Executive Summary Advanced hybrid attacks threaten to disrupt global supply chains, change market dynamics, and destabilize financial systems and national economies. States increasingly rely on non-state actors to inflict harm through disinformation, interference, cyberattacks, or economic threats, often in a synchronized fashion. A greyzone has emerged in which agile groups can avoid detection and attribution, thus making the defense more difficult – yet, also more vital. Implications for International Business Hybrid threats will become part of the normal business environment, requiring a shift from reactive to proactive risk mitigation through the protection of infrastructure, diversification of supply chains, and dynamic monitoring. Beyond economic cost, hybrid attacks can inflict reputational damage, so firms need to take protection measures and develop their crisis communication. State of Play Agile, combined, and efficient – and geopoliticized Europe has become ever more exposed to hybrid threats, creating risks not just for governments and public institutions, but also for companies and individuals. Primarily deployed by authoritarian states such as Russia, China, Iran, and North Korea, hybrid tactics aim to weaken democracies by targeting political, societal, or technological vulnerabilities. They can serve to, for example, discredit their political model, produce instability or uncertainty, influence political decision-making, or do actual damage or otherwise gain tangible advantages. In recent years, the methods used for hybrid attacks have greatly evolved: For one, a combination of tactics – such as “hack and leak”, or simultaneous cyber-attacks and the use of ransomware – is increasingly utilized. Similarly, forced migration into Western countries is employed concurrently with disinformation campaigns. For another, there is greater involvement of non-state actors and economic entities. The former provides additional human resources and expertise while enabling better concealment. The latter receive support to strategically invest in an adversary’s key industries to hinder economic or technological progress. Finally, the cyber and information space is increasingly used as an operational domain, especially through social media and cyberattacks. Moreover, new hybrid tactics have gained in importance, such as the use of sanctions or espionage in the economic and financial sector ("tradefare") or the weaponization of democratic norms and standards against democracy itself ("lawfare"). Key Issues Hybrid attacks challenge state sovereignty… Hybrid threats remain below the threshold of armed conflict. They can lead to regional instability by disrupting society and the economy, thus jeopardizing state security without creating an interstate conflict. The tactics employed focus on a greyzone in which detection and attribution are difficult, such as at the interface between war and peace, internal and external security, or local, national, and international jurisdictions. Hybrid threats therefore challenge state sovereignty without impairing their territorial integrity. The tactics used do not always have immediate implications for diplomatic relations between countries. State actors like military, intelligence and security services, and non-state actors such as militias, terrorist groups, or criminals, both exploit the lack of clear attribution to avoid immediate consequences, even if they have different goals: While state actors often strategically pursue their national interests to gain geopolitical influence or weaken their foes, non-state actors deploy hybrid tactics for short-term immediate economic benefits or ideological intentions. Combatting hybrid threats requires a holistic approach, which is why EU and NATO member states have set up a joint Centre of Excellence to promote a whole-of-government and whole-of-society approach to counter them. In addition, the EU has enacted regulations to enhance the digital and physical protection of critical infrastructure, such as the Network and Information Security Directive 2 (NIS 2) and the Resilience of Critical Entities Directive (CER). To curb the spread of disinformation, the Digital Services Act (DSA) allows for the fast removal of illegal content and manipulated information from online and social media platforms. …as much as entire economies and individual firms A range of hybrid measures specifically target economic activity. These include the imposition of sanctions against other countries or entities, the use of trade restrictions to protect domestic industries, or the manipulation of exchange rates or interest rates to influence economic conditions. As companies adjust their commercial partnerships and investment decisions in response to such measures, these tactics can disrupt global trade patterns and supply chains, alter market dynamics (risk perceptions, investments, capital flows), or destabilize financial systems or national currencies. Eventually, such actions can lead to slower growth, significant market volatility, and political destabilization. For developing economies such as Ukraine, Turkey, Kenya, South Africa, Nigeria, Argentina, Brazil, Colombia, and Georgia, these influences have significant impact. They face economic instability, investment uncertainties, restricted access to markets and resources, environmental damage, and social or political tensions. It will be crucial for them to pursue a sustainable development strategy, promote regional market integration and diversification, establish clear investment guidelines, and ensure legal certainty and political stability. Businesses, too, should implement a set of strategic approaches  to effectively address hybrid threats and strengthen their resilience and readiness . First, they should conduct a comprehensive risk analysis and assessment. This involves deploying early warning systems and scenario analysis to proactively identify potential risks before they escalate. Moreover, collaboration with authorities and other businesses is crucial. This means fostering information exchange on threats and best practices and engaging in joint defense measures to bolster resilience against hybrid threats. In addition, prioritizing cybersecurity and data protection is essential. Businesses should implement safety measures, backup plans, and resilience structures to safeguard critical assets and maintain operational continuity in the face of cyber threats. Finally, legal readiness is key. Understanding legislative frameworks relevant to hybrid threats is important for compliance and preparedness. Establishing uniform security standards across the supply chain through a code of conduct and creating emergency plans for contingencies can enhance a firm's ability to respond effectively to complex threats. Companies should in particular focus on cyberattacks and disinformation campaigns in their geopolitical risk analysis and monitor the respective actors and methods. By implementing an early warning system, such as live tracking of disinformation campaigns on social media and establishing a threat analysis unit, they can identify risks early on. EU-based companies should assess whether they fall within the scope of the regulations such as NIS2, CER, or soon, CRA, and take the required measures. International cooperation and partnerships between states and companies are becoming increasingly important for minimizing damage risks and maintaining economic stability. Companies should collaborate with national security authorities and international organizations, regularly exchanging their experiences and information on threat developments in international public-private partnerships, such as the Partnership Training and Education Centers (PTECs) recognized by NATO or the Joint Cyber Defense Collaborative (JCDC). In the emerging geopolitical rivalry, hybrid attacks by authoritarian actors target democracies at the core. To counter them, companies relying on free markets, legal certainty, and open societies need to collaborate with elected governments.

