

The worst-case scenario is far darker. If regime remnants reject negotiation and fragment, Venezuela could descend into a protracted guerrilla conflict. Armed colectivos, criminalized military units, and narco-linked factions could wage asymmetric warfare, turning parts of the country into contested zones and prolonging civilian suffering long after the regime’s formal collapse. 

 —Alex Plitsas is a nonresident senior fellow with the Scowcroft Middle East Security Initiative, the head of the Atlantic Council’s Counterterrorism Project, and a former chief of sensitive activities for special operations and combating terrorism in the Office of the Secretary of Defense.

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The Canadian government is making a “generational investment” in its infrastructure—including pipelines, ports, and roadways. Prime Minister Mark Carney’s first federal budget, unveiled in early November 2025, establishes Canada’s long-term prosperity as a driver for this investment and enables the new government to approach linked global challenges from a place of strength. Canada’s budget process differs from the US budget process, producing a more concrete plan with less room for deviation once the budget is set. The Canadian government budget outlines actual revenue and the government’s expenditure plans. Indeed, infrastructure investments combine two priorities in the current threat landscape: economic ambition and military necessity. To achieve the stated goals of doubling Canadian exports to non-US markets over the next decade and meeting the new defense spending pledge to which NATO allies committed at the Hague summit, Canada’s new budget begins a major effort to have infrastructure catch up to ambition.

Nowhere is this more apparent than in Canada’s Arctic, where infrastructure investment has sorely lagged. Canada’s vast and remote north is a challenging environment for building infrastructure. It is costly to build and to maintain, with prohibitively high initial costs and the “tyranny of distance” often deterring investment. Amid growing international interest in the Arctic, including pressure from the United States, Canada’s north can no longer be ignored, especially as Carney’s new nation-building agenda pushes for investment in infrastructure. Investing in Canada’s northern infrastructure addresses multiple necessities: It bolsters Canada’s military footprint in the Arctic; it contributes to NATO commitments on defense spending, particularly toward the goal of 1.5 percent of gross domestic product (GDP) spent on infrastructure; it strengthens the economic opportunities available to communities in the region; and it improves access to critical minerals.  

The Canadian Arctic is facing a profound period of transformation. It is warming nearly four times faster than the rest of the globe, dramatically impacting attempts to build infrastructure in the region. Permafrost thaw, less sea ice, and rising sea levels are all challenges facing Canada’s north. Ultimately, this reality needs to be central to the development of infrastructure projects in the region. Canada seeks to become a “clean energy superpower” by supporting the development of low-emission energy projects such as nuclear reactors and low-carbon liquefied natural gas. The government is pushing for the development of carbon capture and storage technologies, as well as enhanced methane regulations. It is also affirming its commitment to the industrial carbon tax. The new federal budget’s approval by parliament was only possible with support from the Green Party. The environment must remain central to Carney’s plans for economic and infrastructure expansion in order to maintain support for his minority government.

One highlight of the new budget is the Arctic Infrastructure Fund. The government is proposing C$1 billion over four years for Transport Canada to invest in “major transportation projects in the north,” including “airports, seaports, all-season roads, and highways.” These infrastructure investments have both civilian and military uses. The Mackenzie Valley Highway is a prime example of the challenges facing major infrastructure projects in the region. The all-weather highway extension is designed to connect remote communities in the Northwest Territories. While this project’s origins date back to the 1960s, it is still several years from breaking ground. The Mackenzie Valley Highway alone is projected to cost C$1.65 billion, with the majority of the cost covered by the federal government. In this context, C$1 billion over four years—while an admirable start—is simply not enough to make a significant difference. To address infrastructure needs in Canada’s north, and to transform its portion of the Arctic so it is no longer the “soft underbelly” of the North American Arctic, this funding must be only the beginning of the Canadian government’s investments. As Carney’s large-scale projects continue to unfold, the Canadian Arctic will require more resources to meet civil and military infrastructure needs and effectively project power into the north.

In late 2025, the Atlantic Council’s Transatlantic Security Initiative hosted a workshop with government officials, academic experts, and participants from the public and private sectors of Canada, the United States, and Europe. The insights gathered from these conversations helped inform this issue brief, which assesses challenges, recommendations, and opportunities for Canada’s infrastructure in the Arctic.

Recommendations for the Department of National Defence and Canadian Armed Forces

Incorporate sustainability and climate security in Arctic infrastructure planning

Many of the Canadian government’s plans for infrastructure in the Arctic are dual use in nature, with the goal of increasing its military footprint in the region. Increased military or infrastructure presence in Canada’s north will invariably have environmental ramifications. Air- and sea-based military activities can generate excessive noise levels and air pollution, while military exercises can result in soil compaction and the destruction of vegetation. As Canada grows its infrastructure footprint in the north, it will need to include countermeasures to offset this damage—such as creating specific operational zones to protect ecosystems or paying to mitigate harm done to the environment. 

Despite these challenges, Canada has extensive resources at its disposal, such as NATO’s new Climate Change and Security Centre of Excellence (CCASCOE), headquartered in Montreal. This center can coordinate best practices, act as a standard-setting body, and provide guidance for allies and partners to operate sustainably in the region. Drawing on lessons from the European Arctic and adapting them for the North American Arctic is one area in which this center of excellence can benefit dual-use infrastructure projects.

Another reason to ensure infrastructure in the Canadian Arctic meets environmental standards is to support Canada’s new Climate Competitiveness Strategy. By linking climate sustainability to economic growth, the Canadian government is building a competitive advantage at a time when other Group of Seven (G7) countries and the European Union are walking back pledges to meet green targets.

Include local communities’ expertise and experiences in infrastructure development

As investments in Canada’s Arctic infrastructure increase, environmental considerations are being taken into account—and the experiences and expertise of those living in Canada’s northernmost regions must also be integrated into planning. Indigenous and local communities are on the forefront of the challenges facing the region, from sinking roads and runways to access to healthcare. Calls to work with Indigenous and First Nation communities are integrated throughout the budget.

Starting in 2025–2026, the government is allocating C$40 million over two years to Indigenous Services Canada through the Strategic Partnerships Initiative “to support Indigenous capacity building and consultation on nation-building projects,” some of which will be in the Canadian Arctic. The Arctic Infrastructure Fund, with its C$1 billion over four years, is specifically tasked with advancing Indigenous economic reconciliation. The budget highlights that “dual-use infrastructure investments in the north will reliably meet both military and local needs, and the government recognizes that Inuit, First Nations, and other communities are best placed to identify community needs.” Spending on infrastructure in Canada’s north has military, economic, and local resilience factors. Ensuring local and Indigenous perspectives are integrated into all stages of infrastructure development—from the planning stages to design, groundbreaking, and finalization of projects—will be key to ensuring the investments successfully meet the needs of both the military and the local community. Investing in roadways, ports, and railways in the Arctic, in close alignment with the local community, will amplify whole-of-society resilience in ways not yet realized.

Recognize critical minerals’ potential as a driver of infrastructure development in the region.

The Canadian government’s decision to increase investment in infrastructure and its northern territories can be partially understood by the global race for rare earth materials heating up. At the G7 meeting in Alberta, the prime minister introduced the Critical Minerals Production Alliance—a Canadian-led initiative that leverages trusted international partnerships to enhance critical mineral supply chains for collective defense and advanced technology.

Canada is one of the top five producers of ten critical minerals, and minerals account for 5 percent of Canada’s nominal GDP. Its northern regions are home to significant deposits of iron ore, gold, diamonds, and rare earth elements. The Mary River Mine on Baffin Island is one of the world’s northernmost reserves of high-grade iron ore, producing millions of tons annually. Similarly, the Hope Bay and Meliadine gold mines contribute substantially to Canada’s mineral output. These resources are critical for economic development and for national security.

Another major priority identified in the new budget is the Port of Churchill Plus. A series of projects will upgrade the Port of Churchill—Canada’s only Arctic-region deepwater port for more than 106,000 miles of coastline—and expand trade corridors with an all-weather road, an upgraded rail line, a new energy corridor, and marine icebreaking capacity. The goal is for the Port of Churchill to become a major four-season and dual-use gateway for the region. Expanded export capacity in the north through Hudson Bay will contribute to increased and diversified trade with Europe and other partners, while more strongly linking Churchill to the rest of Canada.

While this push for access to critical minerals makes sense from an economic perspective, it has several notable roadblocks to overcome. First is the lack of processing and refinement capabilities in Canada, and in the West more broadly. China has exerted a global chokehold over rare earth materials globally, partly due to its technical expertise in the processing stage. Western companies have struggled to compete with China over environmental and regulatory concerns, which leads to the second point: Extraction of critical minerals has an environmental tradeoff. Canada’s economic expansionism and green ambitions will eventually collide—likely in the critical minerals space. In the ever-shifting global market for critical minerals, Canada cannot prioritize short-term economic gain over long-term environmental consequences.

As always, one of the core challenges facing infrastructure projects in Canada’s north lies in sustaining this momentum in the long term. The narrow passage of this budget by parliament demonstrates the challenges of minority government rule. Improving affordability for average Canadians was the main refrain of those who voted against the new budget—a challenge that will not go away in the short term. In the long term, Carney must break the chronic habit of previous governments promising on defense spending without following through. The budget also highlights upcoming sacrifices—C$60 billion in total spending cuts in the next five years—including a 10 percent cut to the public sector (amounting to roughly forty thousand jobs). Although the C$1 billion in funding through the Arctic Infrastructure Fund is a strong step forward, it will need considerably more funding to meet Canada’s ambitions in the region and must be supported by action.

Jason C. Moyer is a nonresident fellow with the Transatlantic Security Initiative at the Atlantic Council’s Scowcroft Center for Strategy and Security. 

Issue Brief May 30, 2025

The frontier is the front line: On climate resilience for infrastructure and supplies in Canada’s Arctic

By Jeffrey Reynolds, Kristen Taylor

The front lines of strategic competition now run through the Arctic. Ottawa must do more to enhance its military readiness and infrastructure preparedness in the region.

Climate Change & Climate Action Defense Policy

Report Aug 1, 2025

Defining Canada’s threat landscape: Resetting for a new reality

By Peter Engelke, Ginger Matchett, Samantha Wong

In a changing strategic landscape, Canada must reinforce its national security and confront the threats of geopolitics, climate change, and emerging technology.

Climate Change & Climate Action Defense Policy

Issue Brief Dec 22, 2025

How to equip Canada’s defense industrial base to meet NATO’s Hague summit commitments

By Jason C. Moyer

In 2025 Canada met NATO’s target of spending 2 percent of GDP on defense for the first time and committed to the new target of 5 percent by 2035, but its defense industrial base will struggle to deliver in its current state.

Defense Industry Defense Policy

The Transatlantic Security Initiative aims to reinforce the strong and resilient transatlantic relationship that is prepared to deter and defend, succeed in strategic competition, and harness emerging capabilities to address future threats and opportunities.

Learn more

The post Prioritizing Canada’s investment in Arctic infrastructure appeared first on Atlantic Council.

New president, new pressures

José Antonio Kast will head to La Moneda in March 2026. Chile’s president-elect won the second round of the election with 58.2 percent of the vote—winning by a margin of more than 16 percentage points. The day after the election, Kast met with outgoing President Gabriel Boric and emphasized afterward that he will advance a “government of national unity on priority issues: security, health, education, and housing.”

Kast will enter office with a slew of economic pressures in his inbox: slow growth, weak investment, stagnant productivity, high inequality, limited social mobility, and regional gaps. The labor market remains segmented, with low female participation and high informality. Along with these economic pressures, security and rising crime rates dominated the electoral campaign and addressing them will be central to Kast’s government plan.

In 2024, Chile’s economy showed signs of stable but uneven recovery, with moderate 2.6-percent gross domestic product (GDP) growth driven largely by mining, easing inflation, and falling poverty, while unemployment and informality remained elevated and investment growth lagged. Looking ahead to 2026, growth is expected to remain steady at 2.6 percent. Alongside a narrowing fiscal deficit and inflation stabilizing, this suggests a macroeconomic environment that is steady but still dependent on restoring investment momentum.

Chileans want to see changes and expect Kast to deliver some economic wins quickly. But the ability to do so goes hand in hand with addressing the increased rates of crime and violence. Kast’s campaign focused on the security of the country with proposals such as his Plan Implacable,  which aims to “restore state authority and curb organized crime” through tougher penalties, more federal control over prisons, and stronger security operations, while also reasserting state authority in areas where criminal networks have expanded. This plan might be among the things on which Chileans want Kast to take action first. However, Kast and his administration need to balance what they want and what they can actually get done, especially regarding migration and deportation.

A challenging congress

The first one hundred days of the Kast administration will test the executive’s ability to move legislation that supports faster growth, rebuilds investor confidence that has been weakened by security concerns and political fragmentation, and signals a clearer economic direction.

That said, Kast takes office with a congress that leans right but does not give him full control. Right and far-right parties aligned with Kast hold seventy-six of the 155 seats in the Chamber of Deputies, with his second-round opponent Jeannette Jara’s left and far-left coalition of Unidad por Chile controlling sixty-one. The swing party of Franco Parisi, Partido de la Gente, holds fourteen seats.

Kast will need a simple majority to pass most legislation. But constitutional amendments and reforms of the electoral system would require two-thirds of votes in the congress. Kast’s coalition cannot reach either threshold on its own, and must work with partners to move any major bill forward. This makes the Partido de la Gente especially important. Because no bloc controls a majority, its fourteen deputies are in position to decide whether a proposal advances or fails. Its votes can tilt negotiations, shape the final text of legislation, and determine how governable the next term becomes.

Passing legislation through the lower house will be easier, but major legislation such as Kast’s proposed mass deportations will need broader support. The evenly split senate will require him to work with the traditional right as well as swing actors to move legislation. As such, Kast will be faced with increased pressure to deliver short-term results on crime and economic growth, signaling early whether his administration can translate public demand for order and stability into a more predictable environment for investment, something US investors typically look for before committing capital in Chile.

How Chile’s investment environment has shifted

Since the mid-1980s, Chile has implemented significant reforms that opened its economy and encouraged foreign investment. These included changes in the financial and social markets, such as Law No. 20.848 of 2015 establishing the framework for foreign direct investment (FDI), as well as other tax and labor reforms. However, social unrest in 2019, the COVID-19 pandemic, two failed constitutional reform attempts, and rising crime have affected investor confidence.

The foundation for investment in Chile lies in democracy, rule of law, and a predictable regulatory environment. The Organisation for Economic Co-operation and Development (OECD) has indicated that Chile’s growth might be reaching a ceiling, making continued reforms—such as streamlining permits, encouraging innovation, digitalizing paperwork, simplifying regulations, and removing bottlenecks—essential for reigniting momentum.

What makes Chile an attractive destination for US investors

Several conditions strengthen opportunities for US investment in Chile. Together they shape a more attractive environment for long-term investment is likely to be a priority for the incoming Kast government.

• Chile is a key tech hub in Latin America. This is because of its stable economy, strong startup ecosystem, skilled workforce, advanced digital infrastructure, and government-backed innovation programs. Successful tech projects require a strong and solid workforce. According to CBRE’s Scoring Tech Talent 2025 report, Santiago has the third-highest tech talent pool in Latin America, with more than 143,000 professionals. This positions Chile as an attractive hub for companies to expand. That said, most initiatives are heavily concentrated in Santiago, emphasizing the need for additional training in both the northern and southern regions to ensure successful new project implementation.
• US companies benefit from working with reliable local partners, in part because Chile has clear rules for contracts and strong institutions and because local firms usually have long experience navigating permitting, local procurement, cultural nuances, and sector-specific regulations. These conditions create an environment where these partnerships give foreign investors a dependable base of support on the ground.  
• Investors trust Chile because its infrastructure is strong, and its politics stay steady. In 2024, Chile received $15.3 billion in FDI, one of the highest inflows in recent years. A big share of that comes from reinvesting earnings, which shows that companies already in Chile are confident enough to expand. The government agency InvestChile closed 2024 with a portfolio of $56.2 billion in foreign-backed projects, with US companies investing the largest share at $20.5 billion. Major investments target clean energy: green hydrogen, mining, and infrastructure. These numbers show that foreign investors, especially those from the United States, believe in Chile’s long-term stability and the clarity of its rules. They see a country where projects can start quickly and scale up, thanks to predictable regulations and reliable systems. That confidence in both infrastructure and political stability strengthens the case for more investment.

The U.S. International Development Finance Corporation (DFC)’s mandate prioritizes investments in markets that offer predictability, stability, and clear rules, conditions that have historically made countries like Chile attractive for engagement. The DFC, a US federal agency, was created under the 2018 Better Utilization of Investments Leading to Development (BUILD) Act, which merged the Overseas Private Investment Corporation (OPIC) with USAID’s Development Credit Authority. Its core purpose is to mobilize private capital to advance US development and foreign policy objectives by leveraging financial tools such as loans, equity investments, guarantees, and political risk insurance to support private-sector-led solutions in markets where commercial finance is limited or unavailable.

In December 2025, Congress reauthorized and modernized the DFC through the FY 2026 National Defense Authorization Act (NDAA), extending its authorization through 2031, and significantly expanding its scope and authorities. Under this reauthorization, the DFC’s investment cap (Maximum Contingent Liability) was raised to $205 billion, and the agency gained new tools, including a $5 billion equity revolving fund and increased equity investment authority. The legislation also broadened DFC’s ability to invest in more countries and sectors while placing limits on financing in the wealthiest countries, ensuring that no more than 10 percent of its portfolio may support high-income markets, with specified sector exceptions such as energy, critical minerals, and information and communications technology.

While Chile’s high-income status means that large-scale DFC engagement is still limited compared with developing markets, the agency can support selected projects in strategic areas, including clean energy, critical minerals, infrastructure, and technology, particularly where there is a clear economic or strategic rationale and consistent with the statutory constraints on participation in wealthy countries.

Addressing bottlenecks to further FDI in Chile

Following the presidential election, Chile enters a new political phase with renewed attention on how the next administration will translate campaign promises into policy. Chile continues to take steps to strengthen its investment environment, while facing persistent bottlenecks that shape foreign investor confidence and will influence the country’s economic direction in the months ahead.

• Regulatory delays are a major concern and become impediments. Permitting and environmental review processes can take several years. However, the Framework Law on Sectoral Authorizations (Law 21.770)—better known as the Ley de Permisología, which creates the Framework Law on Sectoral Authorizations (LMAS)—was enacted and posted in September 2025. The goal is to update and speed up the permit process to encourage investment. The law creates a single digital portal called SUPER to manage permits simultaneously, introduces simplified procedures for low-risk projects, and establishes administrative silence. Streamlining and updating procedures are expected to drop processing times between 30 percent and 70 percent without lowering regulatory standards. This will also be a step forward for attracting foreign investment.
• Policy uncertainty remains a concern for long-term investors. Over the past decade, shifts between governments of the right and left have created questions about the direction of future regulations. Relations between Santiago and Washington are expected to further deepen under a new administration. Kast will need to show that he can meet public expectations for stronger growth and higher investment. Here, it’s critical to balance the demands of [JF1] parties across the political spectrum as this congressional balancing act is what’s needed to advance legislation reassuring to investors. Although Chile has struggled lately to attract FDI, the United States remains its second-largest source, with a strong presence in energy, data centers, and mining.
• The economy also plays a major role in the current political moment. Chile has experienced slow growth for several years and unemployment sits at about 9 percent. Investment remains stagnant, with inflation and high living costs shaping daily choices for many Chileans. Voters widely see the current government as falling short in addressing these issues. The national budget was also a central topic of conversation during the election. The legislative commission in charge of reviewing the annual budget recently rejected the proposal for 2026; Kast will now likely express his approach to next year’s spending plan in the short term. That said, his proposal of gradual elimination of property taxes on primary residences, starting with those on homeowners over sixty-five, would reduce government revenue, meaning the 2026 budget will need to account for this shortfall. The administration will need to balance funding public services and implementing the policy in a fiscally responsible way.
• Security is another major risk. While Chile remains relatively safe in comparison to select other countries, crime has risen in recent years—including organized crime, drug trafficking, and violence in northern regions and Santiago. Researchers estimate crime costs the country nearly $8 billion annually, discouraging some foreign investment. Kast made public safety a core part of his platform through the previous mentioned Plan Implacable, which includes tougher penalties for organized crime, high-security prisons, expanded self-defense laws, protections for law enforcement and judicial actors, and targeted border security measures with his Plan Escudo Fronterizo.

Sectors in Chile with investment potential

• Information technology (IT): Chile’s IT sector is expanding rapidly, driven by high internet penetration, widespread mobile connectivity, and growing demand for digital services. Key emerging sectors include fifth-generation (5G) deployment, big-data analytics, and artificial intelligence (AI) integration, supported by initiatives such as Chile Digital 2035 and the National AI Policy. To accelerate growth, Chile can build on existing programs by expanding Chile Digital 2035 and Digital Talent for Chile, increasing investment in digital infrastructure, scaling training and education initiatives, and deepening public-private partnerships to ensure broader access to advanced IT solutions, close the skills gap, and achieve full digitalization of public services.
• Critical minerals (copper and lithium): As the world’s largest copper producer, supplying 24 percent of global output, and home to 41 percent of lithium reserves, Chile is a strategic source of materials essential for clean technologies. These include electric vehicles, energy storage, and digital infrastructure. With public policies promoting sustainability and high environmental standards, Chile is positioning itself to attract investment that advances technological innovation, supports the global energy transition, and fosters inclusive economic growth. China currently dominates global demand for Chilean copper and lithium, but Kast could attract more Western-aligned investment by promoting legal certainty, officering incentives, and fostering partnerships with companies that meet high environmental and governmental standards.
• Water management and drought mitigation: Chile is increasingly leveraging public-private partnerships to improve water management and climate resilience. Investments focus on both traditional infrastructure, such as dams, and natural solutions including reforestation and wetland restoration. There is demand for technologies that enhance water efficiency, like advanced treatment and recycling systems, data-driven water management tools, and construction waste reduction. Sustainable agricultural practices that conserve water and lower input costs also present promising opportunities. Water management could become a strategic priority for Kast, with the advancement of such projects allowing the administration to deliver visible results, balance regional needs, and contribute to Chile’s robust agriculture sector.
• Seismic-resilient infrastructure: Situated on one of the most active fault lines in the world, Chile experiences frequent earthquakes, including several above magnitudes of eight. Critical infrastructure—such as ports, airports, and energy facilities—requires modern seismic design. There is strong demand for engineering and technology services in risk modeling, resilience planning, and early warning systems. Opportunities include digital twins, smart sensors, and integrated solutions to strengthen utilities, transportation networks, and urban development.

How can the new Kast administration help unlock Chile’s economic potential and attract investment?

• Visit Washington before the March 11 inauguration. This would reinforce Chile’s shared interests in economic security and investment cooperation, present project pipelines aligned with DFC priorities and clarify Chile’s commitments in areas such as energy transition and trade. Early engagement would allow Chile to secure a proactive position in shaping US investment decisions, demonstrate commitment to close cooperation with the United States, and build political support in the US Congress and executive branch for stronger bilateral financing ties. When in Washington, use the visit to generate broader public interest in the importance of Chile as a strong US partner.
• Identify emerging skills and priority growth sectors in Chile and encourage private-sector programs that link education directly to industry needs. Kast can do this by providing tax incentives and speeding up the processing of paperwork for companies involved in workforce training. Scholarships, vocational training, apprenticeships, and partnerships with universities that teach technical skills can help equip students and current workers with the skills required for mining, technology, energy, and other strategic industries.
• Maintain continuity in key policies on permitting reforms. This applies to policies such as the Ley de Permisología, which aims to streamline and coordinate environmental and sectoral permitting across government agencies, and they should be expanded to ensure that the ministries and offices involved are actively collaborating with each other. If government entities are not coordinating—for example, in the processing of environment permits—the procedures for key sectors such as mining and technology will continue to be delayed. Demonstrating consistency will reinforce Chile’s reputation as a stable investment destination and encourage both new and reinvested capital.
• Avoid over-centralizing these initiatives in Santiago. This can be done by collaborating with regional partners or established private-sector actors to develop and train local workforces. This could include local recruitment, training programs at regional universities, and ongoing partnerships between the government and private sector.

These measures strengthen security in ways that matter for investors by creating clearer rules, steadier institutions, and stronger local trust. When the government improves workforce training and expands formal job opportunities, it reduces pressures that fuel crime in regions tied to mining and energy. Better coordination on permits lowers chances of corruption or operational disruptions because companies face fewer conflicting decisions from different agencies. Together, these steps create a safer and more predictable environment for investors. 

Conclusion

Chile remains a trusted and stable partner for the United States. Its democratic values, institutional strength, and openness to trade make it a strategic destination for US investment. But sustaining and expanding this partnership will require continued economic reforms and political engagement between both countries to ease processes for doing business, improve regulatory efficiency, enhance human capital, and foster political stability toward a robust, long-term strategic partnership. As Kast prepares to take office, he has an opportunity to set a foundation to ignite Chile’s economic growth and attract investment. And with the Western Hemisphere as a top priority for Washington, Chile has the potential to be an even more strategic partner to the United States.

The views expressed in this publication are those of the authors alone. Some of the investment opportunities discussed in this issue brief were informed by an October roundtable discussion on US-Chile investment relations, which included the participation of US and Chilean private-sector leaders, public-sector representatives, and multilateral organizations. The roundtable was organized in partnership with AmCham Chile and with the support of MetLife. Neither were involved in the production of this issue brief.

Maite Gonzalez Latorre is program assistant at the Adrienne Arsht Latin America Center of the Atlantic Council.

Jason Marczak is vice president and senior director of the Adrienne Arsht Latin America Center of the Atlantic Council

The Adrienne Arsht Latin America Center broadens understanding of regional transformations and delivers constructive, results-oriented solutions to inform how the public and private sectors can advance hemispheric prosperity.

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Bottom lines up front

• US electricity grid planning prioritizes reliability and neglects affordability considerations, which contributes to skyrocketing energy bills. 
• Utilities and government regulators should ensure that the impact on energy affordability is considered in planning for new energy infrastructure buildout. 
• The Department of Energy and Congress should support industry-led efforts to keep costs down by streamlining permitting processes.

At an October meeting of the North American Electric Reliability Corporation, the authority on grid reliability in the United States and Canada, the agency’s president and CEO declared that the United States is facing “a five-alarm fire” when it comes to providing reliable electricity. This was due, he explained, to an “escalating toxic soup” of causes. This warning of a reliability crisis in the US power grid demonstrates a growing problem: power demand is outpacing the installation of new supply. But some resolutions to this reliability crisis are driving prices and electricity bills higher, creating an energy affordability crisis that is every bit as urgent.

Americans are paying more for their power for several reasons. For instance, power companies are making necessary grid upgrades and replacing aging distribution and transmission infrastructure. They are also responding to wildfire- and storm-related damages. But there is another contributing factor as well: increasing electricity demand driven primarily by new data centers and electrification, the costs of which are often (though do not have to be) passed on to consumers.

For example, a report from the independent market monitor for the PJM Interconnection, the grid operator responsible for the power grid across thirteen states and the District of Columbia, and a follow-up investigation by the Union of Concerned Scientists found that PJM customers are paying an additional $13.6 billion for the July 2025 to July 2026 delivery year for upgrades needed solely to accommodate increasing data center capacity. These additional costs effectively force ordinary ratepayers to subsidize the tech industry’s growing power bills. In November, PJM’s market monitor filed a formal complaint to the Federal Energy Regulatory Commission (FERC), suggesting that PJM should not approve any more new large data center interconnections until procedures improve, citing reliability and affordability concerns.

Too often, US grid planning prioritizes reliability and neglects affordability considerations, which contributes to skyrocketing energy bills. According to an August 2024 report from the consulting firm Brattle Group, more than 90 percent of all US transmission investments are made based on the justification that they are needed for reliability. And since utilities can pass most grid upgrade costs directly to consumers, they lack market incentives to optimize their spending on grid infrastructure absent oversight.

In some cases, this singular focus on reliability is leading utilities to forgo grid investments that can help reduce overall costs and improve the financial sustainability of the power system, oftentimes because they lack regulatory incentives to do so. While reliability remains paramount for maintaining a functioning power grid, affordability objectives and the pursuit of grid-related cost savings must become a central pillar of grid planning alongside reliability and resilience.

The gold standard of grid reliability—and its limitations

Grid reliability is in fact under significant threat in many regions across the United States. Power demand is growing rapidly, and generators are reaching retirement age faster than new ones are being built and connected to the grid. However, cost is often underemphasized in grid planning due to the way regulated utilities are structured. Utilities typically earn a guaranteed return on equity for incurred capital expenditures, known as the rate base, and pass operational costs directly to the consumer through rates approved by state public utility commissions and—if the utility’s service territory or a project crosses state lines—FERC.

Since higher capital spending yields a higher return, this model encouraged utilities to build more infrastructure. But it can also incentivize utilities to build more than necessary or pursue incremental upgrades that add up to higher costs, instead of more affordable holistic grid solutions. Without prudent regulation, utilities can stack up unnecessary capital investments (known as “gold plating”) that are then paid by captive consumers. In other cases, utilities lack regulatory incentives to make improvements to the grid, as is the case for many advanced transmission technologies.

As a result, transmission and distribution costs have increased rapidly, which have caused retail rates and bills to rise at a fast pace. Nationally, the average residential electricity rate has increased more than 30 percent since 2020. Moreover, average electricity rates are projected to grow between 15 and 40 percent by 2030, straining already tight household budgets.

The burden has tended to most acutely impact consumers near data center hubs. Seventy percent of the price node increases across the country—the points throughout the grid where prices are determined—were in locations near significant data center activity, with costs growing by as much as 267 percent. Among the regions affected are “Data Center Alley” in Northern Virginia, Silicon Valley, and, increasingly, the Dallas-Fort Worth metropolitan area.

Thus, plans for system upgrades and grid expansion must incorporate cost-benefit analyses alongside reliability considerations, rather than presuming that any reliability benefit justifies the cost. In other words, utilities should use planning and investment criteria that take into account grid upgrades that avoid high generation or operating costs, especially during times of peak demand or extreme weather.

Improving grid planning

There are several grid planning reform efforts that could lower prices for end users and help ensure that costs are properly distributed among ratepayers, all while increasing the pace and volume of the buildout of energy infrastructure needed to meet US power needs.

Beyond Order 1920

FERC’s Order 1920-B is a landmark FERC order issued in April that requires utilities to conduct long-term, ten-year-horizon planning studies to better predict and procure energy infrastructure needs. However, Order 1920-B does not reform existing utility processes, some of which are outdated. Utilities should complement these long-term efforts by reforming existing processes within their authority that are still driven primarily by reliability.

Designate more national interest transmission corridors

The Department of Energy (DOE) should accelerate the designation of additional national interest electric transmission corridors (NIETCs), land predesignated for transmission infrastructure development aimed at improving project timelines and certainty. If successful, this could vastly improve the prospects of building interstate and interregional transmission lines, which are notoriously difficult to complete.

The DOE currently has three NIETCs heading toward approval, but several regions with valuable opportunities to build high-capacity, interstate transmission infrastructure have been dropped from the initial round of designations due in part to concerns over limits to funding and capacity. The DOE should quickly initiate a second round of designations using the latest research, including a recent report on the tremendous value of interregional transmission lines. New transmission infrastructure is urgently needed, so identifying land on which these projects can be built is essential. The NIETC process has thus far contributed little to the development of additional energy infrastructure but could be crucial to informing national grid planning if its progress is accelerated.

Require cost-benefit-based planning and prudent cost allocation

Utilities and energy commissions must develop new, forward-looking grid planning strategies that incorporate cost-benefit analyses and ensure fair cost allocation of investment expenses.

Experts have recommended several reforms for improving planning outcomes. For example, utilities should co-locate generation sites with large loads to reduce system upgrade costs and the risk of grid congestion. Utilities and transmission developers should install advanced transmission technologies that can expand the capabilities of existing infrastructure at lower cost than building new lines. Meanwhile, policymakers should pass legislation and regulation that allows utilities to recover such investments through their rate base. And they should offer energy efficiency and demand response programs to consumers to lower consumption, which would also lower energy bills.

Consideration of alternatives has long been part of utility decision-making. Incorporating cost-benefit analyses and balancing multiple variables in grid planning is core to securing a reliable and affordable power system.

Develop new rate structures for large-load and “reliability-driven” customers

Utilities should also consider new rate designs for data centers and other large-load customers that are driving the need for new infrastructure. They should also consider rate design for customers with stringent reliability needs, such as hospitals, fire stations, and critical telecommunications facilities. Customers who are less willing to pay to avoid blackouts should be able to opt in to demand response programs, which can curtail power delivery when necessary.

System operators should also consider how market structures may lead to unfair expense allocation due to grid upgrades that are only required for data centers. Proper cost allocation between the primary beneficiaries of network improvements is critical, especially when data centers are outpacing every other demand category.

For instance, some utilities are considering creating a new customer class for data centers—in addition to residential, commercial, and industrial users—with a specialized rate. Other utilities have enacted temporary moratoria on new data center interconnections so that they can reliably serve the existing load while new rules are established for data centers. Calls for moratoria on new data centers are gaining national traction. On the markets side, Southwest Power Pool, which serves areas spanning from Montana to Arkansas, has proposed an accelerated interconnection process for “high-impact large loads.” The DOE has also requested that FERC create a rulemaking for large load interconnection to interstate lines, which could introduce solutions to meet the energy demand challenge of hyperscale data centers nationwide. Independent organizations should analyze these solutions to determine which are effective and replicable in other service territories.

How federal action can shape the grid

There is broad consensus in Congress on the urgency to accelerate construction of new grid infrastructure. To unlock a better US power system, legislators should supplement industry-led efforts by streamlining permitting processes and mandating proactive, cost-benefit-based system planning. In September, a bipartisan caucus released a Permitting Reform Framework, which includes several recommendations that could help control costs.

Public-private partnerships can also accelerate development timelines, increase investor certainty, and decrease the cost of capital. This month, the DOE extended a $1.6 billion loan guarantee to enable the reconductoring of five thousand miles of transmission infrastructure in five states.

These partnerships require consistency in agency decision-making on investments. In July, the DOE canceled a $4.9 billion loan guarantee for the Grain Belt Express line that would have delivered low-cost power from Kansas to Indiana. As the DOE continues to review existing loan guarantee program contracts, a higher threshold should be applied to transmission projects before initiating cancellation.

Consider the costs

While reliability is critical, transmission planners and government entities must also prioritize cost-effectiveness. Failing to do so will risk saddling Americans with high-cost power by stalling the buildout of transmission infrastructure and preventing less expensive generation solutions. Relying solely on old generation will increase costs. A report by the energy consulting firm Grid Strategies published in August estimated that DOE orders to keep coal plants open past their economic life will cost consumers at least $3.1 billion.

Instead, the DOE should focus on facilitating the rapid deployment of new, cost-effective power grid and generation assets. The United States needs an all-of-the-above approach to grid solutions and electricity generation, because when all options are allowed to compete, the result is efficient markets, lower costs, and reliable power. Effective transmission systems enable this competition. By considering available cost savings alongside reliability in grid planning, planners and regulators can ensure a resilient, modern power grid that delivers affordable electricity for all Americans.

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This is the second chapter in the Freedom and Prosperity Center’s 2026 Atlas, which analyzes the state of freedom and prosperity in ten countries. Drawing on our thirty-year dataset covering political, economic, and legal developments, this year’s Atlas is the evidence-based guide to better policy in 2026.

Evolution of freedom

Between 1995 and 2025, Colombia has gone through five institutional phases. Each phase could be characterized by progress and tension, where advances in democracy, improvements in the rule of law, and economic openness were frequently challenged by fiscal limits, political crises, and persistent inequality and informality.

The rooting period (1991–2002)

A fresh chapter of institutional development arrived in Colombia during the early 1990s. The 1991 constitution emerged from a collective determination to eliminate centralism and violence through establishing a participatory and decentralized state which protected rights for all. Social and cultural rights were integrated into the legal framework along with expanded civic freedoms. In addition, the government in the 1990s initiated structural market reforms which included trade liberalization, financial system modernization, and the establishment of an autonomous central bank to manage inflation and create responsible and prudent macroeconomic policies.

Colombia earned economic policy credibility from these reforms which established fiscal and monetary stability for three decades. Nevertheless, these reforms produced a paradox within the country: The economic liberalization process outpaced the transformation of the country’s productive base. As many authors, such as Juan Carlos Echeverry, have noticed, Colombia opened international trade doors without having first constructed its economic base. The nation developed openness, but industries remained defenseless, and infrastructure remained behind. On the other side, the constitution guaranteed a wide range of rights (related to health, education, justice, and more) which had to be funded and created ongoing fiscal burdens exceeding the state’s financial resources. In the 1990s, Colombia emerged as a nation with promising reforms, but its ambitions outpaced its capabilities. This is the tension in which Colombia has operated for many years.

Security and stabilization (2003–2015)

Between 2003 and 2015, Colombia experienced a phase of security along with stabilization. The country managed to regain territorial authority from insurgent forces while attaining public trust in its institutional structures. The government’s “democratic security” strategy was combined with macroeconomic discipline to create a virtuous cycle of investor return, economic growth, and advancement in the rule of law.

During this time, institutional development advanced significantly in response to various policies. A fiscal rule was established while the central bank kept its independence and debt remained controlled. Changes among political ruling parties in Colombia continued without violence while international observers recognized the country’s democratic progress. However, structural problems remained hidden. The security improvements brought undeniable benefits to Colombia, but fighting insurgent forces led to human rights violations that damaged the country’s legitimacy and ability to govern. Colombia made progress on security but failed to improve equality and strengthen its institutions.

Polarization and the post-peace era (2016–2020)

The third stage in modern Colombian history began with the 2016 Peace Agreement, which put an end to fighting with FARC, the Revolutionary Armed Forces of Colombia, the country’s largest guerrilla force. The peace agreement meant to unite society but instead divided it more deeply. The national plebiscite opposition to the agreement, together with its congressional approval, created an impression that the government had disregarded public opinion.

The government could not maintain the ambitious goals of the peace agreement because it lacked sustainable implementation capacity. The implementation of programs for rural reform and reintegration and financial support for these programs remained insufficient. Progress on truth, justice, and reparation was also uneven. At the same time, non-repetition mechanisms—designed to prevent former combatant or affiliated groups from committing the same crimes and to reduce the likelihood of renewed violence—were only partially carried out. Meanwhile regional territorial conflicts increased as coca production grew (due to the dismantling of aerial coca fumigation), and new criminal organizations appeared. The anticipated “post-conflict” situation was instead a reshuffling of existing threats. By 2020, people in Colombia had grown exhausted and increasingly disappointed that the global celebrations of peace appeared so distant from their actual experiences.

Pandemic and social unrest (2020–2022)

The fourth phase revolves mostly around the COVID-19 pandemic. Although Colombia managed to avoid major economic and social setbacks through its proactive countercyclical economic approach, the pandemic nonetheless revealed structural weaknesses of inequality and informality, which led to multiple indicators falling before they partially recovered in 2021 and 2022. The impact of COVID-19 pushed more people into informal work while increasing poverty and inequality and reducing the number of available jobs. The result was diminished economic freedom. The public protests, in part triggered by illegal support and tax increases announced in the wake of the pandemic, revealed deep societal inequalities and perceptions of corruption and political manipulation. These combined to damage institutional trust, hindering investor confidence and consequently the economy.

Uncertainty and political confrontation (2022–2025)

The fifth phase covers the developments since 2022. The current political environment is marked by a confrontational atmosphere, which disrupted consensus-building efforts and created conditions that decreased investment potential and caused institutional uncertainty that destroyed trust in all government institutions. Since 2022, Colombia has faced fresh difficulties caused by inadequate and debatable policies on energy, public services, education, pensions, health, taxes, and land that drive political polarization and create economic instability. The decline of institutional dialogue has diminished investor trust and created uncertainty about Colombia’s future course while democracy persists. The current state of ideological conflict has displaced the practical economic management approach that used to guide the country’s economic affairs. Colombia now confronts the dual challenge of building trust between government and markets and connecting its citizens with their representative institutions.

The 1991 constitution established institutional structures which form one of Colombia’s most valuable assets. The Acción de Tutela gave citizens legal tools to protect their rights, and decentralization increased local government accountability, capacities, and options. The central bank’s autonomy enabled uninterrupted monetary and exchange rate policy and protected the nation from the populist cycles that ravaged most regions on the continent.

But legal systems cannot ensure freedom by themselves. Governance remains weak due to corruption, excessive regulations, and persistent informalities and social inequalities. Over 55 percent of workers remain outside the formal economy, and millions of firms are microbusinesses with low levels of formality, undermining tax collection and labor protections. Colombia needs to protect its democratic institutions while extending institutional benefits to formalize the excluded population.

The security situation represents the second vital point in Colombia’s recent timeline. During the 1990s, the Colombian state faced three concurrent threats from drug cartels, guerrilla insurgents, and armed groups that fought for territory; used kidnapping, extortion, and narcotrafficking to fund their operations; and exported large-scale violence to cities. The homicide rate ticked up, and many people were forced to abandon their homes. Business owners lost their local enterprises and had to defend themselves because municipal authority disappeared from vast sections of the country. By 2005, Colombia regained its administrative control and normalized daily activities, which permitted people to travel more freely, reduced transportation expenses, and extended investor horizons. Companies prospered under fiscal discipline and macroeconomic stability, which directed workers toward new regions for economic enterprise.

Over the course of three decades of social and economic development, women gained visibility and access to opportunities in both the public and private sector. Women’s participation in the workforce increased as did leadership diversity and social policies aimed at gender balance. The boost in household earnings together with more stable societies proved that inclusive growth strengthens both economic prosperity and social freedom.

