🌍 Saudi Arabia’s sovereign fund looses billions

Hi there Intriguer. Back in 2008, a lovestruck fella spent six months travelling 7163.19km around Japan with a GPS tracker to spell ‘marry me’ on Google Earth. His girlfriend then hopped on the nearest bus and spent a few months spelling out ‘yes’ (we’re joking, she just said yes straight away, but that would’ve been funny).

Today’s briefing is a 5 min read:

• 💰 Sovereign wealth funds are shaping geopolitics.

• 🇸🇩 Sudan peace talks stall.

• ➕ Plus: Remembering the Live Aid concert, how the papers are covering judicial reform protests in Israel, and regulators face an antitrust dilemma with Meta’s Threads.

1. 🇰🇵 North Korea: Pyongyang has fired a long-range intercontinental ballistic missile into the Sea of Japan, triggering condemnation from South Korea and Japan. The weapon flew for over an hour, the longest-ever flight for a North Korean missile.

2. 🇫🇮 Finland: Prime Minister Petteri Orpo’s new government is under pressure as two racism scandals rock his coalition partner, the populist Finns Party. The Finns Party came second in Finland’s April elections.

3. 🇲🇲 Myanmar: Thailand’s foreign minister met Myanmar’s detained former leader Aung San Suu Kyi on Sunday, becoming the first foreign official to see the Nobel laureate since she was deposed in 2021. Thailand has sought to re-engage with neighbouring Myanmar’s military junta despite international concerns.

4. 🇨🇦 Canada: A corporate ethics watchdog has launched investigations into Nike and mining giant Dynasty Gold over allegations their operations benefit from forced labour by China’s Uyghur population.

5. 🇸🇾 Syria: At the UN Security Council, Russia (an Assad regime ally) has vetoed a proposed nine-month renewal of a crucial aid crossing to opposition-controlled Syria, insisting instead on a six-month renewal. More than 80% of goods travelling to Northwestern Syria must pass through the Bab al-Hawa crossing.

💰 Saudi Arabia| Geo-economics

Saudi Arabia’s sovereign wealth fund takes a hit

Saudi Arabia’s sovereign wealth fund recorded losses of $11B last year, down from the $19B in profit it made the year prior. The kingdom’s $700B fund is aiming to amass $2T in assets before the end of the decade.

Sovereign wealth funds are state-owned funds that invest a country’s surplus cash, often generated through activities like commodity exports. They’re like private funds, but with fewer fleece vests.

And whether they admit it or not, sovereign funds are geopolitical tools:

• 🇸🇦 Saudi’s fund aims to boost national prestige and diversify the kingdom away from oil, buying everything from Newcastle United and the entire professional sport of golf, through to a new national airline and a vast city in the middle of the desert 

• 🇳🇴 Norway’s fund, the biggest in the world at $1.4T, has warned it’ll vote against the re-election of 80 corporate boards if companies don’t set up or hit environmental and social goals

• 🇸🇬 Singapore’s fund ($287B) has invested two-thirds of its cash in its home region, but its chief investment officer says he carefully avoids “areas that are in the crosshairs of US-China tensions”

• 🇨🇳 And China’s main fund ($1.35T) says it’s more cautious about US assets due to bilateral tensions, and has sought to assuage concerns around its investments in Western strategic sectors, promising it won’t “pose a threat to the countries it invests in”.

Intrigue's take: Who wouldn’t love to have a vast pile of cash, right? These funds can help stabilise an economy, generate income without levying taxes, finance massive national projects, or you can just go full Scrooge McDuck.

But they come with risks: without transparency or accountability, some funds can quickly burn public money through incompetence and corruption. And even the most ridiculously transparent and accountable country (we’re looking at you, Norway) can suffer brutal years in the market (see below).

Still, we’d rather have a vast pile of cash than… not have a vast pile of cash.

Also worth noting:

• Norway’s fund reported a record $164B loss last year, citing Russia’s invasion of Ukraine, high inflation, and rising interest rates.

• Singapore’s fund also just recorded its worst result in years, partly due to its stake in crypto platform FTX (remember them?).

📰 How newspapers covered…

Ongoing protests in Israel against the government’s judicial reforms

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🇸🇩 Sudan | Conflict & security

Sudan is still at war

Sudan’s army has rejected a proposal from the Intergovernmental Authority on Development (IGAD), a group of East African countries, to deploy peacekeepers in Sudan and help mediate peace talks.

The nation’s army has been battling the paramilitary Rapid Support Forces (RSF) since mid-April. Several rounds of Saudi and US-led peace talks have since fallen through due to ceasefire violations on both sides.

So IGAD, currently chaired by Kenya, thought a more local response might help. But Sudan’s army accused Kenya of harbouring members of the RSF, and warned that IGAD peacekeepers would be viewed as “enemy forces.”

Intrigue’s take: Meanwhile, Sudan’s army has welcomed a peace summit hosted today (Thursday) by Egypt, with whom it enjoys close ties.

And there’s the rub: it’s up to the warring parties to first accept that peace requires compromise. Until then, no mediator will ever be good enough.

Also worth noting:

• U.N. chief Antonio Guterres has warned that Sudan is “on the brink of full-scale war” without successful mediation.

• At least 2.9 million civilians have been displaced since fighting started, and at least 24.7 million Sudanese are in need of humanitarian aid.

➕ Extra Intrigue

What we’re reading about Microsoft’s acquisition of Activision and the world of antitrust.

• Microsoft wins FTC fight to buy Activision Blizzard

• The UK – which blocked the Microsoft-Activision deal – is ready to negotiate

• Regulators face an antitrust dilemma after Meta launches Threads

• PGA Tour official: LIV deal 'should not' violate US antitrust laws

🗳️ Poll time!

📊 Today in History

On this day in 1985, 1.5 billion people turned on their TVs to watch Live Aid, a benefit concert held simultaneously in London and Philadelphia to raise funds for the famine in Ethiopia. Performers included Elton John, Queen, Madonna, Santana, the Beach Boys, David Bowie, and U2.

Yesterday’s poll: Do you think the concessions made to Turkey were worth getting Ankara to drop its NATO veto against Sweden?

🟩🟩🟩🟩🟩🟩 💯 Yes, absolutely (84%)

🟨⬜️⬜️⬜️⬜️⬜️ 🙅 No, the price was too steep (14%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🖋️ Other (write in!) (2%)

Your two cents:

• 💯 R.N: “No pay, no play!”

• 🙅 B.I: “Caving into an authoritarian regime’s demands will only create more problems in the future.”

• 🖋️ B.B: “Would have been better to bide time: Turkey realizes Russia's overreach & the concessions would have been less substantial next year with memory of Quran-burning & similar protests shortlived.”

• 🖋️ A.E: “Military alliances are historically only effective at doing one thing, ironically, and that is starting wars. […]- A concerned Swede”