Executive Summary The Gulf states have embarked on an ambitious economic diversification, extending their hydrocarbon value chains and venturing into new sectors like finance, logistics, and tourism. These efforts are driven by a critical need to reduce oil dependency amid a global shift away from fossil fuels; however, continued reliance on crude revenues, intra-Gulf competition in similar sectors, and a significant gap between investment pledges and actual spending pose considerable challenges. Putting a premium on regional stability as a framework for economic growth, the Gulf states view the Gaza war as undermining their long-term trajectories and seek to diversify their foreign relations away from the Israel-supporting West. Implications for International Business The Gulf states present enticing prospects, in sectors ranging from energy to education, for international business, if partnerships are based on mutual respect. A new generation of technocratic leaders gradually assumes responsibility in the Gulf states, reflecting the zeitgeist of economic change, although important decisions remain centralized and hierarchical. European businesses will face competition from other parts of the world as the Gulf states seek to diversify their economic and political relations. State of Play A region in search of new riches Over the past years, the six Gulf states Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE) have launched ambitious diversification projects. They announced that they would radically transform their hydrocarbon-dependent economies, with the ultimate objective of creating alternative sources of income in a post-fossil fuels world. Already today, they are no longer mere exporters of crude oil and raw natural gas but have extended the vertical value chain in the hydrocarbon industry, e.g. by establishing robust petrochemical sectors. In addition, they have ventured into new economic sectors, whether in infrastructure, tech or entertainment. Most notably is the $500 billion megacity Neom, which is as ambitious as it is controversial. Likewise, Gulf states have made billion-dollar investments in artificial intelligence, or they have signed global football superstars to play in the Gulf in a bid to bolster their international standing, including with a nod to the non-Western world.   Notably, the Gulf states’ diversification drive not only aims to overcome the reliance on hydrocarbons but also seeks to lessen dependence on Western countries. To this end, the Gulf states are actively developing ties with China and other East Asian countries, such as Indonesia, Japan, or Malaysia, as well as with Russia. The cooperation between the Saudi-led Organization of the Petroleum Exporting Countries (OPEC) and a group of non-OPEC oil producers led by Russia (OPEC+) has become a vital pillar of the Gulf’s geopolitical and geoeconomic strategy. Now, the war in Gaza has further deepened the rift between the Gulf and the West as most Gulf decision-makers see Israel having been given a carte blanche  and Western governments disregarding the Palestinians’ suffering – or “genocide” for many Arabs. Anti-Western sentiment is on the rise, including among elite circles, with accusations of hypocrisy regarding human rights and universalist principles. In this context, the stance of some European leaders advocating a rapid transition away from fossil fuels, still the Gulf’s economic lifeline, while simultaneously seeking support to substitute Russian energy amid the war in Ukraine, only serves to amplify this perception. Key Issues More active diplomacy & geopolitical diversification The geopolitics of the Gulf states have witnessed a profound transformation, with a newfound emphasis on regional stability as a prerequisite for successful economic diversification and, ultimately, political survival. The 2011 Arab Spring questioned the legitimacy of ruling regimes, while the “shale oil revolution” in the United States and subsequent oil price slump threatened their economic stability. Internally, Mohammad bin Salman’s rise to power in Saudi Arabia brought bold foreign policy actions, including military intervention in Yemen and the economic and transport blockade of Qatar. Anxiety of Tehran remains high, but the lack of US support in response to an Iran-supported attack on Saudi oil facilities in 2019 led to a shift in strategy: instead of confronting Iran, Riyadh and Abu Dhabi decided to seek a modus vivendi with their arch-rival, culminating in the China-brokered resumption of diplomatic ties between Iran and Saudi Arabia in 2023. In parallel, Bahrain, Saudi Arabia, and the UAE negotiated the normalization of relations with Israel under the so-called Abraham Accords. The emphasis on diplomacy obviously has not resolved the region’s conflicts, but at least provides the groundwork for (relative) regional stability as a precondition for successful economic diversification. Against this backdrop, Israel’s response to the Hamas terror attacks of October 7th is perceived as not only highly disproportionate but also threatening to the countries’ own aspired trajectories. Many fear that Israel may intend to effectively expel Palestinians from Gaza, which would fuel regional tensions further. This puts some Gulf leaders in a difficult domestic position given their collaboration with Tel Aviv, whether overtly (Bahrain, UAE) or covertly (Saudi Arabia). Moreover, the escalation between Israel and Iran jeopardizes the regional stability that the Gulf states are striving to secure. Rather than siding with Washington as they used to do on security issues, Gulf states are strengthening ties with Russia and China, both at diplomatic and economic level. Squaring the circle – embracing diversification while prioritizing hydrocarbons The Gulf states’ current efforts at economic diversification differ significantly from earlier endeavors. In the past, overcoming dependency on oil exports and volatile prices was meant to stabilize government income, but momentum for structural diversification typically waned during boom times. Today, there is a much greater sense of urgency: With the world transitioning away from oil, diversification has become a matter of economic and political survival. Both Gulf rulers and citizens are embracing change as the dawn of a new era.   