In Geopolitics Today: Wednesday, November 27th
Spain Needs 25 Million Immigrants to Offset Population Decline, India Partners with Kazakhstan to Secure Critical Minerals Supply, and other stories.
Spain Needs 25 Million Immigrants to Offset Population Decline
Spain recorded 322,098 births versus 434,114 deaths in 2023, continuing a demographic decline that began in 2015. Without immigration, which has increased Spain's population from 46.6 to 48.6 million, the country would face substantial population loss. This pattern mirrors other major EU economies including Germany, Italy, and Poland, where deaths now consistently outpace births. Madrid has responded with a proposal to legalize 500,000 undocumented migrants.
The demographic crisis has become a critical strategic challenge, with the Bank of Spain projecting a need for 25 million immigrants over the next three decades to maintain economic growth. This massive scale of required immigration — nearly one million people annually — would fundamentally alter Spain's economic and strategic position within Europe. The parallel demographic decline across multiple EU states suggests a broader transformation of Europe's labour force, with implications for economic competition, social stability, and immigration policy across the continent.
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German Industry Moves Operations to China
Germany's energy policies have triggered a significant industrial migration to China, with record-setting foreign direct investment reaching 7.3 billion euros in just the first half of 2024. This shift is driven by unsustainable domestic energy costs and a 16.3% drop in industrial energy consumption over two years. Major German corporations like Volkswagen, BASF, and BMW are systematically cutting tens of thousands of jobs at home while investing billions in Chinese operations.
The trend reflects a fundamental restructuring of German industry rather than mere market expansion. Germany's renewable energy transition, combined with the loss of Russian gas supplies, has created an untenable cost environment requiring 20 billion euros in government subsidies for 2024 alone. China offers not just lower operating costs, but also robust infrastructure and market scale that alternative Asian destinations cannot match. While German policymakers advocate reducing Chinese dependence, companies are instead deepening their commitment — German FDI now accounts for 57% of total EU investment in China, up from 48% pre-2021.
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Economic Constraints Preserve Yemen's Fragile Peace
The current fragile peace in Yemen's civil war is likely to hold despite mounting regional tensions, primarily due to key economic constraints on all sides. Since April 2022's de facto ceasefire, the Houthis have paradoxically grown stronger — expanding to 350,000 fighters and maintaining ground capabilities despite joint US-UK strikes targeting their maritime assets. However, their severe economic vulnerabilities, including dependence on aid and inability to pay public sector workers, limit their appetite for major escalation.
Saudi Arabia and the UAE have strategically disengaged from direct conflict, prioritizing domestic economic development and regional stability over military intervention. Despite the Houthis' provocative Red Sea attacks, both Gulf states have avoided being drawn back into Yemen. While limited Houthi attacks on Gulf energy infrastructure remain possible, Saudi Arabia has demonstrated it can absorb minor strikes without military retaliation. With Gulf states focused on attracting foreign investment and the Houthis constrained by economic pressure, neither side appears willing to risk reigniting large-scale conflict despite ongoing regional tensions.
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India Partners with Kazakhstan to Secure Critical Minerals Supply
India and Kazakhstan have formed a joint venture between Indian Rare Earths Limited and Kazakhstan's UKTMP to process titanium slag in Odisha. The partnership leverages Kazakhstan's advanced processing technology to develop India's domestic titanium value chain, addressing a crucial gap in India's industrial capabilities.
The deal reflects broader regional dynamics reshaping Central Asia's role in global mineral supply chains. Kazakhstan, having achieved 4% annual growth since 2017 and developed sophisticated technological capabilities, is no longer merely a raw material supplier. As Central Asia transitions from resource dependency to industrial development, India is recalibrating its regional approach. While China maintains significant infrastructure investments in the region, India sees new opportunities emerging from the Russia-Ukraine war's impact on regional trade patterns. Through initiatives like the Chabahar port agreement and EAEU free trade negotiations, India aims to position itself as an alternative partner for Central Asian states.
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US Reviews Taiwan Policy for a Changing Strategic Environment
The US “status quo” policy toward Taiwan, crafted in the 1970s for a vastly different geopolitical landscape, has become increasingly detached from current strategic realities. This framework, built around deliberate ambiguity and non-committal diplomatic language, originated when China's military and economic power was a fraction of what it is today. The policy achieved its original Cold War objectives, but now constrains US strategic options in the face of China's expanded capabilities.
China has effectively exploited this dated framework by steadily increasing military pressure on Taiwan through air incursions, naval exercises, and gray-zone tactics while staying below the threshold of open conflict. The US emphasis on “maintaining the status quo” has become functionally reactive, reducing Washington to responding to Beijing's initiatives rather than shaping events. With China targeting 2049 for “national rejuvenation” and demonstrating increased tolerance for Western pressure, the fundamental assumption that strategic ambiguity will preserve peace on US terms appears increasingly questionable.
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India Courts Guyana to Diversify Oil Supply Chain
During a recent parliamentary visit to Guyana, Indian Prime Minister Narendra Modi identified the South American nation as crucial to India's energy security, encouraging Indian businesses to invest there. While Guyana expressed willingness to supply India with crude, any arrangement would require ExxonMobil's agreement due to logistical considerations around very large crude carriers that typically transport two million barrel loads.
This initiative reflects India's broader strategy to diversify its energy supplies. Currently, India sources 44.6% of its oil from the Middle East and 36% from Russia, making it vulnerable to disruptions at critical maritime choke points like the Straits of Hormuz and Malacca, through which over 85% of India's oil imports flow. While Guyana's location poses greater logistical challenges than existing suppliers, establishing this relationship would give India access to high-quality light sweet crude while reducing its dependence on traditional sources in potentially volatile regions.