The business environment in Colombia developed according to its political dynamics. Institutional predictability and consistent rules produced the best investment conditions from mid-2010-2020s. The trust in Colombia has been diminished by inconsistent policies and growing polarization since 2022. The business community shows apprehension toward taxation due to its inconsistent design and enforcement.

The country’s most effective reforms happened when governmental authorities joined forces with business leaders and academic experts to craft public policy that integrated regulatory, infrastructure, and labor initiatives to achieve common goals. Economic strategy has lost cohesion because the dialogue that used to inform it has diminished. Because freedom and prosperity depend on a foundation of predictability, the loss of predictability stands as the most critical institutional threat facing Colombia in the short term.

Colombia’s democracy has shown more stability compared to other regional nations, but 2016–18 marked a fundamental change. The nation experienced a rapid deterioration of political rights and a decline in civil liberties during this time frame. The rejection of the peace agreement in the plebiscite triggered political polarization, which worsened after congressional ratification of the plan. This resulted in widespread public concern about the institutional bypassing of political processes. During this period, both cocaine cultivation and illegal mining activities expanded while violence shifted its operational patterns and power dynamics among different actors. The political rights indicator shows further deterioration during the 2020 emergency period, which also witnessed social uprisings, but there was some improvement in 2021–22 once restrictions were lifted.

At present, legal operations are restricted in Colombia because of two fundamental elements. Most labor markets and business activities operate predominantly beyond the formal sector. The rule of law, measured by the legal subindex, experienced a rapid increase in 2014–15, followed by a dramatic decline. Formalization efforts expanded when security conditions improved, and economic activity rose only to retreat once economic performance declined and labor costs increased. Research shows that greater informality reduces enforcement capacity as well as social insurance coverage and tax revenue. Corruption and bureaucratic scandals from 2010 to 2018 reduced judicial public trust, and illegal activities in unregulated territories eroded local government authority.

Governance quality worsened during these processes even though other sectors showed signs of improvement. While problems existed before the pandemic, COVID-19 made them more apparent. Social unrest spiked sharply in 2019, subsided during COVID-19 lockdowns, and intensified again in 2021. Data reveal that political freedom declined both before and after COVID-19. Yet the underlying causes—rising inequality, widespread informality, and growing insecurity—had been eroding democratic rights well before the pandemic triggered massive job losses and overwhelmed public services. The political situation since 2022 has been more confrontational, hindering consensus-building between government, business, and academic partners and stirring tensions between autonomous institutions and regulatory bodies. The key goal of economic recovery requires the establishment of stable economic directions along with trustworthy dialogue mechanisms that will rebuild private-sector confidence and restore normal market expectations.

Evolution of prosperity

Freedom and prosperity in Colombia have developed concurrently, although their progression has never been perfectly aligned. The 1990s and 2000s market liberalization, alongside expanded rights in the new constitution of 1991 and fiscal and monetary discipline, created the foundation for Colombia’s largest social change in contemporary history. The nation’s average per capita income tripled while poverty dropped by 20 percentage points and life expectancy increased by around ten years. This growth, however, contained a key warning since its uneven distribution meant delayed economic benefits for many Colombians. The clear lesson was that growth without fairness damages society just as severely as economic stagnation.

The inequality trap

Between 2005 and 2016, many observers believed Colombia had entered a positive feedback loop.¹ Economic growth remained healthy while job creation improved, and social programs reduced extreme poverty levels. Market freedom finally found a way to work harmoniously with social policy to benefit society.

After 2016, the positive cycle started to break down. Economic growth decreased, and productivity reforms came to a halt while the wealth gap between rural and urban Colombia remained the same. Informal employment increased yet again while people lost hope for their future because inequality returned to its former levels. Then the pandemic struck, revealing structural defects the country had delayed addressing. Education interruptions, female job losses, and strained public finances pushed the country to its limits.

The 2021 protests were triggered by discontent over taxes, but they served to express people’s deeper sense of exclusion. Many Colombians felt that prosperity had become an exclusive privilege rather than a universal promise. The widespread perception damaged people’s trust in democracy and transformed economic inequality into a political moral crisis. People will tolerate slow economic growth, but they will refuse to support a system that fails to reward hard work or equitable treatment.

Colombia achieved indisputable progress through its recognition of Indigenous and Afro-descendant community rights. However, many of these advancements failed to deliver real benefits in practice. From 2010 to 2020, minority inclusion freedom indicators experienced a decline. The absence of governmental security in peripheral regions, combined with ongoing displacement and illegal expansions of mining and drug production, continue to drive social marginalization.

The disconnect between greater formal rights and stagnant living conditions is clearly visible. For many Colombians, equality before the law failed to translate to real equality of opportunities. The main takeaway is that inclusion demands more than official recognition; it requires continuous financing for education, infrastructure, and peacekeeping that creates national investment incentives for all territories.

Since 2018, Colombia has received over two million Venezuelan migrants. Managing this massive influx tested national institutions but also brought new energy, talent, and entrepreneurship to Colombian society. Border communities became overburdened because social services reached their limits. The “Temporary Protection Statute” along with other pragmatic policies transformed what could have been a humanitarian crisis into a demographic boon over time. Formal labor market workers contributed to the economy through tax payments while bringing new and energetic workforce potential. Amid regional tendencies to respond with populist fervor, Colombia demonstrated a distinct approach that blended openness with strategic foresight. Institutional flexibility combined with inclusiveness demonstrated that migration could be a driver of renewal instead of instability.

Colombia has achieved one of its most remarkable successes through environmental policy initiatives. From 2010 through the early 2020s, Colombia transitioned from setting green targets to producing tangible achievements. The economic policy established through CONPES 3934 (2018) and CONPES 4075 (2022) proved that green growth had become an integral economic plan instead of merely aspirational.

The addition of electric vehicle incentives, together with renewable energy auctions in La Guajira and enhanced prosecution of illegal mining, transformed environmental defense into a core competitiveness element. Mercury emissions decreased while wind and solar power capacity expanded, and the nation began perceiving sustainability as an advantage rather than a limitation. Although environmental issues such as deforestation remain, Colombia has advanced to where economic and environmental goals are more in sync.

Human development presents the clearest demonstration of how freedom relates to prosperity. People in Colombia have experienced longer lifespans and enhanced health outcomes over the past three decades. Infant mortality rates dropped dramatically while literacy rates increased, and healthcare access became almost universal. As a result of the 1993 and 2011 reforms, Colombia’s health care systems transformed to become one of Latin America’s most comprehensive.

Education in Colombia remains divided: Urban schools have developed quickly but rural areas continue to lag behind. Digital access and trained teachers remain scarce in many classrooms while educational results show significant differences across regions. The pandemic intensified educational inequalities, emphasizing to policymakers that offering coverage without proper quality or relevance is insufficient. Future development requires better integration between educational systems and productive sectors to create job opportunities which could also lead to social stability.

The path forward

Colombia is approaching a critical point which will define its future direction. Thirty years of institutional advancement delivered stability alongside credibility, yet the country continues to struggle with social inequality, economic informality, and declining public trust. Challenges arose after 2016, when investment diminished, economic growth declined, and political polarization intensified. But the real issue is greater than Colombia’s ability to grow: The crucial challenge is to achieve inclusive growth that transforms freedom into equal prosperity.

The foundation of prosperity rests on establishing stable public finances. After the necessary spending during the pandemic period and the increase in public debt, Colombia started to make a fiscal adjustment which was successfully implemented between 2020 and 2023. However, since then, public debt and the fiscal deficit have risen high enough to make investors nervous. As a result, Colombia needs an effective reform that expands the taxpayer base while making compliance easier; it should also eliminate tax benefits that favor a select few while preserving support for small regional businesses.

The restoration of fiscal rules (which were suspended in 2025) would demonstrate Colombia’s commitment to disciplined governance while enhancing market and public confidence in the country’s fiscal management. Decentralized fiscal authority with proper accountability mechanisms would enable state institutions to connect with citizens more effectively while distributing growth benefits more fairly.

Peacebuilding requires more than negotiation-based approaches while demanding consistent territorial governance. Large rural areas of Colombia still live under alternative and illegal power systems that impose fear instead of upholding legal authority. Road construction alongside internet connectivity and new schools serve as development tools which could also be useful in strengthening citizenship.

Government investments in infrastructure yielded clear advancements across Antioquia, the coffee region, and parts of the Caribbean region in the form of decreased violence, increased job opportunities, and population retention. Security improves only when people have access to opportunities to replace coercive systems. The practical and moral lesson that emerges is that prosperity requires peace, and peace demands governance from a state whose presence is felt where people reside.

Informality blocks the path that unites freedom with a prosperous future. More than 50 percent of Colombian workers lack contracts and protections since they work outside the formal system. The workplace formalization process would be achievable by easing procedures and reducing labor expenses and modernizing ways to connect workers with employers.

Simultaneously, Colombia needs to transition from an extraction-based economy to an innovation-driven economic model. Productivity functions as the link between immediate economic recovery efforts and enduring prosperity. This requires industry-university coordination along with technological implementation support and local business development investment. Subsidies will not reduce inequality nor sustain freedom because productivity growth serves as the fundamental solution.

Colombia’s greatest challenge, however, springs not from fiscal concerns but from the political domain. The current political division has turned policy discussions into entrenched conflicts, making compromise look like weakness. Future development in Colombia depends on institutional pragmatism, which requires leaders to prioritize results over political statements.

Non-negotiables must be to protect the independence of the central bank and to maintain the autonomy of courts and oversight agencies. Dialogue between government, business, and civil society needs to be reestablished through structured channels. Economic freedom depends not only on predictable rules for investors but also on the social contract that allows it to endure. Transparent institutional operations promote both economic and public trust.

The transition toward clean energy creates difficulties while promising new possibilities. Even though oil and gas continue to generate substantial government revenue, Colombia possesses vast renewable energy potential. The appropriate approach involves slow and responsible market transition combined with building new industries based on sustainable agriculture, clean energy, and ecotourism while preserving fiscal stability.

Environmental stewardship could become a competitive advantage when established through consistent regulations and patient investment. Colombia is endowed with geographical diversity, biodiversity, and abundant water resources that would enable green industries to thrive—as long as institutions remain constant, regulations are simplified, and public-private partnerships are strengthened.

Throughout the thirty-year period from 1995 to 2025, Colombia has been trying to balance its aspirations against its limitations. It strengthened its democracy and opened the economy, but it continues to battle persistent problems of inequality, informality, and insecurity. Freedom in the country has never been fixed since each generation must labor to preserve and renew it.

The next chapter depends on Colombia’s ability to tether freedom to present-day opportunities. Achieving fiscal stability together with security systems, educational advancement, and institutional trust is a moral obligation essential for democratic success. Once trust returns to citizens and government bodies, between investors and institutions, and among regions with their central authorities, Colombia will convert its practical liberty to enduring economic prosperity.

The future direction of the nation depends on making decisions between opposing forces, including confrontation versus consensus, populism versus pragmatism, and empty rhetoric versus courageous social and economic reforms. With the right decisions, Colombia can become an example of democratic stability and inclusive development throughout the Americas.

José Manuel Restrepo is an economist, academic leader, and former public servant with experience in education management and economic policy. He has served as president (rector) in Universidad EIA, Universidad del Rosario, and CESA Business School in Bogotá. He held cabinet roles as Colombia’s minister of commerce, industry and tourism and later as minister of finance and public credit. He holds a master’s degree in economics from the London School of Economics and a Ph.D. in management from the University of Bath.

A strong advocate for innovation, sustainability, and institutional ethics, Restrepo has championed policies such as the Entrepreneurship Law, Green Sovereign Bonds, and the modernization of Free Trade Zones 4.0. His leadership experience extends to academia, government, and business, where he seeks to foster collaboration as a means to turn policy into progress. As a frequent speaker and columnist, he reflects on productivity, education, and governance, emphasizing that economic progress must always serve people.

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The post Colombia needs a strong private sector—and renewed government institutions at the helm appeared first on Atlantic Council.

1. What does this blockade mean for Venezuela?

This blockade adds significant pressure to Maduro’s regime, as these shadow tankers act as a financial lifeline that Maduro relies on to sustain his corrupt patronage system. Sanctioned vessels operate in a global black market, transporting US-sanctioned oil that has been critical over the years to the ability for Maduro to stay in power.

Since the initial US seizure of the Skipper last week, Venezuelan crude exports have fallen sharply, effectively targeting Maduro’s main source of income. Venezuela relies entirely on tankers to export its oil, and disrupting the illegal trade that runs on these sanctioned tankers weakens Maduro’s grip on power. As of last week, more than thirty of the eighty ships in Venezuelan waters were under US sanctions.

Frankly, with the size of the US fleet amassed in the Caribbean, it was only a matter of time before this blockade began. It will be important to see which of these shadow vessels continue to try to reach Venezuelan shores and which vessels the United States determines it has the authority to seize. These ships are part of a large shadow shipping network designed to evade US sanctions and mask the destination of Venezuelan crude. This illegal trade network delivers oil primarily to China, and to a lesser extent Cuba, employing several tactics to disguise the origin, name, and shipping routes to evade US regulations.

The blockade of these sanctioned vessels provides an additional source of leverage for the United States. By cutting off a significant part of the regime’s income, the United States gains an additional chip to put on the table in discussions on ending Maduro’s dictatorship in Venezuela. This move elevates the Caribbean campaign from a counter-drug operation to one that is also cutting off the financial lifelines to Maduro, who the United States has designated as the leader of the Cartel de los Soles.

—Jason Marczak is vice president and senior director at the Atlantic Council’s Adrienne Arsht Latin America Center.

2. What is the likely impact on oil markets in the region and globally?

Venezuela exported a little over 780,000 barrels a day in October of this year, 100,000 of which came to the United States and the rest directly or indirectly going to China. It is highly uncertain whether all or only a portion of those exports will be impacted by the blockade.

The president referred to a blockade of “sanctioned vessels,” which could potentially exclude Chevron’s 100,000 barrels per day. A respected tanker tracking outfit suggested that only 40 percent of the vessels transporting Venezuelan crude are sanctioned.

The president also made reference in social media to Maduro and his government being labeled a foreign terrorist organization. We do not yet have designations or explanations from the Treasury or State Department. It is possible that any person or entity doing business with the Venezuelan government or its national oil company, Petróleos de Venezuela, S.A. (PDVSA), could therefore be exposed to liability. In this case, nearly all of Venezuela’s exports (oil or otherwise) could be impacted.

So far, the oil market has shrugged its shoulders at the blockade. Brent crude was up 2.5 percent overnight, to sixty dollars a barrel, according to Bloomberg. That is a pretty modest impact. This could be the result of the market having already priced in the impact of higher levels of naval interdiction of Venezuelan oil exports, high levels of spare capacity, or weak winter oil demand. Ordinarily, one million barrels a day of displaced oil translates into about ten dollars on the oil price, so a complete blockade of all of Venezuela’s exports, if not replaced by increased by OPEC spare capacity or commercial reserves, would be in the range of five dollars to eight dollars a barrel. Everything will depend on how the blockade is enforced.

—David Goldwyn is president of Goldwyn Global Strategies, LLC, an international energy advisory consultancy, and chairman of the Atlantic Council Global Energy Center’s Energy Advisory Group.

3. What else could the United States do to put pressure on Maduro?

Venezuela relies on revenue from sanctioned oil exports to prop up the regime and the country’s economy. Venezuela continues to sell its sanctioned oil, predominantly to China, while accepting payment in digital assets, namely stablecoins, to circumvent US sanctions. To increase economic pressure on Venezuela, the administration should consider enforcing existing sanctions on Venezuela’s oil sector, including PDVSA. Sanctions enforcement would include seizing crypto wallets and working with stablecoin issuers to seize or burn digital assets held by sanctioned Venezuelan entities. This would have an immediate impact on Maduro by taking out significant financial assets and it would be much more cost-effective for the United States and its naval forces.

Separately, as the United States increases pressure on Venezuela with a blockade, the administration should consider where the vessels will go next. As we have seen, the sanctioned tankers carrying Venezuelan oil have also carried Iranian oil. If ships cannot dock in Venezuelan ports, then the United States should anticipate where they will go instead and whose cargo they will carry, which could be Iran or Russia. The shadow fleet used by Venezuela, Iran, and Russia is a network, and to affect Venezuela, the United States needs to address the entirety of the fleet and its operators.

—Kimberly Donovan is the director of the Economic Statecraft Initiative within the Atlantic Council’s GeoEconomics Center. She previously served as acting associate director of the Financial Crimes Enforcement Network’s (FinCEN) Intelligence Division, in the US Treasury Department.

4. What does the blockade mean for Russia’s shadow fleet?

The US move against Venezuelan oil exports may matter less for Venezuela itself than for Russia’s shadow fleet, because it signals a shift from symbolic sanctions toward more assertive enforcement against maritime sanctions evasion.

Russia today relies on a sprawling shadow fleet—aging tankers, opaque ownership structures, flag-hopping, ship-to-ship transfers, and weak or fictitious insurance—to keep oil flowing despite Western restrictions. What the Venezuela case demonstrates is that Washington is increasingly willing to treat sanctions evasion not just as a financial violation, but as a maritime security problem.

This matters because Russia’s shadow fleet is not isolated. Many of the same vessels, intermediaries, insurers, and ship-management networks service Russian, Iranian, and Venezuelan crude interchangeably. Pressure applied in one region exposes vulnerabilities across the entire system. Even limited interdictions force tankers to go dark longer, take riskier routes, rely on fewer ports, and accept higher freight and insurance costs—raising the overall cost of Russian oil exports.

For Moscow, the immediate risk is not a sudden collapse in exports but growing friction and uncertainty. Each escalation increases the probability of seizures, port refusals, or secondary sanctions on service providers—factors that reduce the efficiency and scalability of Russia’s energy revenues over time.

There is also a deterrent effect. By demonstrating that shadow fleets are visible, traceable, and vulnerable, the United States raises the strategic risk premium for Russia’s oil trade—even if enforcement remains selective.

This dynamic is being reinforced in Washington on the policy front. A bipartisan group of US senators has introduced the Decreasing Russian Oil Profits (DROP) Act of 2025, which would authorize financial sanctions on foreign buyers of Russian petroleum products and seek to choke off a key source of Kremlin revenue. The proposal includes targeted measures to penalize entities anywhere in the world that continue to purchase Russian oil, with narrow exemptions tied to support for Ukraine, underscoring Congress’s intent to close loopholes in the sanctions regime and further isolate Moscow’s energy exports.

The key takeaway is this: Russia’s shadow fleet survives on the assumption of tolerance and ambiguity. The Venezuela action suggests that assumption is weakening. For a war economy dependent on energy revenues, that shift matters.

—Agnia Grigas, PhD, is a nonresident senior fellow at the Atlantic Council’s Eurasia Center working on energy and geopolitical economy.

The post What Trump’s Venezuela oil blockade means for Maduro and the world appeared first on Atlantic Council.

All of this unfolded against the backdrop of a new administration in Washington that has been unafraid to shake up decades of US diplomatic conventions.

As 2025 comes to a close, our senior analysts at the Atlantic Council’s Middle East Programs unpack the most prominent trends and topics they are tracking for the new year.

Khalid Azim: Three trends shaping the economic landscape

Gissou Nia: Demands for justice—and protests driven by the thirsty

Karim Mezran: North Africa is a rising priority for US policy

Ahmed Fouad Alkhatib: Key questions remain for Palestinians

Victoria J. Taylor: Iraq must maintain unprecedented stability

Daniel B. Shapiro: A political transition in Iran approaches

Nathanael Swanson: Will the Israel-Iran cease-fire hold?

Jonathan Panikoff: A duality of possible trajectories

Three trends shaping the economic landscape

Three major macro trends will shape the Middle East and North Africa in 2026, each carrying profound implications for the region’s economic trajectory.

1. The pressure of lower energy prices
As energy revenues soften, governments across the region will be forced to make more disciplined, risk-adjusted investment decisions. The era of abundant fiscal cushions is shifting toward one that requires sharper prioritization, operational efficiency, and a clearer sense of expected returns. This will test policymakers’ ability to allocate capital effectively and to reduce long-standing subsidies and support for entrenched constituencies. These choices become even more consequential as a growing cohort of young people demand economic opportunity, purpose, and social mobility.

2. Rising debt and the cost of ambition
Fiscal tightening will coincide with an accelerating need for investment. Across the Gulf, governments are committing billions to data centers, artificial intelligence ecosystems, new power generation, and other foundational infrastructure. These projects will increasingly be financed through borrowing, especially as the current account deficit grows. The result will be higher debt levels and rising debt-servicing costs. Countries that clearly articulate their economic value proposition and demonstrate credible reform will have a competitive advantage in the capital markets. Those that do not may face steeper financing costs and slower momentum in their diversification strategies.

3. Vision 2030 ten year anniversary: A regional bellwether
Saudi Arabia’s Vision 2030 has already reshaped the kingdom’s economic and social landscape through diversification, investment in future industries, and the creation of a more open and optimistic society. The plan’s tenth anniversary in 2026 marks a critical milestone, not only for the kingdom but for the region. The next decade will be defined not by the wealth beneath the ground, but by the wealth of human talent above it. How effectively the kingdom transitions from resource-driven growth to human capital-driven growth will influence the MENA region’s competitiveness for a generation.

Khalid Azim is the director of the MENA Futures Lab at the Atlantic Council’s Rafik Hariri Center for the Middle East.

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Nov 20, 2025

Saudi Arabia’s next horizon: Building human capital beyond Vision 2030

By Khalid Azim

Riyadh still needs to take fully support small and medium-sized enterprises—the true engines of job creation.

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Demands for justice—and protests driven by the thirsty

In 2026, expect to see more widespread protest movements for change across the Middle East and North Africa fueled by climate change and authoritarian mismanagement. Analysis of global protest movements in 2025 focused heavily on the young age of the protesters. While youth demographics have gained relevance as new communication tools have emerged over the last decades (in 2011, it was Twitter organizing the youth in the “Arab Spring”; in 2025, it’s the gaming app Discord organizing Morocco’s “Gen Z” protests), the evergreen undercurrent is frustration with corruption and elites. Resources have become scarcer due to global warming and authoritarian mismanagement, and the globe has become increasingly and overtly transactional as it shuns diplomacy in favor of kinetic means and “might is right” politics. The Middle East and North Africa are profoundly impacted by both these negative trends. With water running out in Tehran and water instability around the Nile Basin and the Tigris and Euphrates River, expect the next wave of regional protests to be driven not just by the youth, but by the thirsty.

Regional victim and survivor-centric demands for justice will also continue to grow in 2026 in countries that are emerging from conflict, experiencing government transitions, or where restive populations wish to usher in a change of rule. There is no clearer example than in Syria, where Assad’s exit one year ago opened the space for a new Syria and where a previously exiled network of Syrian lawyers, researchers, and advocates now work on transitional justice processes from inside their own country. In Iran, where the population is publicly demanding regime change, victims of protest violence, executions, and custodial deaths have organized powerful advocacy groups to demand that international processes deliver justice where domestic courts are unable and unwilling to do the job. And across the region, while many governments have been complicit in the violence in Gaza, the Arab street stands at odds with those governments and instead has demanded—alongside much of the world—that the perpetrators of the violence in Gaza be held to account.

Gissou Nia is the director of the Strategic Litigation Project at the Atlantic Council.

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MENASource

Dec 8, 2025

States shouldn’t waste the chance to establish a Syria Victims Fund

By Kate Springs, Celeste Kmiotek

A centralized fund would better support victims of international law violations in Syria, who face unique challenges.

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North Africa is a rising priority for US policy

North Africa is poised to move closer to the center of US regional policy for 2026. The past year of quiet US engagement, including the work of US President Donald Trump’s Senior Advisor Massad Boulos, is beginning to reduce tensions and open political space. Algeria and Morocco are edging towards some degree of a detente, creating space for practical steps on the Western Sahara file.

Additionally, Libya may see modest but meaningful progress. Headway on an agreement between the divided governments on a unified development funding mechanism may reduce parallel spending and put less pressure on the dinar, as well as release the funds for long-awaited reconstruction and modernization projects. The decision to include Libyan units from both east and west in AFRICOM’s Flintlock 2026 special operations forces exercise suggests an incremental movement on military unification in Libya, an area where US diplomacy with key partners has grown more active.

Egypt will remain an integral partner as Washington tries to deal with situations in Gaza, states located on the Red Sea, and Sudan. At the same time, renewed attention to commercial diplomacy signals a shift toward advancing US business interests across North Africa.

Taken together, these dynamics make the region harder to overlook and suggest that 2026 may be the year North Africa becomes a sustained policy priority in Washington.

Karim Mezran is the director of the North Africa Initiative and resident senior fellow with the Rafik Hariri Center and Middle East Programs at the Atlantic Council.

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Oct 3, 2025

US, Italy, and Turkey alignment could push the needle in Libya

By Frank Talbot and Karim Mezran

The US, Italy and Turkey can—through balanced diplomacy—reinforce the economic opportunities presented by institutional unification in Libya.

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Key questions remain for Palestinians

This was a tectonic year of realignments for the Palestinian people, as well as their heavily divided and largely powerless leadership. Next year is likely to be equally important and trend-setting—and four major threads have emerged that could shape its trajectory.

For Palestinians and what’s next for Gaza, the top four trends to look for in 2026 are the following:

1. The Trump administration’s commitment to the Palestinian issue and its willingness to engage the Palestinian Authority, which remains subject to US sanctions and restrictions. Will elements of a comprehensive peace deal between Palestinians and Israelis, like the one that Trump proposed during his first term, return?
2. What becomes of the Gaza cease-fire that the United States and international players are hoping to cement into a lasting peace deal that transforms the coastal enclave? The year 2026 is either going to be one in which Hamas is disarmed and fundamentally changed—or it will be one in which the Palestinian terror group continues to dominate Gaza’s affairs and prevent substantive change to revitalize the decimated Strip after two years of devastating warfare.
3. The prospect of Saudi-Israeli normalization—which could unlock immense potential for the kingdom, the Palestinians, Israel’s regional integration, and a regional anti-Iran coalition—is enormous. The year 2026 will set the tone for whether Saudi Arabia proceeds with integration based on its often-stated requirement for Palestinian statehood, or if this ends up in further stalemate and stagnation.
4. The fourth critically significant trend to watch is the impact the Gaza war and Israel will have on influencing voters in the upcoming midterm elections. As with the Trump election, this issue increasingly played a role in rallying US voters to the ballot box, including the high-profile race to elect New York City Mayor-Elect Zohran Mamdani. The year 2026 will reveal whether this trend persists or if it is a fad that passes once the Gaza war comes to a more permanent end.

Ultimately, 2026 will either mark the end of the Gaza war and the initiation of reconstruction and hope in the Strip—or it will perpetuate a state of stagnation and stalemate, risking a return to fighting, devastation, and more tragic deaths.

Ahmed Fouad Alkhatib is the director of Realign For Palestine at the Atlantic Council.

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Nov 10, 2025

A little-discussed point in Trump’s Gaza plan could be an opportunity to build interfaith understanding

By Peter Mandaville

Peace efforts don’t need more gleaming Abrahamic baubles, they need a genuine commitment to supporting grassroots religious peacebuilding.

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Iraq must maintain unprecedented stability

Amid continued regional turmoil, Iraq ended 2025 in a period of relative stability and security, avoiding being drawn into the Twelve Day War between Israel, Iran, and the United States—and holding successful parliamentary elections. The challenge for Iraqi political leaders in 2026 will not only be to maintain this unprecedented stability, but also to navigate Trump administration pressure to rein in Iran-aligned militias and avoid being pulled into the broader US maximum pressure campaign against Iran. Iraq is also likely to continue its efforts to appeal to the Trump administration through investment, pitching new energy deals to US companies, but it is not yet clear whether these efforts will be successful.

With Iranian influence in the region at an all-time low, Iraqi leaders have an opportunity to forge a more independent foreign policy that prioritizes continued partnership with the United States and differentiates Iraqi from Iranian interests. Core to this effort will be progress toward Iraq’s regional integration and strengthened political and economic ties to the Gulf and other regional partners such as Jordan and Egypt. In the face of Iraqi efforts to challenge the militias and strengthen partnerships with the United States and the Gulf, 2026 may bring attempts by Iran and Iran-aligned militias to act as spoilers who obstruct Iraq’s progress and imperil Iraq’s stability. Iraq’s next prime minister has an opportunity to transform the country.

The next year will be critical in determining whether the Iraqi government can seize the opportunity and whether the United States and other regional partners will support it in doing so.

Victoria J. Taylor is the director of the Iraq Initiative in the Atlantic Council’s Middle East program.

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Dec 10, 2025

Dispatch from Iraq: The biggest challenge awaiting the country’s next prime minister

By Victoria J. Taylor 

A recent visit to Iraq following parliamentary elections reveals a growing divide between the political elite and the people.

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A political transition in Iran approaches

Political transitions are hard to predict, but there is no doubt Iran is approaching one. With a frail, unpopular, eighty-six-year-old Supreme Leader Ayatollah Ali Khamenei nearing his actuarial and conceivably political limits, 2026 could be the year.

Any transition has the potential to unleash dramatic changes in Iran, across the region, and in relations with the United States. The potential positive implications of new Iranian leadership and a change of approach are massive: relief from brutal suppression for the Iranian people, new possibilities in nuclear diplomacy and toward normalization with the United States, broadened detente with Iran’s Arab neighbors, and an end to the arming of violent terrorist proxies across the region that have squandered hundreds of billions of dollars of Iranian resources—driven by an ideological crusade to destroy Israel—while the Iranian people endure manmade water and electricity shortages. The beneficial effects would be felt from Iran to Lebanon to Gaza to Yemen and beyond.

None of this is preordained or automatic. A transition could cement a new generation of the Islamic Republic’s clerical leadership, bring to power an even more hardline Islamic Revolutionary Guard Corps, or devolve into chaos and civil war with massively destabilizing effects. What Washington should engage in through 2026 is transition planning—not in order to cause a regime change, which must be left to the Iranian people, but to be prepared to provide support for the Iranian people, resources and expertise, potential sanctions relief, and coordination with international partners to assist in steering a transition when it comes toward one of the better possible outcomes. The United States has moved smartly in 2025 to support a stable Syrian transition, and while the jury is still out on long-term stability there, there has been significant progress. An even more consequential transition awaits in Iran. Washington must not be caught flat-footed.

Daniel B. Shapiro is a distinguished fellow with the Atlantic Council’s Scowcroft Middle East Security Initiative.

Will the Israel-Iran cease-fire hold?

Following the Twelve Day War in June, Iran retains large quantities of highly enriched uranium and advanced centrifuges, without oversight by the International Atomic Energy Agency. At the same time, while Iran’s missile program and support for nonstate proxies were diminished, Iran is rebuilding its capabilities and still threatens US, Israeli, and regional security.

After initially declaring Iran’s nuclear program obliterated, Trump has also repeatedly called for resumed negotiations and a new nuclear deal with Tehran. Although still nominally implementing the US “maximum pressure” campaign, Trump also made a high-profile gesture by inviting Iranian President Masoud Pezeshkian to the Gaza Peace Summit in October.

For its part, Iran appears to remain in a largely reactionary posture. It is attempting to rebuild its missile and defense capabilities but is not currently enriching uranium or advancing its nuclear program (that we know of). Foreign Minister Abbas Araghchi says Iran is open to talks at the United Nations, but also foolishly rejected the Cairo invitation. Israeli Prime Minister Benjamin Netanyahu has responded by reminding the world of the Iranian missile threat and increasingly targeting Iranian proxies. There is no written cease-fire in place, and continued peace is partially reliant on Trump holding Netanyahu back. As Israeli elections approach, will Trump’s “complete and total ceasefire” hold? Will Iran do something that gives the Israeli’s an excuse or opportunity to re-engage Iran militarily? Or will Iran give negotiations another chance? Either way, 2026 should make for a pivotal year for Iran.

Nathanael Swanson is a resident senior fellow and director of the Iran Strategy Project at the Atlantic Council’s Scowcroft Middle East Security Initiative.

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Nov 17, 2025

As elections loom, can Netanyahu balance Trump, Mohammed bin Salman, and his political future?

By Daniel B. Shapiro

The Israeli prime minister’s preferred path to survive a treacherous election will be to show Israeli voters that he is advancing their country’s regional integration and staying within the US president’s embrace.

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A duality of possible trajectories

2026 is a year of potential opportunity—and potential peril—for the Middle East.

Gulf states are determined to advance their political, economic, and security autonomy. Syria and Lebanon could either emerge as models of forward movement from instability or revert to sectarian strife and conflict. Pockets of normalcy could continue to advance in Iraq as exists today in parts of Baghdad and other cities, or it could descend back into political stasis and conflict. Israel could find itself more secure in the region by continuing to undertake kinetic strikes, or it could choose the path of less violence by completing meaningful security and cease-fire agreements with its neighbors. Choose the wrong option, however, and Israel could find itself more vulnerable to threats on its borders, not less. Palestinians could find space to grieve and begin to rebuild after two years of devastation—or face continued violence from West Bank settlers and a renewed war in Gaza, as well as some intra-Palestinian conflict. Jordan and Egypt will continue to muddle through their economic challenges and associated domestic social and political pressures, or this will be the year that they face collapse, and the world will look back and say the warning signs were there, we just missed them. 

Most of the region has an opportunity at this moment in which it can seize and advance its desire for greater autonomy, global influence, and further integration. The Middle East can envision a calmer, more prosperous region driven by technological opportunity across sectors, including by leveraging artificial intelligence and US-exported advanced chips, while taking advantage of the economic integration pathways that are being developed, such as IMEC.

But the duality of possible trajectories laid out above reflects that in the Middle East, more often than not, positive opportunities are interrupted by internal or exogenous factors that regional capitals have to manage in a manner they did not expect. How the region grapples with the enduring and emerging risks of 2026 will determine whether it can prosper as a whole or whether only some will thrive while many continue to struggle. But if those regional countries that are advancing economically, politically, socially, and in their security only look inwards and do not seek to stabilize their neighbors facing social and physical insecurity, they will risk the latter impeding their development, as well. And then 2026 will once again be a year of missed regional opportunities instead of progress.

Jonathan Panikoff is the director of the Scowcroft Middle East Security Initiative at the Atlantic Council’s Middle East programs.

The post What will 2026 bring for the Middle East and North Africa? appeared first on Atlantic Council.

On December 2, Imran Bayoumi, associate director of the GeoStrategy Initiative, published an article for “Just Security” titled “As Solar Geoengineering Enters its Startup Phase, Governments Must Address Emerging Security Risks” cowritten with Scott M. Moore. The article breaks down potential security risks associated with solar geoengineering and argues governments must act now to regulate the nascent industry.

Staff

Imran Bayoumi

Associate Director

GeoStrategy Initiative Scowcroft Center for Strategy and Security

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Hopes are high that this moment could present momentum for the long-awaited democratic transition in Venezuela, and US policy should continue to press hard for it. Still, while Washington should continue to ratchet up pressure on the Maduro regime, a military intervention would hold first- and second-order risks to global energy and food markets.

Strikes limited to counternarcotics targets are unlikely to affect energy production or food markets. But any action attacking the regime itself or damaging single points of failure in the energy system, such as ports, is another matter altogether. Some proponents of military intervention in Venezuela are hopeful that any intervention would be relatively small and contained; skeptics, conversely, warn that air strikes could unleash unpredictable forces and lead to “difficult choices about whether and how to escalate.” With President Donald Trump reportedly seeking to speak directly with Venezuelan strongman Nicolás Maduro, a diplomatic solution may also emerge. We leave it to others to assess the dynamics and pathways of a coercive campaign. Still, if a small-scale intervention becomes a large one, several consequences are likely. 

Even with high US domestic oil production, spare production capacity in the Gulf, and a well-stocked US Strategic Petroleum Reserve buffering crude markets, the loss of Venezuela’s heavy-sour barrels would tighten already-strained diesel markets. More dangerously, a conflict could spill over into regional oil or ammonia infrastructure—especially Trinidad and Tobago’s Point Lisas complex—likely resulting in an increase in fertilizer and food prices, which could potentially set off another bout of global inflation. 

Global oil markets and Venezuela 

Although it is still a significant player, Venezuela is at present not as important in oil markets as it was in pre-Hugo Chávez times. Venezuela exports stand at 800,000 barrels per day (bpd), or a little under 1 percent of total world oil consumption (although exports briefly exceeded one million bpd in September). Most export volumes head to China, directly or indirectly, while US imports have fallen below 100,000 bpd in recent months. 

In the event of a US military intervention, Venezuelan production and exports would almost certainly plummet. Furthermore, US military strikes on Venezuelan territory could cause the regime to retaliate, especially if the United States attacked Venezuelan military installations or leadership offices. Venezuelan retaliation could take several forms, including sabotaging production to handicap a potential successor regime, attacking neighbors that seem to be supporting US military action, and fomenting internal political instability that makes continued operation unsafe.

Venezuela’s history shows how quickly production can drop even absent a military intervention. In 2002–2003, a Venezuelan oil workers’ strike, led by opposition to then President Hugo Chávez, reduced Venezuelan oil exports from three million barrels per day to less than 200,000 barrels per day. 

At the same time, high US domestic crude and natural gas liquids (NGL) production, significant spare production capacity in Gulf states, and continued expectations for an oil market glut will put a ceiling on global oil prices—even if Venezuelan production outages occur in the short term. Additionally, the US Strategic Petroleum Reserve is well stocked. 

But the longer-term picture is much more mixed. Venezuelan production would likely require several years to recover from any large-scale US military intervention. Though imperfect, comparative experiences point to the challenge of bringing postwar oil production back online. During the US invasion of Iraq, for instance, Iraqi liquids production fell to zero for several months after the invasion; annual production did not return to pre-war levels until 2011. Libya’s experience, too, suggests a disorderly political transition can severely hamper oil production. Since Libyan leader Muammar al-Qaddafi’s overthrow in 2011, Libyan liquids production has never returned to prior levels: 2024 annual production stood at 1,188 kbpd, down 32 percent from 2010 levels.

The incompetency of the Chávez and Maduro regimes leaves open the possibility that a post-Chavismo Venezuela could eventually see higher production. Indeed, the Venezuelan opposition has released a thoughtful and credible plan for bolstering oil and mining production, including by pursuing best practices. However, rebounding production will depend on several factors. For example, capital and labor will need to return to Venezuela. State-owned Petróleos de Venezuela, SA, which is debt-laden and has deferred maintenance on key pieces of field infrastructure, will need to be overhauled. And many of Venezuela’s reservoirs, which have suffered from poor production practices, will need to be restored. 

Long-term Venezuelan outages would therefore likely lift oil prices, especially diesel. This is because Venezuela’s heavy-sour crude oil grades are highly suitable for producing diesel, which is a key input into virtually every industry. Recently, the International Energy Agency has warned that middle distillate markets—including diesel—are already tight. Accordingly, if Venezuela production is removed from the market, then diesel prices could shift higher, which is likely to increase global inflation. 

Indeed, if US policymakers undertake military intervention in Venezuela, then they should both anticipate higher inflation via diesel markets and prepare for a post-intervention environment wherein Venezuela’s oil production takes time, and requires support, to fully rebound. 

Horizontal escalation risks

A US military intervention in Venezuela might have wider regional impacts should the Maduro regime, faced with an existential threat, escalate a conflict horizontally to other countries or regions via semi-deniable proxies.

Horizontal escalation would expand the aperture of commodity-related risks. For instance, energy infrastructure in Colombia, especially pipelines, could be one such target, given links between Caracas and the ELN, a US-designated foreign terrorist organization. The ELN operates extensively in the Venezuela–Colombia borderlands, where the Caño Limón-Coveñas pipeline has been regularly attacked since it opened in 1986, including as recently as July of this year. An attack by ELN on a Colombian pipeline—either implicitly or explicitly supported by Caracas—would offer Maduro an opportunity to increase the costs of a conflict in an asymmetric or deniable manner, as even short-lived outages in Colombia would compound Venezuela’s supply losses and harm US refinery economics.  

Maduro seems unlikely to approve an attack on Colombian infrastructure, for now, given his need for a diplomatic lifeline with Colombian President Gustavo Petro, a fellow leftist. But his calculus could shift after Colombia’s upcoming legislative and presidential elections in early 2026. If leftist candidate Iván Cepeda prevails, Maduro will likely still seek to preserve ties with Bogotá, but after the election he is less likely to worry that escalation might electorally empower his opponents. If a non-leftist candidate wins, conversely, Maduro may feel freer to escalate inside Colombia. Crucially, Colombia’s exports of heavy and medium sour crude oil, including medium-sour production in Caño Limón sent to the Coveñas terminal on the Caribbean for export, are highly suitable for producing middle distillates. About 40 percent of Colombian crude oil was shipped directly to the United States in 2024, and many Panama-bound shipments are transshipped to US Gulf Coast refineries. Accordingly, losses of Venezuelan and Colombian crude may significantly impact domestic fuel prices, especially for diesel. 

Trinidad and Tobago’s ammonia supply chains are also vulnerable to disruption in a military conflict, especially one that expands beyond Venezuela. While accounting for only 2.5 percent of all global ammonia production, Trinidad and Tobago is responsible for 15-20 percent of global ammonia seaborne trade, and the country is the second-largest exporter to the United States, after Canada. This supply chain centers on Point Lisas, which sits on Trinidad’s west coast in the Gulf of Paria, directly facing Venezuela, about fifty kilometers away, leaving it exposed to disruption and retaliation in a prolonged conflict with the Maduro regime. Point Lisas has limited redundancy, with potential single points of failure such as the Phoenix Park Valve Station, a key hub for processing and routing gas feedstock to ammonia plants.