However, several hurdles stand out on the way to success. First, the Gulf states have a different notion of sustainability from many non-oil exporting countries: They see it as reducing the fossil fuel industry’s carbon footprint, not ending it. For them, a “Circular Carbon Economy”, as promoted by Saudi Arabia during its G20 presidency in 2020, that relies on technological solutions such as carbon capture and storage (CCS) is preferable. Their diversification efforts, meanwhile, remain heavily reliant on financing and subsidies from oil revenue. At a fundamental level, the question therefore remains: Outside the oil sector, where does the Gulf states’ combination of resources and human capital have a competitive advantage in the global division of labor? In this regard, a second hurdle is that the Gulf states largely tend to diversify into the same sectors, such as air and maritime logistics, education, finance, and tourism, effectively competing with one another. A notable example is Saudi Arabia’s introduction of the “Regional Headquarters Program” in 2023, which – in a direct challenge to Qatar and the UAE – forces international companies operating in the kingdom to move their regional headquarters there. Third, the process of diversification is only partial, as efforts at economic integration are accompanied by limited societal but not by political liberalization. In many ways, the Gulf states follow the Chinese model of authoritarian-led modernization, but – so far – without the growth rates and opportunities to compensate for the lack of political freedoms. Finally, there is a significant gap between investment pledges and actual spending among the Gulf states. For instance, as of June last year, Saudi Arabia had only spent $50 out of $879 billion on mega-projects announced under its Vision 2030. All told, firms are advised to tread carefully in pursuing the opportunities on offer, mindful both of the inherent risks of regional or domestic political instability and of the changing business environment that is less welcoming of Western companies.

Executive Summary The Labour Party is set to sweep to power on 4 July with a landslide majority of 150-200+ seats, as the governing Conservatives face unprecedented losses. A Labour government led by Sir Keir Starmer will seek closer relations with the EU and for the UK to remain an active player in international matters, but the scale of domestic and geoeconomic problems severely limit its room for manoeuvre. Labour have promised no major tax rises and only limited policy change, but the country’s poor economic outlook makes keeping up either extremely difficult. Implications for International Business Labour have ruled out increasing income tax, VAT, and national insurance contributions, but have not done so for some others, e.g. on capital gains, second homes, and shares. In fact, they propose £8.6 billion in tax increases, such as a windfall tax of £1.2bn from oil and gas companies and increased taxes for non-domiciled taxpayers. There will be some easing of obstacles to EU-UK trade, but more significant changes, such as the UK rejoining the Single Market, have been ruled out.  State of Play Change is inevitable, but will come slowly After 14 years in power, an exhausted Conservative Party led by Prime Minister Rishi Sunak will suffer a landslide defeat on 4 July. With a record majority, a Labour-led government could be more stable and predictable than its counterparts in France or the United States. Also, markets have anticipated a change of government so no sudden shocks are expected. Yet, Labour will inherit one of the worst economic and fiscal outlooks for any government since 1945. Long-term problems of low investment and productivity have mixed with austerity, Brexit, and Covid to leave Britain with stagnant growth, tight finances, and underfunded and crumbling public services. Voters are angry at the longest waiting lists at the National Health Service (NHS) on record, prisons at breaking point, large swathes of local government on the verge of bankruptcy, a housing and infrastructure crisis, immigration at record highs, and average earnings which, when adjusted for inflation, have barely moved since 2009. The UK’s standard of living is not expected to return to pre-pandemic levels until 2025, making the 2019-2024 parliament the first ever when living standards at the start were higher than those at the end.   Labour have promised change, but stress caution to assure voters that they will not be reckless. The result has been an election manifesto committed to modest tax rises and spending commitments. This is based on an unrealistic hope that growth will come from political stability unlocking investment. While stability of government will be welcomed by the public, businesses, investors, and allies, it will be insufficient to generate the growth and change needed. The independent Institute for Fiscal Studies has calculated that without tax rises or increased borrowing by 2028-29 there will be a £20 billion shortfall in government spending; it bluntly described the unwillingness of both major parties to confront this reality as a ‘conspiracy of silence.’ Caution also defines Labour’s approach to international matters. There will be small but welcome changes to UK-EU relations, but no return to the single market despite the isolation and stagnation wrought by Brexit. In the face of growing geoeconomic competition there will be a greater stress on the UK state as the motor for growth and investment, what Labour have labelled ‘securonomics’. However, initiatives such as GB Energy, a new state-owned energy company that will invest in renewables, and a new £7.3 billion National Wealth Fund will take time to deliver. Key Issues Re-anchoring the UK in the West Within a few days of becoming prime minister, Sir Keir Starmer will meet with other Western leaders at the NATO summit in Washington, DC from 9-11 July. It will be the first opportunity for him to set out an international agenda that David Lammy, who is expected to become Labour’s foreign secretary, defined as ‘progressive realism.’ Much like on domestic matters, it is a policy of gradual change that contains a large degree of continuity and caution. On strategically important matters such as Ukraine, Labour will be as steadfast in its support as the previous government. The party has also committed to raising defence spending to 2.5% of GDP, though without a fixed date. A security review in the first 100 days is expected to stress the need for the UK to respond to the weaponization of economic interdependence. The audit will review relations with China, with Labour stressing the need to ‘compete, challenge and cooperate’. The defence pact with Australia and the US (AUKUS) has moved London closer to America’s approach of challenging Beijing. Likewise, the UK government has encouraged companies to ‘de-risk’ relations with China, although it risks being caught between similar efforts by the USA and EU.   