🌍 Japan and South Korea find a way forward

🗺️ AROUND THE WORLD

1. 🇧🇹 Bhutan: A Singapore investment firm is partnering with Bhutan on a $500M carbon-free bitcoin mining project. Bhutan is hoping to diversify its economy, which relies on hydroelectric energy revenues.

2. 🇷🇺 Russia: The head of Russia’s Wagner mercenary group has said his troops are renewing efforts to take the Ukrainian city of Bakhmut, after earlier announcing a withdrawal due to ammo shortages.

3. 🇨🇴 Colombia: President Gustavo Petro was in Spain last week, securing Madrid’s endorsement for a peace plan with Colombian guerrillas. Spain has mediated in Colombia’s negotiations with the guerrillas.

4. 🇲🇿 Mozambique: Japan’s prime minister has promised financial support for efforts to tackle an insurgency in Mozambique’s northeast. A Japanese company has a 20% stake in the region’s $20B gas project.

5. 🇱🇦 Laos: China has announced plans to conduct rare joint military exercises with Laotian troops starting tomorrow (Tuesday). The exercises are a response to Washington’s growing military cooperation with the Philippines, Thailand and others across the Indo-Pacific.

🇯🇵 🇰🇷 JAPAN AND KOREA | GEOPOLITICS

Japan and Korea might’ve found a way forward

Briefly: This weekend saw Prime Minister Kishida pay Japan’s first state visit to South Korea in over a decade, following Korean President Yoon’s historic visit to Japan in March. The reciprocal trips come after years of acrimony.

Japan and Korea are neighbours, democracies, and US allies. And the two capitals are a 2.5 hour flight apart. So a quick visit should be routine, right?

But these visits are a big deal. Japan’s colonisation of Korea (1910-1945) still casts a long shadow. It brought atrocities like forced labour, including in brothels for the Imperial Japanese Army. And those kinds of wounds don’t heal easily.

But relations soured again in 2018 after a Korean court said Japanese firms (like Mitsubishi) were still liable to pay damages for those atrocities. This was all despite Japan’s claims that a 1965 treaty had already resolved the matter.

So these visits, carrying real political risk for each leader, hint at a way forward.

Intrigue’s take: This all brings to mind two things: first, how politics at home can shape geopolitics abroad. Voters in both countries watched Kishida’s visit intently:

• 🇰🇷 If he offered less than an apology, he risked angering many Koreans who feel Japan hasn’t fully atoned for its colonisation, and yet

• 🇯🇵 If he did offer an apology, he risked angering many Japanese who feel Japan has already apologised but say Korea keeps shifting the goalposts

So Kishida threaded the needle, telling his Korean counterpart: "It touched me that you opened your heart for a future together, without forgetting the painful memories of the past… my heart aches." And this went over well with Seoul.

But second, it’s a reminder how geopolitics abroad can shape politics at home. Polls suggest China’s rise has left many in Japan and Korea more worried about China than each other. And that’s probably created space for their reconciliation.

Also worth noting:

• Korea’s president recently said Japan should no longer be expected to “kneel because of our history 100 years ago.” But polls suggest he’s paying a political price at home for his efforts to mend ties with Japan.

• World leaders aren’t the only ones making the trip. Two-way tourism is up, and K-pop stars like Stray Kids and Aespa recently toured Japan.

Today’s briefing is sponsored by Canva

🇺🇸 US | GEO-ECONOMICS

The world is watching the US debt ceiling debate

Briefly: US spy chief Avril Haines has warned that China and Russia would “love” to see the US descend into chaos if Congress can’t agree to extend the country’s borrowing limit.

The US is one of only two industrialised nations with a hard debt ceiling. In the other nation (Denmark), the government’s borrowing limit attracts little attention and is seen as a formality or technicality.

But in the US, the debt ceiling periodically triggers a broader debate about spending and the role of government. That’s now happening again, and the resulting brinkmanship risks the US defaulting on its debts. That would mean:

• 📉 The immediate halt of 10% of US economic activity

• 👷 The loss of between 1 and 7 million jobs

• ⬆️ A further spike in interest rates

• ⬇️ A share market crash, and

• 🌏 Global turmoil.

Intrigue’s take: A needless US debt default would be the biggest self-inflicted PR mess since United Airlines beat up “re-accommodated” a passenger. And it’d play neatly into a narrative of Western decline that’s been getting plenty of airtime with propagandists in Moscow, Beijing and beyond.

Also worth noting:

• The US has raised its debt ceiling 78 times since 1960. Denmark has raised its own ceiling once, when lawmakers doubled it in 2010.

• The ‘X-date’ (the point at which the US might default on its debts without increasing the debt ceiling) could be as early as next month.

👀 EXTRA INTRIGUE

As ever, your weekly roundup of humorous news:

• Someone dumped 200kg of cooked pasta near a stream in New Jersey.

• A hungry South Korean student ate a $120,000 banana artwork straight off the wall of the Leeum Museum of Art in Seoul.

• A German court has ruled that a naked landlord sunbathing doesn’t constitute enough of a reason to withhold rent payments.

• Dutch police arrested a man with a fake Boris Johnson driver licence. They cited a few clues: the ID was Ukrainian and was valid until 3000.

 📊 CHART OF THE DAY

Notwithstanding a pretty spectacular coronation over the weekend, it seems Britons aren’t as enthusiastic about their monarchy as they used to be. And Brits aren’t alone: around half the 14 countries with King Charles as their head of state have signalled an intention to become republics.

🗳️ POLL TIME!

Thursday’s poll: What do you think NATO's new office in Asia means?

🟨🟨🟨🟨⬜️⬜️ 🤷 Nothing, it's an office (33%)

🟨🟨🟨⬜️⬜️⬜️ 🔥 It's a step towards triggering conflict in Asia (23%)

🟩🟩🟩🟩🟩🟩 🙅 It's a step towards deterring conflict in Asia (39%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🖋️ Other (write in!) (5%)

Your two cents:

• 🔥 S.B: “I'm all for strategising and partnering to a certain degree. But I think NATO needs to be mindful of using "global security" as a euphemism for expanding power and control. […] Fine line between securing borders and stoking tensions. I think we need to tread more intentionally and carefully.”

• 🙅 B.C: “Conflict between/involving major powers goes global fast […]. NATO must be prepared (in advance) to work with Asian allies in the event of a conflict there, because our mutual interests and vulnerabilities will logically bring us together after it starts.”