If Maduro sympathizers disrupt Point Lisas with cyber or kinetic attacks—including asymmetrical methods such as drones—then the effects will be felt throughout the Americas and potentially beyond. While the United States and Europe are Trinidad and Tobago’s largest ammonia partners by volumes, Mexico’s, Chile’s, and Brazil’s fertilizer markets are disproportionately exposed. Accordingly, an outage at Point Lisas would reverberate throughout the region. Mexico, too, would be impacted: It imported 250,000 tons of anhydrous ammonia from Trinidad and Tobago in 2024, while domestic ammonia production stood at only 319,000 tons. Due to deep US-Mexico agricultural ties—22.8 percent of US agricultural imports in 2024 by value hailed from Mexico—a fertilizer disruption at Point Lisas would likely send US, regional, and global food prices higher. 

Carry a big stick, but think before swinging

The Maduro regime is one of the world’s worst, and it lost its legitimacy long ago. And while Maduro must step down, US policymakers should think carefully about the consequences that would accompany military force.

The United States’ strong domestic oil production and Strategic Petroleum Reserve, Venezuela’s limited role in global oil markets, and a projected state of market oversupply all lower the probability of an immediate crude-oil price spike in the event of hostilities. Yet a long road ahead for Venezuela’s oil production to rebound, as well as the possibility of spillover to other oil- or ammonia-producing countries, speaks to a wider and perhaps deeper set of inflationary risks that policymakers and market participants should take into account. 

Joseph Webster is a senior fellow at the Atlantic Council’s Global Energy Center and the Indo-Pacific Security Initiative; he also edits the independent China-Russia Report. 

David Goldwyn is president of Goldwyn Global Strategies, LLC (GGS), an international energy advisory consultancy, and chairman of the Atlantic Council Global Energy Center’s Energy Advisory Group.

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Compared to solar, wind, or battery storage, geothermal power relies relatively less on critical minerals like cobalt and lithium. And, unlike oil and gas generation, geothermal requires no fuel. As a result, geothermal can provide round-the-clock baseload power with lower exposure to disruptions in global supply chains. 

As the cost of enhanced geothermal technologies continues to decrease and their geographic reach expands, now is the time for policymakers, especially in the United States, to take a serious look at geothermal as a key part of their energy security strategy.

The value of geothermal

Geothermal energy taps the earth’s internal heat for electricity and heating. A traditional geothermal well accesses natural steam and hot water, while an enhanced geothermal system (EGS) fractures hot rock and circulates fluid to absorb subsurface heat. This heat produces steam, which returns to the surface to spin turbines that generate electricity. Traditionally, geothermal energy production was limited to tectonic boundaries or hotspots where the earth’s crust is thin and subterranean heat is at its highest. However, technological advances, including drilling techniques borrowed from the oil and gas sector, have now made geothermal commercially viable in a broader range of locations. 

In terms of energy security, geothermal offers two major advantages compared to other sources.

First, it can provide 24/7 baseload power without the need for fuel. Insulated from volatile global commodity markets, geothermal can offer the energy resilience necessary to achieve US energy policy priorities, like independently powering domestic and overseas US military bases and the fast-growing US data center industry. In fact, a growing number of tech giants are signing offtake agreements with geothermal companies to power artificial intelligence (AI) operations, including Meta’s agreements for 150 megawatts (MW) each from Sage Geosystems and XGS Energy, and Google’s agreements with Fervo Energy and NV Energy for 115 MW.

Second, geothermal is not as reliant on vulnerable supply chains as wind and solar are. China controls a high percentage of the global supplies of many minerals that are essential to the manufacture of wind and solar components and systems, especially in midstream refining. According to the International Energy Agency (IEA), for 19 out of 20 strategic minerals, China is the leading refiner, with an average market share of 70 percent. China refines 91 percent of rare earths, 77 percent of cobalt, 70 percent of lithium, 44 percent of copper, and 42 percent of chromium. According to International Aluminum data, it also consistently accounts for around 60 percent of aluminum production. 

While geothermal technology uses more chromium than wind and solar, it uses less of other critical minerals, especially when battery storage is added to a system. Geothermal requires less copper and aluminum than solar photovoltaics, and less copper, rare earth minerals, and zinc compared to wind. Adding battery storage to intermittent wind and solar dramatically increases the need for chromium, cobalt, lithium, and rare earths even further for these technologies.

Downstream, the IEA estimates that China’s share in key solar panel manufacturing stages exceeds 80 percent. In terms of wind development, the IEA in its Energy Technology Perspectives 2023 also estimated China accounts for 70 to 80 percent of global blade manufacturing, 45 to 50 percent of tower production, and around 70 percent [SJ8] [PS9] of nacelle (turbine covers) assembly capacity. While geothermal still relies on global markets for standard components like turbines, steel, and piping, its ability to leverage the existing assets and technologies of the US oil and gas sector—primarily for drilling—significantly reduces its exposure to risks in the supply chain.

Geothermal also offers another major advantage: Multiple projects for lithium extraction from geothermal brine in California’s Salton Sea, as well in the Smackover Formation in Arkansas and the Upper Rhine Graben in Europe, show how geothermal could even become a net producer of critical minerals.  

Renewed US interest in geothermal 

Recent support from President Trump and Energy Secretary Chris Wright places geothermal firmly among the administration’s pillars for securing US energy dominance. In a speech in March 2025, Wright suggested that although geothermal “hasn’t achieved liftoff yet, it should and it can,” adding it “could help enable AI, manufacturing, reshoring, and stop the rise of our electricity prices.” Meanwhile, Trump’s executive orders, as recently as July, have consistently identified geothermal as a key resource to be developed and allowed expedited permitting. 

This renewed enthusiasm has highlighted key areas for White House and Congressional cooperation:

Permitting reform: Establishing more streamlined permitting processes, including ensuring better interagency coordination and adequate resources would reduce uncertainty and project timelines, directly increasing their bankability. 

• Categorical exclusions (CXs): The Bureau of Land Management’s (BLM) could expand on its April 2024 and January 2025 adoption of CXs that exempt certain low-impact, early-stage activities from separate environmental reviews. The US Department of Energy (DOE) estimates that the January 2025 CX alone could shorten the geothermal permitting process by up to a year. Expanding CXs for other early-stage, low-impact activities and allowing concurrent environmental reviews for different phases of the same project would further shorten project timelines, boosting investor appeal.

• Interagency cooperation: Designating one agency to conduct a single, unified review could further accelerate project timelines. Currently, developers must often complete a full environmental review with the BLM and then a second, separate review with the US Forest Service. 

• Sufficient staffing: Expeditious permitting also requires adequate staff to process requests, a factor for policymakers to consider amid proposed reductions to the workforce, including in key state offices responsible for federal licensing.

Continued tax credits and research and development (R&D) support:

• Tax credits: The Trump administration’s maintenance of the Inflation Reduction Act’s (IRA) tax credits for geothermal is a win for the sector. Based on National Renewable Energy Laboratory data, the Center for Strategic and International Studies reported that the IRA’s tax credits could lead to the levelized cost of electricity from EGS to drop by nearly 85 percent, to $60 to $70 per megawatt-hour, making it competitive with other firm and intermittent energy sources. 

• Federal R&D support: The DOE’s Geothermal Technologies Office has helped advance drilling and reservoir techniques at the Frontier Observatory for Research in Geothermal Energy (FORGE) demonstration laboratory in Utah, but more research is needed. Challenges for EGS include drilling into hot rock, which represents over half the project’s budget and destroys standard equipment. This is compounded by the uncertainty of whether a viable underground fracture network can be successfully engineered to circulate water and extract heat without causing issues like induced seismic disturbances. Sustained federal support for testbeds like FORGE will help overcome these challenges, catalyze advances, reduce costs, and enable the scaling of traditional geothermal and EGS across the United States.

By prioritizing the rapid development of geothermal, policymakers could help the United States build a unique path to energy security—one that delivers reliable power 24/7, insulated from global hydrocarbon markets and vulnerable supply chains. 

Paul Stahle is a senior energy advisor and government relations expert with over 18 years of U.S. government experience. His work spans energy and technology policy in Washington, D.C., China, Europe, India, and the Asia-Pacific.

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EnergySource Oct 6, 2025

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By Joseph Webster and Hansika Nath

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Issue Brief Feb 19, 2025

Unlocking America’s untapped energy potential through enhanced geothermal systems

By Chase Thalheimer, Reed Blakemore

Enhanced geothermal systems (EGS) offer a promising clean energy solution by overcoming geographical and cost barriers, providing emissions-free, reliable power while supporting US decarbonization and energy security efforts, but widespread adoption requires government support, investment, and streamlined regulations.

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Crypto adoption is Venezuela’s response to US sanctions

In recent years, the United States has imposed sanctions on Venezuela in response to the Maduro government’s repression of opposition groups and “subversion of democracy.” Much of this US economic pressure has come since 2017, when the Trump administration issued a series of executive orders that it then expanded. In 2019, the United States enacted full blocking financial sanctions against PDVSA (the state-owned oil company Petróleos de Venezuela, S.A.) and the Central Bank of Venezuela. 

Venezuela’s oil sector was particularly exposed, given its complete reliance on PDVSA—a company already weakened by aging infrastructure and chronic underinvestment. This overreliance on PDVSA left both the energy sector and Venezuela’s broader financial system acutely vulnerable to financial sanctions.

This year, the Trump administration has increased economic pressure further, imposing a 25 percent tariff on buyers of Venezuelan oil in March. However, the Maduro government has not yielded to US economic pressure by ceding power. Instead, it has adopted sanctions evasion methods developed by China, Russia, Iran, and North Korea—a group for which my colleague Kimberly Donovan and I coined the term “Axis of Evasion” due to their shared tactics and cooperation in circumventing Western sanctions. 

Like Iran and Russia, Venezuela needed to receive oil payments from China outside the reach of Western financial oversight. Transacting with cryptocurrencies is one such evasion method, which North Korea, for example, has used in the past to launder the proceeds of cybercrime. Last year, Russia softened its restrictive stance on cryptocurrencies by allowing companies to use them in cross-border trade. Reports from this year indicate that Russia has been receiving oil payments from Chinese and Indian customers in Bitcoin and other cryptocurrencies, with transaction volumes reaching tens of millions of dollars. 

The Venezuelan government has spent several years experimenting with cryptocurrencies, most notably with the launch of the state-backed petro (PTR), which was launched in 2018 and collapsed in 2024. As US sanctions on Venezuela intensified in 2019 and the years since, the Maduro regime grew increasingly interested in leveraging digital assets to facilitate oil transactions—leading to US Department of Justice indictments against individuals brokering these deals. Over the past year, Caracas has turned to USDT, a dollar-pegged stablecoin issued by the offshore company Tether, as an alternative vehicle for international payments.

Tether has previously faced scrutiny over its alleged involvement in illicit finance and money laundering. Notably, Tether has also worked with the US Department of Justice in an investigation that led to the dismantling of the online infrastructure supporting Garantex, a sanctioned cryptocurrency exchange implicated in facilitating Russia sanctions evasion and money laundering by transnational criminal organizations. By 2024, Tether had also frozen forty-one wallets that were using USDT to evade sanctions on Venezuela’s oil. 

By the end of first quarter of 2024, PDVSA began requiring new clients to use digital wallets and make payments in USDT for spot oil deals. Subsequently, Venezuelan authorities enabled a limited number of banks and exchange houses to offer USDT to private companies, in exchange for bolívars. In July alone, an estimated $119 million in cryptocurrencies were sold to the private sector. This shift marked the growing use of cryptocurrencies, predominantly USDT, as a substitute for physical US dollars in domestic financial flows. While crypto still represents only a small share of total oil trade by value, it plays an outsized strategic role by offering sanctioned regimes a parallel payment channel outside traditional banking.

Sanctioned oil trade schemes between China and Venezuela

Similar to other “Axis of Evasion” countries, Venezuela transports oil to China via shadow fleet tankers—sometimes called “ghost ships”—employing at-sea evasion tactics such as turning off trackers during ship-to-ship transfers and rebranding the Venezuelan crude oil as Malaysian. By 2020, official Chinese imports of Venezuelan oil dropped to zero, while Malaysian oil imports surged to a sixteen-year high. 

Like Iran and Russia, most of Venezuela’s oil is refined by small independent Chinese refineries known as teapots, primarily located in Shandong province. Although China officially halted imports of Venezuelan crude after sanctions in 2019, China remains the primary destination for Venezuelan crude exports. In September, approximately 84 percent of Venezuela’s exported oil went there, either directly or indirectly. Thus, it is widely reported that Venezuelan oil goes to China, and that Venezuela ends up with USDT. What remains unknown—and needs investigation—is the payment chain that connects these two facts.

New Chinese investments in Venezuela’s oil sector

Venezuela has historically had investments from Chinese companies in its oil sector. While China National Petroleum Corporation halted operations in Venezuela in 2019 due to the risk of US secondary sanctions, reports from August indicate that the smaller China Concord Resources Corp (CCRC) is investing one billion dollars in two Venezuelan oil fields. In May 2024, CCRC signed a twenty-year shared production agreement, aiming to produce sixty thousand barrels per day by the end of 2026. Under this deal, lighter crude will be supplied to PDVSA, while heavier crude will be exported to China. 

This development carries two major implications. First, it challenges the strategic framework through which the United States has traditionally approached sanctions on Venezuela. Washington has long operated under the assumption that escalating sanctions on Venezuela’s oil sector would deter foreign companies from operating there due to the risk of secondary sanctions—and, until now, that assumption has largely held. A twenty-year production agreement with a smaller Chinese firm, however, suggests that Beijing may no longer be willing to adjust its trade and investment decisions in Venezuela according to US sanctions.

Second, if CCRC can indeed raise production to the stated levels and deliver half of the output to Venezuelan authorities, restricting the Maduro regime’s access to cryptocurrencies may become the only remaining lever to curb its oil revenues. That said, CCRC has no prior drilling experience, underscoring the need for caution and close monitoring of whether it can realistically meet its production targets.

What should the US do next

Recent reporting by Reuters and the New York Times indicates that sanctioned entities—including PDVSA—are now using crypto to receive oil payments. To ensure the Maduro regime is not using cryptocurrencies to undermine the Trump administration’s sanctions strategy, the US government, in coordination with partners and allies, should build out the intelligence picture regarding Venezuela’s use of stablecoins and other digital assets to evade sanctions. After identifying the key actors and wallets involved, the government can use targeted sanctions and law enforcement actions, consistent with past actions against Venezuelan oil-trade–related schemes. It should also share relevant information with private-sector partners, particularly stablecoin issuers and exchanges. The government should then request their cooperation on freezing wallets linked to sanctioned individuals, which issuers and exchanges have done before.

Understanding how to counter sanctions evasion through cryptocurrencies is critical—not only in the context of Venezuela, but for the overall integrity of US financial sanctions. Our Axis of Evasion research shows that sanctioned regimes often replicate one another’s tactics to bypass restrictions. With Russia’s oil giants Lukoil and Rosneft now under sanctions, Moscow is likely to adopt Venezuela’s approach of using stablecoins to facilitate oil payments from Chinese buyers. Developing a clear strategy for how US sanctions and law enforcement authorities address the use of dollar-pegged stablecoins and other cryptocurrencies is therefore essential. Doing so would not only disrupt Venezuela’s ongoing sanctions evasion efforts. It would also send a powerful signal to other heavily sanctioned countries that the United States will not tolerate the use of digital assets to undermine its sanctions regime. 

Maia Nikoladze is the associate director of the Economic Statecraft Initiative at the Atlantic Council’s GeoEconomics Center.

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This dashboard focuses on US sanctions and restrictive measures placed on crude oil from Russia, Iran, and Venezuela—including the unintended consequences and the lessons learned.

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This episode illustrates the true power of critical minerals. They now sit at the center of economic policymaking worldwide, with advanced economies racing to secure reliable access to the metals that power the modern global economy.

It is no surprise that the global race to secure long-term access to these resources is accelerating. The list of critical minerals is extensive—the latest US Department of the Interior assessment identifies fifty-four such commodities. But four of them stand out for their strategic value: lithium, nickel, cobalt, and graphite. These minerals are foundational to the future energy economy, in part because they form the core inputs of lithium-ion technologies that power electric vehicles, drones, grid storage, and modern electronics. At the same time, key nodes of their supply chains are highly concentrated. Securing access to these minerals is essential for economic competitiveness, national security, and the global energy transition.

Serious players in the critical minerals landscape specialize in at least one of three key assets—and the assets that these countries lack can present strategic vulnerabilities. One asset is access to reserves or mineral supply, either through geographic fortune or effective dealmaking with nations that host these resources. A second is processing capacity. While raw materials matter, true strategic advantage comes from the ability to reduce dependence on others to make use of those raw materials. And a third is strong export capability, which depends on having either an abundant supply, advanced processing infrastructure, or, ideally, both.

For the United States, the picture is mixed when it comes to the first key asset. But it isn’t as bad as many assume. While the United States holds significant geological potential for various critical minerals, it has not benefited from the same geological fortune in several essential deposits. Even where resources exist, production is frequently uneconomical, permitting processes are highly restrictive, and robust environmental standards further constrain the ability to scale extraction and processing. What it does have, however, is a strong capacity for strategic dealmaking. Both the Biden and Trump administrations have been notably successful in securing deals with countries with reserves. The chart below illustrates just how effective these efforts have been.

US efforts to secure access to lithium, nickel, and cobalt supplies have been largely successful. Countries shown on the graph in green represent those with active critical minerals agreements with the United States. Notably, those agreements include the $8.5 billion deal with Australia, a country that holds substantial reserves of key resources. In addition, the United States benefits from its long-standing free trade agreement with Chile—a major lithium producer. Although the free trade agreement does not explicitly address critical minerals, it makes Chile eligible for US tax credits. This preferential status means that Chilean lithium can enter the US market without additional tariffs, effectively making Chilean exports more cost-competitive.

The United States continues to lag in securing formal access to graphite, with no completed agreements so far and only ongoing negotiations with Brazil and a few African countries, including Mozambique, Madagascar, and Tanzania. Graphite remains especially challenging because China controls roughly 90 percent of global output—including extraction, processing, and exports.

However, the absence of a deal on graphite or any other mineral does not mean the United States is inactive on the ground in countries that host important reserves. The United States uses its development agencies, such as the Development Finance Corporation, to support private-sector deals, especially in Africa.

Of course, there are the other two critical components of supply-chain power: processing capacity and exports. Using lithium as an example, the chart below shows that reserves are relatively well distributed across the globe. However, processing capacity is not. Refining is almost completely concentrated in just two countries: China, which controls about 65 percent, and Chile, which holds roughly 25 percent. Processing capacity also directly shapes export power. While countries such as Australia can export large volumes of raw materials, the real value in the supply chain comes from exporting processed products.

Looking again at the four examples of lithium, nickel, cobalt, and graphite, their combined global market value in 2024, based on my calculations, was roughly $100 billion, about the size of Luxembourg’s gross domestic product. For comparison, the global oil and gas market that same year was valued at around six trillion dollars. I estimate that by 2030, the market value of these four critical minerals is projected to nearly double to $186 billion. That figure isn’t slated to catch up to oil and gas soon, yet critical minerals are gaining rapidly in their strategic significance. As the transition to a modern, electrified economy accelerates, their importance will only continue to grow.

To address its vulnerabilities, the United States must now focus on building and securing access to adequate refining capacity. In their analysis, my Atlantic Council colleagues—Reed Blakemore, Alexis Harmon, and Peter Engelke—highlight US vulnerabilities and offer concrete policy recommendations, such as designing trade and partnership strategies to ensure access, stability, and resilience when a fully domestic supply chain is unattainable. Whatever path the current administration chooses, it is clear that expanding global processing capacity remains a crucial—and currently missing—step in strengthening supply-chain control and export competitiveness. Fortunately, when considering the capacity of the United States’ partners and allies, the overall picture is far more promising.

A strong example of cooperation between the United States and its partners is the recent US-Saudi agreement, which includes a deal to establish a critical minerals processing facility in the Gulf. The joint venture—bringing together mining group MP Materials, the US Department of Defense, and Saudi Arabia’s state-backed mining giant Ma’aden—will focus on rare-earth processing, a segment of the supply chain still largely dominated by China. Looking ahead, expect more of these public-private partnerships as the United States works to strengthen its critical minerals ecosystem.

Bart Piasecki is an assistant director at the Atlantic Council’s GeoEconomics Center.

This post is adapted from the GeoEconomics Center’s weekly Guide to the Global Economy newsletter. If you are interested in getting the newsletter, email SBusch@atlanticcouncil.org.

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This article is the first in a series published by the Atlantic Council’s Africa Center and the GeoStrategy Initiative of the Scowcroft Center for Strategy and Security exploring the nexus between US security and economic interests across Africa.

On Africa’s southeastern coast along the Indian Ocean, Mozambique sits atop vast reserves of hydrocarbons and critical minerals. The country also controls a vital shipping corridor: the Mozambique Channel. Stretching between the mainland and Madagascar, this passage has become a critical chokepoint for commercial vessels seeking to bypass the pirate-ridden Red Sea.

Long overlooked by US policymakers, Mozambique’s resource wealth and strategic location have now brought it into the spotlight for foreign investment. Yet economic engagement in the country is anything but straightforward, as most of its assets are concentrated in the north—the same region where the Islamic State affiliate ISIS-Mozambique (ISIS-M) remains active.

For the United States, which increasingly seeks access to critical minerals and strategic resources—and remains committed to counterterrorism—this necessitates a twofold strategy: it must not only build commercial ties with Mozambique, but also strengthen security-sector cooperation to safeguard the country’s stability and economic potential.

From terrorism to trade?

Gas discoveries in the north during the 2010s catapulted Mozambique into the top ranks of global gas producers. Since then, the US Export-Import Bank (EXIM) and the US International Development Finance Corporation (DFC) have invested heavily in the country’s energy sector—and particularly in developing its liquefied natural gas (LNG) reserves—and more modestly in projects that support economic stability in northern communities. Today, the combined commitments of ExxonMobil’s Rovuma Basin LNG project and TotalEnergies’ investments in Mozambique exceed the country’s gross domestic product.

In March 2025, EXIM approved a $4.7 billion loan for LNG equipment and services. Similarly, DFC launched several projects, ranging from less than $175,000 to $1.5 billion, aiming to bolster energy security for large LNG ventures and the surrounding communities. Besides forming the basis for mutually beneficial economic engagement, the United States hopes that these investments help build resilience in areas that might otherwise tolerate or even support ISIS-M. Exxon’s and Total’s investments in Mozambique also represent key down payments to ensure a stable supply of non-Russian LNG for the United States and its allies. At the same time, they have already led to increased security coordination between Mozambique and the United States, proving that investment can drive engagement.

Violence in the north puts economic development at risk

Beyond its gas reserves, Mozambique hosts the Balama mine—one of the world’s largest graphite mines—along with several other emerging critical minerals sites. Mozambican graphite is used in steelmaking, nuclear reactors, lithium-ion batteries, and as a lubricant for heavy machinery—all essential to the US industrial base. In addition, new mining concessions continue to be announced across the country.

Yet progress toward exporting Mozambique’s LNG and critical minerals has been severely hampered by insecurity. ISIS-M’s terrorist attacks in the north, which began in 2017, pose a direct threat to major US energy and critical minerals investments in the province of Cabo Delgado. They not only disrupt local governance but also cause mass displacement and casualties. According to the Armed Conflict Location & Event Data Project (ACLED), Mozambique has witnessed 2,162 political-violence events and 6,165 total fatalities since 2017—2,554 of them civilian.

Mozambique was identified as a priority country under the Global Fragility Act (GFA), passed into law during the first Donald Trump administration. Despite that designation, meaningful policy attention and funding have not materialized. Instead, the current administration rescinded $200 million in GFA funds that would have been shared among Mozambique and eight other countries to promote stability near LNG and mining projects. This stands in stark contrast to the nearly $820 million in development assistance that Mozambique received in FY 2024, mostly for health programming.

Building stability through partnership and purpose

The Rwandan Defense Forces (RDF) first deployed to Mozambique in 2021 as part of the Southern African Development Community (SADC) mission in Mozambique and have since maintained a presence in the north. While imperfect, the RDF presence has helped reduce violence to the point that the TotalEnergies–ExxonMobil consortium recently lifted its force majeure declaration that froze its Cabo Delgado LNG project mid-construction in 2021. The mission—coordinated by Rwanda and SADC—reflects the oft-promoted principle of “African solutions to African problems.” Still, Rwanda’s efforts alone will not stabilize the area.

Given that Mozambique possesses strategic resources highly sought after in the United States and that its terrorist threat is manageable, the US administration—working with Rwanda and in partnership with France, Portugal, and other allies and partners with investments in Mozambique—should pool resources to stabilize the country. Such a diverse group working to promote Mozambique’s security and prosperity—while respecting the country’s sovereignty—would also align with the burden-sharing model the Trump administration aims to advance in its foreign engagements.

To reinforce regionally-led counterterrorism efforts that both preserve Mozambican lives and promote stability around key US investments, the Department of Defense and the State Department should expand security cooperation and security assistance in northern Mozambique—especially because failure to engage risks leaving US firms dependent on insufficient Rwandan support or Chinese security guarantees. US Special Operations Forces, with their unique capabilities in counterterrorism training and civil-military operations, could strengthen Mozambican and regional forces through joint combined exchange training, civil affairs projects, and military information support operations.  

Mozambique could point the way for US engagement in Africa

Combined with the local economic growth that energy and minerals projects bring, such efforts can pave the way for northern communities to no longer view ISIS-M as their only opportunity. Instead, US security investments should help rebuild trust in the state by delivering security, essential services, and livelihoods that reduce the appeal of extremism. Maritime forces from the United States and partners such as India should also conduct freedom of navigation operations in the Mozambique Channel to preserve open access to this vital trade artery. Finally, the State Department’s counterterrorism programs should strengthen community-security force cooperation to protect strategic investments and prevent further terrorist attacks. Security for communities will translate into security for assets. If Washington wants sustainable influence in Africa, it must align stability with shared prosperity.

As global competition for critical resources intensifies, Africa will serve as a testing ground for the fusion of finance and security. Modest, targeted investments in Mozambique’s stability—building on those already made by regional partners—and a focus on value creation represent the clearest example for how US capital can shape a security posture in Africa. Mozambican President Daniel Chapo’s visit to Washington in late October, where he met with US Vice President JD Vance and the chief executive officer of the DFC, underscores this growing convergence of economic and security priorities. As Chapo announced on the sidelines of this year’s United Nations General Assembly, “Mozambique is open for business.”

Indeed, integrated regional solutions supported by measured US engagement can help ensure Mozambique remains a stable and secure partner contributing to the US industrial base. Such a strategy could make the country a model of “security through investment”—a blueprint the United States could apply elsewhere in Africa.

Rose Lopez Keravuori is a nonresident senior fellow at the Atlantic Council’s Africa Center, an associate director at Strategia Worldwide, and chair of the board of advisors of GCR Group. She previously served as the director of intelligence at the US Africa Command.

Maureen Farrell is a nonresident senior fellow at the Atlantic Council’s Scowcroft Center for Strategy and Security and vice president for global partnerships at Valar, a Nairobi-based strategic advisory and risk firm. She previously served as the deputy assistant secretary of defense for African affairs and director for African affairs at the US National Security Council.

The Africa Center works to promote dynamic geopolitical partnerships with African states and to redirect US and European policy priorities toward strengthening security and bolstering economic growth and prosperity on the continent.

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The GeoStrategy Initiative, housed within the Scowcroft Center for Strategy and Security, leverages strategy development and long-range foresight to serve as the preeminent thought-leader and convener for policy-relevant analysis and solutions to understand a complex and unpredictable world. Through its work, the initiative strives to revitalize, adapt, and defend a rules-based international system in order to foster peace, prosperity, and freedom for decades to come.

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Just before the United Nations’ annual climate conference kicked off in Brazil November 10, three hundred mayors gathered in Rio de Janeiro. C40, a coalition of big-city leaders that has long pushed to be included in decision-making about climate action, hosted the mayors for talks about dealing with the extreme heat, turbocharged storms, and other results of a changed climate. As the summit opened, the conference’s president André Corrêa do Lago stressed “the need to place cities at the center of climate negotiations.”

Is the mayors’ moment here? 

By Peter Engelke

Imagine standing on any street corner in any city center in the world: New York, Los Angeles, Tokyo, Shanghai, Delhi, Berlin, Dubai, Lagos, São Paulo, or thousands of others. You would see a bustling hive of activity, people conversing, working, selling, buying, playing, demonstrating, shipping, transporting, exercising, building, demolishing, loading, unloading, and a million other things besides. These scenes are both ancient and new: ancient in that they repeat countless similar activities on countless street corners over thousands of years; new in that the massive amounts of energy required by such activities in cities today are transforming the very planet we live upon.

Cities are where most of the world’s population lives, where the vast majority of its buildings, factories, companies, homes, and vehicles are located. They are also a central driver of anthropogenic climate change, accounting for 75 percent of global energy use and 70 percent of global carbon dioxide (CO₂) emissions.¹ But they are also where climate solutions will be found. The trick will be in minimizing the first and maximizing the second. As United Nations (UN) Secretary-General António Guterres has said, “Cities are where the climate battle will largely be won or lost.”²

If we are to decarbonize the global economy in time to ward off the worst climate impacts, then we are going to have to transform how thousands of cities around the world function, and how billions of people live, work, travel, and entertain themselves in cities.

Are cities up to the challenge of shaping a livable future for billions of people? Will the world’s nation-states enlist these powerful assets in the fight against climate change, helping cities find and scale up workable solutions?

Why cities matter

Cities can be a partner for—or a counterweight to—national governments.

The debate over how to reduce carbon emissions—decarbonization—typically focuses on nations: how China’s emissions stack up against India’s, for instance. Nations have the power as sovereigns to raise funds, direct investment, and drive policy. Yet the world’s national governments have failed to place binding limits on carbon emissions, with the nonbinding nationally determined contributions under the 2015 Paris Agreement being the most successful outcome of the United Nations Framework Convention on Climate Change process thus far. Unfortunately (and predictably), there has been little progress implementing those emissions caps: National governments’ current policies are insufficient to reach the Paris Agreement’s target of limiting warming to 1.5 degrees Celsius above preindustrial levels.³ (The 1.5-degree goal is swiftly disappearing as a realistic target. In 2024, the world’s hottest year on record, the global average temperature was 1.6 degrees Celsius higher than preindustrial levels.)⁴ Nor is progress guaranteed, as states’ decarbonization policies can change—including in the wrong direction—with electoral outcomes and shifts in priorities.⁵ The United States, to give a prominent example, scrapped its Paris Agreement commitments to cut emissions when President Donald Trump again withdrew the United States from the Paris Agreement on the first day of his second term.

Cities create wealth and power.

There is every reason for national governments to work with city governments on climate, for cities are among the greatest assets that countries have. Cities are an important element of national power: They are, the economist Edward Glaeser argued in his landmark 2011 book, Triumph of the City, gigantic value-adding machines. Why? People live close together in cities. This physical proximity leads to exchange, invention, cooperation, planning, and execution, enabling the formation of institutions—governments, stock exchanges, start-ups, factories, corporations, universities, philanthropies, hospitals, and much more.⁶ Proximity thereby creates wealth, through invention, innovation, collaboration, manufacturing, servicing, and a great many other valuable things besides. The data bear this out: Globally and on balance, the most urbanized countries are the wealthiest, the least urbanized the poorest.⁷

Cities are where most people live.

Although cities are among humanity’s oldest complex creations (the world’s first cities emerged at least five thousand years ago), it was not until recently in historical terms that a truly urbanized world emerged.⁸ Rising fossil fuel use was at the center of this shift. The Industrial Revolution, which captured energy from coal, was the turning point. Starting in northern Europe and expanding outward, the Industrial Revolution enabled mass urbanization, as steam-powered factories pulled workers off the land and into cities.⁹ The city’s appeal today is the same as it was when the revolutionary Boulton & Watt steam engines appeared in Birmingham, England, in the 1770s: Cities, per Glaeser, are where economic opportunities lie.¹⁰

The world is still going through this demographic realignment that began with the Industrial Revolution. In 2022, cities were home to 4.5 billion people, about 57 percent of the global population.¹¹ Those figures will rise for decades to come, by 2050 to nearly 70 percent of the world’s population (6.7 billion city dwellers), with most growth occurring in Asia and Africa.¹²

The five sectors to green up

Cities will need to swiftly cut carbon emissions if global warming is to be limited to 1.5 degrees Celsius above preindustrial levels, the goal set under the 2015 Paris Agreement, or even 2 degrees given that the 1.5-degree goal in 2025 is already nearly moot.¹³ There are numerous ways in which cities can cut their emissions, including removing fossil fuels from electricity generation and power grids, making buildings more efficient (buildings account for roughly 40 percent of all greenhouse gas emissions), electrifying urban transport, shifting to nonmotorized modes such as the bicycle, reducing waste streams, decarbonizing urban infrastructure, and expanding local carbon sinks such as urban tree cover.¹⁴ This diversity of urban decarbonization can be grouped into five main categories—electricity, buildings, transportation, waste, and carbon sinks and offsets—from which most local emissions are generated.

Examples of urban creativity across these five priority sectors can be found nearly everywhere in the world.

Tokyo in 2010 became the first city in the world to implement a mandatory CO₂ cap-and-trade program, focused on the metropolitan area’s largest CO₂ emitters (factories, large buildings, and so on).¹⁵

Paris is implementing Plan Vélo to substantially increase the share of residents traveling by the greenest mode of travel—the bicycle. The plan will dramatically expand the city’s network of bicycle lanes, prioritize cyclists on streets and at intersections (via traffic lights and other traffic rules), expand bicycle parking throughout the city, and otherwise encourage cycling at the expense of driving.¹⁶

Cape Town is piloting waste-to-energy plants to reduce methane releases from the city’s landfills, with an eventual goal of generating 7-9 megawatts of electricity. For decades, Cape Town has been a sustainability pioneer, having experimented with numerous approaches to reducing the city’s carbon emissions through renewable energy projects.¹⁷

Melbourne is piloting a neighborhood battery system that will store renewable energy generated during the daytime and then release it to communities—residents and small businesses—in the evenings when it is most needed.¹⁸

Medellín has planted thousands of trees and hundreds of thousands of shrubs along “green corridors”—roads and waterways—to cool temperatures in the city during heatwaves.¹⁹

The scale of urban decarbonization at the global level is enormous, given the thousands of cities and billions of structures, vehicles, and people that will be involved if the world’s cities are to be successfully decarbonized. In the building sector alone, new urban construction will have to be much less carbon intensive—projections show that some 40 percent of all buildings that will exist in 2050 are not yet built—while the stock of existing buildings will have to be renovated.²⁰ Global energy demand in buildings continues to rise, owing (mostly) to rapid urbanization in a few world regions—Africa, the Middle East, the Asia-Pacific, and Eurasia. Most of the projected growth will occur in emerging economies that lack advanced energy-efficient building codes. However, there is enormous opportunity here as well: The adoption of efficiency codes for new buildings can help all economies, advanced and emerging; make buildings more energy efficient; spur demand for renewable sources of energy; and boost climate resilience by, for example, enabling buildings to better withstand heatwaves.²¹

An important piece of good news here is that local leaders tend to see decarbonization as a positive for their cities, rather than a negative. Decarbonization strategies in cities, if envisioned and implemented smartly, can enhance urban livability, address inequities for historically marginalized communities, reduce climate impacts, improve the local environment, and boost local economic competitiveness all at once. This positivity springs in large part from the pragmatism that abounds in cities. Cities are in constant flux as economic, demographic, environmental, technological, cultural, social, political, and other driving forces change in real time. To stay in office, mayors and city councils must competently anticipate and manage these forces.²²Increasingly, they seem to understand that the creation of a livable, healthy, safe, and sustainable environment buttresses their cities’ economic fortunes. They understand that the global competition for talent requires that their cities offer, all at once, a high quality of life, a clean environment, economic opportunity, and inclusive and competent governance.

In cities, these things are always linked because cities—as Glaeser has written—are where everything happens in one physical place. There is simply no way for local officials to avoid having to manage all these items at the same time. Hence cities are laboratories of policy experimentation, where bold initiatives can be trialed and then adopted, refined, or discarded.

The policymaking behind bus lanes and better building codes

Policy experimentation is commonplace in the world’s cities. In Valencia, Spain, the city government has built a decarbonization agenda around four pillars—energy efficiency, renewable energy, green infrastructure, and sustainable mobility. In each of these areas, Valencia’s efforts have focused on reducing carbon emissions while increasing the city’s livability and economic viability, a trifecta that city leaders insist is the right way to look at the decarbonization problem.²³ While Valencia has been working to reduce emissions, in October 2024 it fell victim to climate-driven disaster. Extreme rainfall generated unprecedented flooding in the city, demolishing parts of it and costing hundreds of lives. The event speaks to the need to build greater urban disaster resilience including through nature-based solutions.²⁴ In Rotterdam, Europe’s busiest port city, energy and shipping companies, local politicians, academics, architects and city planners, and civil society leaders generated the 2019 Rotterdam Climate Agreement, which sought to reduce greenhouse gas emissions by nearly 50 percent by 2030 through a three-pronged strategy: energy efficiency, low-carbon energy generation, and sustainable transportation.²⁵ Six years on, the latest data available from the Port of Rotterdam and surrounding industrial area showed a faster-than-projected drop in greenhouse gas emissions.

In January 2024, New York City began implementing a long-awaited building performance standard, Local Law 97, which requires owners to retrofit their buildings to reduce carbon emissions (buildings generate about two-thirds of New York City’s greenhouse gas emissions).²⁶New York’s regulation, viewed as one of the earliest and most important in the world, was well ahead of the federal government’s policymaking curve.²⁷ This phenomenon is not unusual. A 2022 survey conducted by the Organisation for Economic Co-operation and Development found that 88 percent of cities and regions required higher energy standards in buildings than did their national governments.²⁸

Cities are also banding together. For example, mayors and city councils in Mexico City, Medellín, Rio de Janeiro, Curitiba, San Salvador, São Paulo, and elsewhere in Latin America have been experimenting with a variety of efforts aimed at decarbonization and environmental protection, in some cases for many years, and have been working together in city-based coalitions to engage on these issues.²⁹

A few of these Latin American cities long have been acknowledged as world leaders—Curitiba, Brazil, for instance, is regarded as one of the world’s most sustainable cities. Starting under the visionary guidance of legendary mayor Jaime Lerner, Curitiba in the 1970s began innovative and highly successful programs focused on green space, environmental education, recycling, and transportation. (Lerner once enlisted hundreds of children to sit upon and paint a newly opened pedestrian street, thereby preventing a motorists’ protest that was planned for the same time on the same street; his creative intervention allowed the people-friendly innovation to survive.)³⁰ Curitiba’s most famous innovation, bus rapid transit, privileged mass transit over cars on the city’s streets and became a model for city planners around the world.³¹

For cities to maximize their individual and collective decarbonization efforts, local and national climate policies should match in a mutually reinforcing cycle. National governments have a critical, even foundational, role to play, through setting performance floors and providing much-needed funding to support local investments of all kinds, including but not limited to infrastructural investments. It is critical that national governments also encourage state and local governments to experiment with their own solutions, as with New York’s Local Law 97.

Synergies between local and national authority are not a given, however. California, for example, long has been empowered under federal Clean Air Act requirements to set its own more stringent automobile emissions standards. Owing to California’s massive consumer market, historically the state’s adoption of stricter emissions standards has driven automobile manufacturers to comply with these tighter standards—an example of a subnational standard leading to national-level improvements the national government might not have been able to achieve on its own.³²Yet the so-called California waiver under the Clean Air Act might be coming to an end. The Trump administration is suing the state of California to end its implementation of more stringent emissions requirements under the waiver.³³

Decarbonization policies are often controversial when they are first proposed and implemented, as New York’s building performance standard has been. This political fact requires city leaders to design inclusive processes that incorporate the views of residents. Attempts to do otherwise will fail on political grounds. Cleveland, for example, has spent years building the groundwork for a broad-based decarbonization strategy that is inclusive of historically marginalized perspectives—the city residents whose neighborhoods were divided by highway construction or lost jobs when factories closed or who live too far from bike lanes or bus stops to benefit from those investments. In conversation, Cleveland’s stakeholders stress that such efforts are difficult and time consuming, yet ultimately rewarding.³⁴When citizens and key stakeholders are systematically consulted, as they have been in Cleveland, Valencia, Rotterdam, and many other places, cities can enjoy sustained progress around a coherent decarbonization agenda.

As nations stall, cities band together

Cities and intercity networks form a parallel global governance architecture, a counterweight to an unreliable international system. Cities therefore constitute a steady presence on the global landscape, a cooperative constant within an international system that is becoming less so. National governments, international institutions, and foreign and security policy communities alike should regard cities and the people who run them—city governments and local stakeholders—as allies in the fight against all manner of international challenges, climate change first among them. Cities bring unique strengths, including creativity, innovativeness, global outlook, and flexibility, to the table in finding positive-sum solutions to concrete problems.

Cities are far from parochial actors focused only on their own issues: Transnational cooperation is a hallmark of urban governance, especially for the world’s largest cities such as New York or Tokyo (but also for many of its smaller ones).³⁵ Cities do not exist in a state of geopolitical competition as do nation-states. China and the United States both have an interest in slowing climate change, but their on-again, off-again bilateral climate diplomacy has been hampered by geopolitical suspicion.³⁶ City governments are freed from existential worry about geopolitical power, allowing them to devote their efforts to pragmatic and cooperative problem-solving across national borders. (Geopolitics does have a hand here, if indirectly. China’s rapid growth to global power starting in the early 1980s was centered on its cities. Now China, in a bid to augment its power via the Belt and Road Initiative, is pouring huge sums into transforming cities from Asia to Europe to Africa.)³⁷

Over the past several decades, local governments have formed numerous city associations dedicated to tackling climate change and other problems at the global level. These include C40 Cities, United Cities and Local Governments, ICLEI–Local Governments for Sustainability, Metropolis, the Global Covenant of Mayors for Climate and Energy, and the Resilient Cities Network.³⁸ These networked associations share best practices, build interurban solidarity, and augment cities’ collective impact within global climate negotiations. For example, two organizations, the Global Taskforce of Local and Regional Governments and the Local Governments and Municipal Authorities Constituency, formally represent subnational governments within the UN system, including at the UN’s annual climate summits.³⁹

The upshot is that cities and their associations are not vassals but agents in world affairs. As Simon Curtis, a scholar of intercity diplomacy, has written, “Nation-states need quickly to realize the potential of global cities and take steps to empower them to meet the global challenges of the twenty-first century … [by allowing them] more fiscal autonomy and [giving] them a louder, more influential voice in the deliberations of international organizations.”⁴⁰ And individual cities and city networks (along with supportive institutions such as philanthropies) should continue to deepen and expand their cooperative decarbonization efforts.