Also in July, Starmer will host around 50 leaders of the European Political Community, the new pan-European group convening all countries of the continent (including Turkey, but not Russia and Belarus). This will allow him to present European partners with more constructive and conciliatory terms than they often received from the Tories. The result will be a widely anticipated UK-EU defence and security pact. At the same time, Labour has been clear that there will be ‘no single market membership, no customs union, and no freedom of movement.’ These red lines, intended to limit accusations that Labour will backtrack on Brexit, will be progressively tested as the new government has to confront some of the UK economy’s underlying problems. Europe has become more , not less important to the UK’s economy since Brexit.   A Labour government’s progressive realism, however, will be limited by the scale of domestic challenges, leaving Starmer little bandwidth to engage on international matters. EU leaders will also have noticed Nigel Farage’s return to UK politics as the leader of the Reform Party, which might merge with – or, rather, usurp – the Tories. That will fuel uncertainty as to whether a change to a Labour government will lead to longer-term changes in UK attitudes to the EU. Finally, the prospect of Donald Trump’s return to the Oval Office has led even Labour to reach out to the Republican Party. Efforts to coordinate transatlantic relations with European partners could be tested by a temptation to maintain the US-UK ‘special relationship’ by stressing the UK’s defence spending and non-membership of the EU, which both appeal to Trump. Britain still lagging on global trade Labour offers few solutions to the drag that Brexit has had on the UK economy, contributing to a decline in business investment and lowering the country’s ‘trade openness’. Goods exports and imports since 2019 have been the weakest in the G7, with exports from high-value manufacturing sectors being especially hard hit, e.g. chemical exports down 15% since 2018. Brexit has disrupted supply chains, increasing costs that hurt small and medium sized businesses more than large companies. While the UK has signed some trade agreements around the world, their effect on trade has been negligible. As a result, the EU’s place as the UK’s most important trading partner has grown. In contrast, the UK has outperformed most other advanced economies in services exports: ‘Other business services’ (e.g. legal services, business consultancy and accounting) are now the UK’s leading export sector, on which Brexit has imposed fewer costs than on the more regulated financial services sector. The EU’s continued importance to UK businesses explains why despite fears that it would proactively diverge from EU regulations, the UK has remained closely aligned. Instead, ‘passive divergence’, where the UK struggles to keep up with the pace of EU legislation, has begun to emerge in areas from product repairability to supply chain due diligence.   Reversing the drag of Brexit on the UK economy will require larger changes than those proposed as part of a review of the UK-EU Trade and Cooperation Agreement in 2026. While a phytosanitary agreement, some mutual recognition of professional qualifications, an agreement on youth mobility, and a defence and security agreement will be welcome, they cannot repair the damage of Brexit or facilitate additional growth of services exports. That will require the UK and EU to discuss access to the single market and customs union, which neither side are keen to explore. As older Eurosceptic voters are replaced by younger pro-European voters, Labour’s electoral room for manoeuvre may change in the long term, but for now, the EU economy and its regulations are advancing, while the UK struggles to play catch-up.

Executive Summary Vietnam has recently witnessed changes in political leadership at unprecedented speed. While the grip on power of the Communist Party of Vietnam (CPV) looks uncontested, fissures have become visible ahead of the 2026 party congress. Vietnam continues to be one of the fastest growing economies with an annual growth rate of five percent in 2023. The country benefits from the intensifying Sino-American rivalry as companies diversify from China to Vietnam. In quick succession, the leaders of the United States, China, and Russia visited Hanoi vying for closer ties due to the country’s strategic location in Southeast Asia. Implications for International Business Vietnam emerges as a manufacturing alternative to China in certain sectors such as garment/fashion or electronic devices. However, it still relies heavily on imports for high-tech components and its infrastructure compares poorly with China. International businesses increasingly use Vietnam as a strategic hub for accessing ASEAN markets and the wider region – a role the Vietnamese leadership continues to embrace and plans to expand on further. Vietnam faces geo-economic pressure from both Washington and Beijing as the two are locked in a contest for regional hegemony. International businesses must monitor closely how Hanoi responds to these pressures over time. State of Play Throughout the last 18 months, Vietnam has witnessed major political upheaval not seen for decades. An anti-corruption campaign led to the resignation of two presidents and high-ranking politicians, including Politburo members, as well as to hundreds of arrests and thousands of dismissals and reprimands. On 19 May, news broke that Nguyen Phu Trong, the General Secretary of the Communist Party of Vietnam (CPV) and driving force behind the anti-corruption campaign, passed away. The Politburo has appointed President To Lam, a former head of the country’s secret service, as interim party leader. He is also the likely successor to the party leadership after the next regular party congress in early 2026. While the power of the CPV remains uncontested and there are few signs of wider threats to domestic stability, considerably party frictions have emerged. Currently dominant in the power struggle is a faction of officials, led by Lam, with close ties to the country’s domestic security apparatus who seek to re-ideologize the CPV and strengthen the role of the party vis-à-vis state bureaucracy and society.   