In Global Guardian's monthly Risk Barometer, our Intelligence Team highlights current global hotspots with the potential to impact your business operations and travel. Read below for analysis on the threats we are closely monitoring this month and click here to subscribe for regular intelligence updates.

Taiwanese Elections Could Serve as Major Regional Infliction Point

On 13 January 2024, the Taiwanese are set to elect their President and Parliament for the next four years. The three-way race between the incumbent Democratic Progressive Party (DPP), the Kuomintang (KMT), and Taiwan People’s Party (TPP) is tight with a weak mandate possible. Following the election of President Tsai Ing-wen (DPP) to her first term in 2016, Beijing cut ties and ramped up military intimidation of Taiwan. This election and Beijing’s response to it will largely dictate the tone and tenor of Taiwan Strait tensions and Sino-American relations for the foreseeable future.

While all three candidates – William Lai (DPP), Hou You-yi (KMT), and Ko Wen-je (TPP) – pledge to support the status quo of maintaining Taiwan’s autonomy from China, Beijing views the candidates quite differently. Hou and Ko favor more cross-Strait interaction and economic interdependence, positions that Beijing is likely to reciprocate with less bellicosity and more carrots, while Beijing is antagonistic to the DPP and sees Lai as a “troublemaker” who in 2017 dubbed himself “a pragmatic worker for Taiwanese independence” (a position he has since walked back). With a very difficult path to a parliamentary majority, there is a strong possibility of a divided government ahead — with more cross-Strait turbulence on the horizon.

Recent Events

18 August 2023 – U.S., Republic of Korea, and Taiwan meet in first standalone summit between the three states at Camp David. A big step on way to solidifying an as-of-yet informal anti-Chinese alliance.

19 August 2023 – PLA launches drills around Taiwan following William Lai’s stopover in the U.S.

30 August 2023 – President Biden authorizes weapons transfers to Taiwan under Foreign Military Financing, a program normally used for sovereign states.

23 September 2023 – China announces cross strait integrated development demonstrations zone to promote integrating Taiwan’s outlying islands to the mainland.

07 December 2023 – Taiwan Ministry of Defense (MoD) starts to publicly release information on Chinese surveillance ballons entering Taiwan’s Air Defense Identification Zone. To date, Taiwan has tracked 23 spy balloons over its territory.

22 December 2023 – The 2024 National Defense Authorization Act (NDAA) is signed by President Biden. The 2024 NDAA includes provisions to expedite the fulfillment of previously pledged arms sales to Taiwan.

Following the Taiwanese elections, Global Guardian recommends that clients conduct table-top exercises and scenario planning as the election results may have an outsized impact on topline macroeconomic concerns.

Analysis

China’s policy towards Taiwanese “reunification” has been premised as a carrot and stick approach; whereby, Beijing rewards alignment with economic incentives, more collegial rhetoric and punished non-alignment with economic sanctions, military intimidation, and more bellicose rhetoric. During the last KMT administration (2008-2016), Beijing’s Taiwan strategy was undergirded on buying its way to reunification via investments in property and coaxing legislators into laying the legal groundwork for eventual unification legislation. In this period, Taiwan established direct air and sea links to China and opened Taiwan to Chinese tourists and college students. Conversely, when the DPP rose to power in 2016, relations soured, and Beijing has wielded many sticks, including import bans and tariffs, halting formal bilateral communication, and military action designed to intimidate and signal its ability to blockade the island of Formosa (Taiwan’s main island).

In August 2022, China executed its most extensive live-fire exercises near Taiwan in almost 30 years, showcasing its ability to create a de facto blockade around Taiwan, disturbing maritime and air routes in Taiwan's bustling shipping lanes. Simultaneously, Chinese air and naval intrusions into Taiwan's informal air defense zone have occurred daily since late 2020 and have been increasing in scope and scale ever since.

Looking Forward

The composition of the future Taiwanese government will orient Beijing next moves: carrots or sticks. Depending on the outcome, Tomb Sweeping Day (04 April 2024), and the 20 May 2024 Taiwanese Presidential inauguration speech could serve as flashpoints in the near-term.

• Together, a Lai victory with a DPP parliamentary majority would increase cross-Strait tensions, leaving Beijing few carrots to deploy and many more sticks to compel “reunification.”
• A divided Taiwanese government (president without a parliamentary majority) could lead China to carry out both overt and covert destabilization operations to undermine Taiwan’s democratic system and harm the DPP’s image.
• A Pan-Blue (KMT-TPP) victory could dampen regional tensions and see more bi-lateral engagement.

