GeoData
This is our weekly collection of important data points we believe may impact the future geopolitical outlook. We hope you find it useful. Please let us know if you have any questions.
Japan’s Answer to The Growing Shortage of Truck Drivers (Due to the Nation’s Spiraling Population Decline)? Build a 310-mile-long Conveyor Belt
The Japanese government has announced plans to build a 310-mile-long conveyor belt—an “Autotflow Road”—to move freight to and from Tokyo and Osaka. The belt would move the equivalent of freight that 25,000 trucks (and, thus, 25,000 drivers) move per day.
Why are they doing this? Japan’s dire population decline, it is expected that the number of truck drivers will shrink from 660,000 to 480,000 by 2030.
It should be noted the government is also making the point that they believe it will help reduce greenhouse emissions and ease Tokyo’s notorious traffic congestion. The expected cost would be approximately $500 million per 6-mile stretch.
But Japan is not the only country planning giant conveyor belt systems. In the UK, the British company Magway is planning a system that would send goods around London on a “magnetic surfboard” - a levitating magnetic field in hundreds of miles of narrow tunnels and pipes. And Switzerland is working on the Cargo Sous Terrain, a 310-mile network of underground freight tunnels. The first 43-mile section between Zurich and Häkingen is expected to open in 2031 and the rest by 2045.
Love Don’t Live Here No More: Majority of Chinese and Saudis Dislike Russia. Indians are Not Too Fond of Russia, Either.
Russian President Vladimir Putin has been focusing heavily on winning the hearts and minds of the Global South. We all saw his recent visits to North Korea and Vietnam, and he has been meeting with other leaders in Moscow on a tear. But this does not seem to be improving his or Russia’s overall approval ratings around the world.
Three examples: In a new poll released by Morning Consult, in China - which is seeing significant economic benefit from increased trading due to the Ukraine War - Russia comes in the low 40 percent approval range. That is down from a high of more than 75 percent in 2022. In Saudi Arabia - which Putin has tried but failed to build relations with - Russia comes in below 25 percent approval ratings. Even India - which, like China, has benefitted from a significant uptick in trade with Russia, particularly in the oil sector - seems to not like Russia much, coming in just below 50 percent.
The one factor that emerges as to why Russia is not building a fan base in the Global South is the invasion of Ukraine. All the numbers started to tank after Putin ordered the attack.
Corporate Earnings, the U.S. 2024 Elections, and The Constancy of Political Risk Concerns in the C-Suite
Political risk continues to be a consistent issue of focus among corporate leaders and in corporate earnings and projections. The New York Times Dealbook had an interesting little piece on how often the upcoming U.S. presidential elections are being mentioned in earnings calls.
In Q2, election-related issues have come up 364 times (per data provider AlphaSense.) - that’s more than in 2016 when the topic was raised 307 times but, as Dealbook points out, is below the rate that led to the all-time high of 902 times in 2020.
But we still have another reporting quarter to go - which I suspect will spike this number up considerably. At the very least, it shows that political risk is embedded in the corporate strategies of most major corporations (and that is a smart and good thing).
The Global Battle for Chip Supremacy is Really a Battle for High-Skilled Workers
In 2022, the U.S. Congress passed the CHIPS Act, authorizing $280 billion in new funding to encourage domestic research and manufacturing of semiconductors. So far, $30 billion in direct subsidies and $25 billion in loans have been handed out to support roughly $350 billion in investments. As the Semiconductor Industry Association pointed out, this is likely to trip U.S. chipmaking by 2023, taking the output of advanced logic chips from zero in 2022 to 28 percent of total global production.
But the big question hanging over the ultimate success of this massive effort is where is the U.S. going to get the workforce. As Bloomberg recently reported, “To build and run those fabs, however, companies need workers the US doesn’t have. Shortages of skilled installers of hyper-precise chipmaking equipment have already delayed projects. The number of Americans studying in relevant graduate programs has been flat for 30 years. A third of current fab workers are 55 and older, and more than half say they’re eager to quit. The Semiconductor Industry Association says chipmakers will face a shortfall of 67,000 skilled workers by 2030.”
Congress, anticipating this challenge, appropriated (only) $200 million to help build training and educational programs to help build the workforce. But that will not satisfy the challenge as current trends in the various programs of study necessary for chipmaking show.
What to do? Currently, there are two options, and they are not mutually exclusive: 1. Pour more money into programs for advanced degrees in the necessary fields for chip manufacturing jobs, and 2. Significantly hike the number of H-1B visas, allowing highly-skilled foreign workers into the U.S. Neither option is politically easy to achieve, but pressure will be growing in the next few years to move on both options.
Russia is Selling Ukraine’s Grain. And Among the Country’s They Sell It To Are Two NATO Members
Radio Free Europe/Radio Liberty (RFE/RL) recently investigated of what happened to millions of tons of Ukrainian wheat, grain, and peas seized by Russian forces. Incredibly, they discovered Russia sold it mostly to Iran, Azerbaijan, and Syria as well as Spain and Turkey - both NATO members. Using satellite photography provided by NASA’s Harvest Program, At least 6.4 million tons of Ukrainian-grown wheat alone was harvested by Russia and sold.
As RFE/RL explains, “…the European Union has banned over 91.2 million euros ($97.6 million) worth of Russian imports but has avoided barring Russian-EU trade in food and health products “in order not to harm the Russian population,” an EU explainer states. Clearly, Moscow is now taking advantage of this as a further money-maker to fund the war.