As one of the fastest growing economies focusing on export-driven growth, Vietnam is particularly vulnerable to geopolitical and geo-economic disruptions. It has thus put maintaining cordial relations with all major powers at the center of its so-called “bamboo diplomacy”. Specifically, it expanded bilateral relations with the United States and with U.S. allies such as Australia, Japan, and Korea as well as with Europe. At the same time, Hanoi maintained good relations with China despite maritime disputes in the South China Sea. It also reinforced its close relations with Russia, its largest arms vendor, not least by Russia’s President Vladimir Putin’s visit to Hanoi in June 2024. This includes its relations with the EU and its member states. The EU-Vietnam Free Trade Agreement has led to a huge expansion of economic ties, especially in exports by Vietnam to the EU in sectors such as textiles, footwear, electronics, and agricultural products (to a total of 47.6 bn Euro In 2023). Beyond economic ties and aid, however, EU-Vietnam relations have not progressed as quickly as imagined. Hanoi’s close ties with China and Russia have at times been at odds with the EU’s strategic interests. Moreover, concerns over the country’s abysmal human rights records, its violations of labour standards and intellectual property rights, endemic corruption, and slow progress in legal and administrative reforms have hampered closer cooperation. Key Issues A more assertive regional and geopolitical player Vietnam has profited substantially from current diversification trends, as even Chinese companies have diversified to Vietnam to circumvent export restrictions. So far, Hanoi has successfully maintained good bilateral relations with all major actors to sustain its high levels of economic growth. While increasing security and defense ties with America and its allies, Hanoi also strictly adheres to Beijing's "one China" principle, which claims Taiwan as an inalienable part of China. However, in the case of a Taiwan contingency its strong economic engagement with Taiwan plus the hundreds of thousands of Vietnamese citizens working on Taiwan would pose multiple simultaneous challenges for Vietnam. Hanoi has actively participated in ASEAN and associated multilateral forums, especially concerning issues revolving around the South China Sea. Its leadership also drives efforts toward an ASEAN Economic Community (AEC) as it seeks to profit from stronger trade and investment ties with other ASEAN states. Vietnam’s security and defense policy has been chiefly focused on its immediate neighbourhood rather than the wider region. The key issue for Vietnam’s leadership has been the South China Sea conflict, which it seeks to navigate primarily via diplomatic engagement. The CPV attempts to use its close ties to China’s leadership based on ideological affinity while also asserting its claims internationally based on international law. Nonetheless, Hanoi has itself militarized a number of islands and reefs it controls in the South China Sea and has made attempts to upgrade its navy and coastguard. The primary aim, besides providing illegal revenues through mark-ups and kickbacks for high-ranking military personnel, is for Vietnam to be able to “quietly” contest Chinese maritime expansionism in the South China Sea, in contrast to the Philippines more open confrontation. Yet, the official goal of modernizing the armed forces by 2030 has been effectively curtailed by budgetary constraints, mismanagement, and endemic corruption, and an earlier over-dependence on Russian arms exports which slowed to a trickle since 2022. Geoeconomics Vietnam is one of Asia’s most export-oriented economies and therefore very dependent on continued access to global trade and supply chains, as its high trade to GDP ratio shows. It has created a favourable environment for international companies seeking to establish manufacturing and export bases offering various incentives to foreign investors, including tax breaks, reduced tariffs, and simplified administrative procedures. Vietnam holds membership in all multilateral trade agreements (AFTA, CPTPP and RCEP) to enhance market access across the region, support regional supply chains and reduce tariffs. Its labour costs are low, with an average hourly wage at US$2.99 (VND 68.000) compared to China’s US$6.50. It thus has increasingly emerged as a regional alternative manufacturing hub to China in several sectors, such as textiles (boasting a well-established manufacturing infrastructure), footwear, and furniture making (particularly to the U.S.). Vietnam is also a major exporter of agricultural products such as coffee, cashew nuts, or seafood, effectively competing with China. In consumer electronics, the country has a growing sector with significant investments from Samsung and LG. However, while the country can handle assembly and some component manufacturing, it still relies on imports for high-tech components.   Challenges persist also in other sectors: In advanced electronics, Vietnam lacks the advanced semiconductor fabrication and high-tech component manufacturing capacity that China possesses. Its automotive industry is still developing, with some local assembly and component manufacturing successfully established, but unable to replace China’s established automotive manufacturing base. The same goes for machinery and heavy equipment as well as pharmaceuticals and chemicals. Also, much of the capital and the supply chains, as well as some of the infrastructure investments, that foster Vietnam’s growing clout are China-centric, so diversification to Vietnam does not necessarily mean reduced economic dependence on China.   Vietnam’s embrace of the Belt and Road Initiative (BRI), however, has been lukewarm due to general mistrust in China as well as past controversies with Chinese-funded infrastructure projects. Conversely China has afforded Vietnam a low level of priority within the BRI. Vietnam has actively courted other partners to develop its ageing infrastructure, most notably Japan and South Korea as well as international development banks. As part of its Global Gateway initiative, the EU is funding three major projects in the area of just energy transition as well as the development of a new metro line in Hanoi. US sanctions against China can be potentially undercut by re-routing supply chains via Vietnam, with the significant challenges and limitations mentioned above. Also, Vietnam may face geopolitical pressure from both the US and China regarding its role in circumventing sanctions. How Hanoi will respond to such pressures remains unclear given the current change in leadership.