BBC Radio Interview at 16:30

"They're coming from the small boats, which are very challenging for a number of reasons. How do you discern a fishing boat from a boat that has nefarious intentions?"

On BBC's World Business Report, Global Guardian EVP of Client Risk Management Brian Raymond discusses the challenges that shipping vessels currently face in the Red Sea amid increased attacks on cargo ships by Houthi rebels and rising tensions in the Middle East.

Click below to listen to the full report. If interested in skipping ahead, Global Guardian segment begins at 16:30.

Russian Lawmaker Floats Texas and Alaska Annexations

"We're living in an era of geopolitical chaos when every revanchist country sees now as the window of opportunity to rewrite history and redraw borders."

In a Newsweek article, Global Guardian Senior Intelligence Analyst Zev Faintuch discusses the territorial dispute between Venezuela and Guyana, including its potential to escalate and its significance among geopolitical conflicts and crises across the globe.

TENSIONS ARE SOARING BETWEEN GUYANA AND VENEZUELA OVER A TERRITORIAL DISPUTE

“Maduro’s interest is to get himself reelected and get some more of his oil onto oil markets.”

Global Guardian Senior Intelligence Analyst Zev Faintuch shares insight into the territorial dispute between Venezuela and Guyana—and why tensions might continue to escalate between the two countries—in an Associated Press article.

Myanmar | Guyana

In Global Guardian's monthly Risk Barometer, our Intelligence Team highlights current global hotspots with the potential to impact your business operations and travels. Read below for analysis on the threats we are closely monitoring this month and click here to subscribe for regular intelligence updates.

MyanMar's Civil War Reaches Tipping Point

Myanmar’s Civil War reached a tipping point in October when rebel forces launched a surprise offensive against the military junta, taking key outposts and towns across the country. The success of this new campaign demonstrates both the overstretched nature of the regime’s forces as well as the unprecedented coordination among anti-regime factions. However, the anti-junta alliance is fragile, and raises the specter of the “day after” problem.

On 27 October, the Three Brotherhood Alliance (TBA) – consisting of the Arakan Army, the Myanmar National Democratic Alliance Army, and the Ta’ang National Liberation Army – launched a successful offensive against junta forces in the northern Shan State. The offensive saw the rebels capture several outposts and towns along a key corridor that linked the junta-controlled heartland with China. Since the start of the offensive – dubbed Operation 1027 after its start date – some 224 junta bases and seven towns have been captured. The attacks disrupted Myanmar’s two main trade arteries with China – the Mandalay-Lashi-Muse Road and the Mandalay-Lashio-Chin Shwe Haw Road. Regime control has largely collapsed in the states of Kayah and Rakhine, and the regime’s administrative apparatus withdrew from the states of Kayin and Kachin. Myanmar’s legal trade with Bangladesh, India, and, most critically, China, has been largely halted. The junta now controls less than 50 percent of Myanmar’s territory.

• Global Guardian recommends against all unnecessary travel to Myanmar.
• We recommend for firms with assets or personnel in central and or southern Myanmar to put concrete evacuation plans in place.

Background

The war in Myanmar has been active in some form since the country gained independence from the United Kingdom in 1948, making its civil war the world’s longest running ongoing conflict. In 1962, the Burmese military – the Tatmadaw – seized power and then ran the country as a centralized autocracy for the next forty-eight years. In 2010, the military experimented with political and economic reforms in a bid to retain power and invite international investment. However, Myanmar’s brief foray into democracy abruptly ended in early 2021 when the Tatmadaw launched another coup, arresting then-premier Aung San Suu Kyi and driving much of the democratically elected government into exile.

In March of 2021, pro-democracy protesters took to the streets in opposition to the coup. Police and military forces responded with live fire. Many of the protesters – largely from Myanmar’s Bamar ethnic majority – fled the ensuing political crackdown to seek refuge and training from some of the country’s ethnic paramilitaries. The ensuing clashes between the junta's security forces, the ethnic paramilitaries and the nascent People’s Defense Forces (PDFs) – comprising anti-coup dissidents – quickly escalated into a full-scale civil war. But until last month, the ethnic paramilitaries – which constitute the bulk of Myanmar’s anti-government forces, and which operate largely independently of the government in exile – were reticent to conduct offensive operations outside their own territory.

Looking Forward

The military reacted to the offensive with alarm, publicly declaring that Myanmar is in danger “of coming apart.” The junta has consistently framed itself as the only actor capable of maintaining the integrity of the country in the face of the ethnic factions’ separatist aspirations. This narrative is not unfounded. The ethnic factions and the National Unity Government (NUG) have a history of grievances dating back to the 2010’s when Aung San Suu Kyi defended the genocide of the Rohingya minority. The ethnic factions are wary of any centralized authority and if the NUG fails to develop an acceptable framework of autonomy and federalism, the alliance could break down following the loss of their mutual enemy.