Channeling Guterres, the climate problem is an urban one. Cities are at the heart of the global economy and therefore at the center of both the problem of climate change as well as its solution. If the world’s cities can be decarbonized, they will deliver what they are supposed to deliver—prosperity and a high quality of life to billions of people—at low ecological cost.

Cities around the world have proven their willingness to innovate in pursuit of these goals. Whether national governments will support their efforts remains an open question—and one on which the planet’s future may hinge.

Peter Engelke is a senior fellow at the Atlantic Council’s Scowcroft Center for Strategy and Security and its Global Energy Center. He is on the adjunct faculty at Georgetown University’s School of Continuing Studies and is a frequent lecturer to the US Department of State’s Foreign Service Institute. He was previously a member of the World Economic Forum’s Global Future Council on Complex Risks, an executive-in-residence at the Geneva Centre for Security Policy, a Bosch fellow with the Robert Bosch Foundation, and a visiting fellow at the Stimson Center.

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Articulated buses pull into a terminal in Curitiba, Brazil. Curitiba pioneered bus rapid transit in the 1970s with dedicated bus lanes and protected bus shelters—creating a mass-transit system that reduces car use for much less money than building a new subway or light rail would cost. Video by bydronevideos/Storyblocks

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On the one hand, voices of doubt are rising from some negotiating groups on the ability of the Brazilian presidency and the multilateral process to deliver an ambitious package of decisions that deliver real impact, particularly on finance for adaptation for the least developed countries and small island states. But on the other hand, it is heartening that the heat and humidity of the Amazon have not slowed momentum on elevating the importance of adaptation, resilience, and the role of private finance. Holding this COP in the Amazon rainforest has sharpened the focus for many stakeholders, serving as a powerful reminder that strengthening climate adaptation will require forward-looking climate finance that includes private sector investment.

The private sector—particularly insurers, banks, asset managers, and other financial institutions—has the analytics, risk expertise, and growing appetite to engage in adaptation and resilience finance. And they are ready to work on devising the right investment vehicles to channel that much-needed finance. What they need now are strong policy signals, stable regulatory environments, and practical mechanisms from governments that can connect capital to projects.

One of the most notable developments at this year’s COP was the announcement of the National Adaptation Plans (NAP) Implementation Alliance. Led by the governments of Germany, Italy, and Brazil, as well as the United Nations Development Programme, with the support of the Atlantic Council’s Climate Resilience Center, this initiative aims to improve coherence in the complex ecosystem of financing for NAPs. Streamlining NAP financing will be critical to enable the flow of more public and private resources for climate adaptation and resilience. Over the next year, this initiative will bring together representatives from the private financial sector, multilateral development banks, civil society organizations, the public sector, and other stakeholders to find ways to improve collective action to support the implementation of NAPs.

For the private sector, this means greater visibility into future projects and greater confidence in the investment environment. For governments, it means being better equipped to design projects that meet investor expectations while delivering local resilience benefits.

The Atlantic Council’s Climate Resilience Center, along with the Natural Resources Defense Council (NRDC), will play a vital role in the alliance through Fostering Investable National Planning and Implementation for Adaptation & Resilience (FINI). Announced at a high-level session during the first week of COP30 with representatives of the governments of Australia and Switzerland, FINI is mobilizing more than one hundred actors from civil society, multilateral entities, philanthropy, and the private sector that are already advancing adaptation investments around the world.

Another remarkable development at COP30 was the announcement that fifty-three countries have committed a combined $5.5 billion to the Tropical Forest Forever Facility (TFFF). The TFFF incentivizes the conservation and expansion of tropical forests by making annual payments to tropical forest countries that maintain their standing forest. The initiative is especially notable within the climate community because of its proposed hybrid financing model. The TFFF will mix sovereign and philanthropic funding to de-risk investments on forest conservation, regenerative agriculture, and agroforestry that sustain standing forests. This, in turn, will help attract commercial capital toward these activities.

Throughout COP30, there has been a recognition that the public and private sectors cannot act alone when it comes to climate finance. The announcements and initiatives that have been launched so far at this year’s summit reflected a broad shift: the conversation is no longer about whether private finance should engage in adaptation and resilience, but how quickly financial ecosystems and policy frameworks can be aligned to deliver project pipelines to respond at the scale and speed that climate change requires.

Jorge Gastelumendi is the senior director of the Atlantic Council’s Climate Resilience Center. He formerly served as chief advisor and negotiator to the government of Peru, playing a critical role during the adoption of the Paris Agreement in the government’s dual role as president of COP20 and co-chair of the Green Climate Fund’s board.

The post Dispatch from COP30: In the Brazilian jungle, the private sector takes center stage appeared first on Atlantic Council.

As COP30 convenes in Belém, the first UN Climate Conference hosted in the Amazon and a symbolic turning point for global climate solidarity, the question before negotiators is not only how to scale climate ambition, but how to ensure it delivers on Nationally Determined Contributions (NDCs) finance for countries’ sustainable economic development. Ukraine’s recovery stands as one of the clearest tests of whether climate finance can function under conditions of war. Article 6, finalized last year in Baku, now enters its implementation phase; Ukraine’s experience could define how these mechanisms evolve.

The challenge of financing reconstruction in Ukraine is massive. Russia’s full-scale invasion has inflicted more than $176 billion in direct damage and over $589 billion in economic losses across Ukraine, which is nearly three times the country’s pre-war gross domestic product (GDP). The destruction is systemic, with the metals sector reducing steel production by almost 71 percent after several leading plants were destroyed or occupied. Millions of acres of farmland are unusable due to occupation or contamination from over two million landmines, making it the most heavily mined country in the world. Natural reserves such as Sviati Hory have lost thousands of hectares of forest and wetland ecosystems to fires and contamination. The energy sector ranks among the most heavily affected, with up to 93 percent of damaged or destroyed assets across power generation, transmission, and distribution infrastructure since the start of Russia’s full-scale invasion. As of December 2024, the sector’s recovery and modernization needs are estimated at $67.78 billion, including $53.7 billion to rebuild power generation on green transition principles aligned with EU climate and energy goals. The Ukrainian regions facing the highest reconstruction needs—Zaporizhzhia, Kharkiv, Dnipropetrovsk, Donetsk, Odesa, and Sumy oblasts—are industrial hubs and front-line territories.

Despite the scale of destruction, Ukraine’s recovery offers an opportunity for transformation. The country can not only rebuild what was lost, but also redesign its economy and infrastructure on resilient, sustainable, and future-ready foundations. Guided by the Build Back Better principle, endorsed by President Volodymyr Zelenskyy and supported by international partners, Ukraine aims to reconstruct using higher-quality, advanced, and sustainable technologies, aligning recovery with the EU’s Green Transition and Digital Transformation agendas. 

If realized, this vision could radically reshape Ukraine’s economic landscape by mid-century. The economic dividends would be substantial: lower import bills, improved trade balance, and thousands of skilled jobs in engineering, manufacturing, and local services. Breaking its historic dependence on imported fossil fuels, once 70 percent of Ukraine’s energy mix, Ukraine could become nearly self-sufficient in primary energy. New value chains in clean technologies, sustainable construction materials, and bio-based industries would drive regional growth and anchor long-term industrial modernization.

As Ukraine aligns its recovery strategy with the EU Green Deal, one of the most pressing challenges will be balancing industrial revival with the obligations stemming from the EU’s Carbon Border Adjustment Mechanism (CBAM). Exemption from CBAM may be politically feasible in the short term, but in the long run, Ukraine’s competitiveness will depend on achieving genuine emissions reductions across energy-intensive sectors. Carbon finance under Article 6 could be instrumental in this process—directing investment toward low-carbon steel, cement, and fertilizer production, speeding the transition away from coal and gas, and helping Ukraine move toward alignment with the EU’s carbon pricing and reporting systems.

Yet the challenge is immense. Achieving this transformation will require annual investment around $35 billion across energy, industry, transport, and buildings, including $11 billion each year in renewable generation and grid infrastructure. Ukraine’s $524 billion reconstruction need is therefore more than rebuilding physical assets; it is a test of financial credibility, investor confidence, and political will. In defending Ukraine against Russia’s unlawful aggression—a threat not only to Ukrainian sovereignty but to the shared interests and security of its allies—Western countries have already demonstrated significant political will, mobilizing over $454 billion in military, financial, and humanitarian aid since 2022. The same resolve now needs to power a new framework for climate-aligned reconstruction, where solidarity is measured not just in aid, but in investment, innovation, and shared security. 

The scale of Ukraine’s reconstruction is daunting, yet existing international frameworks currently being discussed at COP30 could potentially help mobilize the necessary capital. Can COP leaders leverage the framework of Article 6 of the Paris Agreement to bring reconstruction finance to Ukraine?

Article 6 as a bridge to climate, development, and green recovery finance

Article 6 of the Paris Agreement enables the trade of emission reductions and removals units as “internationally transferred mitigation outcomes” (ITMOs)—equal to 1 ton of CO₂ counted toward the country’s climate targets. In practice, a government or company can fund verified climate action abroad, and count the resulting emissions reduction toward its own NDC, or use them for corporate or investment needs. 

If implemented at scale, Article 6 can become a channel for financing Ukraine’s reconstruction and green transition. Reimagined as a mechanism for countries to further demonstrate their unwavering support for Ukraine, Article 6 ITMOs could be redefined as “solidarity credits,” verified units of climate finance directed to Ukraine’s reconstruction. These credits would support grid restoration, renewable-energy deployment, and institutional capacity building, while following Article 6’s framework and maintaining its integrity and transparency requirements.The governments of the United Kingdom, the EU, and Ukraine could take the lead in testing this approach through bilateral agreements under Article 6. The initiative would pilot a new class of “solidarity credits” that uphold Article 6’s integrity rules while extending its application to post-conflict reconstruction. These credits would enable partner countries to channel verifiable climate finance (or results-based finance) into Ukraine’s recovery, supporting projects such as clean energy. Then, the supporting government could either claim these credits or let the private sector buy or invest in them, thus providing climate finance and advancing global decarbonization goals. Because these are authorized under the Paris Agreement, there is no risk of double-counting. Companies can retire these ITMO units to support high-integrity corporate climate claims, bolstering their climate accountability and transition plans while channeling capital into Ukraine’s recovery.

Current endeavors

Last year’s package agreed at COP29 in Baku effectively finalized the core rulebook for Article 6. In practice, this means that the Paris Agreement architecture for issuing and trading ITMOS under Article 6.2 and under Article 6.4 is now sufficiently clear for countries to move from design to delivery. Early movers, including Switzerland, Honduras, Suriname and Japan, have begun translating these rules into real national programs and project transactions, showing what the Article 6 implementation actually looks like.

That shift, however, has also underscored how complex and demanding Article 6 is to implement effectively. The framework builds on the Kyoto Protocol’s clean development and joint implementation mechanisms, retaining their focus on transparent governance, environmental integrity, and contributions to sustainable development while introducing stricter safeguards and transparency, and stronger alignment with national climate targets. Implementing this framework requires robust national systems, including clear authorization procedures, reliable monitoring, reporting and verification, and registries capable of tracking units from issuance to final use. Many countries are now developing and implementing these systems, and while progress is evident, it remains uneven across jurisdictions.

For the moment, international transfers of ITMOs remain modest in volume, but some countries, such as Honduras and Suriname have signed MoUs to trade large volumes with large banks and companies. Limited adoption is not a failure of the concept so much as a reflection of both the infancy of this new market and the work needed to align domestic institutions, data systems, and project pipelines with these new Article 6 rules and regulations. As more countries complete those building blocks and capital liquidity enters this market, a steady scale-up is inevitable.

Designing a new financial architecture

Implementing Article 6 to enable Ukraine’s reconstruction will be a test of financial ingenuity, with clear policy signals, proving that climate finance can operate even under extreme conditions of risk and instability, such as war.

The framework suggested by the Oxford Roadmap to Net-Zero Aligned Carbon Market Regulation, which is widely referenced as setting a gold-standard approach in carbon finance investment-grade, defines six pillars: efficient financing, net-zero alignment, ecosystem integrity, equitable outcomes, enforcement, and usability. These principles can support a de-risked Article 6 architecture, one that embeds high-integrity standards within Ukraine’s reconstruction finance. Applied to Ukraine, they suggest a model where carbon revenues complement grants and concessional lending. Even a modest stream of credits could channel between $2 billion and $3 billion annually into verified renewable and grid-resilience projects, roughly 5 percent of Ukraine’s annual recovery needs.

Translating these principles into practice requires a concrete governance model. Integrity and traceability are the bridge between abstract standards and operational finance. Each Article 6 credit should therefore carry verifiable metadata—satellite monitoring, reporting, and verification; third-party audits; and tangible co-benefits such as megawatts restored, hospitals powered, jobs created, or tons of diesel displaced.

Why now?

The UK and EU are uniquely positioned to partner with Ukraine on carbon finance. London retains diplomatic credibility on climate policy and has been among Ukraine’s staunchest allies since 2022. Its management of the International Climate Finance (ICF) portfolio and commitment to high-integrity carbon markets form a solid foundation, reinforced by the 2025 UK–Ukraine 100-Year Partnership Memorandum.

The EU, on November 5, 2025, approved a 90 percent emissions reduction target for 2040, allowing member states to use Article 6 international carbon credits for up to 5 percent of their emissions. This would allow and incentivize any EU member countries, companies, and investors to invest in Ukraine and use those Article 6 carbon credits for their emissions reduction purposes.

On October 29, 2025, the second NDC of Ukraine to the Paris Agreement was approved by resolution of the Cabinet of Ministers of Ukraine and published on the UNFCCC website during COP30. This sends a strong political signal and shows a clear determination by Ukraine to grow its economy sustainably. Ukraine aims to reduce its greenhouse gas emissions in 2035 by more than 65 percent from 1990 levels. Furthermore, Ukraine intends to continue participating in market mechanisms under Article 6 of the Paris Agreement as a party on whose territory projects under Article 6 of the Paris Agreement are implemented. 

By participating in cooperative approaches, under Article 6, Ukraine will comply with the rules and guidelines in accordance with the decisions of the Paris Agreement to ensure proper accounting, environmental integrity, transparency, and avoidance of double counting. 

A proposed bilateral Article 6 framework could consist of three pillars:

1. Solidarity credits: The UK and the EU would contribute approximately £200 million ($263.4 million) to a Ukraine Green Recovery Fund. This fund would finance projects such as grid reconstruction, solar energy initiatives, and energy efficiency upgrades. The resulting ITMOs would be transferred to the UK but explicitly not used to meet its NDCs. Instead, they would function as either “solidarity credits,” or sold to businesses and the capital markets, thus strengthening business cooperation and bringing symbolic political value.
   
2. Guarantee facility for risk mitigation: Utilizing UK-backed concessional finance, a first-loss guarantee facility would reduce investment risk for private developers. This guarantee would cover partial losses if a project is destroyed or interrupted by conflict, thereby lowering Ukraine’s perceived country risk.
   
3. Pilot “green corridors” with transparent monitoring, reporting, and verification. Two to three green corridors, for example, around Kyiv, Vinnytsia, and Dnipro, could serve as regional reconstruction zones integrating distributed renewable energy and upgraded transmission infrastructure within international carbon-market frameworks, including the Paris Agreement Crediting Mechanisms.

For quick and lasting impact, Ukraine should prioritize projects where carbon finance meets human security:

• Distributed renewables on schools, hospitals, and administrative buildings—Ukraine’s rooftop photovoltaic potential exceeds 238.8 gigawatts, alongside distributed storage. Ukrainian firms such as KNESS have already deployed over 100 megawatt-hour of battery capacity. For example, retrofitting municipal hospitals in Chernihiv oblast with rooftop solar systems could unlock concessional financing backed by a UK guarantee covering 20 percent of potential losses, thereby reducing the cost of capital from 12 percent to 7 percent.
  
• Energy-efficiency retrofits could cut heating demand by 50 percent and 60 percent since almost 80 percent of the housing stock in Ukraine is considered energy inefficient, with the bulk constructed between the 1960s and 1980s.
  
• Circular-economy and low-carbon materials for reconstruction can cut emissions and reduce import dependency. Ukraine’s biomethane potential, estimated at 9.7 billion cubic meters annually, offers a strategic opportunity to replace fossil natural gas in heating, industry, and transport.
  
• Nature-based solutions should be a priority in both ecological and urban recovery. With more than ten million hectares of degraded land, Ukraine could pilot high-integrity restoration projects under Article 5—from reforestation to green urban renewal in heavily affected cities such as Chernihiv and Mykolaiv.

These activities would diversify Ukraine’s mitigation portfolio and embed climate resilience in its recovery model.

Restoring trust through carbon finance cooperation

By linking emission reductions and removals to real reconstruction outcomes, Ukraine can turn climate cooperation into a driver of national renewal, and the COP process can become the beginning of this road for Ukraine. A transparent, high-integrity carbon market would show that climate action can restore energy generation capacities, reforest bombed landscapes, and reconnect communities. 

In this sense, Ukraine’s carbon market could become a prototype for conflict-affected economies worldwide, where climate policy and recovery policy converge, and where the currency of carbon is measured not only in tons of CO₂ but in megawatts restored, hectares rehabilitated, and lives rebuilt. 

Ievgeniia Kopytsia is a legal scholar and policy expert with more than ten years of experience advancing climate and environmental governance across Ukraine, the EU, and international institutions. She specializes in climate and energy law, post-conflict reconstruction, and the legal alignment of Ukraine with European and global standards for a green transition.  As a national legal expert, Kopytsia has provided legislative assessments, policy advice, and project leadership on the implementation of environmental and climate laws, including supporting Ukraine’s climate policy reforms and green recovery initiatives. She is a frequent contributor to international conferences and working groups, focusing on the intersection of environmental law, conflict resilience, and sustainable development within the Euro-Atlantic community.

Darka Harnyk is the director of the Energy Security Marshall Plan for Ukraine at EOPA, where she works with Ukraine’s Ministry of Economy, Ministry of Environment, and international partners to develop financing mechanisms for post-war green reconstruction. Her work focuses on Article 6 climate cooperation, war-risk de-risking, and critical raw materials. Before transitioning into reconstruction and climate finance, Harnyk worked in the tech sector at Unity Technologies and later earned a degree in environmental science and policy from Columbia University.

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EnergySource Nov 10, 2025

The energy conversation has changed—so must COP30  

By Charles Hendry

At COP30, world leaders have an opportunity to reframe how countries work together to achieve energy security, decarbonization, and affordability.

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EnergySource Apr 28, 2025

If Russian gas returns to Europe, it must go through Ukraine

By Sergiy Makogon

The resumption of Russian gas supplies to Europe as part of a potential cease-fire agreement in Ukraine is under discussion, but any such flows would need to transit through Ukraine rather than Nord Stream or other routes. To safeguard regional stability, the EU, Ukraine, and the US must enforce strict safeguards to avoid renewed dependency and prevent Russia from once again weaponizing its energy exports.

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“We’ve always been on the same side of every issue.” That’s how US President Donald Trump described Saudi Crown Prince Mohammed bin Salman (MBS) during a chummy Oval Office meeting on Tuesday, part of a day of pageantry and dealmaking at the White House. The United States and Saudi Arabia struck a series of agreements on defense, semiconductors, nuclear power, and more. While the world awaits the fine print of these deals, our experts took stock of what the leaders have announced so far and what to expect next. 

• Daniel B. Shapiro (@DanielBShapiro): Distinguished fellow at the Scowcroft Middle East Security Initiative and former deputy assistant secretary of defense for the Middle East and US ambassador to Israel
• Tressa Guenov: Director for programs and operations and senior fellow at the Scowcroft Center for Strategy and Security, and former US principal deputy assistant secretary of defense for international security affairs 
• Jennifer Gordon: Director of the Nuclear Energy Policy Initiative and the Daniel B. Poneman chair for nuclear energy policy at the Global Energy Center
• Tess deBlanc-Knowles: Senior director with the Atlantic Council Technology Programs and former senior policy advisor on artificial intelligence at the White House Office of Science and Technology Policy

Jet setters

• On defense, Trump approved the sale of fifth-generation F-35 fighter jets to Saudi Arabia, which Dan interprets as an indication that the US president “is going all-in on the US-Saudi relationship.” 
• But “China remains an issue in the backdrop of US-Saudi defense relations,” Tressa tells us. She notes that US intelligence agencies have reportedly raised concerns about Chinese access to the F-35 if a US-Saudi sale were to proceed, and “similar efforts to sell F-35s to the UAE were not realized across the previous Trump and Biden administrations, in part due to concerns of technology transfer to China.” 
• There’s also the US legal requirement to ensure Israel’s qualitative military edge (QME) in the region. Dan points out that although the 2020 F-35 deal with the United Arab Emirates was later scuttled, it did pass a QME review, and the Saudi deal is likely to do so as well, in part because “Israel will have been flying the F-35 for a decade and a half before the first Saudi plane is delivered, and Israel will have nearly seventy-five F-35s by then.” 
• But the UAE deal was linked to its normalization of diplomatic relations with Israel, and “it appears there is no link to Saudi normalization” with Israel in this deal, Dan points out. In the Oval Office, MBS conditioned his joining the Abraham Accords on “a clear path” to a Palestinian state, which does signal a potential disparity from Saudi Arabia’s previous stance requiring the “establishment” of a Palestinian state.
• The Biden administration held talks with Saudi Arabia about a treaty that “would have included restrictions on Saudi military cooperation with China and ensured access for US forces to Saudi territory when needed to defend the United States,” Dan tells us. But “Trump has not announced whether he is giving the Saudis a one-way security guarantee, or whether there are mutual-security commitments.” 
• So what about Trump’s announcement during MBS’s visit that Saudi Arabia has become the United States’ twentieth Major Non-NATO Ally? Tressa tells us the designation “is a favorite tool of US presidents to cap off major visits with a symbolic flourish to indicate elevated relations.” But Saudi Arabia already enjoys many of the benefits of the designation, Tressa notes, such as privileged access to US arms sales, and the designation “does not provide any special or enforceable security guarantees, nor is it a binding treaty.” 

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Nuclear option

• The White House also announced a Joint Declaration on the Completion of Negotiations on Civil Nuclear Energy Cooperation. Jennifer tells us it’s “likely a precursor to an official Section 123 agreement” on peaceful nuclear cooperation, which must also be reviewed by Congress. 
• “Saudi Arabia has indicated keen interest for years in pursuing civil nuclear technologies,” Jennifer notes, both to add to its power grid and for water desalinization. If the United States provides that nuclear technology, she adds, then “it can exert influence on security matters and help prevent the development of nuclear weapons in Saudi Arabia and beyond.”  
• “Although there had long been speculation that a civil nuclear agreement between the US and Saudi Arabia might cover broader geopolitical issues,” Jennifer adds, “this week’s announcement reflects a more pragmatic approach with a focus on technologies that have strong national security implications.” 

Chipping in

• The two leaders also announced an AI Memorandum of Understanding but did not release many details. “Likely this means the approval of the sale of a package of advanced AI chips to Saudi Arabia,” Tess says. In the Oval Office, she points out, “MBS shared his vision (and strategic bet) on computing to compensate for the country’s workforce shortfalls and ensure continued economic growth.” 
• While the Trump administration has lifted the Biden administration’s “AI Diffusion Rule” that limited the sale of chips to many countries, it still has the final say on exports of the most advanced chips to Saudi Arabia, Tess notes, “likely due to fears related to ties with China.” 
• Now, Tess adds, US national security officials will keep their eyes on “the provisions of the new AI agreement focused on technology protection and what measures will be put in place to keep America’s most advanced AI chips out of reach of Chinese adversaries.” 

The post Digging into the details of the US-Saudi deals appeared first on Atlantic Council.

As the US role in the Sahel is weakening, Turkey’s role is rising. With new defense agreements, increasing diplomatic engagements, and joint economic development projects with new, junta governments that espouse anti-colonial rhetoric in Burkina Faso, Mali, and Niger, Turkey finds itself working in the same theater as the Kremlin to fill the void left after Western forces departed. Turkey’s new trusted status among Sahelian governments and its state-led approach make it one of the nations positioned to influence regional security dynamics during a time when other Western powers are constrained. Although Turkish efforts in the Sahel have been primarily based on its own strategic ambitions and national interests, Ankara’s growing influence offers a rare channel through which the United States and its allies could recalibrate their approaches to the region. 

The Sahel’s break with the West 

Since these coups and the establishment of military juntas in Mali, Niger, and Burkina Faso, France and the United States have faced the annulment of defense agreements in the region, French and US troops have withdrawn from the region, the European Union’s Takuba Force ceased anti-Jihadist operations in Mali, and, in January, Niger revoked a counterterrorism accord with the United States, demanding the withdrawal of 1,000 US troops from the country. The United States has laws that prohibit it from assisting governments that have overthrown democratic governments, including clear guidance from the US State Department against foreign assistance to Niger, and now Washington finds itself without a clear role in the Sahel.

The region’s Western-backed security architecture has collapsed: Three withdrawals (i.e., Mali, Burkina Faso, and Niger) prompted the dissolution of the Group of Five (G5) for the Sahel. The same three departures from the Economic Community of West African States (ECOWAS) has left the Sahel searching for new patrons and new strategic frameworks. Mali, Burkina Faso, and Niger, for example, have formed the Alliance of Sahel States (AES), a political and defense bloc that rejects old alignments. To fill the new defense void, alternative partners without the baggage of colonial legacy—most notably Russia and Turkey—have stepped in, offering defense cooperation without the governance conditions demanded by the West. 

The United States, which provided humanitarian aid, economic investment, and security forces to the region for roughly a decade prior to the coups, lost much of its ability to advance regional security interests when it was pushed out of the region. Its ability to monitor threats in the region and in neighboring countries like Libya, coordinate strategies with local forces, and access crucial intelligence was significantly degraded. Although US security operations in the region have been constrained by new partnerships, it still has options. Opportunities remain through indirect engagement—particularly with actors that retain both credibility on the ground and diplomatic standing in the West. Turkey is one of the only powers operating in the Sahel that meets both criteria.

​Turkey’s role amid a shrinking Western presence, rising Russian influence

Turkey’s military cooperation in the Sahel draws on nearly two decades of experience positioning itself as a rising power in Africa, rooted in its 2003 ​​​​Strategic Depth​ doctrine and early initiatives like the “Strategy for the Development of Economic Relations with Africa” and the “year of Africa” in 2005—the same year it secured observer status in the African Union. Initially, Turkey relied on soft power, leveraging shared Ottoman heritage, cultural diplomacy, and economic partnerships to expand its influence. However, what began as a soft-power push—through development aid, cultural ties, and embassy openings—has evolved into a defense and infrastructure strategy, especially under President Recep Tayyip Erdoğan’s aim to position Turkey as a leader among emerging powers. Turkish delegations have conducted regular visits to AES capitals, striking arms and infrastructure deals while pursuing bilateral military agreements.  

At the same time, Russia, too, has made swift inroads. It is capitalizing on anti-colonial sentiment and offering support through its largest private military company, the Wagner Group, to provide “training, close protection, and counter-terrorism operations.” Through proxy forces, Russia has gained access to political influence and resource extraction in exchange for security-force training, arms deals, and protection of junta leaders. Russia’s use of proxy forces has allowed it to distance itself from Russian casualties and military failures. 

However, Russia’s war in Ukraine has slowed its operations in the Sahel. Across AES, Russian forces are stretched thin. Despite Russia’s success in stabilizing the Touadéra regime in the Central African Republic in 2021—a conflict that gave Russia defense legitimacy despite the fact that Sahel—Russian forces have largely been unsuccessful. In 2024, fifty-one percent of global terrorism-related deaths took place in the Sahel. This was the deadliest year in the Sahel’s history as the region remains mired in conflict and plagued by violent insurgencies, fragile state institutions, and waning international engagement. 

​​​​In the Sahel, Turkey can play the same role as Russia. Turkey can offer Sahelian militaries affordable, “rapidly deployable” equipment. And Russia, which has been struggling to keep up with military-industrial demands, is an increasingly unreliable partner. Sahelian clients grew more discontented with the Russian proxy forces’ unsuccessful operations and inability to fulfill weapons contracts, and the Wagner Group officially left Mali, announcing on Telegram that its mission was accomplished. In its place, Russia plans to consolidate its troops under the Russian Ministry of Defens​​​​e-backed Africa Corps. Reestablishing connections, building trust, and establishing higher capacity supply lines will take time; meanwhile, alternative partners like Turkey are in place in the Sahel and can take advantage of the Kremlin’s declining foreign-operations capacity. 

In contrast to Russia’s focus on mercenary deployments and ​​​​direct-combat missions, Turkey offers a more varied tool​ ​kit: combining diplomacy, state-to-state defense deals, economic engagement, intelligence sharing, and technology transfers. Turkey’s defense industry, particularly its drone sector, made early moves into the African market, supplying low-cost, high-capability platforms like Baykar’s Bayraktar TB2 and Akinci drones. These have become cornerstones of AES air power, and are ​​​​​often more cost-effective​ than systems from Iran, Israel, or even Russia. 

Turkey is now the main producer of combat drones for Africa, according to the Africa Center for Strategic Studies (part of the US Department of Defense). In December 2024 Mali received Turkish Akinci drones in addition to its eight TB2 drones; Niger has purchased six TB2 drones, five Karayel-SU drones, and Aksungur drones; and Burkina Faso has purchased at least six TB2s and two Turkish Akinci drones. These drones are managed and operated out of local airbases, like the Niamey air base in Niger or the Bamako Air Base 101 in Mali, and are managed by a “hyper-closed circle” of high-ranking officials. In early April 2025, Mali was also found to be using MAM-T bombs 20 kilometers from its border with Algeria when a Turkish-made Akinci drone was shot down. This was the first time the Malian armed forces were found to be using MAM-T bombs, which are guided, high-explosive fragmentation munitions that can be strapped to Bayrak drones, and are manufactured by Turkish company Roketsan. 

On the ground, Turkey’s engagement increasingly makes up for declining Russian power. Turkish drones and, ​​​​​​reportedly, Turkish-hired Syrian mercenaries disrupt insurgent operations in areas where state forces are absent, helping to alleviate local manpower shortages. ​​​​​Although unconfirmed, Sadat, a private Turkish military contractor often referred to as Erdogan’s “parallel army,” was alleged to have sent more than one thousand Turkish-trained Syrian mercenaries to Niger and Burkina Faso in 2024, ​​​​tasked with protecting mines, petroleum infrastructure, and military installations​. This is not the ​​first time​​ Sadat has been accused of using Syrian ​​mercenaries​​ in foreign conflicts.

Already, Turkey has increased intelligence-sharing capabilities in the region through its intelligence agency, Milli İstihbarat Teşkilatı, which recently opened a hub in Niger. Its growing network​ of embassies, companies, and security personnel across the Sahel gives Ankara access to critical information, which can influence security operations.

Turkey’s economic expansion in the Sahel

Turkey has slowly expanded its influence in the Sahel by expanding its security operations simultaneously with its commercial agreements. 

While the AES has implicitly distanced itself from former colonial powers through new security partnerships and arms contracts, the three states are also turning to alternative partners for economic support. They had perceived prior Western economic conditions as unfair and are seeking more beneficial economic relationships. After revoking mining licenses and pulling out of economic partnerships with the West, the Sahel now needs new partners to help develop its potentially lucrative energy and raw materials sectors.  

Since the 2010s, Turkey has increasingly engaged with Africa’s energy sector, leveraging its 2017 National Energy and Mining Policy to enhance its energy independence. It has signed agreements with at least seventeen African countries across North, West, and East Africa, as well as the Horn of Africa, focusing on renewables and critical minerals. Trade volumes between Turkey and Africa increased from ​​​​$5.4 billion in 2003 to $40.7 billion in 2022, and a ​​​​growing number of Turkish companies are expanding their operations in Africa. 

Turkey now has greater reason to diversify its imports away from Russia and Iran— given the disruption of trade patterns by conflicts in Ukraine, the Mediterranean, and the Middle East—and toward Africa. The Sahel’s underdeveloped energy sector offers Turkey a foothold in new supply routes and economic opportunities.  

A Turkish energy company has taken a leading role in Mali, supplying 60 megawatts of power and building a heavy fuel oil power plant. Turkish exports to Mali rose from $87 million in 2021 to $111 million in 2023. Similarly, Turkey has boosted trade with Burkina Faso, despite regulatory hurdles in the mining sector. Exports rose from less than $100 million prior to 2020 to $166 million in 2024, reflecting Ankara’s deeper economic engagement with the new military government. 

In the Sahel region, Niger has traditionally been Turkey’s strongest energy partner in the region. Turkey and Niger have signed bilateral mining agreements and oil and natural gas agreements, established a working committee​ to expand economic cooperation, and held leadership-level discussions about infrastructure development projects​ in northern Niger. Turkish firms have been uniquely willing to engage in high-volatility regions, implementing critical infrastructure, energy, and mining projects simultaneously with increased defense cooperation. 

The Sahel’s mineral wealth is critical to Turkey’s industrial ambitions and plans to become a processing hub for critical minerals. Turkey’s defense industry depends heavily on critical minerals used in advanced weaponry, aerospace systems, and batteries and, at the same time, Turkey’s rising clean technology industry has accelerated the need for lithium, nickel, copper, and other raw minerals. While Turkey is beginning to build up its raw mineral processing capabilities in an attempt to limit foreign control over critical supply chains, Ankara is in search of suppliers for these materials.  

With limited domestic reserves and rising industrial needs, Ankara is targeting the region’s large supplies of raw materials. Mali is Africa’s second-largest lithium producer; Niger is a leading exporter of uranium; and Burkina Faso is a major gold supplier. Though Turkey has domestic reserves of tungsten, graphite, and cobalt, access to the Sahel’s minerals enables Turkey to compete in global markets and develop its own processing base. 

Through diplomatic and corporate efforts, Turkey has tried to secure access to gold and uranium in Niger, the world’s seventh-largest producer of uranium; Turkish and Azerbaijani companies have discussed joint mining projects in the Sahel; and, until recently, a Turkish company held the industrial exploitation rights of the largest gold mine and the largest manganese mine in Burkina Faso. Russian companies have likewise expanded their economic presence in the Sahel; Russian companies ​​​​have signed lithium mining deals with Mali, lithium and uranium mining deals with Niger, and deals on nuclear cooperation with Burkina Faso. While Western companies have been sidelined, governments in the Sahel remain open to cooperation with both Ankara and Moscow. Turkey, as a NATO ally that retains the political space to operate in these markets, is a potential counterbalance to Russia’s growing influence while advancing its own strategic and industrial objectives.

Solution-based diplomacy in a security-first landscape

What sets Turkey apart from other external actors—especially Russia—is the diversity of its engagement. Unlike Moscow’s arms-for-access model, which is often viewed as exploitative and destabilizing, Ankara has prioritized a ​​​​multifaceted approach that includes trade, infrastructure, defense, diplomacy, and development. Turkish-African trade spans sectors from textiles to healthcare and energy, and Turkey’s public and private sectors have actively invested in education and capacity building across the continent. This “solution-based” diplomacy contrasts sharply with Russia’s security-first playbook. 

Yet Turkey’s growing presence in contested regions comes with risks. Infrastructure investments in unstable political environments require security guarantees—and that often means greater military involvement. As Ankara deepens its footprint, it must decide whether to align more openly with Russia, or to use its position to mediate and potentially counter Russian influence. 

Turkey is viewed by many African leaders as a reliable, noncolonial partner. This gives Ankara access that Western powers now lack. While Turkey has not publicly aligned with US or European policy in the Sahel, its access and credibility in the region offer an opportunity to bridge the growing gap between Western interests and Sahelian realities. 

If Ankara chooses to leverage this position, it could quietly support Western objectives—sharing intelligence, coordinating security policies, or shaping development strategies that undercut Russian influence. Turkey would not be acting as a Western proxy, but as a sovereign actor leveraging its credibility and access to serve both its own interests and those of the broader international order. In a region where Western engagement is rapidly shrinking, Turkey’s role may become indispensable—not as a rival, but as a crucial partner.

Not a proxy but a pathway: The West’s reentry point in the Sahel

The power balance between Russia and Turkey is markedly different from conflict zones where they stood or stand on opposite sides—such as Syria, Libya, Ukraine, and the Azerbaijan-Armenia conflict. In the Sahel, both powers are engaging the same postcoup regimes—Russia through mercenary-led counterinsurgency and Turkey through state-led arms deals, drone operations, and economic development. They are not in direct confrontation in the Sahel, nor are they locked in zero-sum competition. Instead, they operate in parallel, often in the same theaters and with the same governments, but with divergent methods, capabilities, and long-term goals. 

Parallel engagement between Russia and Turkey raises security concerns for Western powers who have lost their influence in the region, but it also creates a unique opening. While Russian security forces have been largely unsuccessful in their efforts to mitigate threats in the Sahel, Turkey has an opportunity to increase its engagement with local forces. And as the only Western partner force that is directly engaging with the region, Ankara can potentially disrupt Russian influence and coordinate with the West on security strategy. Its access to critical mineral assets, defense infrastructure, and high-level political relationships across the AES bloc can offer the West indirect access to a region from which it has been largely expelled. 

Since President Donald Trump returned to office at the beginning of 2025, both Washington and Ankara have shown renewed willingness to deepen their bilateral partnership on regional matters and cooperate in third countries, most notably Syria. In addition to diplomacy, including Foreign Minister Hakan Fidan and Secretary of State Marco Rubio meeting in Washington and Brussels, both capitals have continued demonstrating top-level cooperation on Syria with the trilateral gathering in Riyadh, where Trump and Erdoğan met with Syrian President Ahmed al-Sharaa, together with the creation of the joint Syria Working Group to further enhance closer cooperation on Syria’s reconstruction and stability efforts. This dynamism and strategic alignment can be a strong foundation for extending the US-Turkey partnership into Africa, where shared interests in stability and security could help reshape the dynamics of great​-​power competition in the region. 

Turkey’s pragmatic foreign policy is not without complications. But in the Sahel, that very pragmatism can work to the West’s advantage. If Washington moves beyond its reflexive skepticism and recognizes Turkey’s intermediary potential, the Sahel could shift from a symbol of Western retreat to a frontier of renewed influence—anchored by a partner that understands and navigates both the streets of Niamey and the corridors of NATO.

Alp Burak Ozen is a program assistant at the Atlantic Council Turkey Program.

Haley Nelson is a Boren Scholar and a Georgetown University alumna. She is an independent geopolitical consultant with a focus on energy and infrastructure security in Eastern Europe, Central Asia, and Turkey.

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By Kiran Baez

To strengthen their ties to Central Asia, the United States, Turkey, Japan, and South Korea should work together on their engagement with the region.

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AfricaSource Sep 10, 2025

To counter Chinese and Russian influence in Africa, Turkey could be a decisive ally for the US and Europe

By Rama Yade, Defne Arslan

As Turkey continues to develop closer ties to African nations, the United States and Europe should work with Turkey as a partner in its efforts to gain soft power throughout the continent.

Africa Economy & Business

The Atlantic Council Turkey Program aims to promote and strengthen transatlantic engagement with the region by providing a high-level forum and pursuing programming to address the most important issues on energy, economics, security, and defense.

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The post Why Ankara’s rising power in the Sahel could benefit the West appeared first on Atlantic Council.

China’s weaponization of supply chains has already left industries across the United States and Europe scrambling, since these materials quietly underpin every digital-age economy, not to mention every munition and weapon system. Such actions by Moscow and Beijing to secure their own mineral supply chains signal that despite the growing prominence of digital-age economies in the 21st century, economic and military capabilities are still constrained by industrial capacity. We described this as the rise of mineral powers in a recent essay.

The United States, by contrast, remains an innovator without a foundation. It designs world-class systems but depends on others for the materials that make them work—although that is changing now with a new “muscular” approach to financing projects. While the Pentagon’s 2023 National Defense Industrial Strategy (NDIS) identifies supply-chain resilience as a national priority, Washington still lacks a basic performance metric for its own industrial base. For instance, the Department of Defense does not use a single “readiness-per-dollar” measure for industrial-base investments. Readiness is tracked at the platform level (i.e., mission-capable rates, supply availability, repair cycle times), while industrial-base actions remain fragmented across programs such as Industrial Base Analysis and Sustainment (IBAS), Defense Production Act Title III, and Department of Defense Manufacturing Technology(ManTech). This hodgepodge approach results in bureaucracies spending billions on “resilience” without any standard way to assess what each dollar actually buys in surge or recovery capacity.

This strategic planning shortfall matters because adversaries understand that economic growth and technological advancements pair with military effectiveness. It’s just now becoming more obvious that controlling the entire material process (e.g., mines, foundries, refineries, and specialized fabrication plants), is what enables an economy and military to gain a comparative advantage in an era of strategic competition. China’s 2023 export controls on gallium and germanium were less about markets than about leverage; they showed how quickly strategic materials could become tools of coercion. Russia’s rare-earth roadmap fits the same pattern: hardening its economy for prolonged confrontation with the West. If the United States wants the NDIS to mean something beyond PowerPoints and Congressional briefings, it must translate industrial ambition into measurable readiness, bankable financing, and built-in redundancy.