Executive Summary The government led by Prime Minister Narendra Modi is widely expected to win the upcoming general election held from 19 April to 1 June 2024, indicating political and investment stability. With its geopolitical shift towards strategic autonomy and multilateralism, India is strengthening ties with the West and regional blocs like ASEAN while asserting its national interests. Its growth prospects remain strong, supported by initiatives like "Make in India" and infrastructure investments, and allows it to position itself as a major player in global supply chain resilience. Implications for International Business Due to the strong growth expected in the Indian economy, the Indian corporate sector is likely to have double-digit earnings growth on a sustainable basis for the next couple of years. In particular, opportunities are emerging in generative AI, new energy businesses, and digital space, including e-commerce and payment systems. State of Play With more than 945 million voters eligible to cast their ballot, India’s election is the largest democratic exercise in the world. It will be held in seven phases, with final results to be announced on June 4. Current polls point to a win of the National Democratic Alliance (NDA) led by the Prime Minister’s Bharatiya Janata Party (BJP). Especially during his current – second – term, Modi has curbed the independence of the media, the judiciary, and of civil society and targeted opposition figures from Congress and other parties for alleged tax crimes. Moreover, he used last year’s G20 presidency not just to establish India as a shaper of global affairs but also to boost his image at home. That said, unemployment, inflation, and ensuring that the benefits of growth trickle down to the masses are the main domestic concerns. Despite some progress, there is still a huge unmet need for basic services such as healthcare, water and sanitation, education, and energy. At the international level, India has managed to attract significant foreign investment as it steers the middle ground between two competing superpowers. A like-minded democracy favoring the rule of law, Delhi tries not to directly antagonize China while gaining US support. Key Issues A growing player in its own right and a difficult partner for the EU India is in the midst of a significant geopolitical repositioning, discarding its old non-alignment policy in favor of strategic autonomy and multilateralism. Its G20 presidency in 2023 turned the country into a leading voice of the Global South, not least through the inclusion of the African Union as the new member of the group. Another significant legacy is the India-Middle East-Europe Economic Corridor, a comprehensive rail and shipping connectivity network announced last year that links the India, Saudi Arabia, the Gulf states, and the EU in a long-term project. Moreover, regional blocs such as the Association of Southeast Asian Nations (ASEAN) expand their partnerships with India, just as Delhi builds defense partnerships with the United States, Japan, and Australia to buttress its strategic autonomy. Through its participation in multilateral fora such as the QUAD or the Indo-Pacific Economic Framework (IPEF), India underlines its commitment to a liberal international order.   Two years ago, India and the EU relaunched trade negotiations to boost economic growth, create job opportunities, and attract significant foreign investment including in pharmaceuticals, machinery, and manufacturing. For now, the two sides continue to differ on so-called technical barriers to trade, with the next round of talks scheduled only after the general election. The European Free Trade Association (EFTA) of Switzerland, Norway, Liechtenstein, and Iceland, in turn, achieved a diplomatic coup of sorts by signing a free trade agreement with India in early March. The deal will see India lift most import tariffs for industrial products from the EFTA countries, as the latter invest $100 billion over the next 15 years.   Still, India will not blindly follow the West, as proven by its recent imports of Russian oil despite being a vocal votary of peace in Ukraine. Its fossil fuel use has stymied climate negotiations, as Delhi refuses to give in on what it considers detrimental to its national interests. That makes it a reliable, but difficult partner for Europe and the US. India sees strong growth ahead India already has the highest correlation between overall economic and corporate earnings growth among large emerging markets, making GDP growth projections fairly achievable. Moreover, the next government is expected to continue pushing the “Make in India” agenda launched in 2014. Along with the ‘Skill India’ program, this is one of the many initiatives of the government to improve the skill base of the Indian workforce to support Indian businesses and their global supply chain operations. The program’s success is reflected in the latest arms export figures, which touched a record INR 21,083 crore (ca. US$ 2.63 billion) in FY 2023, a growth of 32.5% over the previous fiscal year at INR 15,920 crore.   In addition, the government committed over $120 billion in FY2023 only to announce to improve transportation infrastructure, including roads and ports, to make the movement of goods and services more efficient. They are also creating an enabling environment for companies to invest in technology and innovation to build their own logistics network or partner with third parties who can provide value-added services like supply chain consulting and inventory management solutions. As part of its revitalization efforts, India aims to bring more manufacturing onshore and increase the number of sectors in which it is a competitive location for supply chains, with a particular focus on energy, pharmaceuticals, and financial services. The FY2024 budget also announced a new funding scheme for research and innovation, whose 50-year interest-free loan offers a significant boost to the private sector's efforts in emerging domains like Gen-AI, new energy businesses, and digital space. According to UNCTAD, India secured the third-highest foreign investments for greenfield projects and the second-largest for international project finance deals in 2022.   Along with Japan and Australia India is one of the founders of the Supply Chain Resilience Initiative (SCRI) after the COVID-19 pandemic revealed an over-reliance on China. The goal of this initiative is to create a "virtuous cycle" of strong, sustainable, balanced, and inclusive growth throughout the Indo-Pacific by sharing best practices, investment promotion, and buyer-seller matching events to diversify supply chains. Prime Minister Modi is using India’s growing appeal as the world’s fastest-growing major economy and alternative to China to clinch free trade pacts even in a departure from the country’s protectionist past.   There are strong macroeconomic growth factors that work in favor of aiding a positive outlook on the Indian economy. Consumption and a pickup in the investment cycle remain key growth drivers. Apart from government spending, capital expenditure is supported by rising capacity utilization levels and strong balance sheets for firms and banks. Such solid fundamentals should more than offset challenges like global slowdown risks, high inflation, and geopolitical tensions.