Another critical unknown is Myanmar’s northern neighbor: China. Beijing thus far has been ambivalent towards the conflict. Following the offensive, Beijing made a series of pro-junta moves but it is unlikely that the offensive, more than a year in planning, had come to pass without the knowledge of China’s Ministry of State Security (MSS) intelligence service. Beijing is likely hedging its support for the junta against its interest in retaining its influence in Shan state, safeguarding its Belt and Road Initiative investments, and maintaining its access to northern Myanmar’s oil and gas infrastructure.

Operation 1027’s significance rests primarily in its demonstration of the increased political and military cohesion among the NUG, PDF, and various ethnic factions that currently control more than half the country’s territory. For the first time in the conflict, it appears more likely than not that the junta will not be able to retain control of the important population centers, trade routes, and resources it needs to legitimate its rule. Barring a significant intervention by an outside actor or the fracturing of the anti-junta alliance, the rebels have the momentum necessary to potentially take and hold major cities in Myanmar’s heartland.

On 03 December, Venezuela held a referendum on the proposed statehood for the oil-rich Essequibo region currently governed by neighboring Guyana, raising fears that Caracas is setting the stage for annexation. The Essequibo region is the area between the Essequibo and Orinoco rivers, accounting for around two thirds of Guyana's national territory, one sixth of its population, and is key to Guyana’s vast resource wealth. While it is unclear if the referendum signals a looming invasion, it is clear that Venezuela will leverage its military superiority over neighboring Guyana to advance the regime’s interests, ultimately raising the specter of gray zone warfare in a region where the ExxonMobil-led consortium of oil companies is expected to produce 750 thousand barrels per day by 2026.

Over 95% of voters reportedly supported the proposed acquisition in Venezuela's referendum. The poll posed five questions to citizens, covering the establishment of a new state named Guayana Esequiba, offering its inhabitants Venezuelan citizenship and identity cards, and incorporating this new state into Venezuela's territorial map. The plebiscite was held just days after the International Court of Justice (ICJ) ruled on 01 December that Guyana “administers and exercises control over that area [Essequibo]," and that Venezuela must refrain from altering the status quo. Ahead of the 03 referendum, the Bolivarian (Venezuelan) Armed Forces moved close to the Northern borders with Guyana, mobilizing nearly 500,000 troops according to Brazil, who bolstered its positions in the area bordering the Essequibo region.

• Global Guardian recommends car driver and agent services for all travel to Guyana.
• We also recommend the creation of scenario-based contingency planning for all firms with assets in and/or consistent travel to Guyana.

Context

1814 – Britain acquires Essequibo through a treaty with the Netherlands.

1899 – In a three-to-two decision, an international tribunal awards Essequibo to Britain (British Guiana), a ruling never recognized by Venezuela (but Venezuela accepts the boundary in 1905).

1962 – Venezuela claims Essequibo.

2015 – ExxonMobil discovers oil in Essequibo's offshore waters, leading to a legal case between Venezuela and Guyana at the International Court of Justice (ICJ).

2018 – According to an unverified report in Brazilian newspaper O Antagonista, Brazil warns Guyana of a possible Venezuelan invasion based on intelligence that Caracas is contemplating an incursion in Guyana.

2018 – An ExxonMobil ship is harassed by a Venezuelan naval vessel off the coast of Guyana.

2021 – The Venezuelan National Assembly rejects the ICJ ruling that it has the jurisdiction to hear Guyana’s suit against Venezuela over the disputed Essequibo province. President Nicolás Maduro also vows to “reconquer” Essequibo and announced creation of new maritime territory dubbed “strategic zone of national development” in what Guyana claims to be its territorial waters and exclusive economic zone.

2023 – The United States (U.S.) broadly eases sanctions on Venezuela's oil sector in response to a deal reached between the government and opposition parties for the 2024 Venezuelan election.

Analysis

The timing of Caracas’ provocative referendum and rhetoric suggest a threefold rationale. First, with presidential elections set for next year, the referendum is a means of distracting the population on an external issue and drumming up nationalist support. Second, with America’s demand that Maduro release political prisoners and arbitrarily detained Americans, the threat of annexation or mischief at sea gives President Maduro a lever for negotiations with the U.S. Finally, with two ongoing wars – both impacting global energy security – Caracas’ believes that the U.S. is both too overstretched and too sensitive to oil price fluctuations in an election cycle to invest political capital into punishing Venezuela now.