Operationalizing the NDIS requires a playbook with three lines of effort: measurement, financing, and doctrine. 

First, the Pentagon needs better measurement metrics. We propose three industrial-readiness metrics: Lead-time reduction (how long until a critical subcomponent is delivered under normal conditions), time-to-recovery (how many weeks production bounces back after a disruption), and platform elasticity (how a 10-20 percent supply-chain shock maps into mission-capable rates). These metrics provide the basis for a “readiness per dollar” calculus that Congress and the Pentagon can use to compare investments, monitor progress and link industrial policy to warfighting outcomes.

Second, there needs to be financial incentives for midstream manufacturers. Due to market risks and low profit margins, many businesses struggle to find capital to fund and run magnet plants, alloy melters, and rare-earth separation, because demand is difficult to predict, especially as China essentially runs a mineral cartel, making costs, supply, and demand murky in global markets. Fortunately, existing authorities suffice: Title III of the Defense Production Act allows offtake commitments and price floors; the IBAS program funds workforce and facility scale-up; the Office of Strategic Capital (OSC) provides low-interest loans and credit guarantees for private investment. When layered together, we get what the energy sector uses: demand signal, patient capital, and private scale. Domestic deals, such as the billions pledged by the Pentagon and private sector companies to MP Materials to build a US magnet manufacturing facility, illustrate how such a stack works.  But these deals cannot remain ad-hoc.

Third, there needs to be a defense industrial base doctrine that guides decisions through the acquisitions process of weapon systems and munitions. Supply-chain resilience must be treated like combat logistics; it’ s an operational imperative, not an administrative nuisance to be solved by an acquisitions officer. We recommend concentration-threshold triggers. For example, if 40 percent of any key material processing is sourced from a single country or firm, a domestic or allied alternative must be activated. Dual-qualified supply lines—one domestic, one allied—provide wartime options and peacetime flexibility. Allies are not just optional; they are force multipliers. America must embed cooperation frameworks like the Minerals Security Partnership and the US–Japan Critical Minerals Framework into its defense industrial base doctrine. Such surge playbooks should coordinate Australia’s rare-earth separation, Canada’s graphite and nickel capacity, and Japan’s magnet finishing. These materials, and many other import-dependent minerals and metals, are vital to American weapon systems and munitions. Such coordination avoids parallel buildouts, aligns subsidies with strategy, and leverages allied industrial bases instead of competing with them.

These three playbook approaches might seem bureaucratic compared with stealth fighters or warships, but the real surprise in any conflict will be the factory that couldn’t deliver—not the plane that couldn’t fly. As China’s 2025 export controls on medium and heavy rare earths demonstrated, the ability to choke US supply chains is already operationalized.  

Deterrence depends less on “who builds the biggest bomber” and more like “who can re-qualify their magnet line in weeks when a competitor shuts ours down.” The alloys, magnets, and refining capacity of tomorrow will define whether the United States can mobilize and sustain its industrial base for the next crisis and conflict. Modern warfare begins in the furnaces and finishing rooms of allied industrial bases, not at an airbase or seaport. 

Lt. Col. Jahara “FRANKY” Matisek is a US Air Force command pilot, nonresident research fellow at the US Naval War College and the Payne Institute for Public Policy, and a visiting scholar at Northwestern University. He has published over one hundred articles on strategy and warfare.

Morgan D. Bazilian is the director of the Payne Institute for Public Policy and professor at the Colorado School of Mines. Previously, he was lead energy specialist at the World Bank and has over two decades of experience in energy security, natural resources, national security, energy poverty, and international affairs.

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EnergySource Oct 15, 2025

Solving the US military’s gallium dilemma requires turning trash into treasure

By Macdonald Amoah, Morgan D. Bazilian, Lt. Col. Jahara “Franky” Matisek, and Col. Katrina Schweiker

The metal gallium plays an outsized role in US war readiness—and China controls most of its supply. As geopolitical competition deepens, the United States needs a new playbook to fix this vulnerability.

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The making of jet fuel for military use depends on the rare earth element lanthanum. With China in control of most of the element’s supply, the United States must prepare for potential supply disruptions.

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By Reed Blakemore, Peter Engelke

Critical mineral risks to US national and economic security should be evaluated on a mineral-by mineral basis

Critical Minerals Energy & Environment

The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

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The post Operationalizing the National Defense Industrial Strategy for great power competition appeared first on Atlantic Council.

Most of this additional investment will have to come from the private sector, but existing approaches to use public funds to generate multiples in private investment—“blended finance”—have resulted in only marginal progress toward the funding levels needed. On average, a dollar of public money across all development finance still manages to “crowd in” only about half a dollar of private money. It will take a broad spectrum of financial structures and institutions to meet the pledges made in Baku including reform of multilateral development banks (MDBs), enhanced securitization, innovative insurance products, improvements in the integrity of private voluntary carbon markets, and new green bond structures. Of these approaches, we believe none are as effective as guarantees, which, if scaled significantly and effectively, could leverage public capital to attract significant multiples of private investment. 

Guarantees are a critical solution and can be implemented at a global scale

A consensus has begun to form in the climate investment community that innovative guarantee structures are likely to be particularly effective—perhaps the most effective—mechanisms to leverage private capital. Only a small percentage of the guaranteed private investment must be contributed in cash, amounting to a conservative estimate of expected loss—as long as the tail risk is adequately protected by other sources. 

In the lead-up to COP30 and in recognition of the potential for guarantee mechanisms to scale climate finance, several public-private coalitions and governmental task forces including the Sustainable Business (SBCOP30) initiative and a team formed by the Brazilian Development Bank (BNDES) have formulated several new guarantee proposals for investments in Brazil. Smaller guarantee structures underwritten by private sources like the Green Guarantee Fund and iTrust, as well as several new guarantee proposals backed by the balance sheets of MDBs or a single sovereign entity, have recently launched. These include Inter-American Development Bank and BNDES guarantees, Norwegian Agency for Development Cooperation and Swedish funds, a newly proposed fund in the BRICS multilateral bank (representing emerging economies Brazil, Russia, India, China, South Africa, and five additional members), and the World Bank’s plan to streamline and triple its offering of guarantees. But these existing guarantee initiatives are also much too small to begin to address the challenge of scaling up new private investment to the levels required. 

To help close the financing gap, we have worked in conjunction with partners and a global advisory committee over the past two years to develop a proposal originated by UK climate investment expert Ian Callaghan to establish an ambitious, innovative, multilateral global guarantee facility to be backed in part by wealthy countries through both cash contributions and their sovereign balance sheets. The facility would offer qualifying private investors who agree to standards of investment, due diligence, and key performance indicators (KPIs) the opportunity to use the facility’s near-comprehensive guarantees to assemble portfolios or funds for climate mitigation investment in EMDEs. The facility would not require the double or triple diligence typically performed in blended finance transactions nor a prior guarantee from the domestic country’s government. We call this proposal the Emerging Market Climate Investment Compact (EMCIC).

The EMCIC facility embodies five necessary elements for the successful de-risking of debt investments for climate mitigation by private investors in EMDEs on the scale required to meet the capital needs pledged in Baku. They are:

1. A streamlined structure. The structure must offer big global investors an environment that is more familiar and attractive to their customary practice, which means reducing overlapping bureaucracies in dealing with governments and MDBs, reducing time delays, streamlining the investment process, and contemplating guarantees of portfolios or funds rather than applying a multi-level review of every project investment.  
2. High leverage. Because cash contributions to capitalize the facility need only be made in the amount of anticipated losses, the cash can be highly leveraged so long as the tail risks are covered at least in part by developed-country sovereign balance sheets, possibly supplemented by a combination of insurance and mezzanine financing. 
3. Due diligence standards. The guarantees should be extended to pre-qualified investors and managers who agree to consistent environmental and due diligence standards  and also sign up to KPIs that will deepen their involvement in EMDEs over time (the “Compact” element of the facility’s title).
4. Additional debt avoidance. To be attractive to EMDEs, the facility must not require backup guarantees on the part of the host EMDE governments, many of whom cannot afford additional sovereign debt.
5. Risk coverage. The facility must provide enough risk coverage so that the investor can secure an “investment grade” rating or one sufficient to meet the fund’s risk/return ratio. Devoting a substantial portion of their concessionary financing or low-interest loans to such a facility should be greatly attractive to developed-country investors, since it would multiply and leverage the total amount of investment generated toward the Baku goal.  

Beyond Belém: Taking guarantees on the road to COP31

Guarantees may be critical and desperately needed for a variety of financial structures, including new portfolios by major infrastructure investors, securitization and public sale of portions of MDB portfolios, green bond funds, and debt for nature swaps.

Given the consensus among academia, proliferating proposals for new guarantee products, and the steep challenge to reach new levels of funding needed, COP30 and the climate finance community should prioritize the development and growth of both existing and more ambitious new guarantee products and facilities.

Moreover, developing countries should challenge wealthy governments to organize a guarantee facility or several regional facilities that use their cash and balance sheets in the most effective possible way. Acting on this step should be an important deliverable for next year’s COP31.

Ken Berlin is a nonresident senior fellow at the Atlantic Council Global Energy Center.

George Frampton is a distinguished senior fellow at the Atlantic Council Global Energy Center.

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Ken Berlin

Nonresident Senior Fellow

Global Energy Center

Chinese Climate Change & Climate Action

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George Frampton

Distinguished Senior Fellow

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EnergySource Nov 13, 2025

Key takeaways from the COP30 Circle of Finance Minister’s report

By Ken Berlin, George Frampton

For COP30, the Brazilian Ministry of Finance prepared a report with input from dozens of finance ministers, institutions, industry, and many others. Read the key takeaways here.

Americas Energy & Environment

EnergySource Nov 10, 2025

The energy conversation has changed—so must COP30  

By Charles Hendry

At COP30, world leaders have an opportunity to reframe how countries work together to achieve energy security, decarbonization, and affordability.

Americas Brazil

The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

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The post How climate funding from governments and MDBs can scale private investment appeared first on Atlantic Council.

Editor’s note: This article was updated on November 17 to include Herman Halushchenko’s response to the corruption investigation.

Amid Russia’s ongoing invasion, Ukraine is now facing the largest corruption scandal of Volodymyr Zelenskyy’s presidency. It is a scandal with the potential to reshape the country’s politics. The intrigue, which involves alleged kickbacks in the graft-prone energy sector laundered through Russian-linked channels by close associates of President Zelenskyy, may prove as big a test of his leadership as the war itself.

On November 10, the National Anti-Corruption Bureau of Ukraine (NABU) exposed an alleged $110 million corruption scheme at state-owned nuclear company Energoatom. The charges are supported by a fifteen-month wiretap and over seventy searches carried out as part of a major investigation called Operation Midas.

According to NABU officials, the investigation uncovered a criminal enterprise run by Timur Mindich, a film producer and a former business partner of Zelenskyy. Additional suspects include former Minister of Energy and recently appointed Minister of Justice Herman Halushchenko; former Naftogaz CEO and Deputy Prime Minister Oleksii Chernyshov; former Minister of Defense and current National Security and Defense Council member Rustem Umerov; and Ihor Myroniuk, former deputy head of the State Property Fund and former advisor to Halushchenko.

Mindich fled Ukraine the day before his premises were raided and is reportedly now in Israel. Both Chernyshov and Mindich have long had ties with Zelenskyy, who co-founded the latter’s production company in 2003. Thus far, formal charges have been filed against eight of those implicated. Halushchenko has said he would defend himself against the accusations.

The alleged theft took the form of 10-15 percent inflated prices for infrastructure project contracts, which contractors were forced to pay in order to avoid losing their supplier status. The kickback scheme reportedly included security measures for the Khmelnytskyi Nuclear Power Plant. The Ministry of Energy is suspected of facilitating the scam.

The stolen funds were allegedly laundered through an office linked to fugitive ex-Ukrainian MP and now Russian Senator Andrii Derkach before being extracted from Ukraine. Derkach has been sanctioned since 2021 and was stripped of his Ukrainian citizenship in 2023.

As the world watches the Russian invasion of Ukraine unfold, UkraineAlert delivers the best Atlantic Council expert insight and analysis on Ukraine twice a week directly to your inbox.

While the investigation is still underway, the scandal is already proving extremely damaging to Zelenskyy and his entire administration. The alleged involvement of a former Ukrainian MP turned Russian fugitive in the middle of the Kremlin’s ongoing invasion of Ukraine may be the most scandalous aspect of the accusations.

Meanwhile, Zelenskyy’s long contact with many of the accused and their high-level appointments has raised the political stakes for the President. This has led to speculation over whether the scandal could topple Zelenskyy and cost Ukraine the war.

The investigation comes in the wake of a recent standoff between Zelenskyy and his administration with Ukraine’s anti-corruption institutions. In July 2025, a law proposed by Zelenskyy’s political party was passed by the Ukrainian parliament stripping NABU and other anti-corruption institutions of their independence.

This led to vocal condemnation from Ukraine’s civil society and the international community, including the largest street protests since the start of Russia’s full-scale invasion. Days later, Zelenskyy reconsidered and signed a law that restored and guaranteed the independence of the country’s anti-corruption agencies.

That guarantee has now been tested and proven credible. While the sheer number of criminal investigations and indictments targeting prominent Ukrainian officials has raised concerns about possible political prosecutions by NABU, the apparent success of Operation Midas and its exposure of alleged corruption on the part of some of the most powerful people in Ukraine would seem to confirm the agency’s independence and its efficacy.

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Zelenskyy appears to recognize the dangers of the situation and has begun responding to the crisis. The Cabinet of Ministers is looking at sanctions against Mindich and businessman Oleksandr Tsukerman, who was also implicated in the scandal. The Ukrainian leader has already forced the resignations of Halushchenko and newly appointed Minister of Energy Svitlana Hrynchuk.

Meanwhile, Ukrainian Prime Minister Yulia Svyrydenko has announced a comprehensive audit of all state-owned companies, especially in the energy and defense sectors. Anastasia Radina, head of the parliament’s anti-corruption committee, has called for a parliamentary inquiry into the transfer of funds to Russia.

These steps are significant but are unlikely to prove adequate. The stakes are extremely high, not just for Zelenskyy’s political future, but for Ukraine’s conduct of the war. European leaders answer to their citizens, many of whom might now be wondering why they are sending massive aid to Ukraine if large sums are being siphoned off by privileged insiders. In the US, while Trump is slowly moving in the right direction with recent sanctions on Russia, there are still influential figures in his orbit who are looking for ways to end all American support for Ukraine’s defense against Kremlin aggression.

This means that Zelenskyy must turn his attention to the crisis energetically. A good next step would be for him to speak up on the issue publicly and strongly, much as he did in the first days of Russia’s full-scale invasion.

Zelenskyy might start by acknowledging, as former US President Harry Truman did when he said the buck stops with him, that as President of Ukraine, he is ultimately responsible for failures in his government. He should recognize the magnitude of the scandal and the underlying problem of corruption, while explaining how he intends to take the lead in fixing it. This means bringing to justice, in accordance with the law, all those responsible, no matter who they are and where they are. He can do this by vowing to empower NABU and other relevant state institutions fully.

Zelenskyy could frame the scandal as proof that despite clear progress made by Ukraine in dealing with corruption, much more remains to be done. He could demonstrate his openness by inviting advice from Ukrainian civil society and the country’s international partners. This current crisis has clearly demonstrated the dangers of relying on just a small circle at Bankova to get things done.

Such a speech should not be a one off. It should be the start of a dialogue with the Ukrainian public, much like Zelenskyy’s masterful wartime communications. This dialogue should include regular updates on efforts to bring those responsible for this theft to justice, and news about steps to strengthen state institutions against the scourge of corruption. Zelenskyy has the skills to take this on. Now is the time to do it.

Suriya Evans-Pritchard Jayanti is a nonresident senior fellow at the Atlantic Council’s Eurasia Center.

Further reading

UkraineAlert Oct 23, 2025

Russia’s ‘human safari’ in southern Ukraine is a warning to the world

By Oleksandr Tolokonnikov

Russia’s escalating campaign of drone attacks on the civilian population of Ukraine’s Kherson region highlights the destructive power of modern drone technologies, writes Oleksandr Tolokonnikov.

Conflict Defense Industry

UkraineAlert Nov 4, 2025

EU praises Ukraine’s progress but warns Zelenskyy over corruption

By Peter Dickinson

Ukraine’s bid to join the EU received a boost this week with the release of a report praising the country’s progress toward future membership, but EU officials also warned President Zelenskyy about the dangers of backsliding on anti-corruption reforms, writes Peter Dickinson.

Conflict Corruption

UkraineAlert Nov 6, 2025

Vladimir Putin’s endless nuclear threats are a sign of Russian weakness

By Stephen Blank

Since 2022, Russian President Vladimir Putin has repeatedly used nuclear threats to deter Western support for Ukraine, but this scare tactic risks exposing Russia’s inability to project strength via more conventional means, writes Stephen Blank.

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The views expressed in UkraineAlert are solely those of the authors and do not necessarily reflect the views of the Atlantic Council, its staff, or its supporters.

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Complicating any plan to meet financing goals, there is disagreement over how much funding is needed, what financial tools are most effective, and what the impact would be of such investment on the world economy. A report just published by the COP 30 Circle of Finance Ministers, however, provides authoritative answers to resolve many of these questions.

The Brazilian Ministry of Finance prepared the report with input from finance ministries in dozens of countries, international financial institutions, banks, industry, think tanks, environmental organizations, and many other groups. This comprehensive and rigorous review provides the most complete and reliable assessment to date of the issues facing climate finance. 

Key takeaways from the report are below:

The vast majority of global financial flows goes to developed countries. 

“Global climate finance flows for all countries hit an all-time high of USD 1 trillion in 2023, more than doubling in three years, but only around 10% goes to Emerging Markets and Developing Countries (EMDCs), while less than 5% goes to adaptation.  The lower bound of global estimated climate finance needs – USD 6 trillion – is still 3 times more than current flows.” (Page 9 of the report)

The developed world must massively scale up financial flows to EMDEs.

“According to the third report of the Independent High-Level Expert Group on Climate Finance, EMDEs will need to invest at least USD 2.4 trillion per year by 2030 and USD 3.3 trillion per year by 2035 to meet their needs for the clean energy transition, adaptation and resilience, response to loss and damage, natural capital, and just transition. This would amount to a five-fold increase by 2030 and a six-fold increase by 2035. These estimates reflect total investment needs from all sources, both public and private, and include domestic and international finance.” (Page 9)

Investments in nature-based solutions (NbS) remain far below what is needed:

“The UNEP State of Finance for Nature (2023) estimates that annual financing for NbS must more than double, from about USD 200 billion today to over USD 400 billion by 20305, to align with global climate, biodiversity and land restoration goals.” (Page 10)

Investments in adaptation and resilience also need to be scaled up significantly.

“Well-designed adaptation investments deliver a “triple dividend”: they avoid future losses, generate positive economic returns, and create broader social benefits. Yet the adaptation finance gap remains stark. Global adaptation needs are estimated at USD 215–387 billion annually by 2030, while international public flows reached only USD 28 billion in 2022.” (Page 10)

Clean technologies are cheaper than fossil fuels

“According to IEA and IRENA analyses, clean technologies are now cheaper than fossil fuels in most regions—91% of new renewable projects in 2024 outcompeted new fossil fuel alternatives, with onshore wind and solar PV leading the way. That year alone, renewable generation displaced coal and gas that would otherwise have been burned to meet the same electricity demand, saving power systems around USD 467 billion in fuel purchases and confirming renewables as the lowest-cost source of new power, with battery prices down nearly 90%.” (Page 10)

Investment in the energy transition will power the world economy

“While outcomes will vary by country and sector, especially in the short term, many studies suggest that, over the long-term, clean investment tends to outperform business-as-usual. Boosting green investment rates by 1–2% of GDP in developed economies, and 3–5% in EMDCs can spur global growth, strengthen energy security dependence, and unlock millions of decent jobs. Accelerated climate action is the foundation for a new era of sustainable, inclusive growth. Countries that lead will thrive, shaping the industries and jobs of the future; those that delay will bear the greatest costs.  The imperative is clear: act now, act together, act at scale.” (Page 11)

Failure to act will have a severe impact on the world economy

“The Network for Greening the Financial System long-term scenarios suggest that, under current climate policies, global GDP could be up to 15% lower by 2050 compared to a world without climate change, undermining the achievement of development objectives and poverty reduction. Under a scenario where global temperatures are 3°C above pre-industrial levels, which many experts see as increasingly plausible by the end of the century, projected losses could reach 30% of GDP by 2100… The macroeconomic fallout would dwarf recent crises: the only two modern episodes of global GDP contraction, in 2009 and 2020, saw one-year drops of 1.3% and 2.8% respectively.”(Page 11)

Severe impacts are happening now

“According to Munich Re (2025), climate-related disasters caused economic losses of USD 320 billion globally in 2024 – part of a continuing upward trend – of which around USD 140 billion were insured.  Price stability is also already under threat: climate and nature impacts are driving inflation (Page 12)…These (climate) shocks would erode financial stability, strain public and private balance sheets, and suppress long-term investment, creating a chronic drag on growth and sustainable development. The European Central Bank found ~€70 billion in losses for just 41 banks under short-term disorderly transition and acute physical-risk scenarios— figures that may be underestimated given methodological limitations —while the Bank of England’s CBES projects late action could add ~£110 billion in credit losses and cut bank and insurer profits by 10–15% annually.” (Page 13)

Among the many financial instruments highlighted in the report, guarantees appear repeatedly. In part two of this article series, we take a closer look at why the Circle of Finance Ministers’ report identifies guarantees as one of the most powerful tools to unlock and massively scale up climate investment in EMDEs.

Ken Berlin is a nonresident senior fellow at the Global Energy Center.

George Frampton is a distinguished senior fellow at the Global Energy Center.

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Ken Berlin

Nonresident Senior Fellow

Global Energy Center

Chinese Climate Change & Climate Action

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George Frampton

Distinguished Senior Fellow

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Energy & Environment Energy Transitions

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EnergySource Nov 10, 2025

The energy conversation has changed—so must COP30  

By Charles Hendry

At COP30, world leaders have an opportunity to reframe how countries work together to achieve energy security, decarbonization, and affordability.

Americas Brazil

EnergySource Oct 15, 2024

Attention to market realities are key to a successful COP29

By Robert Cekuta

Increasing funds for addressing climate and energy needs in developing countries is a COP29 priority. But it is important to remember that market conditions in recipient countries are critical in determining the success of such efforts.

Energy & Environment Energy Markets & Governance

Econographics Nov 27, 2024

Divided COP29 and G20 Summits: A taste of things to come

By Hung Tran

President-Elect Trump’s “America First” approach is already raising concerns at the G20 and COP29.

Brazil Climate Change & Climate Action

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The post Key takeaways from the COP30 Circle of Finance Minister’s report appeared first on Atlantic Council.

• Introduction
• Food, society, and politics
• Food security in the Americas
• Drivers of change in the Americas and beyond
• Toward a food-secure future
• Conclusion
• About the authors

Introduction

Food security is at the core of national, regional, and global security. When societies are food secure, they stand a much greater chance of social and political stability; when they are food insecure, the opposite is true. Fortunately, the Western Hemisphere—the Americas—is a food-secure region. Although access to food is an ongoing challenge deserving greater attention in every country (as there are hungry people across the hemisphere), food abundance generally characterizes the Americas. Historically, the hemisphere has owed its unique position to several factors: a favorable natural resource base; equally benign geopolitical conditions; and extensive public and private cooperation to improve production methods and support innovation.

However, the future is not guaranteed to look like the past. Several key drivers of change are afoot that could alter the trajectory of hemispheric food security. These drivers bring with them uncertain outcomes, alternatively threatening the stability and productivity of current agrifood systems or offering hope that they could become even stronger and more resilient in the years to come.

This report assesses the future of food in the Western Hemisphere. It focuses on the major uncertainties that are driving change in the agrifood systems within the hemisphere and the world. These drivers represent risks or opportunities, and sometimes both. They include the decline of healthy and stable ecosystems, rapidly changing geopolitics, the erosion of multilateral institutions, increasingly inflationary and volatile food prices, the promise of innovation and emerging technologies, and generational shifts in farming and agricultural production.

These forces are not siloed. Rather, they intersect. There might be an awareness that these individual drivers of change represent obstacles to (or opportunities for) achieving durable food-security solutions in the future, yet many leaders see them as isolated challenges rather than as intersecting ones, obscuring the bigger picture.

The drivers discussed in this report therefore are not just accumulating layers of risks and opportunities. Rather, their interaction multiplies the system’s dynamism. This emerging dynamism will require policymakers, business leaders, investors, and farmers to find innovative solutions in the face of a rapidly changing, and not entirely predictable, agrifood landscape. Yet such outlooks may not arise. Complacency is a big risk, if leaders believe that the status quo will continue to improve, requiring changes only at the margins. In such a situation, the hemisphere would become far more vulnerable to unexpected shocks because there would not be enough appreciation for how ecological, technological, geopolitical, and institutional changes are reshaping the future.

This concern is not hyperbolic. A very recent external shock—the COVID-19 pandemic—erased major progress that the hemisphere had made on reducing hunger, which should remind us that the foundations of food security remain shaky. Looking ahead, there is little margin for error, as even moderate shocks can have profound consequences.

Food, society, and politics

Food security is at the core of national, regional, hemispheric, and global security. When societies are food secure, they stand a much greater chance of social and political stability; when they are food insecure, the opposite is true.

This axiom, although a simple one, has been demonstrated time and again throughout history. High food prices occasioned by war, poor harvests, or high taxation of the peasantry (or all three) preceded the onset of the French Revolution in 1789 and the Russian revolutions of 1905 and 1917, to name just a couple of famous examples from history.

Today, despite far greater agricultural production at national and global levels, such disturbances still recur with alarming frequency: The 2007–2008 food riots across Africa followed commodity price spikes for agricultural inputs (oil, principally) that inflated the price of food; the 2010–2011 Arab Spring was preceded by food-price spikes owing to multiple breadbasket harvest failures across several world regions; and Russia’s war in Ukraine, which disrupted wheat, fertilizer, and natural gas exports, blocked the flow of agricultural inputs and outputs and dramatically raised food prices globally. Millions of additional people became food insecure around the world.

No other good has such an impact on society and politics as food because people need to eat every day. “Food riots are as old as civilization itself,” as one food security analyst summarized the impact of food on social and political stability. Often, it will only take a single big food-price shock to change social and political dynamics within a country or even an entire region. Although high food prices have a disproportionately negative impact on vulnerable, poor, and fragile countries, they also can have an outsized impact on otherwise wealthy and stable ones. Japan offers a recent example. In July 2025, soaring rice prices in Japan directly contributed to the defeat of Prime Minister Shigeru Ishiba’s Liberal Democratic Party in parliamentary elections.

The Food and Agriculture Organization (FAO) adopted a definition of food security at the 1996 World Food Summit (see box 1 for the history of the concept), which has persisted with only slight revision:

• Food security exists when all people, at all times, have physical, social, and economic access to sufficient safe and nutritious food that meets their dietary needs and food preferences for an active and healthy life.

This definition contains four main dimensions, or pillars:

1. The physical, supply-side availability of food, typically assessed at the national level and consisting of domestic agricultural production plus food imports.
2. Household access to food, which is dependent on household incomes and food prices (set by a combination of market and nonmarket forces).
3. Nutritional intake by individuals, which is not the same thing as caloric intake; nutrition depends in part on dietary diversity.
4. Stability of the first three pillars over time.

A couple important pieces of the food security puzzle are missing from this formulation. One is ecological stability. Food security depends on the sustainability of the underlying Earth systems that are essential to food production. Maintaining the integrity of these Earth systems, including the integrity of the world’s soils, water, biodiversity, nutrients, and atmospheric conditions (precipitation and temperature, primarily), is critical. A second missing piece is the stability of the international systems, specifically stability of a rules-based trading order that ensures that food moves easily from food-surplus to food-deficit countries. Such a trading order improves food security through enhancing agriculture productivity and (under emergency conditions) enables swift distribution of humanitarian aid in the form of food. Such a system helps to avoid trade conflicts and establishes international norms for the notion that food security is in the collective interest and responsibility of all parties.

The capacity of the current international system to encourage global production and trade in food has increased over time, dramatically so over the past several decades: The FAO reported that in 2021, the world traded some 5,000 trillion kilocalories of food, more than double the amount that it did in 2000. A central piece of this equation has been the existence of key multilateral institutions that have had the credibility and authority to provide a forum for states to negotiate trade agreements, resolve trade disputes, and monitor and enforce commitments.

None of these conditions should be treated as a given. Looking ahead, the odds are high that the world will become more dynamic rather than less so, with no guarantee that dynamism will have more upside than downside. To adapt and thrive within changing conditions (with both positive and negative impacts), the world’s agrifood systems will need to become more resilient and adaptable. The good news is that humankind has the tools—or can develop the necessary tools—to ensure such outcomes.

Food security in the Americas

The Western Hemisphere is in a fortunate position regarding agriculture and food. Its natural endowment is significant, consisting of arable soils and plentiful rainfall distributed across numerous regions suitable for agriculture (temperate, subtropical, and tropical). The hemisphere’s highly productive agriculture benefits from relatively stable political and economic environments, medium-to-high income levels, and reasonably well-functioning domestic and international markets, all stimulated by public, private, and academic sector investments in agricultural research and development (R&D).

As a result, the hemisphere’s aggregate production capacity in both staple and specialized crops gives it an indispensable role in providing domestic food security but also meeting the world’s food needs.

There are several caveats to this picture, which this report endeavors to make clear. First, several driving forces are changing baseline conditions that will alter the hemisphere’s future, for better or worse. Second, the Americas might be fortunate in many respects, but it is not a single bloc of countries acting in unison. Trade disputes, unfortunately, are becoming a sharper and more common part of the hemisphere’s diplomatic landscape, for example. Finally, as this report also makes clear, food security is not just about supply-side agricultural production. Food insecurity remains a problem in the Americas as it does everywhere in the world.

Supply side: Agricultural production
in the Americas

The five largest primary crop producing countries (by tonnage) in the world are all in the Americas: Brazil, the United States, Argentina, Mexico, and Canada. As shown in table 1 and figure 1, the hemisphere also contains top exporters of all four primary crops: soybeans, corn, wheat, and rice. The largest producers of food in the Americas are, therefore, critical for ensuring global food security. What happens in the region matters greatly, because developments in the Americas have an outsized effect on global trade in food.

In addition to the largest primary crop producers, the Americas also lead in the production of a wide range of specialty crops, including coffee, avocados, lemons, limes, oranges, blueberries, cranberries, quinoa, almonds, and more. Numerous countries in the hemisphere are leading producers of these crops. For example, Peru is in the top three global producers of avocados, blueberries, and quinoa, while Colombia is a leading global producer of coffee, sugar cane, avocados, and agave fibers.

For many countries in the Americas, agriculture continues to be a critical piece of their national economies. As shown in figure 2, agriculture’s share of gross domestic product (GDP) is above five percent in most countries and is above ten percent in a handful of countries in Central America, the Caribbean, and South America. Over the 2023–2024 period, agriculture’s share of Brazil’s GDP was 6.24 percent while its agricultural exports represented nearly half (49 percent, at $164 billion) of Brazil’s total exports by value. Both figures demonstrate the spectacular growth in Brazil’s intensive farming, especially of soybeans (see also box 2).

Demand side: calories and nutrition

The FAO’s definition of food security, which is broadly accepted among experts, emphasizes that food security is as much about access and affordability, especially by vulnerable populations, as it is about the aggregate production of food. If people cannot access a nutritious diet at affordable and stable prices, they will not be food secure.

In recent decades, the Western Hemisphere has gradually decreased its level of food insecurity. In comparative terms, it has done well. Between 1990 and 2015, for example, Latin America and the Caribbean (LAC) was the only region in the world to reduce hunger by half.

As shown in table 2, the FAO’s latest data indicates that the Western Hemisphere continues to be relatively food secure. Over 2022–2024, the two major subregions in the Americas, North America on the one hand and LAC on the other, performed better than the world average. This is reflected in several key metrics related to the reduction of caloric intake of food, in particular undernourishment (calorie deprivation over time), severe food insecurity (a measurement of households going without food for periods of time), and the prevalence of wasting in small children (an indicator of undernourishment). On metrics related to poor diets such as overweight and obesity (both of which are indicators of too many calories rather than too few), the Americas performed less well.

These outcomes are consistent with levels of wealth. Although an oversimplification, as national wealth increases, per capita consumption of food rises. Most countries in the Americas are classified by the World Bank as either high- or upper middle-income countries. (Note, however, that lower-income populations, including those within both lower- and higher income economies, are at increasing risk of obesity, in part due to easy availability of inexpensive processed foods with low nutritional value.)

There are several countries in the Americas that underperform. According to the FAO, over half (54.2 percent) of Haitians are undernourished, while just 10.7 percent of adults are obese (compared with over 40 percent of US citizens); Haiti is the most fragile state in the Americas. Although undernourishment is much lower across the hemisphere now than in previous decades, it nonetheless remains high in several countries including Bolivia (21.8 percent), Honduras (14.8 percent), Ecuador (12.1 percent), and Guatemala (11.8 percent).

There is a gendered dimension to deprivation, with women being more likely to be food insecure than men. This difference worsened during the COVID-19 pandemic, increasing to a 3.3 percent gap between the genders in Latin America in 2021, before reducing again by 2024. In North America, the gap has worsened every year since 2020, from 0.1 percent in 2020 to 0.5 percent in 2024.

Drivers of change in the Americas and beyond

Strategic foresight asserts that the future likely will not conform to our expectations. It is risky to assume that the future will consist of a simple linear extrapolation of one or two current trends. Hence, the discipline focuses as much on the intersections of the drivers that together will drive multiple possible futures. Food security in the Americas is no different, as there are several significant intersecting drivers of change that will
shape the hemisphere’s future.

Changing ecology

Ecological risks are among the greatest threats to food security in the Americas. A rapidly changing climate creates the primary set of risks, from rising heat and worsening drought and flooding. Other ecological risks exist as well in specific subregions, for example deforestation, biodiversity loss, and soil erosion and degradation.

Of these changing ecological conditions, perhaps the worst for agricultural production is the combination of drought and heat, or “dry-hot” conditions. Trend data show that such conditions are becoming more frequent and intense. An Organisation for Economic Co-operation and Development (OECD) study of drought patterns, released in July 2025, found that the share of land globally exposed to drought has doubled since 1900.

Dry-hot conditions threaten to become more frequent across the Americas. In North America, for example, scientists estimate that the now decades-long megadrought that has impacted northern Mexico and the southwestern United States might be the worst in 1,200 years. In South America, the frequency of dry, hot, and flammable weather has increased across much of the continent since the early 1970s. Such changes are highly consequential for agriculture. A 2021 study, for instance, showed that increases in Brazil’s dry-hot conditions, combined with the impacts of deforestation on temperature and rainfall, have already pushed 28 percent of the country’s agricultural land beyond its optimum productive range, with further projections of 51 percent by 2030 and 74 percent by 2060.

One of the more discouraging climate-driven outcomes is the possibility, even probability, of future multiple breadbasket failures (i.e., “simultaneous harvest failures across major crop-producing regions” around the world). Climate change likely will make such failures more common in the future. A 2021 study projected that the probability of multiple harvest failures globally was “as much as 4.5 times higher by 2030 and up to 25 times higher by 2050.”21 Another, focusing on the impacts that oscillations such as the El Niño-Southern Oscillation (ENSO) and North Atlantic Oscillation (NAO) might have under future warming, concluded that shifting ENSO and NAO patterns might “expose an additional 5.1–12% of global croplands” to such oscillations, with strong ENSO/NAO negative phases “likely to cause simultaneous yield losses across multiple key food-producing regions.”

The Americas, home to several of the world’s major producers of staple crops including soybeans, corn, and wheat, faces the possibility of multiple breadbasket failures. It is entirely possible that in the years to come, severe dry-hot conditions could strike simultaneously in the United States, Mexico, Brazil, and Argentina. The consequences for agricultural production and global food security would be enormous.

A changing climate also will negatively impact most—perhaps all—of the other crops grown across the Americas. Coffee and banana production, to name just two examples, likely will be severely affected by increased heat and altered precipitation patterns. A recent scientific study conducted by the University of Exeter forecasts that 60 percent of the regions currently producing bananas—including regions in Central America—will be unable to do so before the end of this century, owing principally to increased temperature. The world will not have to wait nearly that long to see such effects because climate-driven impacts are already occurring. In 2024, the FAO reported a 38.8 percent annual increase in global coffee prices “primarily driven by supply-side disruptions, stemming from adverse weather conditions” including drought, heat, and flooding in major coffee-producing countries including Brazil, Vietnam, and Indonesia.

Because farmers are on the receiving end of changing ecological conditions, it is critical to understand how they are impacted by such change and how they process those changes.

Doing so will assist in defining the policy and investment options with the greatest likelihood of mass adoption on farms and in farming communities. Farmers will be impacted differently depending on where in the hemisphere they farm, their farm sizes and resources (financial and otherwise), whether they are subsistence farmers or integrated into national, regional, and global markets, and the types of crops they grow. Taken together, farmers do not experience changing ecological conditions in the same way at the same time. Smallholder farmers in poorer settings, for example, will be at greatest risk from climate-driven impacts given the small size of their landholdings and a lack of access to insurance and other sources of resilience. It follows that farmers’ perceptions of ecological impacts on their farming operations will not follow a straight line. Farmers will parse the impacts of environmental hazards such as drought, heat, or flooding differently.

In sum, ecological change dramatically increases the risk of declining crop yields while shifting the locations where crops can be grown. Potentially, ecological change with impacts at scale could generate significant shortfalls in global food supply, causing market panics, high prices, hoarding, and a breakdown of trade. Food insecurity would spike.

Geopolitical and geoeconomic turbulence

A second set of risks stems from rising geopolitical and geoeconomic competition and uncertainty. An open, rules-based trading system has been essential to improving hemispheric and global food security. Trade in that system has precipitated more economic integration of the region—more bilateral trade and investment agreements, greater investment flows, and exchange of technical know-how—which benefits food security via higher economic growth, greater employment opportunities and rising incomes, poverty reduction, and general economic dynamism. It also has allowed governments to see that a set of policies, including more focus on innovation and competitiveness and less on trade distortions and protectionism, is the best path forward.

Yet this trajectory is now subject to geopolitical risk. Over the past two decades, the global food trading system has been disrupted by several significant events including wars and related phenomena (e.g., civil strife, terrorism). Such events generate (largely) unanticipated shocks to agricultural inputs, supply chains, and agrifood exports, resulting in higher production prices and, therefore, consumer prices. The most well-known and significant of these events is the full-scale war in Ukraine, which upon its onset in 2022 immediately resulted in higher global prices for key commodities including natural gas and nitrogen fertilizers (because Russia is the world’s third ranking natural gas exporter and natural gas is a critical input for nitrogen fertilizers); potash fertilizers (primarily from Russia and Belarus) and wheat (before the war, Ukraine was the world’s seventh-largest wheat exporter).

Although global input markets, for example for fertilizers, are broadly resilient, at the same time they also clearly are affected by geopolitical turbulence arising from trade policies, sanctions, shocks such as wars, and other phenomena. While the war in Ukraine is an important case, it hardly exhausts the list of current examples. In July 2025, the World Bank said that sanctions and restrictive trade policies “are playing an increasingly significant role in reshaping global fertilizer markets,” citing China’s discretionary export restrictions on nitrogen and phosphate fertilizers to protect its domestic agriculture, and the European Union’s (EU) June 2025 tariffs against Belarusian and Russian fertilizers to reduce EU dependence on these countries.

An even more difficult problem is the risk that the hemispheric and global agrifood trading system is returning to a protectionist order, which risks the benefits that have accrued since the emergence of a rules-based trading model in the 1990s for agriculture established under the World Trade Organization (WTO) 1994 Agreement on Agriculture. Under that model, countries tended to place high tariffs only on a few politically sensitive crops (such as sugar or cotton). Yet today’s rising protectionism is much broader, affecting a larger number of crops, including staple crops, and implemented by an ever-longer list of countries. The result is likely to undermine food security by increasing food prices—with impacts falling most harshly on poor households—and reducing profitability by raising both producers’ and exporters’ costs, lowering investment and decreasing productivity.

Over the past several decades, the largest agricultural producers in the Americas, including the United States and Brazil, have become the world’s largest agrifood exporting nations. Southern Cone states have pushed agricultural exports as key pieces of their export-led growth strategies, especially to China given its rapidly growing demand for commodities. With such a high dependence on global agricultural exports, the biggest agricultural producers in the Western Hemisphere ought to be the most heavily invested in a global agrifood free-trading regime. Tariff and nontariff barrier uncertainty negatively impacts agrifood producers, processors, distributors, and consumers.

These disruptions have other distorting effects. Trade patterns within the Americas, and between the Americas and the rest of the world, are shifting because of trade tensions. China’s behavior in international agricultural markets is a significant example, with direct relevance to the Western Hemisphere. A decade ago, China imported more agricultural goods from the United States than from Brazil; today, China imports almost twice as much from Brazil as from the United States, including in soybeans and corn. China’s shift toward non-US sources (including but not limited to Brazil) began even before the 2018 trade dispute with the United States. In addition to supply diversification, China also has dramatically increased its stockpiling of food (grains, soybeans, and frozen meat), which it defines as a strategic good.

Further, China’s decoupling from the US agricultural market has had major consequences for trade patterns in that it has helped Brazil become the world’s largest exporter of soybeans. Since the 2018 Sino-American trade dispute, Brazil’s global soybean exports have increased by 40 percent, while those from the US have remained flat.