In dieser Folge spricht Dr. Timo Blenk mit Harald Krüger über unternehmerisches Handeln in Zeiten geopolitischer Unsicherheit. Protektionistische Maßnahmen, Einfuhrzölle und Handelshemmnisse wachsen weltweit. Auch in der Europäischen Union findet in vielen Mitgliedsstaaten ein Rechtsruck statt. Gleichzeitig sind für die europäische und deutsche Industrie der europäische Binnenmarkt und einheitliche europäische Bedingungen ein großer Erfolg. Auf was sollten sich Unternehmen in der Zukunft einstellen? Welche Rolle spielt lokale Wertschöpfung? Was würde ein Trump 2.0 Szenario speziell für Europa und Deutschland bedeuten? Müssen Unternehmen ihre Produktionsarchitektur angesichts der wachsenden strategischen Rivalität zwischen den USA und China anpassen, oder zwischen Absatzmärkten entscheiden? Welche Länder bieten sich als gute Alternativen zu China an? Wo gibt es Wachstumspotenzial und was verändert sich in Deutschland? Und was macht erfolgreiches unternehmerisches Handeln aus?

Munich, August 8, 2024 – With his official appointment by the Supervisory Board on June 15, 2024, Fabian Vetter formally joins the Executive Board of the Agora Strategy Group. He will assume the role of Chief Operating Officer, a position he has been effectively fulfilling since the beginning of the year.   In his new role, Fabian Vetter will oversee the company’s operational processes while continuing to lead larger projects for international industrial clients and government mandates. As one of the first employees following the founding of Agora Strategy in 2015, Vetter has played a pivotal role in the company's development. Prior to this, he worked in the political affairs department of BMW Group in Munich.   Holding academic degrees in Politics, Political Economy, and History from the Universities of Heidelberg, Vienna, and Oslo, Vetter brings deep knowledge and diverse expertise in corporate strategy, industrial transformation, and geopolitics in Central and Eastern Europe. He also has experience in the MENA region.   Prof. Dr. Kurt Lauk, Chairman of the Supervisory Board of Agora Strategy: “With Fabian Vetter, Agora Strategy gains an excellent addition to its Executive Board. Mr. Vetter has been with the company since 2016 and, alongside his duties as Partner, will now take on additional responsibilities in operational management, helping to strengthen the structures and processes necessary for further company growth. On behalf of the Supervisory Board, I look forward to continued successful collaboration!”   “Geopolitics has become a megatrend for companies. I am excited that I have had the privilege of advising clients in this critical field for nearly a decade and to now contribute my experience as a member of the Executive Board,” says Fabian Vetter. “Dr. Timo Blenk and I are committed to further strengthening Agora Strategy’s position as a key partner for companies navigating geopolitical challenges, risks, and opportunities.”  Media contact: Fabian Vetter +49 89 2153 693-32 +49 152 5106 9060 vetter@agora-strategy.com Agora Strategy is a geopolitical consulting firm, founded in 2015 as a spin-off of the Munich Security Conference by Ambassador Wolfgang Ischinger, Chairman of the Board of the Foundation of the Munich Security Conference. Agora Strategy is specializing in political risk analysis, strategic political advisory, and international crisis management. Agora Strategy’s 300+ senior advisors and fellows, drawn from the fields of politics, diplomacy, security and defense, business and academia, are regionally and locally connected across the world. Leveraging this unique network, Agora Strategy provides bespoke consulting services to medium and large companies, governments, and multinational institutions. Agora Strategy is headquartered in Munich with offices in Berlin, Paris, and Brussels. www.agora-strategy.com

In the Agora Strategy Group geopolitics podcast “The Future of Power”, Dr. Timo Blenk (CEO) invites decision-makers from diplomacy, business, politics and the military to discuss current geopolitical developments on a monthly basis. The core of this project is to provide information about the influences of these developments and to create a sound basis for decision-making.   The most important topics of the month EuRepoC: Foreign- & defence Cyber attacks in the focus Cyber: Cloud security; extraterritorial Infrastructure & risks Future of the EU: New commission; Blockbuilding; Internal market; standards & regulation Israel-Gaza conflict: No prospects without a ceasefire MENAT: Partnerships not just business opportunities Jordan: Climate; Drugs & Refugees   In-house announcements  All other episodes of the podcast „Agora Strategy Group“ website „Agora Strategy Group“ on LinkedIn   Current projects & events of the Agora Strategy team Agora Institute exclusive membership

