Iranian Drones, European Defence Stock, and a Call to Regulate Social Media to Prevent War

This week's big story covers the escalation of Iranian drone production over the past two years in at least five countries. Supported by a network of international partnerships and private companies, Iran bypasses sanctions and expands its global influence.

The two other major stories cover how European defense stocks experienced a wobble this week but have increased by 40% year-to-date and Barbara Walter’s case on that unregulated social media is increasing the threat of civil wars.

But first, Janan Ganesh asks if perhaps war is not only the worst thing we do as a species but also necessary for innovation.

The Big Story

Iranian Drones Are Redefining Global Warefare

Over the last two years, Iranian drone production has escalated in at least five countries, ranging from South America to Central Asia. Recently, Russia began manufacturing Iranian drones for use in the Ukraine conflict.

The drones are reshaping military strategies and bolstering Iran's status as a global arms dealer. The technology, while straightforward, has penetrated various conflict zones, prompting powers like the US and Israel to develop new defensive tactics.

Despite facing international sanctions, Iran has innovated by utilizing basic, often US-made components to produce drones that significantly influence warfare and regional stability. The spread of these drones, supported by a network of international partnerships and private companies, allows Iran to bypass sanctions and expand its global influence.

In the Red Sea, Yemen's Iranian-backed Houthis have drastically reduced trade through the Suez Canal by over 50% this year by targeting cargo ships with drones and missiles. Since the Gaza conflict began, Iranian-supported militia groups in Syria and Iraq have frequently attacked remote military bases in the region.

UN restrictions on Iran expired in October, shortly after conflict erupted in Gaza. Around the same time, the IRGC showcased its most advanced weapons and drones to Iran's supreme leader, Ayatollah Ali Khamenei, one of them being Shahed-149, also called "Gaza".

Read the full article on Bloomberg.

Iran’s drone technology exported to Yemen’s Houthi militia is disrupting Red Sea shipping lanes.
Source: Bloomberg, retrieved on 09/04/2024

European Defence Stock has Risen 40%

Investors have gained $30 billion this year after European leaders intensified their calls for increased military spending.

Shares in defense companies surged following Russia's attack on Ukraine and again when the Israel-Hamas conflict commenced. Another uptick occurred with Europe's initiative to escalate military expenditure. However, this has raised concerns that stock prices may have accelerated too rapidly. Until this week, six out of seven companies were trading above the average price target set by analysts.

On Tuesday this week, even the largest European publicly traded military hardware firms, including Rheinmetall AG, BAE Systems Plc, and Saab AB, experienced a decline. Goldman Sachs Group Inc. has indicated that European defense stocks now "likely present more downside than upside risk." Despite this week's downturn, the index tracking defense-exposed European shares has seen a 40% increase year-to-date.

A Call to Regulate Social Media to Prevent Civil War

Barbara Walter, a political scientist and professor at the University of California, San Diego, makes a case that unregulated social media is increasing the threat of civil wars.

"People tend to 'like' information that taps into their emotions, and that tends to be things that make them angry, outraged, resentful. And what the recommendation engines do is not just recommend more material like that but more material that's even more extreme," she writes in her 2022 book "How Civil Wars Start: And How to Stop Them."

One example of this is Malaysia, where Facebook was used to help incite genocide against the country's Rohingya minority by depicting them as murderers and rapists in content that then went viral.

Walter says that the answer is not censorship - people have the right to voice opinions that are wrong, ugly, and sometimes evil. But tech companies should not be able to push the most extreme materials into people's hands.

Other News

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Read more at Bloomberg.

South Korea launches its 2nd military spy satellite amid animosities with North

South Korea has successfully launched its second military spy satellite, a strategic move to enhance its surveillance capabilities amid escalating tensions with North Korea. This development comes as both nations are actively expanding their reconnaissance capabilities in space, with North Korea also planning multiple satellite launches. South Korea's satellite, launched from the Kennedy Space Center, is part of its broader goal to deploy five military satellites by 2025, strengthening its independent surveillance and defense posture.

Read more at Al Jazeera.

U.S., U.K. and Australia discuss AUKUS tech cooperation with Japan

The defense leaders of the U.S., U.K., and Australia are considering involving Japan in the AUKUS security pact's technology initiatives to counter China's rise. This potential collaboration, focused on advanced defense technologies, signifies a strategic expansion of the AUKUS framework, aiming to enhance joint capabilities and interoperability in areas such as cyber capabilities, artificial intelligence, and quantum technologies.

Read more at Nikkei.

Ukraine Gets Air Defense Equipment Worth $138M From US

The United States has facilitated a $138 million emergency sale of air-defense equipment to Ukraine, aiming to enhance its defensive capabilities amidst the ongoing conflict. This support is part of a broader initiative to bolster Ukraine's military resilience against adversarial threats, especially in the face of escalating tensions and military engagements in the region.

Read more at Bloomberg.