AIG Edition 7

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LEBANON: Iranian Reconstruction Pledge Likely to Ease Reform Demands from the West

Summary: The Iranian Foreign Minister stated that Iran is ready and willing to reconstruct Lebanon with Iranian investments. Tehran will likely fill the reconstruction void if Western and Gulf assistance remains blocked due to the unmet reforms by Lebanon. 

Development: On 3 June, Tehran announced its readiness to assist in the reconstruction of Lebanon during a visit to Beirut by the Iranian Foreign Minister Abbas Araghchi. The World Bank estimated the cost of rebuilding Lebanon to be $11 billion. Beirut has publicly stated that it does not have the money to rebuild Lebanon and that funding will need to come from international support. The U.S., Europe, and the Gulf states have all expressed hesitation in funding Lebanon’s reconstruction without the disarmament and status change of Hezbollah. The Lebanese government has stated it wants to deal with the disarmament of Hezbollah safely and diplomatically, not to start a civil war in Lebanon. Beirut met with Hezbollah on 2 June to discuss a “region-by-region” disarmament plan, which would involve disarming Hezbollah in phases based on certain regions in which it has a presence. Israel and Lebanon have had a ceasefire agreement since November 2024, but Israel has been violating the agreement by continuously striking Lebanon, as recently as an airstrike on 31 May. The U.S. stated to Lebanese officials that it wants to see “Hezbollah disarmed as soon as possible” in order for international rebuilding efforts to take place, according to The National. 

Analysis: If the West and Gulf states do not ease reconstruction conditions, Beirut will likely turn to Tehran for reconstruction support, as its slow, diplomatic approach to disarming Hezbollah to avoid internal conflict prevents meeting international demands in the near term. Beirut will likely partner with Tehran for reconstruction efforts if the West and Gulf states do not ease specific requirements and deadlines for the Lebanese government, which will lead to Iranian influence entering and increasing back into Lebanon. Beirut will likely attempt to speed up any plans and processes in the disarmament of Hezbollah, such as the region-by-region plan to receive Western and Gulf investments. The West and the Gulf will likely ease demands and reforms to curb Iranian influence entering back into Lebanon. 

[Unnamed Contributor]

RUSSIA: Drone Attack Likely to Lead to an Increase in Ukrainian Operational Tempo

Summary: Ukraine’s drone operation deep inside Russian territory attacked and destroyed a third of Russia’s strategic bomber fleet, and it has no immediate ability to replace it. The result of this attack will likely disrupt Russia’s supply chain and short-term military capabilities, allowing Ukraine to increase operational tempo, further escalating the war, and reversing negotiations.

Development: On 1 June, Ukraine carried out a long-range drone operation targeting Russian air bases, aimed at destroying nuclear-capable bombers and causing an estimated $7 billion in damage. Ukraine destroyed around a third of Russia’s strategic bomber fleet in the attacks. Russia has “no immediate ability to replace it,” according to AP News. There were a total of four locations targeted inside Russia, the farthest being 2,500 miles into Russian territory. The drones were transported inside Russia in shipping containers without being detected by authorities. The shipping containers were equipped with retractable roofs, allowing the drones to exit the containers once they arrived at the location. The attack prompted Russia to move the rest of its bombers deeper into the country. On 3 June, Ukraine launched an attack on a bridge in Russian-controlled Crimea that connects the peninsula to mainland Russia. The Crimean Bridge serves as a critical supply and transport route for Russian forces to the occupied Ukrainian territories. Ukrainian President Volodymyr Zelenskyy stated that the operation showed Russia’s vulnerability to losses, and “that is what will push it toward diplomacy,” according to The New York Times. On 4 June, U.S. President Donald Trump had a phone call with Russian President Vladimir Putin. Putin strongly said he will “have to respond to the recent attack on the airfields,” according to ABC News. 

Analysis: Ukraine’s drone attack inside Russia, which damaged a third of its strategic bomber fleet, will likely disrupt the Russian military supply chain as increased security measures and the relocation of assets deeper into Russian territory complicate logistics and operations. The Ukrainian attack on the bridge connecting Russia to Crimea just days after the drone attack likely indicates an increase in operational tempo due to Russia’s weakened military state and reversed logistical efficiency. The method of using Russia’s supply chain as the delivery method for Ukraine’s drone attack will likely slow down Russia’s supply chain, further hindering the efficiency of its military capabilities, along with the retreat of military assets. With Putin vowing to respond accordingly with retaliatory attacks on Ukraine, the war is likely to escalate and reverse negotiations between the two countries. Russia’s diminished strategic bomber fleet and lack of immediate ability to replace it may lead to assistance from allies such as Iran or North Korea. 

[Jacob Faciana]

WEST BANK: Arab Delegation Likely to Reschedule Despite Restriction from Israel

Summary: Tel Aviv blocked the visit of Arab delegates into the West Bank with the intent to discuss a Palestinian state. The U.S. will likely favor Saudi Arabia as a more cost-effective and tone-aware partner in the Middle East, granting it greater regional influence. Saudi Arabia will likely reschedule the delegation, with the U.S. staying largely hands-off and giving Riyadh more agency.