München, 24. Juli 2024 – Sandra Deutschländer ist seit Juli 2024 Teil des Aufsichtsrates von Agora Strategy. Sandra Deutschländer ist Partnerin und Geschäftsführerin bei der Boston Consulting Group (BCG). Ihr Schwerpunkt liegt auf der Beratung von Konsumgüterunternehmen und Kunden aus der Private Equity Industrie. Mit fast 20 Jahren Erfahrung in der Strategieberatung verfügt sie über Expertise entlang der gesamten Wertschöpfungskette, vor allem Wachstumsstrategien, Markenpositionierung und M&A-Strategien für international tätige Unternehmen. Dr. Timo Blenk, Partner und CEO der Agora Strategy Group: „Um erfolgreich geopolitische Dynamiken in Firmenstrategie zu übersetzen, sind tiefes Branchenwissen und Industrieexpertise entscheidend. Ich freue mich sehr, dass wir mit Sandra Deutschländer eine sehr erfahrene und exzellente Strategieberaterin als weitere Aufsichtsrätin für Agora Strategy gewinnen konnten! Dieser Schritt ist nach dem Abschluss der strategischen Partnerschaft mit Porsche Consulting vor wenigen Monaten ein weiterer Meilenstein auf dem Weg, Agora Strategy als führende Strategieberatung für geopolitische Themen zu etablieren“. „Eine immer komplexere Welt erfordert zunehmend Aufmerksamkeit und Weitsicht von Entscheiderinnen und Entscheidern. Agora Strategy bietet umfassendes Fachwissen und ein exzellentes globalen Netzwerk, um Veränderungen vorauszusehen und Führungskräften zu helfen, sich darauf einzustellen. Ich freue mich darauf, das Agora Strategy-Führungsteam dabei zu begleiten“, betont Sandra Deutschländer. Medienkontakt: Fabian Vetter +49 89 2153 693-32 +49 152 5106 9060 vetter@agora-strategy.com Über Agora Strategy: Agora Strategy ist ein geopolitisches Beratungsunternehmen, das 2015 als Spin-off der Münchner Sicherheitskonferenz von Botschafter a.D. Prof. Dr. h.c. Wolfgang Ischinger, Präsident des Stiftungsrats der Stiftung Münchner Sicherheitskonferenz, gegründet wurde. Agora Strategy ist spezialisiert auf politische Risikoanalysen, strategische Politikberatung und internationales Krisenmanagement. Die mehr als 300 Senior Advisors und Fellows von Agora Strategy, aus Politik, Diplomatie, Sicherheit und Verteidigung, Wirtschaft und Wissenschaft, sind weltweit, regional und lokal vernetzt. Auf Grundlage dieses einzigartigen Netzwerks bietet Agora Strategy mittelständischen und großen Unternehmen, Regierungen und multinationalen Institutionen maßgeschneiderte Beratungsleistungen. Agora Strategy hat seinen Hauptsitz in München und Büros in Berlin, Paris und Brüssel. www.agora-strategy.com

Germany's fourth-largest management consultancy Porsche Consulting and the geopolitical consultancy Agora Strategy are supporting their global customer base by integrating geopolitical developments into strategic executive consulting Stuttgart, München. Porsche Consulting and Agora Strategy have signed an exclusive strategic partnership. This partnership will enable both companies to support clients accelerating their business transformations in the face of growing geopolitical complexity. Porsche Consulting delivers the strategic management perspective based on cutting edge technology know-how and industry insights. Agora Strategy offers a deep know-how in geopolitical risk advisory, based on a global network of more than 300 internationally distinguished experts in politics, business, diplomacy and defense. Together, this creates a unique new consulting approach to strengthen the resilience and transformational change of their clients.   Eberhard Weiblen, Chairman of the Executive Board of Porsche Consulting: „The impact of geopolitical factors on the business of our clients has increased dramatically over the last decade. We therefore have to extend our strategic advice to them. This partnership will enable us to integrate geopolitical perspectives into corporate strategy and to find feasible answers to the most important questions of our clients. “   Dr. Timo Blenk, Partner and CEO of Agora Strategy Group AG: „By combining excellent strategic advice with in-depth geopolitical skills, we will better guide our clients in times of heightened geopolitical uncertainty. Together we increase their resilience to growing risks by delivering practical solutions and strengthen their market position to gain a competitive advantage. “                                                                                                            The two independent companies will join forces to deliver added value to their clients with their combined services. Porsche Consulting and Agora Strategy will continue to further enhance their expertise in their respective fields of business.   Porsche Consulting GmbH  is one of the leading management consultancies from Germany. It was founded in 1994 resulting from the successful transformation of Porsche into one of the most profitable and admired sports- and luxury-car companies. Today, their experts support corporations around the world in strategic transformation and performance management. The consultants advise clients in various industries including automotive, life sciences, industrial goods, transportation, financial services, energy, aerospace, construction and consumer goods. They provide excellence in the fields of strategy and organization, brand and sales, development and technology, as well as operations from locations in Germany, Italy, France, China, Brazil, and the US. With passion and a pioneering spirit. www.porsche-consulting.com   Agora Strategy is a geopolitical consulting firm, founded in 2015 as a spin-off of the Munich Security Conference by Ambassador Wolfgang Ischinger, Chairman of the Board of the Foundation of the Munich Security Conference. Agora Strategy is specializing in political risk analysis, strategic political advisory, and international crisis management. Agora Strategy’s 300+ senior advisors and fellows, drawn from the fields of politics, diplomacy, security and defense, business and academia, are regionally and locally connected across the world. Leveraging this unique network, Agora Strategy provides bespoke consulting services to medium and large companies, governments, and multinational institutions. Agora Strategy is headquartered in Munich with offices in Berlin, Paris, and Brussels. www.agora-strategy.com Media contacts: Porsche Consulting Jan Boris Wintzenburg (+49) 152-39118663 Jan_boris.wintzenburg@porsche-consulting.com   Agora Strategy Roberta Randerath (+49) 89-2153 693-34 (+49) 172- 361 70 88 randerath@agora-strategy.com