Looking Forward

A military campaign to conquer the entirety of Essequibo would be logistically fraught, as the territory is located within the remote Amazon rain forest and Brazil sits between Venezuela and southern Essequibo. An invasion would also lead to international condemnation and would not automatically result in Venezuela’s ability to develop and exploit Guyana’s hydrocarbons. Thus, it is more likely that Caracas will adopt a gray zone approach, much like its allies in Moscow, Beijing, and Tehran; whereby it uses political and military provocations, short of full-on war to better its bargaining position.

It would be fairly easy for Venezuela to deploy a small contingent of a few hundred soldiers into Guyana to take over a few strategic locations like villages, bridges, or roads. Capturing and controlling territory in Guyana could provide Caracas with leverage, potentially enabling it to negotiate a more favorable political amnesty agreement in return for withdrawing its forces. Additionally, with its new Iranian-made missile boats, the Bolivarian Navy could harass oil exploration vessels in the territorial waters of Guyana much the same way China bullies commercial ships in the South China Sea within its “nine-dash line.” However, given China National Offshore Oil Company’s (CNOOC) 25% stake in the Exxon-led consortium, Venezuela will be constrained in its actions at sea.

Why effective cybersecurity is more important than ever for European family offices

“Family offices must strike a balance between security and functionality while staying a step ahead of cybercriminals.”

Following the release of Campden Wealth's European Family Office Report 2023, Global Guardian EVP of Client Engagement Chuck Costanza weighs in on cyber security strategies for family offices in CampdenFB. Chuck discusses the impact of advances in artificial intelligence on cyber crime, the role of the end user in cyber security, and the steps family offices need to take to ensure business continuity in the face of a cyberattack.

"We will take that offensive step when prudent, but also trying to balance the political aspect of not trying to escalate and tripping into a war—this is difficult."

In an interview on Mornings with Maria on Fox Business, Global Guardian CEO Dale Buckner discusses the latest developments in the war between Israel and Hamas, including the difficult balancing act that the United States faces in the Middle East. Dale also weighs in on another potential geopolitical threat—the evolving relations between the United States and China following President Xi's visit to California.

A hard, bloody winter awaits Ukrainian and Russian soldiers, say experts

“The winter is just going to reinforce the misery … neither side is going to have a tactical or operational breakthrough.” 

In a recent interview with Al Jazeera, Global Guardian Vice President of Client Risk Management Seth Krummrich discusses the current on-the-ground realities in the Russia-Ukraine war as winter arrives—including solider morale—and the potential for negotiations between the two sides in the new year.

Shifa Hospital Becoming Israel's Biggest Problem of War So Far

"Does Israel, once the threat from Gaza has been pacified, go for broke and eliminate its main strategic threat, Lebanese Hezbollah?"

In a Newsweek article, Global Guardian Senior Intelligence Analyst Zev Faintuch provided up-to-date analysis of the conflict between Israel and Hamas, including the situation at Al-Shifa hospital, as the war enters its second month. Faintuch also discusses the overall strategy of Israel's campaign.

Israel & Gaza | MENA | Global

In Global Guardian's monthly Risk Barometer, our Intelligence Team highlights current global hotspots with the potential to impact your business operations and travels. Read below for analysis on the threats we are closely monitoring this month and click here to subscribe for regular intelligence updates.

Implications of the Israel-Hamas Conflict

The crisis in the Holy Land threatens to ignite a global terror wave while Middle Eastern regional stability hangs by a thread. Key regional actors have thus far indicated an aversion to a rapid escalation of the war, but international terror organizations may attempt to seize the media moment by bringing the war to the West. The footage of the 07 October massacre and subsequent bombardment of Gaza has inflamed an already polarized discourse and driven mass social unrest and a sharp rise in antisemitic and Islamophobic hate crimes. Regardless of whether the local conflict between Israel and Iran’s proxies escalates, the world is looking at an elevated threat of terror and socio-political unrest in the short and medium term.

Recommendations:

• Avoid non-essential travel to the MENA region
• Increase caution in and around:
  • Jewish sites of community or worship
  • Israeli consulates, embassies, and other official sites
  • High-value soft targets in major Western cities (Times Square, Champs Elysee, Buckingham Palace)
  • Western, particularly American and British, installations, assets, or symbols in the Middle east and North Africa (American or British universities, schools, hospitals, military bases, and embassies or consulates)
• Avoid demonstrations as they are susceptible to easy-access, low-tech terror tactics (cars, ABVIEDs) in addition to clashes between protesters and counter-protesters as well as security forces
• Israeli, Jewish, and American travelers to Muslim-majority countries should consider secure car and driver for all ground transportation and executive protection agents while traveling in these countries

Local Situation

The 07 October attacks made Israel’s previous “mowing the lawn” strategy – in which it periodically reduces Hamas’ force projection capabilities – unworkable going forward. Israel is now moving towards a more permanent rearrangement of its local security architecture with the principle aim of destroying Hamas as an organization capable of threatening Israel.

