The world is splitting along ideological lines, ushering in a new era of strategic competition that demands thorough scenario planning.
This October 2025 edition of our Global Compass reveals an international system where fragmentation accelerates beyond economics into legitimacy itself. From the protest-filled streets of Jakarta and Kathmandu to the Federal Reserve’s pivotal rate decision in Washington, we’re witnessing the collapse of post-Cold War governance assumptions alongside the deepening of technological and ideological divides that will define the next decade of global business.
Courtesy: Al Jazeera
The world is fragmenting along technological, ideological, and generational lines. Youth-led protests challenge governance legitimacy across Morocco, Indonesia, Nepal, and the Philippines while great powers pursue technological decoupling and strategic autonomy.
Key Takeaway: Companies face three simultaneous pressures: geopolitical fragmentation, technological bifurcation, and domestic instability in previously stable emerging markets.
Middle East & North Africa
Key Developments
Israel-Palestine: UN adopted two-state resolution; multiple European nations advanced Palestinian statehood recognition. Ground-level violence persists despite diplomatic activity.
Gulf Diversification Accelerates:
- UAE deepens AI leadership (OpenAI partnership) while drawing sharper diplomatic lines on Israel
- Saudi Arabia opens capital markets; defense pact with Pakistan extends into South Asian security
- Kuwait: 14 GW power capacity by 2031
- Oman: Green hydrogen hub positioning
- Bahrain: First Middle East deep-sea mining permit
Morocco Risk Escalation: Youth protests over unfulfilled Arab Spring promises elevated risk from Moderate to Extreme. Hundreds arrested; violent confrontations spreading.
Syria/Lebanon Divergence: Syria bets $1.5B on tourism reconstruction contingent on Israel de-escalation. Lebanon remains in IMF-conditional paralysis.
Business Impact
Opportunities: Gulf infrastructure (power, hydrogen, renewables), Saudi capital markets access, strategic minerals
Risks: Morocco urban center disruptions, Red Sea shipping costs up 15-25%, Lebanon currency volatility, Syria success dependent on fragile geopolitical de-escalation
Asia-Pacific
Key Developments
China’s Strategic Moves:
- Dropped WTO developing country status (repositioning for digital trade governance influence)
- Launched AI talent visa (directly competing with U.S. H-1B restrictions)
Taiwan Under Pressure:
- China reinforced “One China” principle; military pressure continues
- TSMC projected $100B revenue; U.S. demands half of production in America
- Taiwan leverages MICE industry for unofficial diplomacy
South Korea: Exports hit all-time highs despite tariffs (semiconductor/auto strength), but Georgia worker detentions exposed U.S. policy unpredictability
India: Accelerates Atmanirbhar Bharat (self-reliance); pursues EU FTA to counter 50% U.S. tariffs; maritime reforms underway
Youth Revolts Intensify:
- Indonesia: 10 deaths from protests over elite housing allowances; 3,000+ detained; cabinet reshuffle failed to quell unrest
- Nepal: PM resigned after social media ban triggered protests; 10.7% unemployment; March 2026 election looms
- Philippines: 100,000+ marched against ₱180B corruption scandal; 216 arrested; larger protests planned November
Maritime Flashpoints: South China Sea (Philippine-China collisions), Thailand-Cambodia border (29 injured), Gulf of Aden (Houthi attacks)
Business Impact
Opportunities: South Korea/Japan semiconductor alternatives, India manufacturing partnerships, Australia stable AAA-rated environment
Risks: Taiwan semiconductor concentration, youth protest disruptions (tourism, real estate, consumer sectors), maritime chokepoint volatility, North Korea unpredictability
Rest of World: Fed Rate Cut
Federal Reserve cut 25 basis points to 4.0-4.25%. Powell: “balance of risks has shifted” toward employment concerns.
Emerging Market Impact: Lower U.S. yields push capital toward higher-yield markets; weaker dollar aids emerging market assets
APEC Summit (Oct 31): Trump-Xi meeting expected in South Korea; potential U.S.-North Korea dialogue on sidelines
Critical Business Implications by sector
Technology/Semiconductors: Immediately diversify beyond Taiwan; prepare for geopolitically restricted chip access; monitor quantum computing/HNDL attack risks
Shipping/Logistics: Flexible routing essential; Red Sea requires 15-25% cost premiums; multiple chokepoint disruptions simultaneous
Energy: Kuwait/Oman infrastructure opportunities vs. Iran export unreliability and Red Sea operational risks
Financial Services: Saudi market access improved; Fed cut increases EM capital availability but with governance scrutiny
Tourism/Hospitality: Morocco, Indonesia, Nepal, Philippines face near-term disruption; Gulf states only stable anchors
Renewables/Infrastructure: Major Gulf pipelines (14 GW Kuwait, Oman hydrogen) but execution risks from FX pressure and external financing dependency
Strategic Recommendations
The Four Imperatives
- Build Supply Chain Redundancy: Multiple suppliers across competing ecosystems; sacrifice efficiency for resilience
- Make Strategic Choices: You cannot serve all markets/regulatory regimes; choose alignment carefully in bipolar technology landscape
- Scenario Plan Continuously: Taiwan conflict, Red Sea closure, protest escalation, trade war—prepare for simultaneous disruptions; quarterly updates not annual
- Assess Governance Legitimacy: Traditional metrics miss youth unemployment, inequality, elite-median gaps driving protests across regions
The Reality
The globalized, efficiency-optimized era is over. Nations prioritize strategic autonomy over economic efficiency, technological independence over integration, and domestic legitimacy over elite consensus.
For businesses: Early adapters to fragmented, multi-polar reality gain competitive advantage. Those clinging to pre-2020 assumptions face mounting existential risks.
Contact: Email ceo@northstar-insights.com for detailed country-by-country assessments and sector-specific strategic recommendations.
NorthStar Insights: When the world gets messy, clarity becomes your competitive advantage.