Geopolitical and geoeconomic turbulence has distorting effects on global trade in food. The biggest concern for global food security is the impact on food prices, both in terms of inflation but also price variability. Such turbulence also can generate trade disputes and, therefore, contribute to fractured relations among states. After the United States levied tariffs in August 2025 of up to 50 percent against certain Brazilian agricultural goods including coffee, beef, and sugar, Brazil immediately asked the WTO for consultation, arguing that the tariffs violate international trade rules. A likely immediate effect of the tariffs is to hasten Brazil’s interest in developing alternative markets for its agricultural products, including with China. A second and (often) underappreciated concern is that unstable trade rules and fluctuating market access make it more difficult for farmers to plan and make production and investment decisions, increasing their economic uncertainty.

Geopolitical tensions and rising trade protectionism are also likely to lead to slower economic growth. This is important because in the Americas, as everywhere, economic growth coupled with rising incomes are keys to increased food security. If slower economic growth combines with higher food prices owing to increasing trade friction, then there is a greater risk of more food insecurity in the future. International food trade is being shaped increasingly by geopolitical considerations rather than market signals, thereby realigning trade patterns in unpredictable ways.

Institutional uncertainty

Multilateral institutions are a hallmark of the current international order. Most of the world’s biggest and most important institutions that exist today were created after 1945. Although not without criticism, much of it deserved, these institutions have been central to building a global order which has delivered unprecedented—if also uneven—prosperity. When it comes to trade, the data say as much: Today’s global trade is 45 times by volume and 382 times by value greater than it was in 1950. Moreover, since the mid-1990s, global trade growth has accelerated, averaging 4 percent growth by volume annually and 5 percent by value.

However, the multilateral institutions that have facilitated this growth in trade now are under enormous pressure from all sides. One reason is that the world’s largest trading powers as well as many smaller ones have been willing to bend or even break established norms and international trade law. China, for example, has taken advantage of its status as a developing country under the WTO to engage in unfair practices, including massive subsidies, heavy use of state-owned enterprises, forced technology transfer, and protection of its domestic market (for example, limiting foreign companies’ and investors’ access to its technology and financial markets).36 Further, the United States is preventing the WTO’s Appellate Body from functioning as designed, preventing the organization from enforcing its own rules.

Such developments are important because they create uncertainty surrounding trading rules and thereby increase friction among countries when it comes to trade. Even worse, these developments create space wherein the breaking of rules by some countries prompts others to believe they can as well. Both India and Indonesia, for example, recently have taken advantage of the lack of a functioning Appellate Body to
implement policies that likely are in violation; Indonesia instituted a ban on nickel exports (to induce nickel processors to relocate to Indonesia) while India heavily subsidized steel and pharmaceuticals. By some estimates, two-thirds of initial WTO rulings made about trade disputes have been appealed, but the Appellate Body cannot convene itself.

The decline of multilateral institutions is significant because the Americas benefit more than other regions from an open global trading system in agricultural goods, per table 1 above. Agriculture always has been a controversial topic in trade negotiations, extending back to the origins of the Global Agreement on Tariffs and Trade (GATT) in the 1940s. Despite this fact, functional multilateral institutions are valuable because
they create a stable, rules-based global marketplace that in turn enables trade in food at scale.

In sum, a breakdown of multilateral institutions and rising protectionism portend headwinds for agriculture in the years to come, increasing risks and possibly disincentivizing investments by farmers. Such developments erode the open agrifood trading system that globalization made possible. The Americas have utilized open trade to expand agriculture production and exports and, therefore, is most at risk from the unraveling of that system

Price inflation and variability

The price of food is a core metric for food security: For the world’s consumers, the most desirable food prices are both low and stable over time. Food insecurity is made worse when the opposite applies: rapid price inflation combined with high price variability. Unfortunately, as shown in figure 3, the latter situation has characterized global food prices for much of the past quarter century.

Since the 2000s, shocks have occurred with such frequency that prices settle on a new higher baseline rather than returning to previous levels. The FAO noted this trend as early as 2009: Prior to the 2006–2008 global food-price shock, “real prices [in food had] shown a steady long-run downward trend punctuated by typically short-lived price spikes.” But by the mid-2000s, the FAO observed, this trend no longer held. As of 2008, its own food-price index “still averaged 24 percent above 2007 and 57 percent above 2006.” Indeed, as shown in figure 3, since the mid-2000s, global food prices have risen to a new and higher level after each exogenous shock. The most recent global shocks—the COVID-19 pandemic followed by the full-scale invasion of Ukraine—has had the greatest impact on sustained high food prices.

The upward trend in the price of food has important implications for food security around the world. Food is less affordable; households have more difficulty consuming a healthy diet, and they are forced to switch to less nutritious foods and/or reduce their total consumption of food. This cost-of-living crisis erodes food security gains and threatens to make societies less stable.

Food-price inflation and volatility is as problematic in the Americas as elsewhere in the world, increasing food insecurity and becoming a key social and political issue. In Latin America, rising food prices have been a major driver of inflation across the region. In some cases, such as Argentina, food prices have contributed to extreme inflation rates. In North America, food prices also continue to rise and are a major cause of the cost-of-living crisis experienced by many households.

Investment: Innovation, technology, and infrastructure

Public- and private-sector investments in on- and off-farm innovation and productivity have been critical enablers of modern agrifood systems. A question to be answered in the years to come is whether such investments will increase agricultural productivity and sustainability enough to match or exceed demand-side pressures for more food (from population and income growth), even as baseline conditions from other drivers—ecological, institutional, geopolitical—become more challenging.

Historically, on- and off-farm innovation and productivity increases, which stem from process and technological developments plus infrastructural improvements, have been fundamental to increasing the supply of food to meet rising demand. Since the 1990s, global efficiency gains have been the largest contributors to global growth in agricultural output. Efficiency gains have far outstripped the other contributors, including the use of more inputs per hectare of land, greater extension of irrigation to cropland, and expansion of new agricultural land (e.g., expansion of agriculture into previously forested lands).

In agriculture, efficiency is gauged using total factor productivity (TFP), a metric of inputs relative to outputs. If total on-farm output (e.g., volume of crops produced) is growing faster than inputs (defined as labor, capital, and material resources), then TFP is increasing.

That is the good news. The bad news is that global TFP growth is now slowing. After steadily increasing from a 0.55 percent annual growth rate during the 1970s to a peak of 1.97 percent annual growth rate in the 2000s, TFP has since fallen back to 1.1 percent annually (figure 4). Within the Americas, the picture is even more dire. Between 2011 and 2020, TFP increased by only 0.9 percent annually in Latin America and the Caribbean. In North America, typically at the global forefront in productivity and efficiency gains, TFP grew over the same period by just 0.2 percent annually. The Americas significantly lagged the global average (figure 5).

The decline in TFP over the past fifteen years is a worrisome development, as it threatens to undermine progress toward an elusive goal, which is to produce enough food to meet growing global demand while simultaneously retaining on-farm profitability and reducing environmental impact. Analysts at the US Department of Agriculture recently made this argument. “At the global level,” they wrote, “improvements in agricultural productivity have not been rapid or universal enough to make a significant dent in the effect of agriculture on the environment.” If TFP were to continue to slow down in the future, the impact “could [negatively] affect food prices, [lead to] the expansion of agriculture into more natural lands, and [threaten] global food security.”

Nor is underinvestment in innovation the only form of investment risk. Despite the hemisphere’s reliance on trade in agriculture and food, infrastructure across much of the Americas remains underdeveloped. The so-called infrastructure gap in the Americas refers to how the hemisphere’s ports, railways, bridges and roads, telecommunications, and other forms of infrastructure are insufficiently robust in kind, quality, and/or maintenance. In 2021, for example, the Inter-American Development Bank (IDB) estimated that countries in Latin America and the Caribbean alone would need to invest $2.2 trillion in “water and sanitation, energy, transportation, and telecommunications infrastructure” to meet the UN’s Sustainable Development Goals. The IDB’s estimate included not just funds for new infrastructural investment but for maintenance and replacement as well (at some 41 percent of the total).

North America is not exempt from this problem, as both Canada and the United States face large infrastructure deficits. As is well-known, for decades the United States has largely underinvested in infrastructure. Despite passage of the 2021 Infrastructure Investment and Jobs Act, which directed the federal government to spend some $1.2 trillion over five years on infrastructure, investment levels in the United States will remain insufficient absent systematic changes in how funds are raised by local, state, and federal governments.

Likewise, in Canada, the infrastructure deficit, which is estimated at $196 billion, is of particular importance to that country’s globally important agricultural exports, which include foodstuffs such as grains (wheat, principally) and key agricultural inputs such as fertilizers, largely produced in the country’s vast interior. Getting bulky grains and inputs to external markets more cheaply and efficiently will require Canada to upgrade its transport infrastructure, including railway lines, bridges, and ports, which are key in all circumstances but especially so during periods when unexpected disruptive factors, such as recent port labor strikes or extreme weather events, create choke points that necessitate rerouting. The recent announcements by the government of Canada to expand the Port of Montreal is a step in the right direction. However, significantly greater ambition will be required to push Canada’s infrastructure investments to levels comparable to other leading OECD countries.

Policymakers, the private sector, farmers, investors, and the scientific and technological communities will need to find solutions to these challenges. Doing so will require some combination of enhanced public and private investment in on- and off-farm infrastructure, R&D, improved piloting and scaling of new technologies, and implementation of policies to encourage farmers to become more innovative, productive, and efficient.

Demographic shifts

Agricultural employment as a share of global GDP has been trending downward for decades, owing to the ongoing mechanization of farmwork, increasing urbanization and industrialization, and other factors. According to the World Bank, in 1991, 43 percent of the world’s population was employed in agriculture. By 2023, that figure had fallen by almost half, to 26 percent.

The Western Hemisphere has followed this trendline. In Latin America and the Caribbean, agricultural employment fell over the same 1991–2023 period from 21 percent to 13 percent and in North America from 2.8 percent to 1.6 percent. As can be expected, given differences in income levels, structure of national economies, and crop specialization, there are widespread differences in agricultural employment across the hemisphere. In 2023, several countries still had employment levels in agriculture above 20 percent: Haiti (by far the most, at 45 percent), Ecuador, Guatemala, Bolivia, Nicaragua, Peru, and Honduras. In contrast, the hemisphere’s biggest producers of staple crops—the United States, Canada, Mexico, Brazil, and Argentina—are all well below the global average of 26 percent, in most cases in low single digits.

This demographic transition underscores how agriculture is becoming more capital-intensive and productive: more food is being produced per person employed in the sector. The largest food producers also typically have the lowest share of farmers and agricultural workers employed in the national economy, as the United States, Canada, and Argentina all show (each is at less than 2 percent of their populations employed
in agriculture).

However, there is a generational downside to this demographic trend: farmers worldwide are aging in part because on-farm employment opportunities are declining. The trend appears to be worse in the wealthiest regions having the smallest share of employment in agriculture. In the EU, for example, only 11.9 percent of farmers were under forty years old in 2020.52 In the United States, only 9 percent were under thirty-five years of age in 2022.

Toward a food-secure future

The world needs a bold new way of thinking about food security, one that incorporates a comprehensive understanding of how divergent forces, including those identified in this report, are creating a dynamic and unsettled agrifood landscape that will shape the future in unpredictable ways. To avoid negative future scenarios and increase the odds of positive ones, what is needed is a shift in the prevailing debate about food security that incorporates all these driving forces. That debate should stress that these forces combine in important and not entirely predictable ways to disrupt agrifood systems.

Such an outlook recognizes, for example, that geopolitical tensions add risk to other phenomena such as climate change to make an already perilous situation more difficult.

Policymakers and other leaders across the Americas should recognize that these drivers intersect and combine, in turn reshaping the hemisphere’s agrifood outlook. The challenge is clear: They will need to develop strategies and design policies that will lead to resilient and sustainable food systems that minimize the impact of shocks—both natural and human-made—on the production, distribution, and access to food.

Ecology

As stated above in the introduction, a central challenge will be to ensure that food production can remain profitable and resilient in the face of disruptive change. Ecological changes and the environmental resources that the world relies upon for productive and healthy agriculture systems are critical pieces of this equation.

A key task concerns how best to frame this problem for policymakers, business leaders, and farmers, to relay that ecological changes threaten to undermine progress toward a food-secure future. How these stakeholders act through policies, investments, and practices to mitigate and adapt to ecological changes will go a long way to determining whether the hemisphere’s future is food secure or insecure.

Farming is inherently uncertain because of the vagaries of weather and disease, so efforts to minimize the instability caused by ecological changes, including climate change, extreme weather, disasters, and other phenomena, will help farmers to manage this complex set of risks. Integration across risks is an important way to frame the problem, not only because the problem itself is multifaceted but so too are the solutions. Synergies among healthy ecosystem services, robust agricultural production, and profitability can be found with the right application of imagination, creativity, policymaking, investment, and on-the-ground application by utilizing input and knowledge from farmers and farming communities.

Agriculture is a major driver of ecological change, including land-use patterns and carbon emissions. Yet at the same time, agriculture also holds enormous potential, under the right domestic and international conditions, to provide robust and lasting solutions. Doing so would require that policymakers, investors, farmers, scientists, and technologists and society writ large coordinate efforts toward effecting scalable change.

Synergistic approaches include a range of alternative farming techniques and practices as well as novel technologies that collectively hold great potential not only to perform at a high level of output but at the same time go some way toward repairing the natural world. These strategies, which overlap in practice, include regenerative agriculture, no-till farming, agroforestry, climate-smart agriculture, and 4R nutrient stewardship practices (referring to nutrient-management practices focusing on the right sources, right rates, right times, and right places for nutrients). Such approaches aim to improve resource efficiency, reduce waste, protect ecosystems and ecosystem services including freshwater sources, soils, and biodiversity, while retaining profitability. Through the more efficient use of resources, carbon sequestration in soils, land and forest conservation, and improved management (for example, of water and waste processes), these strategies also can mitigate the agricultural sector’s significant greenhouse gas emissions.

Although many of these approaches once were considered experimental, novel, and unproven, that is far less the case today. Regenerative farming, for example, now has more adherents (including farmers) who believe that the diverse methods falling under it deliver tangible environmental benefits without sacrificing on-farm yields—a claim that is also drawing greater financial-sector interest and investment. A global survey of farmers, conducted in 2024 by McKinsey and Company found that over three-quarters of farmers in Argentina, Brazil, Canada, and the United States were adopting no-till or reduced tillage practices. Farmers’ willingness to adopt these and other regenerative practices were “underpinned by economics,” according to McKinsey, with respondents in the Americas ranking increased yields as their primary motive for adoption, followed by lower production costs and additional revenue streams.

There is an enormous amount of land worldwide and in the Americas that could be revitalized through such approaches. Land degradation, which by extension means the degradation of the world’s soils, is a massive problem. The world is losing at least one hundred million hectares of productive land each year, with some forecasts suggesting up to 95 percent of the world’s arable land could be in some kind of degraded state
by 2050.

In the Americas, degradation is a serious problem but also a big opportunity for soil and land regeneration. Brazil alone has enormous swathes of degraded pastureland. Embrapa, Brazil’s agricultural research agency, estimated in 2024 that the country has approximately twenty-eight million hectares of degraded pastureland (classified as intermediately or severely degraded). Bringing this land back into production using regenerative methods would help alleviate forest conversion pressures in Brazil’s Cerrado and Amazon regions.

One important consideration for policymakers is that if trade in agriculture and food becomes more costly, there is a risk that the fiscal capacity to invest in policies to make agrifood systems more productive and resilient in the face of ecological change will be reduced. Hence, this report focuses on understanding how these issues are linked and addressing them through greater international cooperation to promote more sustainable and resilient agrifood systems.

Trade, geopolitics, and institutions

Rising protectionism and geopolitical competition undermine the incentives for states to cooperate. Trade tensions risk spilling over into diplomatic tension, eroding international trust. In such conditions, states will be less likely to collaborate, which can sour international relations. If the world’s biggest economies are becoming more protectionist and eschewing a rules-based trading system, a zero-sum world returns, with many states, concerned by protectionist measures placed on them from elsewhere, believing they must adopt such policies. More dialogue among states, not less, is an antidote.

An increasing number of governments around the world appear to no longer see the equation in these terms. China, for example, is seeking greater self-reliance in food through stockpiling and other measures. It also has weaponized tariffs for its own purposes, imposing large tariffs on grain imports from Australia and more recently on Canada. These are not isolated incidents but part of how China exercises its power, given its outsized impact on world markets.

As articulated in this report, global trade in food depends on the strength of multilateral institutions and international agreements. These institutions are often underappreciated contributors to global food security. Today these institutions are being eroded by rising geopolitical and diplomatic conflict and other forces. The rapid rate of their erosion is worrisome.

Despite the WTO’s flaws—of which there are many—it remains valuable because it has the reach and standing to create and enforce global trading rules. Yet the organization is failing at doing so, in large part because of its own rules (decisions are made by consensus) and even more so because the largest trading countries no longer want to abide by a rules-based system. The risk is a collapse of the entire multilateral trading system. “The reversal of global economic integration [if the multilateral trading system were to fail] would bring with it growing lawlessness, conflict, and disorder in the global economy,” one scholar writes, and with it “the international system at large.”

One aim should be to build alternative institutions within the hemisphere consisting of states having the critical mass to achieve desired outcomes. One such solution would be to mimic the Group of Seven and Group of Twenty, two examples of institutions that bring leaders from the world’s largest economies together to attempt to coordinate solutions to various global challenges. One possibility would be to start with just the largest agricultural producers in the hemisphere—an “A5” consisting of the United States, Brazil, Mexico, Canada, and Argentina—to bring agriculture ministers together for systematized dialogue about hemispheric trade. Dialogue outcomes might include regional food-security compacts that generate commitments to invest in agricultural research leading to breakthrough technologies (“agtech”), to avoid the most trade distorting policies (export bans, for example), and more.

A related idea is to construct a standing (as opposed to episodic) hemispheric food security council to bring willing governments together for discussing responses to future shocks, identifying pathways for greater scientific and technological cooperation, and buttressing the norm regarding the hemisphere’s responsibility to the rest of the world as a major food supplier. Hemispheric institutions such as the Organization of American States (OAS) and Inter-American Development Bank can be leveraged to convene this council, given their credibility in addressing hemispheric affairs, including in trade. Using the inter-American system to convene a hemispheric food security council consisting of foreign, environment, and agriculture ministers—alongside representatives from industry and producer groups—should appeal to a wide set of stakeholders.

Investment in innovation, technology, and infrastructure

The constant improvement of on- and off-farm activities, including innovative use of new technologies and processes, and capital investment in the phenomena that enable them (including infrastructure), are central to ensuring that the hemisphere and the world are food secure. Innovation and investment also are critical components of agrifood systems that not only are productive but also sustainable and resilient, given
the need to prepare for climate-driven shocks in the future. Innovative technologies and processes, and the infrastructure that undergirds them, can build redundancy and efficiency into the agrifood system in anticipation of such shocks.

Regenerative agriculture and other agrifood systems focused on sustainability can be enhanced through the application of advanced technologies. Examples include:

• Alternative energy sources can enhance on- and offfarm systems while reducing carbon footprints.
• Geospatial remote sensing tools for precision farming can identify and help safeguard ecological assets.
• Robotics and mobile digital technologies (including deeper integration of handheld devices into farming practices) can improve agricultural efficiencies while reducing environmental impact.
• AI-driven analytics can integrate and utilize data streams from numerous applications.

Such technologies will become more critical in the future, as ecological changes make farming more difficult. Rising heat, for example, will create harsher working conditions for farm labor, in turn requiring machines and other technologies to alleviate workers’ outdoor exposure during periods of extreme heat.

Biotechnologies should be added to this list, given their promise to improve on-farm productivity and nutrient use efficiency while protecting ecological assets such as soils and water. Biofertilizers, for example, aim to improve soil fertility and nutrient use efficiency through application of living organisms including bacteria, fungi, and algae, with crop yields increasing by an estimated 10 percent to 40 percent. They also help
plants withstand abiotic stressors, some brought on by climate change, including drought, salinity, and extreme temperatures.

How can governments, the private sector, and other actors together ensure that the right mix and scale of investments are being made that will lead to innovative technologies and processes across the hemisphere’s agrifood systems? Additionally, how can they ensure that innovative technologies and processes are transformative at all scales, including for the hemisphere’s millions of smallholder farmers in addition to its largest producers? Some technologies and processes are more suitable for large-scale applications because of high cost or other considerations, for example. Improving access to the benefits of such technologies will require improved pathways for dissemination of knowledge, practical know-how, access to capital, and other services (e.g., training).

Every year, researchers at Virginia Tech produce the Global Agricultural Productivity Report, which tracks and analyzes TFP trends. The 2025 version asserts that reversing the decline in TFP growth—including low growth in the Americas—will require five “policy, investment and research priorities,” which are:

• Invest more in strengthening and expanding multistakeholder dialogues, agriculture extension services, and incentive structures for technology transfer to smallholder farmers.
• Expand access to markets for all participants in the agrifood value chain, including smallholder farmers.
• Strengthen trade as it “enhances competitive prices” which incentivizes investment in improved inputs and technologies” while facilitating “the exchange of knowledge, innovations, and best practices across borders, driving productivity gains.”
• Reduce food loss and waste.
• Invest in public-private partnerships, joint ventures, knowledge sharing agreements and platforms, and interdisciplinary research.

These types of innovative practices have real impact on agrifood systems at every level, down to the farm itself. Innovation delivers new seeds and crop varieties, creates more efficient production methods, solves practical problems faced by farmers (pests and disease), and creates new markets for goods and services provided by farmers (such as using sugarcane to produce ethanol to reduce carbon emissions of transport
fuels).

Farmers are both users and creators of innovative technologies and processes, so their knowledge and experience should be included in robust feedback loops. Moreover, farmers must be able to adopt and utilize innovative technologies and processes to realize their full positive contributions. This is not an automatic process, as on-farm adoption is not the same thing as laboratory invention. When making investment decisions, farmers are businesspersons, concerned about the upfront costs and return on investment (ROI). Global surveys of farmers indicate they are hesitant to adopt new technologies and processes if the technologies and processes are unfamiliar or they face high initial investment costs or uncertain ROI.

Publicly funded agricultural extension programs, which connect researchers at universities and other institutions to farmers—in the process, enabling mutual learning and successful technology transfer—are critical to improving agtech adoption. Maintaining and strengthening extension services (including public funding) should be central to any country’s aspiration to build world-class agrifood systems based on widespread technology and process adoption by farmers.

Improving infrastructure to strengthen agrifood supply chains is also critical, especially as higher temperatures, changing precipitation patterns, more frequent and powerful disasters, and other problems will put more infrastructure—e.g., ports, bridges, roads, railroads, canals— at risk. Ports are especially at risk, with most food trade moving by cargo ships. The Panama Canal, which in recent years has had low water levels due to Central American drought, is a good example. (Chinese ownership of port facilities also has proven controversial in the United States.) Beyond adaptation measures designed to improve individual pieces of infrastructure, there is much need for strategies that will frame the challenge in terms of societal and even transboundary (international) resilience. Canada, for example, in 2023 released a whole-of-society National Adaptation Strategy that emphasizes the need to make physical infrastructure (and communities) more resilient to climate-driven impacts.

Farmers for the future

Ensuring a food-secure future in the Americas must place human beings at its center. This formula long has been the focus on the demand side of the food-security equation: The goal always is to ensure that all humans always have access to affordable and nutritious food.

Yet the same logic also holds on the supply side of the equation. To avoid the demographic decline of farming amid the chronic aging of the world’s farmers, it is imperative that farming be made financially, socially, and culturally attractive to younger generations. Unfortunately, such conditions are not prevalent in many countries (perhaps most) around the world. The reasons for this are many. To young people, particularly those without a family heritage in agriculture, farming can be perceived as backward, unprofitable, difficult, alien, or uncool—or all the above.

There is no single set of recognized solutions to assist in turning the demographic trendlines around. However, evidence from around the world suggests that a combination of interventions, some obvious and others not so much, might suffice. The obvious ones are to make it easier to gain access to farming in the first place by reducing barriers to entry (access to affordable financing or access to farmland through ownership or long-term contract), and closing knowledge and skills gaps through on-farm training programs, scholarships, and apprenticeships. There are less obvious interventions, too. One such intervention is to incentivize nontraditional candidates to enter farming, for example, young women, in addition to traditional candidates (typically men). Another is to stress the increasingly important role played by digital technologies, robotics, big data and remote sensing, artificial intelligence, and other technical applications that appeal to tech-savvy and ambitious young people.

Although none of these solutions will guarantee a demographic rebound in farming, there are examples of where the curve has been bent toward youth. Brazil’s farmers are getting younger rather than older. They appear to be attracted by the prospect of getting rich in Brazil’s booming, forward-facing, and tech-savvy industry.

Conclusion

The issues outlined in this report should be seen as a starting point for discussion. The challenges and the opportunities facing agrifood systems in the Americas in the coming decades will be profound. A central question is whether the hemisphere’s key actors—governments, farmers, the private sector, researchers, foundations, civil society groups, and the public—will be willing to invest in the transformative processes and approaches that will reduce risk while increasing prosperity, sustainability, and resilience.

This report has put great emphasis upon generating productive dialogues among key stakeholders. Promoting the diffusion of critical innovations for food security will be an important piece of this process. It is imperative that governments and multilateral institutions in the hemisphere find financing and pool technological know-how to support programs tailored to meet the needs of the region.

Beyond that, however, it is critical that nongovernmental stakeholders, including investors, the private sector, researchers, scientists, analysts, farmers, and farming communities, act in concert with one another. They must themselves build the transnational dialogues to assist in envisioning, creating, and strengthening the tools that will be needed to ensure a food-secure future.

This report was produced by the Atlantic Council with support from The Mosaic Company as part of the Food security: Strategic alignment in the Americas project.

Peter Engelke is a senior fellow with the Atlantic Council’s Scowcroft Center for Strategy and Security as well as a senior fellow with its Global Energy Center. His diverse work portfolio spans strategic foresight; geopolitics, diplomacy, and international relations; climate change and Earth systems; food, water, and energy security; emerging and disruptive technologies and tech-based innovation ecosystems; and demographics and urbanization, among other subjects, and he is the creator of the Council’s most widely read long-form publication series, Global Foresight. Engelke’s previous affiliations have included the Geneva Centre for Security Policy, the Robert Bosch Foundation, the World Economic Forum, and the Stimson Center.

Matias Margulis is associate professor of the School of Public Policy and Global Affairs and a faculty member of Land and Food Systems at the University of British Columbia. His research and teaching interests are in global governance, development, human rights, international law, and food policy. In addition to his academic research, Margulis has extensive professional experience in the field of international policymaking and is a former Canadian representative to the World Trade Organization, Organisation for Economic Co-operation and Development, and the UN Food and Agriculture Organization.

The GeoStrategy Initiative, housed within the Scowcroft Center for Strategy and Security, leverages strategy development and long-range foresight to serve as the preeminent thought-leader and convener for policy-relevant analysis and solutions to understand a complex and unpredictable world. Through its work, the initiative strives to revitalize, adapt, and defend a rules-based international system in order to foster peace, prosperity, and freedom for decades to come.

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Introducción

La seguridad alimentaria está en el núcleo de la seguridad nacional, regional y global. Cuando las sociedades tienen garantizado el acceso a los alimentos, poseen una probabilidad mucho mayor de mantener la estabilidad social y política; cuando carecen de ella, sucede lo contrario. Afortunadamente, el hemisferio occidental—las Américas—es una región con seguridad alimentaria. Aunque el acceso a los alimentos sigue siendo un desafío constante, la abundancia alimentaria caracteriza en general a las Américas, gracias a una base favorable de recursos naturales, condiciones geopolíticas benignas y una amplia cooperación pública y privada orientada a mejorar los métodos de producción y fomentar la innovación. 

Sin embargo, el futuro podría no parecerse al pasado. Varios factores clave de cambio podrían alterar la trayectoria de la seguridad alimentaria hemisférica, amenazando la estabilidad y productividad de los actuales sistemas agroalimentarios o, por el contrario, ofreciendo esperanza de que estos se vuelvan aún más sólidos y resilientes. Estos factores incluyen el deterioro de ecosistemas sanos y estables, la rápida transformación de la geopolítica, la erosión de las instituciones multilaterales, la creciente inflación y volatilidad de los precios de los alimentos, la promesa de la innovación y las tecnologías emergentes, y los cambios generacionales en la agricultura y la producción agropecuaria. 

Aunque estas fuerzas se cruzan, muchos líderes las perciben como desafíos aislados. Su interacción multiplica el dinamismo del sistema, lo que exigirá que los responsables de políticas públicas, líderes empresariales, inversionistas y agricultores encuentren soluciones innovadoras frente a un panorama agroalimentario que cambia rápidamente y cuyo futuro no es del todo predecible. 

Alimentación, sociedad y política 

Ningún otro bien tiene un impacto tan profundo en la sociedad y la política como los alimentos, porque las personas necesitan comer todos los días. A menudo, basta con un solo gran aumento en los precios de los alimentos para alterar las dinámicas sociales y políticas dentro de un país o incluso de toda una región. Aunque los precios altos de los alimentos afectan de manera desproporcionada a los países vulnerables, pobres y frágiles, también pueden tener un gran impacto en naciones que, en principio, son ricas y estables. 

La definición estándar de seguridad alimentaria, adoptada en 1996 por la Organización de las Naciones Unidas para la Alimentación y la Agricultura (FAO) y solo ligeramente revisada desde entonces, establece que: 

La seguridad alimentaria existe cuando todas las personas, en todo momento, tienen acceso físico, social y económico a alimentos suficientes, inocuos y nutritivos que satisfacen sus necesidades dietéticas y preferencias alimentarias para llevar una vida activa y sana. 

Sin embargo, faltan algunos elementos importantes en esta formulación de la seguridad alimentaria. Uno de ellos es la estabilidad ecológica. La seguridad alimentaria depende de la sostenibilidad de los sistemas naturales de la Tierra que son esenciales para la producción de alimentos. Un segundo elemento es la estabilidad del sistema internacional, específicamente la estabilidad de un orden comercial basado en normas que garantice que los alimentos puedan desplazarse fácilmente desde los países con excedentes hacia aquellos con déficits alimentarios. 

Estas condiciones no deben darse por sentadas. Mirando hacia el futuro, es probable que el mundo se vuelva más dinámico y menos estable, con aspectos tanto positivos como negativos. Para prosperar, los sistemas agroalimentarios mundiales deberán volverse más resilientes y adaptables. 

Seguridad alimentaria en las Américas 

El hemisferio occidental desempeña un papel indispensable en la seguridad alimentaria global. 

Lado de la oferta: Producción agrícola en las Américas 

Los cinco países con mayor producción primaria de cultivos (por tonelaje) en el mundo se encuentran todos en las Américas: Brasil, Estados Unidos, Argentina, México y Canadá. El hemisferio también cuenta con los principales exportadores de los cuatro cultivos básicos: soya, maíz, trigo y arroz. Además, las Américas producen una amplia variedad de cultivos especializados, entre ellos café, aguacates, limones, limas, naranjas, arándanos, cranberries, quinua, almendras y muchos más. 

La agricultura continúa siendo un componente esencial de las economías nacionales en las Américas. La participación de la agricultura en el PIB supera el 5% en la mayoría de los países y llega a más del 10% en algunos de ellos. 

Lado de la demanda: Calorías y nutrición 

La definición de seguridad alimentaria de la FAO subraya que, si las personas no pueden acceder a una dieta nutritiva a precios estables y asequibles, no se puede hablar de seguridad alimentaria. 

En las últimas décadas, el hemisferio occidental ha reducido gradualmente su nivel de inseguridad alimentaria. En términos comparativos, ha tenido un buen desempeño. Entre 1990 y 2015, América Latina y el Caribe fue la única región del mundo que logró reducir el hambre a la mitad. Actualmente, el hemisferio presenta mejores resultados que el promedio mundial en cuanto a subalimentación, inseguridad alimentaria severa y prevalencia de emaciación infantil (niños pequeños con bajo peso). 
(Aunque varios países tienen un rendimiento inferior, como Haití, Bolivia, Honduras, Ecuador y Guatemala.) 

En los indicadores relacionados con dietas poco saludables, como el sobrepeso y la obesidad, las Américas muestran un desempeño menos favorable. 

Finalmente, las mujeres en las Américas son ligeramente más propensas que los hombres a sufrir inseguridad alimentaria. 

Factores de cambio en las Américas y más allá

La seguridad alimentaria en las Américas enfrenta varios factores de cambio significativos que se cruzan e interactúan entre sí. 

Cambio ecológico 

Los riesgos ecológicos se encuentran entre las mayores amenazas para la seguridad alimentaria. Los principales riesgos incluyen el cambio climático, la deforestación, la pérdida de biodiversidad y la erosión y degradación del suelo. Quizás la amenaza más grave para la producción agrícola sea la combinación de sequía y calor extremo, condiciones “secas-calientes” que se volverán más frecuentes tanto en el mundo como en las Américas. 

Una posibilidad desalentadora para el futuro es la aparición de fallas simultáneas en múltiples regiones productoras de granos básicos (“fallas en las canastas de pan” del mundo). Las Américas, hogar de varios de los principales productores mundiales de cultivos básicos, enfrentan esta posibilidad. El cambio climático también afectará negativamente a la mayoría de los cultivos especializados, incluidos el café y los plátanos. 

Los agricultores se verán afectados de manera diferente dependiendo de dónde trabajen dentro del hemisferio, el tamaño y los recursos de sus fincas (financieros y de otro tipo), si son agricultores de subsistencia o están integrados en los mercados nacionales, regionales y globales, y los tipos de cultivos que producen. Los pequeños agricultores en contextos más pobres estarán en mayor riesgo debido al tamaño reducido de sus parcelas y a la falta de acceso a seguros y otros recursos. 

Potencialmente, los cambios ecológicos con impactos a gran escala podrían generar importantes déficits en el suministro mundial de alimentos, provocando pánicos en los mercados, precios altos, acaparamiento y una ruptura del comercio internacional. La inseguridad alimentaria se dispararía. 

Turbulencia geopolítica y geoeconómica 

Un segundo conjunto de riesgos proviene de la incertidumbre geopolítica y geoeconómica creciente. Un sistema comercial abierto y basado en normas ha sido esencial para mejorar la seguridad alimentaria, al fomentar una mayor integración económica que, a su vez, contribuye a la seguridad alimentaria mediante mayor crecimiento económico, más empleo, aumento de ingresos, reducción de la pobreza y dinamismo económico. 

Sin embargo, el sistema mundial de comercio de alimentos ha sido perturbado por varios acontecimientos geopolíticos importantes, incluyendo guerras (como la de Ucrania), políticas comerciales y sanciones que generan choques imprevistos en los insumos agrícolas, las cadenas de suministro y las exportaciones agroalimentarias, lo que resulta en mayores costos de producción y precios de los alimentos. 

El sistema agroalimentario mundial podría estar regresando a un orden proteccionista previo a los años 1990, cuando los países solían aplicar aranceles elevados solo a unos pocos cultivos políticamente sensibles (como el azúcar o el algodón). Hoy, el proteccionismo emergente es mucho más amplio, afecta a un número mayor de cultivos y lo implementa una lista cada vez más larga de países. 

Los patrones comerciales también están cambiando debido a la geopolítica. El comportamiento de China es un ejemplo significativo. Hace una década, China importaba más productos agrícolas de Estados Unidos que de Brasil; hoy, importa casi el doble de Brasil que de EE. UU. La desvinculación de China del mercado agrícola estadounidense ha ayudado a que Brasil se convierta en el mayor exportador mundial de soya. 

Además, después de que Estados Unidos impusiera aranceles en agosto de 2025 a ciertos productos agrícolas brasileños, Brasil probablemente intensificará su interés en desarrollar mercados de exportación alternativos, incluidos los acuerdos con China. 

Incertidumbre institucional 

Las instituciones multilaterales han contribuido a generar una prosperidad sin precedentes—aunque desigual—al fomentar el comercio global y hemisférico. Sin embargo, hoy estas instituciones están bajo una enorme presión. Las principales potencias comerciales del mundo, junto con muchas naciones más pequeñas, han estado dispuestas a romper normas establecidas y leyes internacionales de comercio, creando una gran incertidumbre en torno a las reglas comerciales. 

Las Américas se benefician más que otras regiones de un sistema global de comercio agrícola abierto. La agricultura siempre ha sido un tema controvertido en las negociaciones comerciales, desde los orígenes del Acuerdo General sobre Aranceles Aduaneros y Comercio (GATT) en la década de 1940. A pesar de ello, las instituciones multilaterales funcionales son de gran valor porque crean un mercado global estable y basado en normas, lo cual posibilita el comercio de alimentos a gran escala. 

Inflación y variabilidad de precios 

La inseguridad alimentaria se agrava con una inflación rápida de precios y una alta variabilidad de precios. Desde los años 2000, los sucesivos choques han generado nuevos niveles base de precios más altos. Los alimentos son menos asequibles, y los hogares enfrentan más dificultades para mantener una dieta saludable. 

La inflación y la volatilidad de los precios de los alimentos son tan problemáticas en las Américas como en otras partes del mundo, y se han convertido en un tema clave social y político. En América Latina, el aumento de los precios de los alimentos ha sido un principal impulsor de la inflación regional, mientras que en América del Norte, el alza de precios ha sido una de las principales causas de la crisis del costo de vida que afecta a muchos hogares. 

Inversión: Innovación, tecnología e infraestructura 

Las innovaciones y aumentos de productividad dentro y fuera del ámbito agrícola —derivadas de los avances tecnológicos, las mejoras en los procesos y las inversiones en infraestructura— han sido fundamentales para aumentar la oferta de alimentos y satisfacer la creciente demanda mundial. 

Desde la década de 1990, las ganancias globales en eficiencia han superado ampliamente otros factores, como el uso de más insumos por hectárea, la expansión del riego en tierras de cultivo o la apertura de nuevas áreas agrícolas (por ejemplo, la conversión de tierras forestales en agrícolas). 

Sin embargo, el crecimiento mundial de la Productividad Total de los Factores (PTF) —una medida de eficiencia que evalúa los insumos agrícolas en relación con los resultados— se está desacelerando. Después de aumentar de forma constante durante décadas, la PTF ha comenzado a caer, especialmente en las Américas. 

Las inversiones en infraestructura en gran parte del hemisferio también siguen siendo insuficientes, con trillones de dólares necesarios para mejorar las redes de transporte, energía y logística. 

Por ejemplo, en Canadá, el déficit de infraestructura, estimado en casi 200 mil millones de dólares, es particularmente relevante para las exportaciones agrícolas de ese país, que incluyen tanto productos alimenticios (como granos) como insumos agrícolas clave (como fertilizantes) producidos en su vasto interior. Reducir los costos y aumentar la eficiencia del transporte de estos bienes hacia los mercados internacionales exigirá modernizar la infraestructura de transporte. 

Cambios demográficos 

El empleo agrícola como proporción del PIB mundial lleva décadas en descenso. El hemisferio occidental ha seguido esta tendencia, lo que demuestra que la agricultura se está volviendo más intensiva en capital y más productiva. 
Hoy se produce más alimento por persona empleada en el sector. 

Sin embargo, existe un efecto generacional negativo asociado a esta tendencia. En todo el mundo, los agricultores están envejeciendo, en parte porque las oportunidades laborales en las fincas están disminuyendo. 
Esta tendencia es más pronunciada en las regiones más ricas, donde la proporción de empleo agrícola es menor, como en la Unión Europea y los Estados Unidos. 

Hacia un futuro con seguridad alimentaria 

El mundo necesita una nueva y audaz forma de pensar sobre la seguridad alimentaria, una que incorpore una comprensión integral de cómo fuerzas divergentes están creando un panorama agroalimentario dinámico e inestable, que moldeará el futuro de maneras impredecibles. 

Ecología 

Un desafío central será garantizar que la producción de alimentos siga siendo rentable y resiliente frente a los cambios ecológicos disruptivos. 
Las sinergias entre los servicios ecosistémicos saludables, una producción agrícola robusta y la rentabilidad pueden encontrarse mediante la aplicación adecuada de imaginación, creatividad, formulación de políticas, inversión y acción práctica, utilizando el conocimiento y la participación de los agricultores y sus comunidades. 

La agricultura es un importante impulsor del cambio ecológico, incluido el uso del suelo y las emisiones de carbono. Sin embargo, al mismo tiempo, la agricultura posee un enorme potencial —bajo las condiciones nacionales e internacionales adecuadas— para ofrecer soluciones sólidas y duraderas. 

Los enfoques sinérgicos incluyen una amplia gama de técnicas y prácticas agrícolas alternativas, así como tecnologías novedosas, entre ellas: 

• La agricultura regenerativa 
• La siembra directa (no-till farming)
• La agroforestería 
• La agricultura climáticamente inteligente 
• El Manejo 4R de Nutrientes (Right sources, Right rates, Right times, Right places: fuentes, dosis, momentos y lugares correctos para aplicar nutrientes). 

Aunque muchos de estos enfoques se consideraban antes experimentales o no comprobados, hoy eso es mucho menos cierto. Por ejemplo, la agricultura regenerativa cuenta con un número creciente de adeptos —incluidos agricultores— que creen que puede generar beneficios ambientales tangibles sin sacrificar los rendimientos en las fincas. Existe una enorme cantidad de tierras y suelos degradados que podrían revitalizarse mediante estas prácticas.

 
En las Américas, la degradación representa un problema serio, pero también una gran oportunidad. Brasil, por ejemplo, posee vastas extensiones de pastizales degradados que podrían volver a ser productivas utilizando métodos regenerativos, lo que ayudaría a reducir la presión sobre la conversión de bosques en las regiones del Cerrado y la Amazonía. 