Statements and actions taken thus far indicate that Jerusalem intends to reduce Hamas’s capability by killing its leadership, destroying its armament stockpile, and reducing its rank and file through ground and air operations in Gaza. Due to the impossibility of civilian extrication from Gaza, and Hamas’ extensive use of human shields, Israel’s operation in Gaza will likely incur a very high level of civilian casualties. Historically, military-only approaches to counter-insurgency issues are only workable when they operate with a high level of acceptable civilian casualties. Russia, Sri Lanka, and Algeria were all able to effectively destroy insurgencies in the late nineties and early two-thousands (before the age of social media), but at the cost of tens of thousands of civilian deaths. Israeli military planners are aware of this fact and appear to have factored it into their strategy.

On 03 November Hezbollah leader Hassan Nasrallah announced that Hezbollah would not escalate its attacks on Israel but would continue to engage in tit-for-tat exchanges across the border to tie down and demoralize Israeli troops. The announcement assuaged fears of immediate escalation but came with an ambiguous red line. If Hamas appears to be near defeat, Nasrallah intimated, Hezbollah will utilize a greater portion of its substantial munitions supply and ground forces. In addition to tens of thousands of well-trained and well-armed fighters, Hezbollah possesses a sophisticated arsenal of approximately 150,000 rockets, missiles, and drones. Some of these are long-range, precise, guided weapons with the ability to hit specific sensitive targets deep in Israeli territory.

Both Hezbollah and Israel remember the 2006 war in which Israel was unable to dislodge Hezbollah from southern Lebanon, but not before inflicting serious damage. Hezbollah is likely content to pin down Israeli forces in the north without instigating a more total conflict. Nasrallah likely views the threat of escalation as more politically valuable than escalation itself and he may be wary of reducing Hezbollah’s capabilities in Lebanon in service of Hamas’s capabilities in the Gaza Strip. As of 03 November, Israeli forces had bifurcated the Gaza Strip in an encirclement of Gaza City where urban fighting intensified over the weekend. The past month of airstrikes have turned the outermost parts of the Gaza City to rubble, which as we have observed in Bakhmut, is a near ideal defensive environment for small unit tactics. However, unlike the defenders of Bakhmut, Hamas has had more than a decade to construct a network of tunnels and defensive positions. Israeli forces will likely sustain high casualty rates in attritional house to house fighting and tunnel clearing. So long as Hamas is able to inflict losses on Israeli forces, Hezbollah has an incentive to stay on the sidelines.

Hezbollah action is not, however, the only path to escalation. The Houthis in Yemen, independently of Hezbollah, have joined the war as a cobelligerent of Hamas by launching missile attacks on southern Israel and in doing so adding pressure to limited and critical Israeli air defense capacities. Other Arab and Muslim countries and non-state actors could follow suit depending on their domestic political situations and exposure to retaliatory strikes.

The United States (U.S.) and United Kingdom (UK) amongst other Western powers have voiced unequivocal support for Israel’s anti-Hamas campaign despite muted calls for a ceasefire. The U.S. and its partners have also deployed military resources and warships to the area in a move to deter Hezbollah and Iran from widening the war. While the presence of two American aircraft carriers gives the U.S. the option to respond with significant force to an expansion of the conflict, they also present major targets for a range of actors. Iran and Hezbollah have highly sophisticated weapons systems and could have as-of-yet unknown military capabilities that may pose a threat to the naval task force. American casualties would substantially widen the conflict.

As more American forces are mobilized to and within the region, Iranian backed forces have stepped up their attacks. There are more than 40,000 American troops stationed throughout the region including 2,500 in Iraq and 900 in Syria which have come under attack dozens of times since the outbreak of the war. In addition to the potential for direct attacks on servicemen, the strong military and political support the United States has offered Israel makes the U.S., its interests, and its citizens attractive targets for anti-Israeli forces that cannot reach Israel. In Iraq, the U.S. has closed its embassy and consulate in addition to evacuating non-essential staff due to specific threats from local Iran-backed militias such as Ashab al-Kahf and Kataib Hezbollah.