Development: On 30 May, Tel Aviv blocked the visit of Arab delegates to the West Bank with the goal of meeting with the president of the Palestinian Authority (PA), Mahmoud Abbas, to discuss the establishment of a Palestinian state. The delegation of Arab nations led by Saudi Arabia consisted of Turkey, Jordan, Egypt, Qatar, and the United Arab Emirates. The delegation would have been the first time a Saudi minister visited the West Bank since Israel took control of it in 1967. Israel controls all entry and exit into the West Bank, giving it the power to block such a visit. The delegation planned to meet in Jordan and then be flown into Ramallah to meet with Abbas. Israel claimed the establishment of a Palestinian state would threaten its security and become “a terrorist state in the heart of the land of Israel,” according to the Times of Israel. Prince Faisal, the foreign minister of Saudi Arabia, stated that Israel’s denial of the delegation to Ramallah would “strengthen the will to double diplomatic efforts within the international community,” according to Al Jazeera. Saudi Arabia recently received the largest U.S. weapons deal in international history. The U.S. recently brokered a ceasefire deal with the Houthis in Yemen, but this agreement did not include Israel, resulting in continued Houthi attacks on Israel. In the last six months, Israel has seen two of its most notable and nearby enemies become weak and fall. Israel severely weakened Hezbollah after the war between them, seeing its weapons capabilities drop from 10,000 projectiles a day onto Israel to roughly 100 after the war. Shortly after the war with Hezbollah, the Assad regime in Syria fell to the overwhelming advancement of rebel groups. 

Analysis: The U.S. likely views Saudi Arabia as a more tone-aware and cost-effective partner than Israel will be moving forward in the future of the Middle East, shifting its priorities to it and allowing Saudi Arabia more liberty in the region. Saudi Arabia is likely to reschedule the delegation despite Israel calling the meeting a provocation and a threat to its national security, and the U.S. will likely leave itself removed from the situation, allowing Saudi Arabia more agency in this situation. Saudi Arabia likely views the newfound relationship with a weapons package from the U.S. as having increased its bargaining power in the political apparatus of the Middle East. Israel plays a crucial role for the U.S. in the Middle East as it fights a common enemy: Iran. Two of Iran’s most notable influences in the region, Hezbollah and the Assad regime in Syria, have been severely weakened and fallen, which now may strip a sense of priority to Israel from the U.S. In recent months, the U.S. has shifted much of its focus towards stabilizing the region through more cost-effective instruments of power, such as investments in Syria and lifting the decades-old sanctions to allow the country a chance at rebuilding. Israel’s immediate importance and Saudi Arabia’s cost-effective instrument of power for the U.S. will likely present a new regional dynamic in the Middle East that sees Israel becoming less prioritized for the U.S.

[Unnamed Contributor]

BRAZIL: Legal Action Likely to Reshape Labor Laws and Deter Chinese Investments

Summary: Brazil sued the Chinese vehicle manufacturer Build Your Dream (BYD) for human trafficking and inhumane labor conditions following previous zero-tolerance policies for labor abuses. The lawsuit will likely deter future Chinese investment and create stricter labor laws across Latin America, especially for foreign businesses operating in their borders.

Development: On 27 May, Brazilian prosecutors filed a lawsuit against Chinese electric vehicle manufacturer BYD and two subcontractors, alleging human trafficking and labor conditions "analogous to slavery," according to BBC. The case involved 220 Chinese workers brought to Bahia, to construct  a BYD factory. Investigations revealed evidence of overcrowded and unsanitary housing, the confiscation of passports, contracts containing illegal clauses, excessive work hours, and 70% wage withholding. Brazilian authorities are seeking approximately R$257 million in damages. BYD has previously claimed a zero-tolerance policy toward labor abuses but  has not publicly responded to these specific allegations. BYD, the world’s largest electric vehicle manufacturer, has been looking to expand its market overseas. Brazil has some of the strictest labor laws, some mandated in its constitution and others outlined in its Consolidation of Labor Laws, threatening fines and legal action if broken.

Analysis: The Brazilian lawsuit against BYD carries reputational fallout that could extend to other Chinese firms operating in the region, deepening concerns about ethical standards in foreign development initiatives and the dwindling investment that could follow. The threat to BYD is especially significant as it attempts to expand its global presence in markets where human rights standards are under close scrutiny, such as Latin America, a region historically associated with human rights violations. If proven, the allegations could provoke consumer backlash and damage brand credibility. The lawsuit may prompt increased scrutiny of Chinese business practices across Latin America. Governments may begin to enforce stricter labor oversight on foreign contractors, particularly those involving imported labor. This legal case will likely receive domestic and international attention from human rights organizations and trade regulators, whose scrutiny can amplify pressure on BYD’s reputation and test Brazil’s response to labor laws. Brazil will likely use this case to demonstrate greater enforcement of its labor laws, reflecting a broader effort to assert control over foreign investment practices amid rising public concern for worker rights. This incident highlights an emerging trend in Latin America, where governments are more assertive in regulating foreign business conduct. For example, Mexico, Colombia, and Chile are leading the way in ensuring compliance from global companies with new labor laws like shorter working hours, which could lower short-term economic growth and employment. The outcome of this case could influence future trade dynamics and investment decisions, especially as Brazil navigates the tension between welcoming foreign capital and upholding labor and legal standards within its borders. A ruling against BYD could set a precedent for holding foreign companies to stricter labor laws and transparency, directly impacting the cost for foreign investors who typically outsource labor for its cheaper cost and weakened regulations. An increase in costs and legal risks could lead Chinese companies to reconsider investments and move their markets to other countries where the regulations are weaker, potentially slowing Brazilian job creation and economic growth. Brazilian labor advocates would likely view the ruling as a victory for workers’ rights and could influence neighboring countries to adopt a similar approach to labor laws.

[Delaney Kingsland]