Comercio, geopolítica e instituciones 

El aumento del proteccionismo y la competencia geopolítica socavan la cooperación entre Estados y erosionan la confianza internacional. El comercio mundial de alimentos depende de la fortaleza de las instituciones multilaterales y de los acuerdos internacionales, que suelen ser contribuyentes subestimados a la seguridad alimentaria global. Hoy, estas instituciones están siendo erosionadas, y el riesgo es la posible caída de todo el sistema multilateral de comercio. 

Una mayor cantidad de diálogo entre los Estados es un antídoto necesario. 
Un objetivo podría ser la creación de nuevas instituciones regionales, empezando, por ejemplo, con los principales productores agrícolas del hemisferio —un posible grupo “A5” compuesto por Estados Unidos, Brasil, México, Canadá y Argentina— para reunir a los ministros de agricultura en torno al diálogo comercial. 

Los resultados de dicho esfuerzo podrían incluir: 

• Pactos regionales de seguridad alimentaria 
• Compromisos de inversión en investigación agrícola
• Acuerdos para evitar políticas comerciales que distorsionen los mercados 

Una idea relacionada es la creación de un Consejo Hemisférico Permanente de Seguridad Alimentaria, que reúna a los gobiernos para coordinar respuestas a crisis y choques, identificar vías para una mayor cooperación científica y tecnológica, y reforzar la norma que reconoce la responsabilidad del hemisferio como principal proveedor de alimentos para el resto del mundo. Instituciones hemisféricas existentes, como la Organización de los Estados Americanos (OEA) y el Banco Interamericano de Desarrollo (BID), podrían desempeñar un papel clave en la convocatoria y apoyo de este consejo. 

Inversión en innovación, tecnología e infraestructura

La mejora constante de las actividades dentro y fuera de las fincas —incluyendo el uso innovador de nuevas tecnologías y procesos, así como la inversión de capital en los factores que las posibilitan (como la infraestructura)— es fundamental para garantizar que el hemisferio y el mundo sean seguros en materia alimentaria. 

La agricultura regenerativa y otros sistemas agroalimentarios sostenibles pueden potenciarse mediante la aplicación de tecnologías avanzadas. Algunos ejemplos incluyen: 

• Fuentes de energía alternativas que mejoran las operaciones dentro y fuera de la finca, reduciendo al mismo tiempo la huella de carbono. 
• Herramientas de teledetección geoespacial aplicadas a la agricultura de precisión, que permiten identificar y proteger los activos ecológicos. 
• Robótica y tecnologías digitales móviles (incluyendo una mayor integración de dispositivos portátiles en las prácticas agrícolas) que pueden mejorar la eficiencia y reducir el impacto ambiental. 
• Analítica impulsada por inteligencia artificial (IA), que puede integrar y utilizar flujos de datos provenientes de múltiples aplicaciones. 
• Biotecnologías que mejoran la productividad agrícola y la eficiencia en el uso de nutrientes, al tiempo que protegen activos ecológicos como el suelo y el agua. 

Los agricultores son tanto usuarios como creadores de tecnologías y procesos innovadores, y deben tener la capacidad de adoptar y aprovechar estos avances. Sin embargo, la adopción en el campo no es lo mismo que la invención en laboratorio. 

Las encuestas globales de agricultores muestran que muchos son reacios a adoptar nuevas tecnologías o procesos cuando enfrentan altos costos iniciales de inversión y rendimientos inciertos. 

Por ello, los programas públicos de extensión agrícola, que conectan a investigadores y agricultores para fomentar el aprendizaje mutuo y la transferencia tecnológica, son críticos. Fortalecer los servicios de extensión debe ser una prioridad central para lograr una adopción amplia de innovaciones agrícolas. 

Asimismo, mejorar la infraestructura para fortalecer las cadenas de suministro agroalimentarias es esencial. Se necesitan estrategias que aborden este desafío desde la perspectiva de la resiliencia social e incluso transfronteriza (internacional). 

Los agricultores del futuro 

Para evitar el declive demográfico del sector agrícola, es fundamental que la agricultura se vuelva financieramente, socialmente y culturalmente atractiva para las nuevas generaciones. 

Para muchos jóvenes —especialmente aquellos sin una herencia familiar agrícola—, dedicarse al campo puede parecer anticuado, poco rentable, difícil, ajeno o poco atractivo… o todo lo anterior. 

No existe un conjunto único de soluciones reconocidas para revertir esta tendencia demográfica. Sin embargo, la evidencia global sugiere que una combinación de intervenciones podría ser suficiente: 

• Facilitar el acceso a la agricultura, reduciendo las barreras de entrada, como el acceso limitado al financiamiento asequible y a la tierra cultivable. 
• Cerrar las brechas de conocimiento y habilidades mediante programas de capacitación en campo, becas y programas de aprendizaje. 
• Incentivar la participación de candidatos no tradicionales, como mujeres jóvenes, en la agricultura. 
• Resaltar el papel creciente de la tecnología digital, la robótica, los macrodatos (Big Data), la teledetección, la inteligencia artificial y otras aplicaciones técnicas que resultan atractivas para los jóvenes ambiciosos y con afinidad tecnológica. 

En resumen, el futuro de la agricultura dependerá de su capacidad para integrar la innovación con el atractivo social y económico, de modo que las nuevas generaciones vean en el campo una oportunidad de progreso y liderazgo, no una ocupación del pasado. 

Conclusión breve 

Una cuestión central es si los actores clave del hemisferio —gobiernos, agricultores, sector privado, investigadores, fundaciones, grupos de la sociedad civil y el público— estarán dispuestos a invertir en procesos y enfoques transformadores que reduzcan riesgos a la vez que incrementen la prosperidad, la sostenibilidad y la resiliencia. 

Promover la difusión de innovaciones críticas para la seguridad alimentaria será una parte importante de esta ecuación. Es imperativo que los países y las instituciones multilaterales del hemisferio encuentren financiamiento y compartan el conocimiento tecnológico necesario para apoyar programas adaptados a las necesidades de la región. 

Otros actores no gubernamentales, incluyendo inversores, sector privado, investigadores, científicos, analistas y comunidades agrícolas, también deben actuar de manera concertada para visualizar, crear y fortalecer las herramientas necesarias que aseguren un futuro con seguridad alimentaria. 

Este reporte fue elaborado por el Atlantic Council con el apoyo de The Mosaic Company como parte del proyecto Seguridad alimentaria: alineación estratégica en las Américas

Peter Engelke es experto sénior del Centro Scowcroft para Estrategia y Seguridad del Atlantic Council, y experto sénior del Centro Global de Energía. Su diverso portafolio de trabajo abarca previsión estratégica; geopolítica, diplomacia y relaciones internacionales; cambio climático y sistemas terrestres; seguridad alimentaria, hídrica y energética; tecnologías emergentes y disruptivas y ecosistemas de innovación basados en tecnología; y demografía y urbanización, entre otros temas. Es el creador de la serie de publicaciones extensas más leída del Consejo, Global Foresight. Las afiliaciones previas de Engelke han incluido el Centro de Política de Seguridad de Ginebra, la Fundación Robert Bosch, el Foro Económico Mundial y el Centro Stimson.

Matias Margulis es profesor asociado de la Escuela de Políticas Públicas y Asuntos Globales y miembro de la facultad de Tierras y Sistemas Alimentarios de la Universidad de Columbia Británica. Sus intereses de investigación y docencia se centran en la gobernanza global, el desarrollo, los derechos humanos, el derecho internacional y la política alimentaria. Además de su investigación académica, Margulis tiene una amplia experiencia profesional en el ámbito de la formulación de políticas internacionales y fue representante canadiense ante la Organización Mundial del Comercio, la Organización para la Cooperación y el Desarrollo Económicos y la Organización de las Naciones Unidas para la Alimentación y la Agricultura.

La Iniciativa GeoStrategy, alojada dentro del Centro Scowcroft para Estrategia y Seguridad, utiliza el desarrollo estratégico y la previsión a largo plazo para servir como el principal referente y convocante de análisis y soluciones relevantes para las políticas públicas, con el fin de comprender un mundo complejo e impredecible. A través de su trabajo, la iniciativa se esfuerza por revitalizar, adaptar y defender un sistema internacional basado en normas para fomentar la paz, la prosperidad y la libertad durante las próximas décadas.

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The post El futuro de la alimentación en las Américas appeared first on Atlantic Council.

Introdução

A segurança alimentar está no núcleo da segurança nacional, regional e global. Quando as sociedades possuem segurança alimentar, elas têm muito mais chances de alcançar estabilidade social e política; quando não a possuem, ocorre o contrário. Felizmente, o hemisfério ocidental — as Américas — é uma região com segurança alimentar. Embora o acesso aos alimentos continue sendo um desafio constante, a abundância de alimentos geralmente caracteriza as Américas, graças a uma base favorável de recursos naturais, condições geopolíticas estáveis e ampla cooperação entre os setores público e privado para aprimorar os métodos de produção e promover a inovação.

Entretanto, o futuro pode não se parecer com o passado. Diversos fatores determinantes de mudança podem alterar a trajetória da segurança alimentar no hemisfério, ameaçando a estabilidade e a produtividade dos atuais sistemas agroalimentares ou, alternativamente, oferecendo a esperança de que esses sistemas se tornem ainda mais fortes e resilientes. Esses fatores incluem o declínio de ecossistemas saudáveis e estáveis, as rápidas transformações na geopolítica, a erosão das instituições multilaterais, o aumento da inflação e da volatilidade dos preços dos alimentos, o potencial da inovação e das tecnologias emergentes, bem como as mudanças geracionais na agricultura e na produção agropecuária.

Embora essas forças se interconectem, muitos líderes as veem como desafios isolados. A interação entre elas multiplica o dinamismo do sistema, o que exigirá que formuladores de políticas públicas, líderes empresariais, investidores e produtores rurais encontrem soluções inovadoras diante de um cenário agroalimentar em rápida transformação — e não totalmente previsível.

Alimentação, sociedade e política           

Nenhum outro bem exerce impacto tão significativo sobre a sociedade e a política quanto os alimentos, pois as pessoas precisam se alimentar todos os dias. Muitas vezes, basta um único grande choque nos preços dos alimentos para alterar as dinâmicas sociais e políticas dentro de um país ou até mesmo em toda uma região. Embora preços elevados de alimentos tenham um impacto desproporcionalmente negativo sobre países vulneráveis, pobres e frágeis, eles também podem afetar de maneira significativa países que, de outra forma, seriam ricos e estáveis.

A definição padrão de segurança alimentar, adotada em 1996 pela Organização das Nações Unidas para a Alimentação e a Agricultura (FAO/Food and Agriculture Organization) e apenas ligeiramente revisada desde então, é:

A segurança alimentar existe quando todas as pessoas, em todos os momentos, têm acesso físico, social e econômico a alimentos seguros, nutritivos e em quantidade suficiente para atender às suas necessidades dietéticas e preferências alimentares, permitindo uma vida ativa e saudável.  

Algumas peças importantes do quebra-cabeça da segurança alimentar estão ausentes nesta formulação. Uma delas é a estabilidade ecológica. A segurança alimentar depende da sustentabilidade dos sistemas terrestres subjacentes, essenciais à produção de alimentos. A segunda é a estabilidade do sistema internacional, especificamente a estabilidade de uma ordem comercial baseada em regras, que garante que os alimentos possam se mover com facilidade de países com excedentes para países com déficits alimentares.

Essas condições não devem ser tratadas como garantidas. Olhando para o futuro, é provável que o mundo se torne mais dinâmico — e não o contrário — com ganhos e perdas. Para prosperar, os sistemas agroalimentares globais precisarão se tornar mais resilientes e adaptáveis.

Segurança alimentar nas américas

O hemisfério ocidental desempenha um papel indispensável na segurança alimentar global.

Lado da oferta: Produção agrícola nas Américas

Os cinco maiores países produtores de culturas agrícolas primárias do mundo (em volume) estão todos nas Américas: Brasil, Estados Unidos, Argentina, México e Canadá. O hemisfério também abriga os principais exportadores das quatro principais culturas globais: soja, milho, trigo e arroz. Além disso, as Américas produzem uma ampla variedade de culturas especiais, incluindo café, abacate, limões, limas, laranjas, mirtilos, cerejas, quinoa, amêndoas e outras.

A agricultura continua sendo uma peça fundamental das economias nacionais nas Américas. Em grande parte dos países, sua participação no PIB é superior a 5%, e em alguns casos ultrapassa 10%.

Lado da demanda: Calorias e nutrição

A definição de segurança alimentar da FAO enfatiza que, se as pessoas não tiverem acesso a uma dieta nutritiva a preços acessíveis e estáveis, elas não estarão em situação de segurança alimentar.

Nas últimas décadas, o hemisfério ocidental reduziu gradualmente seu nível de insegurança alimentar. Comparativamente, teve um bom desempenho. Entre 1990 e 2015, a América Latina e o Caribe foram as únicas regiões do mundo a reduzir a fome pela metade. Atualmente, o hemisfério apresenta desempenho superior à média mundial em indicadores de desnutrição, insegurança alimentar grave e prevalência de emagrecimento em crianças pequenas, (embora vários países apresentem desempenho inferior, incluindo Haiti, Bolívia, Honduras, Equador e Guatemala). Em métricas relacionadas a dietas inadequadas, como sobrepeso e obesidade, as Américas tiveram desempenho menos favorável.

Por fim, as mulheres nas Américas têm uma probabilidade ligeiramente maior do que os homens de enfrentar insegurança alimentar.

Fatores de transformação nas américas, e além

A segurança alimentar nas Américas enfrenta diversos fatores significativos e interconectados de transformação.

Transformações ecológicas

Os riscos ecológicos estão entre as maiores ameaças à segurança alimentar. Os principais riscos incluem mudanças climáticas, desmatamento, perda de biodiversidade e erosão e degradação do solo. Talvez o mais preocupante para a produção agrícola seja a combinação de seca e calor — as chamadas condições “quentes e secas” — que ameaçam se tornar mais frequentes em todo o mundo e nas Américas. Um cenário desanimador para o futuro é a ocorrência de múltiplas falhas nas “breadbaskets” (quebras simultâneas de safra em regiões produtoras de grãos-chave). As Américas, que abrigam vários dos principais produtores mundiais de culturas alimentares básicas, enfrentam essa possibilidade. As mudanças climáticas também terão impacto negativo sobre a maioria das culturas especiais, incluindo café e bananas.

Os agricultores serão impactados de maneiras diferentes, dependendo de onde se localizam no hemisfério, do tamanho e dos recursos de suas propriedades (financeiros e de outra natureza), de serem agricultores de subsistência ou estarem integrados aos mercados nacionais, regionais e globais, e dos tipos de culturas que cultivam. Os pequenos produtores em contextos menos favorecidos estarão sob maior risco, devido ao tamanho reduzido de suas propriedades e à falta de acesso a seguros e a outros recursos.

Potencialmente, transformações ecológicas com impactos em larga escala podem gerar déficits significativos na oferta global de alimentos, provocando pânico nos mercados, elevação de preços, acúmulo de estoques e colapso do comércio. A insegurança alimentar aumentaria drasticamente

Turbulência geopolítica e geoeconômica

Um segundo conjunto de riscos decorre da crescente incerteza geopolítica e geoeconômica. Um sistema comercial aberto e baseado em regras tem sido essencial para o avanço da segurança alimentar, promovendo maior integração econômica — o que beneficia a segurança alimentar por meio de crescimento econômico mais elevado, maior geração de empregos, aumento de renda, redução da pobreza e dinamismo econômico.

Ainda assim, o sistema global de comércio de alimentos tem sido impactado por diversos eventos geopolíticos significativos, incluindo guerras (como a guerra na Ucrânia), políticas comerciais e sanções que geram choques inesperados sobre insumos agrícolas, cadeias de suprimentos e exportações agroalimentares — resultando em aumento dos custos de produção e dos preços dos alimentos.

O sistema de comércio agroalimentar pode estar retornando a uma ordem protecionista anterior aos anos 1990, quando os países costumavam aplicar tarifas elevadas apenas sobre algumas culturas politicamente sensíveis (como açúcar ou algodão). O protecionismo atual, no entanto, é significativamente mais amplo, afetando um número maior de culturas e sendo implementado por uma lista cada vez mais extensa de países.

Os padrões de comércio estão se transformando em função da geopolítica. O comportamento da China é um exemplo significativo. Há uma década, a China importava mais produtos agrícolas dos Estados Unidos do que do Brasil; atualmente, importa quase o dobro do Brasil em relação aos EUA. Esse processo de desacoplamento da China em relação ao mercado agrícola norte-americano contribuiu para que o Brasil se tornasse o maior exportador mundial de soja. Além disso, após a imposição de tarifas pelos Estados Unidos, em agosto de 2025, sobre determinados produtos agrícolas brasileiros, é provável que o Brasil intensifique seu interesse em desenvolver mercados de exportação alternativos para produtos agrícolas, incluindo a China.

Incerteza institucional

As instituições multilaterais têm contribuído para proporcionar uma prosperidade sem precedentes — embora desigual — ao impulsionar o comércio global e hemisférico. No entanto, essas instituições estão agora sob enorme pressão. As maiores potências comerciais do mundo, assim como muitos países menores, têm demonstrado disposição para romper normas estabelecidas e leis internacionais de comércio, gerando incertezas em torno das regras que regem o sistema comercial.

As Américas se beneficiam mais do que outras regiões de um sistema global de comércio aberto de produtos agrícolas. A agricultura sempre foi um tema controverso nas negociações comerciais, desde a origem, na década de 1940, do Acordo Geral sobre Tarifas e Comércio (GATT/General Agreement on Tariffs and Trade). Apesar disso, instituições multilaterais funcionais são valiosas, pois criam um mercado global estável e baseado em regras, que, por sua vez, possibilita o comércio de alimentos em larga escala.

Inflação e volatilidade dos preços

A insegurança alimentar se agrava com a rápida inflação de preços e a elevada volatilidade dos preços. Desde os anos 2000, choques geraram novos patamares mais altos de preços. Os alimentos se tornaram menos acessíveis, e as famílias enfrentam maior dificuldade para consumir uma dieta saudável.

A inflação e a volatilidade dos preços dos alimentos são tão problemáticas nas Américas quanto em outras regiões do mundo, tornando-se uma questão social e política fundamental. Na América Latina, o aumento dos preços dos alimentos tem sido um dos principais impulsionadores da inflação em toda a região, enquanto na América do Norte, o aumento dos preços dos alimentos é uma das principais causas da crise do custo de vida enfrentada por muitas famílias.

Investimento: Inovação, tecnologia e infraestrutura

A inovação dentro e fora das propriedades rurais, aliada ao aumento da produtividade, decorrentes de avanços processuais e tecnológicos, além de melhorias na infraestrutura, têm sido fundamentais para aumentar a oferta de alimentos e atender à crescente demanda. Desde a década de 1990, os ganhos globais de eficiência superaram amplamente os demais fatores, incluindo o uso de mais insumos por hectare de terra, a extensão da irrigação em áreas cultivadas e a expansão de novas terras agrícolas (por exemplo, a expansão da agricultura em áreas anteriormente florestadas).

Infelizmente, o crescimento global da Produtividade Total dos Fatores (PTF — métrica de eficiência que relaciona os insumos agrícolas aos resultados obtidos) está desacelerando. Após décadas de crescimento contínuo, a PTF passou a registrar queda, especialmente nas Américas.

Os investimentos em infraestrutura em grande parte das Américas também permanecem subdesenvolvidos, sendo necessários trilhões de dólares para impulsionar a infraestrutura do hemisfério. No caso do Canadá, por exemplo, o déficit de infraestrutura — estimado em cerca de US$ 200 bilhões — é particularmente relevante para as exportações agrícolas do país, que têm importância global. Essas exportações incluem produtos alimentares como grãos e insumos agrícolas essenciais, como fertilizantes produzidos no vasto interior canadense. Para viabilizar o transporte desses produtos volumosos aos mercados externos de forma mais barata e eficiente, será necessário modernizar a infraestrutura logística do país.

Mudanças demográficas

A participação do emprego agrícola no PIB global vem diminuindo há décadas. O hemisfério ocidental tem seguido essa tendência, evidenciando que a agricultura está se tornando mais intensiva em capital e mais produtiva. Cada vez mais alimentos são produzidos por pessoa contratada no setor.

No entanto, há um efeito geracional negativo associado a essa tendência demográfica. Os agricultores em todo o mundo estão envelhecendo, em parte devido à redução das oportunidades de emprego no campo. Essa dinâmica é mais acentuada nas regiões mais ricas, que apresentam a menor participação relativa de empregos no setor agrícola, como a União Europeia e os Estados Unidos.

Construindo a segurança alimentar do futuro

O mundo precisa de uma nova e ousada forma de pensar sobre a segurança alimentar — uma abordagem que incorpore uma compreensão abrangente de como forças divergentes estão criando um cenário agroalimentar dinâmico e instável, que moldará o futuro de maneiras imprevisíveis.

Ecologia

Um dos principais desafios será garantir que a produção de alimentos continue sendo lucrativa e resiliente diante das mudanças ecológicas disruptivas. É possível encontrar sinergias entre serviços ecossistêmicos saudáveis, uma produção agrícola robusta e lucratividade, por meio da aplicação adequada de imaginação, criatividade, formulação de políticas públicas, investimentos e ações práticas, baseadas na contribuição e no conhecimento de agricultores e comunidades rurais.

A agricultura é um dos principais vetores das mudanças ecológicas, incluindo as relacionadas aos padrões de uso da terra e emissões de carbono. No entanto, ao mesmo tempo, a agricultura também possui um enorme potencial — sob as condições domésticas e internacionais adequadas — para oferecer soluções sólidas e duradouras.

Abordagens sinérgicas incluem uma variedade de técnicas e práticas agrícolas alternativas, bem como tecnologias emergentes, como agricultura regenerativa, cultivo sem revolvimento do solo (no-till farming), sistemas agroflorestais, agricultura inteligente para o clima (climate-smart agriculture) e o Manejo 4R de Nutrientes (4R Nutrient Stewardship) — um conjunto de práticas de gestão de nutrientes que prioriza o uso das fontes corretas, nas doses certas, nos momentos adequados e nos locais apropriados.

Embora muitas dessas abordagens tenham sido consideradas, no passado, experimentais, inovadoras e não comprovadas, hoje essa percepção mudou significativamente. A agricultura regenerativa, por exemplo, conta hoje com um número crescente de adeptos — incluindo produtores rurais — que acreditam em seu potencial para gerar benefícios ambientais concretos sem comprometer a produtividade das lavouras. Há uma quantidade expressiva de terras, incluindo solos, que poderiam ser revitalizadas por meio dessas práticas. Nas Américas, a degradação representa um problema grave, mas também uma grande oportunidade. O Brasil, por si só, possui extensas áreas de pastagens degradadas que poderiam ser reincorporadas à produção agrícola por meio de métodos regenerativos, contribuindo para reduzir a pressão por conversão de florestas nas regiões do Cerrado e da Amazônia. 

Comércio, geopolítica e instituições

O aumento do protecionismo e da competição geopolítica enfraquece a cooperação entre os Estados, desgastando a confiança internacional. O comércio global de alimentos depende da força das instituições multilaterais e dos acordos internacionais — instituições que, muitas vezes, não recebem o devido reconhecimento por sua contribuição à segurança alimentar mundial. Atualmente, essas instituições vêm sendo enfraquecidas, e o risco é o colapso de todo o sistema multilateral de comércio.

Mais diálogo entre os Estados é um antídoto para esse cenário. Um dos objetivos deve ser a construção de instituições alternativas — por exemplo, começando com os maiores produtores agrícolas do hemisfério, um grupo “A5” formado por Estados Unidos, Brasil, México, Canadá e Argentina — para reunir ministros da agricultura em torno de um diálogo sobre comércio. Os resultados potenciais incluem convenções regionais de segurança alimentar, compromissos de investimento em pesquisa agrícola e acordos para evitar as políticas que mais distorcem o comércio.

Uma ideia relacionada é a criação de um conselho hemisférico permanente de segurança alimentar, destinado a reunir governos para discutir respostas a choques, identificar caminhos para uma cooperação científica e tecnológica mais ampla e reforçar a norma que reconhece a responsabilidade do hemisfério perante o restante do mundo como um dos principais fornecedores de alimentos. Instituições hemisféricas, como a Organização dos Estados Americanos (OEA) e o Banco Interamericano de Desenvolvimento (BID), podem ser mobilizadas para convocar esse conselho.

Investimento em inovação, tecnologia e infraestrutura

A melhoria contínua das atividades dentro e fora das propriedades rurais — incluindo o uso inovador de novas tecnologias e processos, além do investimento de capital nos elementos que os viabilizam (como a infraestrutura) — é fundamental para garantir a segurança alimentar no hemisfério e no mundo.

A agricultura regenerativa e outros sistemas agroalimentares voltados à sustentabilidade podem ser aprimorados por meio da aplicação de tecnologias avançadas. Exemplos incluem:

• Fontes alternativas de energia podem aprimorar os sistemas dentro e fora das propriedades rurais, ao mesmo tempo em que reduzem as marcas das emissões de carbono.
• Ferramentas de sensoriamento remoto geoespacial aplicadas à agricultura de precisão podem identificar e contribuir para a preservação dos recursos ecológicos.
• Tecnologias robóticas e digitais móveis (incluindo a integração mais ampla de dispositivos portáteis às práticas agrícolas) podem aumentar a eficiência da produção agrícola, ao mesmo tempo em que reduzem o impacto ambiental.
• As análises orientadas por inteligência artificial podem integrar e utilizar fluxos de dados provenientes de diversas aplicações.
• As biotecnologias podem melhorar a produtividade no campo e a eficiência no uso de nutrientes, ao mesmo tempo em que protegem recursos ecológicos, como o solo e a água.

Os agricultores são tanto utilizadores quanto criadores de tecnologias e processos inovadores, e precisam ter condições de adotar e aplicar essas inovações. A adoção no campo não é o mesmo que a invenção em laboratório. Pesquisas globais indicam que os produtores rurais tendem a hesitar em adotar novas tecnologias e práticas quando os custos iniciais de investimento são elevados e os retornos financeiros são incertos.

Programas de extensão agrícola financiados com recursos públicos — que conectam pesquisadores a produtores, promovendo aprendizado mútuo e transferência de tecnologia — são fundamentais. O fortalecimento dos serviços de extensão deve estar no centro das estratégias para ampliar a adoção de inovações pelos agricultores.

Aprimorar a infraestrutura para fortalecer as cadeias de suprimento do sistema agroalimentar também é fundamental. Há uma necessidade premente de desenvolver estratégias que enquadrem esse desafio em termos de resiliência social e até mesmo transfronteiriça (internacional).

Agricultores para o futuro

Para evitar o declínio demográfico da agricultura, é fundamental tornar a atividade agrícola financeiramente, social e culturalmente atrativa para as novas gerações. Para os jovens — especialmente aqueles sem vínculo familiar com o setor —, a agricultura pode ser percebida como uma atividade ultrapassada, pouco lucrativa, difícil, distante da realidade ou “sem apelo” — ou todas essas coisas ao mesmo tempo.

Não existe um único conjunto de soluções reconhecidas para reverter as tendências demográficas no setor agrícola. No entanto, evidências de diversas partes do mundo indicam que uma combinação de intervenções pode ser eficaz: facilitar o acesso à atividade agrícola, por meio da redução de barreiras de entrada (como o acesso a financiamento acessível e a terras cultiváveis); reduzir lacunas de conhecimento e habilidades por meio de programas de capacitação prática nas propriedades rurais, bolsas de estudo e estágios supervisionados; incentivar a entrada de perfis não tradicionais na agricultura — como jovens mulheres — e destacar o papel cada vez mais relevante desempenhado pelas tecnologias digitais, pela robótica, pelo Big Data, pelo sensoriamento remoto, pela inteligência artificial e por outras aplicações técnicas que despertam o interesse de jovens ambiciosos e familiarizados com tecnologia.

Breve conclusão

Uma questão crucial é saber se os principais atores do hemisfério — governos, produtores rurais, setor privado, pesquisadores, fundações, organizações da sociedade civil e o público em geral — estarão dispostos a investir em processos e abordagens transformadoras capazes de reduzir riscos e, ao mesmo tempo, aumentar a prosperidade, a sustentabilidade e a resiliência.

Promover a difusão de inovações essenciais para a segurança alimentar será um elemento crucial dessa equação. É indispensável que os países e as instituições multilaterais do hemisfério encontrem fontes de financiamento e reúnam o conhecimento tecnológico necessário para apoiar programas adaptados às necessidades específicas da região.

Outras partes interessadas, não governamentais — incluindo investidores, o setor privado, pesquisadores, cientistas, analistas, além de agricultores e comunidades agrícolas — também deve agir em conjunto para conceber, criar e fortalecer as ferramentas que serão necessárias à garantia de um futuro com segurança alimentar.

Este relatório foi produzido pelo Atlantic Council com o apoio da The Mosaic Company como parte do projeto Segurança alimentar: Alinhamento estratégico nas Américas.

Peter Engelke é pesquisador sênior do Scowcroft Center for Strategy and Security do Atlantic Council, bem como pesquisador sênior do seu Global Energy Center. Seu portfólio diversificado abrange prospecção estratégica; geopolítica, diplomacia e relações internacionais; mudanças climáticas e sistemas terrestres; segurança alimentar, hídrica e energética; tecnologias emergentes e disruptivas e ecossistemas de inovação baseados em tecnologia; e demografia e urbanização, entre outros temas, sendo o criador da série de publicações de formato longo mais lida do Atlantic Council, Global Foresight. As afiliações anteriores de Engelke incluem o Geneva Centre for Security Policy, a Robert Bosch Foundation, o World Economic Forum e o Stimson Center.

Matias Margulis é professor associado da School of Public Policy and Global Affairs e membro do corpo docente de Sistemas Agrícolas e Alimentares da University of British Columbia. Seus interesses de pesquisa e ensino abrangem governança global, desenvolvimento, direitos humanos, direito internacional e política alimentar. Além de sua pesquisa acadêmica, Margulis possui vasta experiência profissional na área de formulação de políticas internacionais e foi representante canadense na Organização Mundial do Comércio, na Organização para a Cooperação e Desenvolvimento Econômico e na Organização das Nações Unidas para a Alimentação e a Agricultura.

A GeoStrategy Initiative, sediada no Scowcroft Center for Strategy and Security, utiliza o desenvolvimento de estratégias e a prospecção de longo prazo para servir como principal referência e articuladora de análises e soluções relevantes para políticas públicas, visando a compreensão de um mundo complexo e imprevisível. Por meio de seu trabalho, a iniciativa busca revitalizar, adaptar e defender um sistema internacional baseado em regras, a fim de promover a paz, a prosperidade e a liberdade nas próximas décadas.

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US Energy Secretary Chris Wright summed it up well when he said that energy should make societies richer by driving economic growth, rather than making them poorer, through high prices.

In spite of the tensions in today’s energy debates, global leaders need to re-establish a common ground around energy and climate and recognize that the friction does not in fact represent a choice between decarbonization or affordability—we can still strive for both. This becomes all the more important in light of the rapidly growing demand for energy—and especially of electricity—to meet society’s needs, before even considering the rising power demand of artificial intelligence (AI) and data centers.

Reframing the energy and emission conversation

Finding this common ground again means moving on from the term “net zero.” The court of public opinion has made up its mind: net zero is now more associated with higher energy costs than delivering a desirable goal. 

And the target is too absolute. The final 10 percent of the journey to net zero could be as expensive as the first 90 percent, which cannot be a sensible use of limited resources. Achieving 90 percent would still be an extraordinary achievement, and any target needs to be credible to be accepted, with a clear pathway for delivering it.

The old talk of an energy trilemma—balancing security, affordability and decarbonization—is evolving. The conversation now also needs to include sovereignty—those resources within a country’s jurisdiction—and abundance—that which is most abundant should be more affordable. Just as this has led the United States to a policy focused on its vast gas resources, in the United Kingdom and Europe more generally, it means a continuing role for the most affordable renewables.

A new approach to energy and climate needs to start with a set of clear principles, which determines priorities, values and what leaders are looking to achieve.

These can be summarized as follows:

• Global leaders should prioritize secure and sovereign sources of energy to reduce dependence on others.
• Lawmakers should craft energy policy to help drive economic growth, reduce electricity bills, and make countries more competitive. 
• Industry leaders should champion new technologies that address these challenges.
• Public and private actors should ensure that the transition happens in a way that fairly delivers more choice to consumers and empowers them to be part of the solution.

Celebrating and building on achievements

The conversation should also champion what has already been achieved. The UK, for example, in 2022 became the first major economy to reduce its carbon emissions by half (compared to 1990 levels) while still growing the economy by 80 percent; the first major economy to end coal-powered generation; and the country that led the creation of a new global energy industry—offshore wind—in little more than a decade.

These achievements resonate with the public. Polling shows over 60 percent of the public support such policies—far and away the most popular policies of the last Conservative Government. However, it is also clear that people want to secure these achievements in a way that is much more affordable.

Accomplishing this goal has to start from facts—and the facts are promising. Many countries, including some of largest like Brazil and Kenya, get well over 80 to 90 percent of their power from clean resources. Solar generation doubled in the past three years, with China installing more solar power in one month this year than the United States did in the whole of the 2024. And most of the European countries that have lower energy prices than the UK use more renewables. These facts contradict the argument that there is no need for countries like the UK to reduce its emissions if other countries aren’t doing anything—because many are.  

Rather than discarding what has been successful, leaders need to look at how energy systems should evolve in a new era and become more affordable. 

Taking time to enact common sense policies

It is clear now that gas will have a long-term role to play in the energy transition in the UK and elsewhere. It thus does not make sense, as US President Donald Trump has reminded us, to prematurely close the North Sea with all the job losses that would entail. If gas is to be part of the mix, then it makes sense to maximize the recoveries from the UK’s own offshore fields.

A clean, affordable future also means more nuclear, despite setbacks. For a nation that led the world in civil nuclear power, the UK for one seems to have lost its way. Hinkley Point C, initially promised for 2018, will be fifteen years late and significantly over budget. The United States has had similar experiences. That does not mean nuclear isn’t worth the investment, but that leaders need to learn how to build it better and faster. It means more standardization of design and a regulatory approach that learns more actively from other countries. 

COP30: A chance to reset global thinking on energy and climate

These considerations point back to what can be done at COP30. The news from the conference is likely to be disappointing, but it gives those leaders attending the chance to set out a new way of thinking, which shows that they don’t need to choose between energy security, decarbonization, and keeping bills low. Investors need clarity and long-term thinking. We need to see more of that in evidence over the coming days.

Charles Hendry is a distinguished fellow at the Global Energy Center.

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Charles Hendry

Distinguished Fellow

Global Energy Center

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EnergySource Oct 15, 2024

Attention to market realities are key to a successful COP29

By Robert Cekuta

Increasing funds for addressing climate and energy needs in developing countries is a COP29 priority. But it is important to remember that market conditions in recipient countries are critical in determining the success of such efforts.

Energy & Environment Energy Markets & Governance

EnergySource Mar 31, 2025

The future of global energy policy is abundance 

By Charles Hendry

The United States and Europe are diverging on energy policy, with the United States prioritizing low costs and economic growth while the United Kingdom and the European Union focus on decarbonization. But reconciling these approaches is possible through the lens of energy abundance—each country must leverage its most plentiful resources to drive down costs, enhance security, and support sustainability without burdening consumers.

Energy & Environment Energy Markets & Governance

EnergySource Jan 15, 2025

Tripling global nuclear energy capacity is in reach—if the world seizes the moment

By Amy Drake

At COP28, nations and corporations committed to tripling global nuclear energy capacity by 2050, underscoring its essential role in achieving net-zero emissions. Looking ahead to COP30, global leaders must strengthen multilateral collaboration, engage the financial sector, and provide support for new partnerships with the nuclear industry to meet this goal.

Energy & Environment Nuclear Energy

The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

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The post The energy conversation has changed—so must COP30   appeared first on Atlantic Council.

Those defining lines of tension were this month underscored at a pivotal moment for the region. Intense rainfall over the Ethiopian Highlands this month triggered severe flooding in several northern Egyptian governorates, including Beheira, Kafr el-Sheikh, and Menoufia.

The floods triggered renewed hostility over Ethiopia’s Grand Ethiopian Renaissance Dam (GERD). Ethiopia presents the GERD as a developmental milestone aimed at poverty reduction and energy self-sufficiency. For Egypt and Sudan, however, the project’s unilateral management represents an existential risk.

Egypt’s Ministry of Irrigation blamed Ethiopia for “reckless dam management,” claiming that abrupt water discharges from the GERD exacerbated the recent surge in floodwaters. Addis Ababa—having formally inaugurated the dam only weeks earlier, on September 9—countered that operations followed technical protocols and mitigated what would otherwise have been worse flooding in Sudan. This episode underscores how data opacity fuels political mistrust.

The latest escalation coincides with a renewed diplomatic shift. In a recent interview with Al Arabiya Arabic, Massad Boulos—senior adviser to US President Donald Trump on African, Arab, and Middle Eastern Affairs—stated that Washington now supports a “technical, not political” approach to the GERD dispute. According to Boulos, “the GERD issue must be resolved through technical means, not political pressure,” a position that signals a recalibration of US engagement and places the emphasis on data transparency, operational coordination, and joint risk mitigation rather than on coercive diplomacy.

Cairo warned more than once that rapid filling or uncoordinated water releases could sharply reduce downstream flows, disrupt irrigation, and even increase flood risk during heavy rains—challenges that pose real risks for a deeply water-stressed country.

The GERD and Egypt’s water stress

Costing roughly five billion dollars, located fourteen kilometers from the Sudanese border, and designed to hold 74 billion cubic meters of water, the GERD represents Africa’s largest hydroelectric plant. Following the fourth and final filling in September 2023, Addis Ababa declared the dam fully operational, doubling national power capacity and consolidating its ambition to become a regional energy hub.

The hydrological risks of the project for Egypt’s Delta are both immediate and structural. In the short term, large or poorly coordinated releases from upstream reservoirs can overwhelm outdated drainage systems, provoking floods and disrupting irrigation cycles. In the medium to long term, a new operational regime at GERD will alter seasonal flow patterns, affecting groundwater recharge and salinity levels, and challenging agriculture and infrastructure alike. Without transparent data-sharing and coordinated management, Cairo will struggle to anticipate these shifts.

With over 118 million people and relying on the Nile River for nearly 97 percent of its freshwater, the Nile represents not merely a resource but Egypt’s national bloodstream. Average water availability per person has declined from almost 1,900 cubic meters in 1959 to fewer than six hundred today—well below the United Nations’ water-poverty threshold—and is expected to fall below five hundred by 2050, signaling an absolute water scarcity level. Climate change, sea-level rise, and irrigation inefficiencies compound these pressures, placing food production and social stability at risk.

Cairo, therefore, faces a dual challenge: modernizing its irrigation and drainage infrastructure while preventing upstream states from restricting flows. Meanwhile, Ethiopia—despite contributing 86 percent of the Nile’s waters—remains among the world’s lowest in water-use capacity, struggling with recurrent droughts and power shortages.

Historical legacies and legal asymmetries

The current diplomatic crisis cannot be understood without recalling colonial-era water agreements between Egypt and Sudan. The 1929 British-brokered Nile Waters Agreement granted Egypt 48 billion cubic meters per year and Sudan 4 billion, along with Cairo’s veto over upstream projects—an agreement negotiated solely between Egypt, Sudan, and their former colonial power, the United Kingdom. Ethiopia was never a party to this treaty and has consistently rejected its legitimacy, arguing that no upstream state can be bound by colonial-era arrangements in which it had neither representation nor consent. The 1959 Egypt–Sudan accord reinforced this asymmetry, allocating about 84 percent of the river’s flow (55.5 billion for Egypt and 18.5 for Sudan) and creating a joint commission to oversee water management between these two countries—again without Ethiopian participation. Addis Ababa regards both treaties as legally irrelevant and historically obsolete.

For decades, these treaties anchored Egypt’s claim to “historic rights,” while upstream countries rejected them as colonial relics. The result is a structural mismatch between legal legitimacy and hydrological reality: Upstream states see their development prospects as constrained, while Egypt perceives any alteration in river flow as an existential threat.

But structural tensions escalated with Ethiopia in 2011 when Addis Ababa launched construction of the GERD. Years of negotiations mediated by the African Union, the United States, and the World Bank have yet to yield a binding trilateral agreement, leaving both hydrological and political uncertainty unresolved and tensions high among these states. In this context, water management has become inseparable from national security, energy policy, and regional diplomacy.

Ethiopia insists that dam operations follow seasonal hydrology and turbine requirements, while Egypt argues that opaque management violates the 2015 Declaration of Principles on equitable use of Nile waters. From a geopolitical and security perspective, the return of tensions among these states confirms the reemergence of hardened positions and the risk of a prolonged hydropolitical confrontation. Addis Ababa continues to argue that the GERD symbolizes a new order based on equitable development and regional interdependence, rather than dominance. Yet, this new order still lacks a legal and technical framework acceptable to all. No binding agreement exists on how the dam will be filled and operated during droughts or flood years, leaving each side vulnerable to the other’s decisions.

Sociopolitical tensions further magnify these physical risks. Recurrent floods and perceived external threats to national water security could exacerbate domestic grievances, fuel nationalist rhetoric, and push policymakers toward confrontational postures—including legal or, in extreme cases, military options. Indeed, Egypt has repeatedly framed control over Nile waters as an existential issue and has at times indicated that it would consider armed intervention if upstream dam operations were to threaten downstream flows.

Recommendations

Today, three overlapping deficits continue to undermine Nile Basin governance: a technical deficit (lack of real-time data on releases and inflows), an operational deficit (absence of agreed rules for drought or flood management), and a political deficit (mutual distrust and competing national narratives). The recent floods starkly reveal the cost of these gaps. Egypt’s repeated assertion that the Nile constitutes a “red line” underscores how water security remains inseparable from national sovereignty, making compromise politically difficult.

Cairo should consider a strategic path forward from this dilemma, based on a dual approach.

On the one hand, it must intensify external engagement—pursuing legal and diplomatic efforts through mechanisms such as the International Court of Justice, which reframes the dispute in legal rather than existential terms, while sustaining negotiations under the African Union (regional legitimacy) and the United States (one of the few external actors able to exert leverage on all three capitals).

Representatives of Egypt, Sudan, and Ethiopia will establish an independent trilateral technical commission under African Union oversight to analyze hydrological data and develop predictive flood models. At the same time, an integrated early-warning system that interconnects the existing hydrological, meteorological, and dam-operation monitoring platforms in Ethiopia, Sudan, and Egypt—allowing real-time data sharing and coordinated response to droughts, floods, and irregular water releases—would help avert humanitarian crises and improve coordination during extreme weather events. Equally important is the negotiation of legally binding operational guarantees—however minimal—that can anchor political trust in measurable hydrological parameters. International partners, including the United States, have promoted technical confidence-building measures designed to calm tensions, such as installing automated flow gauges and satellite-based monitoring to increase transparency. Yet such measures will build trust only if embedded within a political framework for data sharing and collaborative drought management.

On the other hand, Cairo should prioritize domestic adaptation by investing in water efficiency, desalination, and drainage upgrades to enhance resilience regardless of upstream actions. Egypt must accelerate its adaptation efforts by upgrading drainage infrastructure, modernizing pumping stations, and expanding agricultural insurance schemes to protect vulnerable communities. Ultimately, international diplomacy should be reframed toward the goal of shared resilience, encouraging Ethiopia to view coordination as an expression of responsible sovereignty, rather than an externally imposed constraint.

The recent floods serve as a warning: Technical cooperation cannot remain hostage to political rivalry. Whether the GERD becomes a driver of regional integration or a lasting fault line will depend on how quickly riparian states shift from mutual accusations to shared management. The alternative—a future of recurrent floods, escalating mistrust, and securitized water politics—would threaten not only livelihoods in the Nile Delta but also the broader stability of the Horn of Africa and the Eastern Mediterranean.

Alessia Melcangi is a nonresident senior fellow at the Atlantic Council’s Rafik Hariri Center and Middle East Programs. She is also an associate professor of contemporary history of North Africa and the Middle East at the Sapienza University of Rome, an associate research fellow at the Italian Institute for International Political Studies in Milan, and a member of the scientific committee of the Fondazione Med-Or Leonardo SpA in Rome.

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On November 8, Mercedes Sappuppo, nonresident fellow at the Atlantic Council’s Eurasia Center, was quoted in Kyiv Post on the one-year exemption for Hungarian imports of Russian gas.

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Mercedes Sapuppo

Nonresident Fellow

Eurasia Center

Belarus Civil Society

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Then came Hurricane Melissa, the strongest Atlantic hurricane on record ever to make landfall in Jamaica. Starting late last month and into this week, it tore through the island’s central and western parishes, destroying towns, roads, hospitals, and critical infrastructure.

After days of watching the slow, relentless approach of Hurricane Melissa, one of the authors, Patricia, sheltered in her home in Kingston. She could hear the wind howling at over 100 miles per hour (mph) and rain lashing sideways against the windows—yet even that was nothing compared to the 185 mph winds and torrential rain battering the west of the country, where her friends and family live. While Patricia dealt with small leaks, her friends and family were left with nothing.

In the days after, her family visited some of the hardest-hit communities to distribute care packages, and what they saw was heartbreaking. Entire neighborhoods flattened, the landscape looking as if an atomic blast had torn through it.

At least 40 percent of the buildings and roads on the western part of the island, including Montego Bay, suffered damage. Many small communities, such as the port town Black River, were almost completely wiped out. Such damage is remarkable mostly for its sudden severity, not for its novelty. The Caribbean Community (CARICOM) countries lose an estimated 2 percent of their infrastructure capital stock annually to climate-related damage. Infrastructure upgrades must therefore be a priority, given the region’s exposure to natural disasters and climate change.

This is where US leadership can step in, not as charity, but as shared investment in resilience and regional stability. Jamaica has kept its promises: it has delivered disciplined fiscal reform, climate-smart policies, and innovation in risk financing. It has done what the international system asks of developing nations. Now, it needs that system, and its closest ally, the United States, to respond.

Reality over foresight

The Caribbean remains highly vulnerable to hurricanes and other climate-related events, which can disrupt or extend projects critical to rebuilding, driving up costs. Natural disasters often destroy essential infrastructure, forcing projects to pause or cancel. The question now is how long it will take Jamaica to recover from this cumulative destruction. The immediate response is urgent, but so too is planning for the months ahead. With projections indicating that dangerous climate events will become more frequent and severe, insurability declines and the cost of future investment rises.

The damage caused by Hurricane Melissa already amounts to almost eight billion US dollars, which is equivalent to nearly half of Jamaica’s annual GDP. That figure dwarfs the country’s much-heralded $150 million parametric catastrophe bond that it arranged with the World Bank. This bond, purchased as a form of insurance from capital markets, is designed to trigger after major disasters like this one. Given the strength of Hurricane Melissa and the scale of Jamaica’s losses, it is expected that the 2024 catastrophe bond to pay out its full $150 million value. Even so, Jamaica will need much more to rebuild.

Two sustainable paths forward

The destruction caused by Hurricane Melissa is so extensive that once the search-and-rescue efforts end and basic services such as water and electricity are restored, the damage to homes and infrastructure will exceed the capacity of any single government. Jamaica’s recovery will likely therefore depend on two important factors: innovative financing models that reduce investment risk and strong public-private partnerships that accelerate sustainable recovery.

The Caribbean’s unique and small markets call for creative financing, but there are tools readily available to help US companies invest in infrastructure and the recovery process. Two options are especially relevant.

First, US companies partnering with multilateral development banks and insurance companies can help de-risk investments. To reach the average of advanced economies by 2030, Jamaica would need significant investment, including $5.8 billion for new infrastructure and asset replacement in road infrastructure. It would also need more than $1.4 billion toward telecommunications infrastructure for fixed broadband and 4G networks to reach equivalent levels in developed economies. This significant need offers opportunities large enough to attract major investment. Limited human and institutional capacity make collaboration with third-party institutions even more important. Projects such as the Inter-American Development Bank’s One Caribbean program can help prepare projects, strengthen public-private partnerships, and manage political risk. Equally important is building trust with local partners. Many Caribbean firms are family-owned and community-rooted, which makes relationship-building essential for lasting investment. Joining local business organizations such as American Chamber of Commerce chapters and participating in trade missions can help US investors understand regulations, identify talent, and ensure that projects succeed over time.

Second, public-private partnerships can help the Jamaican government and their partners meet urgent recovery needs while driving long-term, sustainable efforts. Launching public-private partnerships is one of the most effective ways to mobilize capital from local, regional, and private investors. Under these partnerships, governments provide needed guarantees and subsidies to reduce risk, while the private sector generates the capital needed to determine a project’s commercial viability.

It is important that this model is used, as opposed to wholesale private ownership of foreign operators, to avoid eroding projects’ national economic value. Therefore, local equity participation should be prioritized in public-private partnership structures to maximize national benefits and ensure long-term sustainability. The private sector can work with governments and local civil society to strengthen resilience through environmental and social impact assessments. It can also support by improving infrastructure standards, including for underground piping and the usage of hurricane-proof glass, as well as updating building codes where necessary. Insurance can also help keep infrastructure projects afloat during delays and stoppages resulting from natural disasters. At the same time, new investments will need to focus on renewable energy, resilient infrastructure, digital connectivity, and community housing, all sectors where US expertise and capital can make an immediate impact.

Hurricane Melissa tested Jamaica’s strength and found it unbreakable but not inexhaustible. The island has proven that fiscal responsibility is possible. Now it’s time for the United States to prove that climate solidarity is, too.

Patricia R. Francis, who currently resides in Jamaica, is a nonresident senior fellow for the Caribbean Initiative at the Adrienne Arsht Latin America Center, Atlantic Council.

Maite Gonzalez Latorre is a program assistant at the Adrienne Arsht Latin America Center, Atlantic Council.

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That is where the Partnership for Transatlantic Energy Cooperation (P-TEC), taking place in Athens today and tomorrow, has proven its unique value. P-TEC is an annual gathering of public and private energy leaders held by the US Department of Energy in partnership with Central and Eastern European countries and the Atlantic Council. It is more than just a forum for exchange—it is becoming a compass. On a continent governed by directives and evolving standards, P-TEC can serve as a guide through the labyrinth, helping partners understand not only the current rules but also how these rules might evolve. 

Europe’s current regulatory architecture often reflects good intentions undermined by practical contradictions. The European Investment Bank, for instance, no longer finances natural gas projects, even in places like Moldova or the Western Balkans—regions still heavily dependent on Russian supply. This leaves them in a geopolitical dead end, precisely when diversification should be a top priority.  

The European Union’s Methane Emissions Regulation (MER) illustrates how the EU’s well-intended climate ambition can sometimes create operational uncertainty. Approved in 2024, MER includes measures to reduce methane emissions from fossil fuel operations. Even large and experienced companies, however, struggle to interpret what compliance with the policy means in practice—from methane reporting and certification to national implementation pathways. This experience has shown that Europe’s energy transition is not only about technology, but also about regulatory literacy. Understanding the system has become as critical as investing in it. 

Similarly, the EU’s inconsistent treatment of nuclear power—recognized as a zero-carbon source, yet excluded by some from green financing frameworks—continues to divide member states and deter investors. 

Such contradictions do not make Europe greener; they make it more fragile. They illustrate the gap between ambition and execution—between a decarbonization agenda that aspires to lead the world and a market reality that too often punishes pragmatism. 

P-TEC’s mission, therefore, should be twofold.  

First, it should continue to act as a translator—helping US and regional partners understand the dense network of European rules, taxonomies, and climate instruments. Second, and more importantly, it should evolve into an architect of the next stage: a space where transatlantic cooperation contributes to a more coherent, realistic, and resilient European framework. 

This evolution requires a shared strategic vision focused on connectivity. The North–South energy corridor, linking the Baltic, Adriatic, and Black Seas, remains the backbone of regional resilience. Expanding interconnections and ensuring market interoperability are not just technical goals but instruments of sovereignty. Here, the United States can add real value through investment and project expertise that turn political declarations into results. 

At the same time, P-TEC can help demonstrate that much can already be achieved within the existing system. The recent success in enabling gas deliveries to Moldova under EU market principles showed that rules can be instruments of empowerment, not paralysis. The rules are changing, but not quickly or deeply enough: gas infrastructure and new nuclear builds remain trapped in a slow evolution.   

P-TEC provides an opportunity for Europe to accelerate needed change and create momentum with an eye toward the 2026 Three Seas Initiative Summit in Croatia. This shift requires the recognition that the real opportunity lies not in creating new institutions but in enhancing interoperability among those that already exist, including P-TEC and the Three Seas Initiative. These critical platforms share the same DNA: regional integration, diversification, and partnership with the United States. Together, they can become Europe’s version of a transatlantic “operating system”—a modular architecture that balances climate ambition with competitiveness and security. 

To achieve this, both sides of the Atlantic must invest in more than infrastructure. They must invest in regulatory literacy—the ability to navigate, interpret, and align policy frameworks that increasingly define who can build what and where. This is not a bureaucratic detail; it is a strategic necessity.  

Europe’s future energy landscape will be shaped not only by new technologies, but also by new understandings. P-TEC stands at the intersection of both. It can guide the evolution of Europe’s energy operating system—one that is pragmatic, open to innovation, and resilient enough to serve both sides of the Atlantic. In a continent of rules, that may produce the most valuable export of all: clarity. 

Michał Kurtyka is a distinguished fellow with the Atlantic Council Global Energy Center.

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Michał Kurtyka

Distinguished Fellow

Global Energy Center

Eastern Europe Energy & Environment

Public Event Thu, November 6, 2025 • 8:00 am ET

Sixth Partnership for Transatlantic Energy Cooperation (P-TEC)

The sixth P-TEC Ministerial convened industry leaders to discuss energy security and affordability, infrastructure projects, and investment opportunities from Athens, Greece.

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The African Great Lakes region is where nearly three‑quarters of global cobalt is mined and where flows of untraceable tantalum, tin, and tungsten continue to fuel sustainability risks that ripple through the supply chains of US manufacturers. If the peace agreement and the related US-DRC critical minerals deal fail to deliver on their promises, illicit networks will entrench themselves further, and China will remain the default processor and refiner of the minerals core to electric vehicles, semiconductors, and defense systems. The United States has one instrument that can respond with the scale, speed, and credibility this moment demands—the Millennium Challenge Corporation (MCC).

Designed to turn political will into economic transformation

Founded in 2004, the MCC set out with the aim of using large grants to spur economic growth and open markets in poor countries with good governance. The MCC has been active in twenty-four African countries, making investments of over ten billion dollars in energy, agriculture, and infrastructure, with a notable 3,800 kilometers of road completed. Within the US government’s economic statecraft toolbox, the MCC’s large-scale grant capital is a rare and strategic asset able to fund enabling infrastructure for US investment in markets of strategic import. The MCC can also work regionally, not just bilaterally, which is exactly what a cross-border security and trade deal requires. Reimagined as “MCC 2.0,” it can accelerate the development of minerals-corridor infrastructure in African markets, help investors navigate complex permitting regimes, and crowd in US private investment. Armed with flexible funds, MCC compacts finance feasibility studies, workforce upskilling, data gathering, energy, and infrastructure that create the “bankability” that US investors need to move into the DRC market, while also driving regional economic development.

Unlike the US Development Finance Corporation, which is driving the US-Ukraine minerals deal signed earlier this year, the MCC has expertise in driving policy shifts by conditioning disbursements on reforms, addressing market entry barriers. The corporation’s regional focus also suits the fact that mineral supply chains will cross borders, allowing the MCC to reinforce both the corridor‑based US-DRC minerals deal and the related DRC‑Rwanda agreement. Tying disbursements to measurable governance benchmarks gives the United States leverage beyond diplomacy and makes reform inseparable from financing. With the MCC, the Trump administration has an execution platform, not just a financing source, that can support the long-term success of the US-DRC critical minerals deal. 

Country eligibility requirements: An operational choice, not legislative constraint

Over the past twenty years, the MCC has developed complex and often onerous eligibility requirements that score countries—using data from Freedom House, Reporters without Borders, and the World Bank, among others—and determine which can receive grants. Neither the DRC nor Rwanda would qualify for a full compact under MCC’s current scoring regime.

However, these eligibility practices do not have to stand in the way of the MCC being mobilized to make the peace and economic agreements successful. The metrics that are currently used to determine country eligibility are an operational choice: Such use of these metrics is not mandated by the statute that created the MCC, and it precludes the agency from adapting to urgent, strategic opportunities like the one now unfolding in Central Africa. Congress instructed the MCC to partner with countries demonstrating a commitment to governance, economic freedom, and investment in people, and the compacts must align with US national interests.

The procedural hurdles and rigid scorecard formulas that have been layered on the law’s framework can be removed by new political leadership. To let operational rigidity block US minerals security and Congolese development ambition is to let process defeat purpose.

MCC needs political direction

There is no need to rewrite the MCC’s authorizing statute. Congress has already put in place its legal authority and full‑year appropriations. What is needed is political direction. Now that the corporation has a new board that met in August, the agency is beginning work on compacts that had been paused during the foreign assistance review. US Secretary of State Marco Rubio, as chair of the MCC board, should instruct the MCC to fast-track a Great Lakes regional compact to become the platform for the execution of the peace agreement and critical minerals deal. Such a compact, focusing on power, rail, border systems, mining-skills training, and rule‑of‑law, could create an investible minerals corridor integrated with the US-supported Lobito Trans‑Africa Corridor* connecting the DRC to ports in Angola.  

At the least, a $750 million Great Lakes regional compact could rapidly do the following:

• Support data collection and the use of artificial intelligence in minerals exploration;
• Fund the basics of bankability, including through feasibility and environmental studies;
• Co‑fund last‑mile rail and road spurs to connect the Kivu (in the DRC) and Copperbelt (in Zambia) nodes to Lobito rail and border crossings in coordination with the DFC’s Lobito financing;
• Finance substation upgrades and dedicated lines to processing zones in eastern DRC;   
• Digitize customs, implement pre‑clearance for certified minerals, and modernize warehousing;
• Support metallurgy/geoscience training and tech transfer programs; and
• Accelerate traceability and the formalization of the artisanal mining sector through digitization.

The metrics for success could be visible within a year in terms of private capital mobilized, US offtake agreements, and reduced cost of production. As specific mining projects mature, DFC and Export–Import Bank financing could be leveraged to match the growing need for equity and debt financing and insurance products.

The bottom line for the administration

The Trump administration should be applauded for its diplomatic efforts in Central Africa. Now it must back that diplomacy with a minerals corridor that demonstrates the shared economic dividends of peace. The MCC is operating, the board is engaged, and the legal and financial authorities exist to move now. A Great Lakes regional compact would leverage the MCC’s unique strengths—flexible grants, reform conditionality, and regional scope—to turn a fragile deal into durable minerals security and local development. Any delay would simply entrench China‑centric processing. It’s time to move fast, with the MCC in front.

Aubrey Hruby is a senior adviser and senior fellow at the Africa Center at the Atlantic Council and leads the center’s Critical Minerals Task Force.

*Rawbank, which supports the Atlantic Council Africa Center’s work on the Democratic Republic of Congo, has an equity stake in the Africa Finance Corporation, which leads the development of the Lobito Corridor.

The Africa Center works to promote dynamic geopolitical partnerships with African states and to redirect US and European policy priorities toward strengthening security and bolstering economic growth and prosperity on the continent.

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This kind of access gives China options for coercion, deterrence, and signaling, pursued through temporary and targeted effects in a “gray zone” crisis, as well as for conducting larger-scale attacks in the event of a major conflict. With this in mind, it is essential that the private sector—not just the US government and military—better prepare for attacks on the US electrical grid resulting from a geopolitical crisis or conflict in the Indo-Pacific. Importantly, this preparation should include both assessing the geopolitical risks and practicing what to do in a crisis.

During a recent industry forum in California, we heard from senior utility executives, grid operators, market strategists, and other experts about the range of complex challenges that the energy sector faces. Utilities must, for example, keep costs in check, meet regulatory standards, manage load growth, and advance the energy transition. At the same time, we contend that they need to treat Chinese cyber and supply-chain exposure as a standing threat—part of the context of overall strategic planning and risk mitigation—given the geopolitical risks the United States faces. During the forum, we discussed a pressing question on a panel with an unusual focus for industry: how to protect the mission to deliver reliable, safe, and affordable power as geopolitical risks rise, particularly the threat China could pose to US electrical infrastructure in the context of a regional crisis or conflict. Based on our discussions, we came to three overall takeaways.

First, utilities should identify practical geopolitical crisis indicators to monitor that, when the indicators occur, should move utility leaders from watchful to active measures. One such indicator is Chinese military exercises that move beyond the routine and are on a scale indicative of invasion preparation and/or involve live-fire training that interferes with access to Taiwan. Other indicators could be narratives from Chinese official sources that aim to justify imminent “defensive” military action, sudden pressure on key vendors, or export controls that signal possible supply disruptions. None of these signposts require classified sources, as they are visible in publicly available information and sector channels.

Second, utility leaders need to take action now. Addressing cyber and supply chain infiltration risks to power infrastructure is not only a job for cybersecurity professionals and government officials, nor can it wait until a geopolitical crisis or attack. Grid operators, supply-chain leaders, control system engineers, and procurement officials each have roles in ensuring resilience.

A range of actions can help mitigate risk. For example, contract language can clarify product security and transparency requirements. Steps can be taken to harden control system equipment and network pathways, particularly for China-sourced devices. And utilities should regularly and thoroughly test controls on vendors’ remote access to operational technology. More broadly, utilities should seek to de-risk: diversify suppliers before a crisis, keep targeted spares for the most critical equipment, and engineer by focusing on addressing high consequence events so the most important grid functions have robust fail-safe controls.

The third—and clearest—takeaway from our conversations in California was about the need for preparation rather than prediction or reaction. Regular, realistic, leadership-level tabletop exercises are the single best way to build discipline for the first forty-eight hours of a fast-moving event, especially since misinformation is likely to surge.

Tabletop exercises, long used by the US military and government as a low-cost way to improve preparedness for a high-intensity crisis or conflict, can serve the same purpose for the private sector. Comprehensive exercises expose single points of failure, validate who decides what, test communications, and force hard choices on where to deploy resources. They also create a common picture of risk and available response options that hold under pressure.

These issues have important implications for a broader audience, given the potential implications of energy disruptions for all aspects of the United States’ national security and economy. This basic three-point approach is simple and practical, even if implementing it while balancing other considerations will be complex for the industry:

• Watch for indicators that geopolitical risks are rising;
• Keep sharing and implementing best practices within the energy sector and with its partners to strengthen resilience; and
• Run regular leadership-level tabletop exercises that simulate the key decisions that leaders in a vital sector will face in a geopolitical crisis.

Introducing this three-step approach into response systems and building on it will go a long way toward making sure that essential services stay running, even if a crisis erupts halfway around the world.

Victor Atkins is a nonresident fellow with the Indo-Pacific Security Initiative at the Atlantic Council’s Scowcroft Center for Strategy and Security, where he specializes in cyber intelligence, national security, and industrial cybersecurity issues. A former Department of Energy official, he served as deputy director for operations of its Cyber Intelligence Directorate, and after details to the National Security Council staff and US intelligence community. He is the director for critical infrastructure security consulting at 1898 & Co., part of Burns & McDonnell.

Markus Garlauskas is the director of the Indo-Pacific Security Initiative at the Atlantic Council’s Scowcroft Center for Strategy and Security. He is a former senior US government official with two decades of service as an intelligence officer and strategist, including twelve years stationed overseas in the region.

The Best Practices Forum that helped inform this analysis, and the authors’ participation in it, was hosted and sponsored by Burns & McDonnell. The event adhered to the Chatham House Rule to foster transparency, candor, and forward-thinking approaches. The views expressed here are the authors’ own.

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The decision to impose a complete ban on Russian gas is the latest stage in ongoing efforts to exclude the Kremlin from European energy markets. Since Russia began its full-scale invasion of Ukraine in February 2022, Moscow has lost nearly 80 percent of its European market share after curtailing supplies to undermine Western support for Ukraine. Even so, Russia has earned no less than €215 billion during the wartime period through the reduced but ongoing sale of gas to some EU clients.

EU policymakers now say European consumers can no longer bankroll Russia’s war budget. The move is timely because Europe could soon benefit from an abundance of liquefied natural gas (LNG) as the United States and Qatar are set to double their production in the upcoming years. However, there are still many challenges and possible loopholes that could stymie the process.

As the world watches the Russian invasion of Ukraine unfold, UkraineAlert delivers the best Atlantic Council expert insight and analysis on Ukraine twice a week directly to your inbox.

A number of legislative complexities will need to be addressed during negotiations to determine the final version of the ban, with talks expected to continue into next year. The European Commission published the first draft of the phaseout roadmap for imports of Russian pipeline and liquefied natural gas during summer 2025. The document stipulated that short-term contracts of less than a year would be discontinued in 2026, while longer-term contracts would be terminated by January 2028.

The draft proposal raised some eyebrows, particularly due to the introduction of an article suggesting that the ban could be temporarily lifted in case of market emergencies. Contrary to expectations, the clause was not pushed through by Hungary and Slovakia, the EU’s most Kremlin-friendly Russian gas buyers. Instead, it was introduced under pressure from Spain, where several companies still hold long-term LNG import contracts with Russian producers.

The text has been reviewed by both the European Parliament and the Council of Ministers, with the former pushing for even more ambitious terms. For example, MEPs would like to see all imports terminated by 2027, a year earlier than initially stated by the European Commission. They also insist on closing loopholes by targeting circumvention risks.

The draft version adopted by the Council of Ministers aligns to a large degree with the version circulated by the European Commission and continues to include an emergency brake. The final text will have to be negotiated as part of talks involving the European Parliament, Council of Ministers, and European Commission.

To further complicate matters, the EU recently adopted its nineteenth Russian sanctions package, which includes a ban on Russian LNG imports from 2027, a year earlier than the deadline proposed by the EU’s own phaseout roadmap. This fast-tracked LNG ban was likely introduced in response to pressure from US President Donald Trump, who has singled out Europe for continuing to buy Russian fossil fuels.

While this sanctions-mandated ban may lead to an earlier block on Russian LNG exports, many observers fear that it is insufficiently robust and could be overturned, since EU sanctions are up for review every six months and require unanimous backing in order to be extended. This means the fast-tracked LNG ban could be vulnerable to opposition from any individual EU member.

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While the legislative path toward a full EU ban on Russian gas imports remains long and complex, enforcement may prove even more difficult. The ban enjoys strong political backing across Europe, but there are widespread concerns that the Kremlin will try to identify potential loopholes to evade the ban.

Russian gas is currently exported to Europe via the Black Sea and Turkey, using a dedicated pipeline transporting the gas to the Balkans and Hungary. The EU has included this entry point in legislation and notes that flows must stop from 2028, but Russian gas arriving in Turkey via an interconnection point nearby could be relabelled and sold under a different name. The risk of relabelling Russian gas also extends to the entire bloc because there are still a number of companies with large import portfolios which hold long-term LNG contracts with Russian producers.

Regulations related to the enforcement of the EU ban, including penalties for potential breaches, will need to be reviewed and tightened up. Existing EU proposals may not be sufficient, while it is still unclear how violations will be penalised. This must be addressed in order to deter non-compliance.

EU officials are well aware that Moscow will fight efforts to exclude it from lucrative European markets. Deprived of fossil fuel revenue and with its economy facing mounting difficulties, the Kremlin will seek any opportunity to continue selling oil and gas to Europe. Allowing loopholes to remain could create large grey areas in European energy markets that would fuel Russia’s war in Ukraine and allow the Kremlin to retain leverage over Europe.

Dr. Aura Sabadus is a senior energy journalist who writes about Eastern Europe, Turkey, and Ukraine for Independent Commodity Intelligence Services (ICIS), a London-based global energy and petrochemicals news and market data provider. Her views are her own.

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Click to jump to an expert analysis:

Josh Lipsky:  A trade truce, if they can keep it

Matthew Kroenig: This relationship will get worse before it gets better

Melanie Hart: Beijing is wielding the power of the calendar to its advantage 

Jeremy Mark: China has the advantage as talks continue—and the US risks losing the leverage it has

Tressa Guenov: The US needs to up its game to counter Chinese espionage

Markus Garlauskas: With “Taiwan is Taiwan,” Trump dispels fears he will fold to Xi on Taiwan

Reed Blakemore: The G7 must be ready for China to try this export control tactic again

Kit Conklin: A floor for the US–China trade relationship—for now

Joseph Webster: Promises of an Alaska-to-China energy acceleration may be overblown 

Dexter Tiff Roberts: Even the biggest victories from the meeting could prove hollow

A trade truce, if they can keep it 

The long-awaited meeting between Trump and Xi delivered real results—and a lot of stepping back from ledges both sides created over the past year. China walks away with approximately the same tariff rate as most of its Asian neighbors, a welcome victory that will ensure its exports continue to provide ballast to a struggling domestic economy. The United States gets soybean purchases, which will alleviate some of the pressure the administration had been feeling from farmers—as a bipartisan vote against tariffs in the Senate showed this week. Key questions surround China’s one-year pause on rare earth export controls, including whether US allies will get the same exemption. Europe will be trying to negotiate a similar arrangement this week, but without the tariff leverage Trump has wielded effectively.  

Meanwhile, it appears at least at this point there is no loosening of US export controls on high-end chips, something that was rumored throughout the day yesterday and created fears in Washington (as well as London, Tokyo, and Brussels) that China would be able to supercharge its artificial intelligence (AI) capabilities.  

But many of these wins just get us back to where we were before the US-China trade wars of the spring. In fact, China still faces higher tariffs than it did when Trump came into office. And many of the most difficult issues in the relationship were left to be discussed another day. But will that day come? As we’ve seen over the past six weeks, it only takes one misstep or misinterpretation on either side for another round of tit-for-tat escalation and a full-blown trade war between the world’s largest economies.  

Next week brings a critical Supreme Court hearing on the challenge to the president’s tariff authority—the very authority he’s used to levy tariffs on China and dozens of other countries. China and the rest of the world will be watching closely. But no matter what happens, Trump won’t fully relinquish what he sees as the best tool in his economic arsenal—and that means a trade truce is likely the best either side can hope for in the near future. 

—Josh Lipsky is the chair of international economics at the Atlantic Council and the senior director of the Atlantic Council’s GeoEconomics Center. He previously served as an advisor at the International Monetary Fund.

This relationship will get worse before it gets better 

The United States and China are locked in what will likely be a decades-long rivalry that includes significant economic, technological, ideological, diplomatic, and military dimensions. Whether China buys a “tremendous amount of soybeans” is not the central issue and will not resolve the significant underlying issues at dispute between Washington and Beijing. 

As just one example, shortly before meeting with Xi, Trump made an unspecified threat to start nuclear testing in response to the nuclear activities of China and Russia. It is unclear whether Trump meant nuclear explosive tests (which the United States has not done in decades) or the testing of nuclear delivery systems (which the United States does regularly). 

Either way, expect the bilateral relationship to get worse before it gets better.  

—Matthew Kroenig is vice president and senior director of the Atlantic Council’s Scowcroft Center for Strategy and Security and the Council’s director of studies.

Beijing is wielding the power of the calendar to its advantage

The Trump-Xi meeting in Beijing delivered no surprises. As expected, China is rolling out the fentanyl measures it offered earlier this year, and the US side is ratcheting down tariffs accordingly. Both sides are pausing planned measures, with more clarity on the US side than the Chinese side on what that pause really means. China maintains the ability to yank back every concession it provided to the United States.  

The real story is a forward-looking one, and a major win for Beijing: China’s biggest concern with Trump is his unpredictability, and they are using an extraordinary line up of pre-scheduled 2026 meetings to box him in and force a degree of, if not quite predictability, at least plannability in US-China relations. We now know what 2026 will look like. Trump plans to visit Beijing in April, and Xi will visit the United States for the Group of Twenty (G20) summit in December (or at least dangle the possibility of that visit). The next fourteen months will be consumed with preparations for those two meetings. Moreover, Trump’s planned visit to Beijing gives China the opportunity to script the next interaction and to press for a new wave of US concessions over the coming months to lay groundwork for a “good” meeting. A similar dynamic will play out next fall.   

Chinese leaders are strategic, and their diplomats are strong. Just as in the run-up to this week’s meeting, they will know exactly what they want ahead of these 2026 summits, and exactly where their red lines are. There is still no indication that the US side has the same strategic clarity. The White House will need to prioritize developing it—fast. 

—Melanie Hart is the senior director of the Atlantic Council’s Global China Hub.

China has the advantage as talks continue—and the US risks losing the leverage it has 

The relatively bland readout issued by China’s Ministry of Foreign Affairs after the meeting contained one profound understatement attributed to Xi: “China-U.S. economic and trade relations have experienced ups and downs recently, and this has also given the two sides some insights (italics mine).” For Xi, one core insight since Trump launched his campaign of punitive tariffs and export controls against China has been how much leverage his country has over the US economy and the US president himself. Beijing’s tight grip on rare-earth exports revealed the depth of US industrial vulnerability in a globalized economy. And the cutoff of Chinese soybean purchases underscored Trump’s own political exposure at a moment in which polls reveal Americans’ deepening unhappiness with the state of the economy. 

However the White House chooses to portray the agreement in the coming weeks, there is no avoiding the fact that Beijing has tremendous advantages in the ongoing negotiations. The United States certainly still has its own leverage with China—especially in the realm of advanced semiconductors. But with semiconductor powerhouses such as Nvidia pressing the Trump administration to loosen controls on chip exports and China making rapid gains in the field, that US advantage could quickly evaporate. 

—Jeremy Mark is a nonresident senior fellow with the Atlantic Council’s GeoEconomics Center. He previously worked for the International Monetary Fund and the Asian Wall Street Journal.

The US needs to up its game to counter Chinese espionage 

Spying was not front and center at the meeting between Xi and Trump—at least according to the public readouts—but this should be an opportunity for Trump to take a clear and redoubled stance against China’s pernicious espionage activities and information operations against the United States and its allies. That adversaries spy on each other is, of course, not news (China recently accused the United States of a breach of its systems), but the diffuse nature of the Chinese espionage threat remains a serious challenge to US national and economic security that the Trump administration must address along with traditional trade and economic issues.  

On any given day, it is reasonable to assume that China is almost certainly conducting multiple espionage attacks or operations against US national security infrastructure, personnel, or other critical infrastructure. There are hundreds of open-source documented cases of traditional espionage by China or its apparent agents in recent decades. On the cyber side, massive Chinese telecommunications breaches such as Salt Typhoon—assessed by multiple US agencies to be ongoing to this day—may have netted data from every single American and affected some eighty countries worldwide, according to experts. China’s sustained cyber breaches of US water, energy, transit, and other critical infrastructure systems are also well documented.  

It is not hard to imagine China’s potential disruptive or coercive intentions with those infiltrations in the event of a military contingency or diplomatic crisis. China’s vast spying is not new, but AI’s exponential acceleration raises the stakes for the Trump administration. The Trump-Xi meeting is a reminder that the United States is behind and needs to up its game now against a determined and effective foe. 

—Tressa Guenov is the director for programs and operations and a senior fellow at the Scowcroft Center for Strategy and Security. She previously served as the principal deputy assistant secretary of defense (PDASD) for international security affairs in the Office of the Under Secretary of Defense for Policy.

With “Taiwan is Taiwan,” Trump dispels fears he will fold to Xi on Taiwan

TAIPEI—For days leading up to the summit, some commentators took it as a given that Taiwan would be on the agenda, while highlighting the risk that Xi would seek to use trade issues as leverage to extract concessions from Trump on Taiwan. Their speculation appeared to be validated when a Chinese government spokesperson warned just a day before the meeting that China would not rule out the use of force to bring Taiwan under its control—an ominous formulation that was not new, but a departure from a softer tone that Beijing had struck days before.

Meanwhile, international media reporting was rife with worries that Trump might change the US position on the status of Taiwan, even citing the fears of unnamed officials in the White House, despite Secretary of State Marco Rubio having already dismissed the idea of Taiwan being a bargaining chip in the talks. Taipei wisely played it cool, with Foreign Minister Lin Chia-lung projecting confidence and dismissing these fears as unfounded.

Then, when Trump himself was pressed by a reporter not long before the meeting, he also spoke dismissively: “I don’t know that we will even speak about Taiwan . . . There’s not too much to ask about. Taiwan is Taiwan.” After the summit, Trump related that “Taiwan never came up,” suggesting that Xi hesitated, perhaps realizing that he did not have the leverage to get his way. 

Though there may now be a “truce” of sorts on trade, as Josh Lipsky assesses, there is no “truce” in the ongoing struggle for the future of Taiwan. The Chinese Communist Party’s intimidation campaign to subjugate the small, but strategically key, island democracy will therefore continue. Fortunately, it also seems that Washington’s support for maintaining the status quo of Taiwan’s self-rule will do so as well.

—Markus Garlauskas is the director of the Indo-Pacific Security Initiative of the Scowcroft Center for Strategy and Security.

The G7 must be ready for China to try this export control tactic again 

Trump returns to Washington having secured an important pause in China’s exploitation of its leverage in rare earth element supply chains. An agreement to walk back China’s export controls to pre-September 29 levels for one year provides some urgently needed relief.  

Yet while a cooling of temperatures in the rare earth supply chain is critical, there is a lesson to be learned in how China used export restrictions as a valuable lever in trade negotiations. Not only can one expect Beijing to use a similar tactic should US-China trade tensions resurface over the course of the next year, but it appears for now that the walk back applies strictly to the United States, with Europe and other Western partners still exposed to Beijing’s supply chain leverage as they negotiate their own deals. Further still, the scale of supply chain influence China displayed earlier this month by implementing export controls well beyond raw ores and precursors to manufactured components will likely remain a source of uncertainty for the private sector. The durability of this temporary pause and the subsequent risks of supply chain controls emerging once more will remain a top-of-mind issue.  

This underscores the need to treat this deal as a moment of relief, but not a solution. Expect this administration to continue to aggressively pursue supply chain partnerships such as those recently announced with Australia and Japan. Meanwhile, as Group of Seven (G7) energy ministers meet this week in Toronto, critical mineral supply chains will be at the top of the agenda, with ambitions to better coordinate supply chain security among the G7 members becoming a major priority. If the G7 can find the right mix of coordinated investment, trade tools, and market supports, the opportunity for true supply chain resilience is possible. Otherwise, negotiating with Beijing to secure these brief moments of supply chain relief will become the norm—and come at the expense of a number of other priorities in the US-China relationship.  

—Reed Blakemore is director with the Atlantic Council Global Energy Center, where he is responsible for the center’s research, strategy, and program development.

A floor for the US–China trade relationship—for now 

Welcome to the new era of supply chain warfare, where geoeconomics are the frontlines of great power competition. The new US–China trade deal is a temporary cease-fire, not détente. Beijing has agreed to suspend its planned export controls on rare-earth elements—a move that had threatened to severely disrupt global manufacturing and reaffirmed China’s dominance in critical mineral supply chains. In exchange, Washington has paused the expansion of export restrictions on Chinese subsidiaries and eased select measures targeting the maritime, logistics, and shipbuilding sectors.   

The deal sets a temporary floor for the US–China trade relationship, restoring a measure of predictability for industries navigating two competing economic systems. Yet it leaves the structural imbalances of that relationship largely intact. China retains significant leverage over rare-earth refining and processing, while the United States will continue to deploy economic security tools to safeguard control over critical and emerging technologies. These enduring realities point toward the eventual return of trade and national security barriers that will surpass the scope of this agreement. For example, there is no scenario in which the US Department of Defense and US defense industrial base should rely on China for critical minerals, even if Beijing’s export controls are delayed for twelve months.   

As the Trump administration recalibrates its economic security strategy, both sides are likely to reimpose targeted restrictions—driven less by market efficiency than by strategic necessity. In the months ahead, the contest will continue to unfold in the gray zone between trade and security, where control over supply chains increasingly defines hard power. Global policymakers and industry leaders should prepare for renewed volatility in the year ahead. 

—Kit Conklin is a nonresident senior fellow at the Atlantic Council’s GeoTech Center.

Promises of an Alaska-to-China energy acceleration may be overblown 

Many in the energy community will breathe a temporary sigh of relief at Beijing’s pausing of critical mineral controls for a year. But elsewhere, the Trump-Xi meeting in Busan produced more sizzle than steak. 

Trump stated that “a very large scale transaction may take place concerning the purchase of Oil and Gas from the Great State of Alaska.” There are many reasons to be skeptical that a transaction will occur, or that it will be large-scale, however.  

Even if such an oil deal materializes, it would be insignificant: Alaska produced only 421,000 barrels per day of crude oil in 2024, or 3 percent of total US output. Any deal with China over Alaskan crude won’t materially impact the US oil and gas complex.  

China is also very unlikely to make large purchases of Alaskan liquefied natural gas (LNG). While an Alaskan project would enjoy advantages due to lower shipping distances and canal fees, industry analysts at Rapidan Energy hold that the Alaskan LNG project is not viable, as the second phase alone is projected to cost sixty billion dollars. That’s because Alaska lacks the infrastructure to compete with other players, such as US Gulf Coast states. Alaska has limited natural gas production, challenging geography, a small labor pool, and would require a long greenfield pipeline plus imported steel for both the pipeline and liquefaction facility. 

Additionally, China never fulfilled its “Phase 1” purchase commitments, including for LNG, in a prior iteration of the trade war. US-to-China LNG shipments may well rise in the coming months and years, but they will be determined by market factors such as supply and price, not optics. 

—Joseph Webster is a senior fellow at the Atlantic Council’s Global Energy Center, a nonresident senior fellow at the Atlantic Council’s Indo-Pacific Security Initiative, and editor of the independent China-Russia Report.

Even the biggest victories from the meeting could prove hollow

A temporary trade truce with no real breakthroughs. That’s the best characterization of the first Xi-Trump face-to-face meeting since 2019.

That hasn’t stopped the US president from trying to spin it as a grand success, calling the meeting “amazing” and rating it a “twelve” on a scale from one to ten, speaking to reporters on the plane back to Washington. Even in his introductory comments before discussions began, Trump exuded positivity, calling Xi “a great leader of a great country” and a “great friend.”

Xi had a much less enthusiastic demeanor, barely smiling during the meeting. And when he stressed the importance of cooperation, he also cautioned that the two countries must avoid “falling into a vicious cycle of mutual retaliation.”

Xi’s most transparent attempt to make nice was his comment that China’s development “goes hand in hand” with the US president’s “vision to ‘make America great again.’”

The biggest victories—Beijing delaying for a year its plans to radically expand its controls over rare earths and Washington postponing plans to implement the “50 percent rule,” a move that would have put sanctions on a far larger list of Chinese companies by including their subsidiaries—could prove hollow.

The United States can always sanction new companies. And the rare earth licensing rules that Beijing put in place earlier this year haven’t gone away, which allows China to slow-walk permits for exports once again. Other supposed victories, such as China’s promise to purchase soybeans, just return things to the status quo of the last few years.

Finally, Trump’s comment that Chinese officials would be talking more to Nvidia going forward, and that Washington would only serve as a “referee,” hinted of a possible further loosening of restrictions on the sale of advanced semiconductors, which would be a huge win for Beijing.