Americas: Temer faces crucial Senate vote amid increased corruption-fallout risk
Sectors: all
Key Risks: political instability; policy uncertainty; violent civil unrest; strikes

In Brazil, the Senate is expected to hold the final vote on President Michel Temer’s proposed constitutional amendment to cap public spending on 13 December. Temer’s controversial fiscal austerity plan has recently fuelled violent protests in Brazil’s main urban centres which are likely to continue to occur should the Senate approve the measure, as expected. The vote will come days after it became public that a former Odebrecht executive indicted in the Petrobras probe had linked Temer and other key cabinet members to illegal financing and other corruption scandals. Should the accusations be confirmed, they could destabilise Temer’s presidency and eventually lead to his removal from office. Passing the much-anticipated reforms would be a clear sign of strength amid increasing corruption-fallout which will add weight to already high tension among the population.

Asia-Pacific: Jakarta governor Basuki Tjahaja Purnama (Ahok) faces blasphemy trial
Sectors: all
Key Risks: political instability; political uncertainty; civil unrests

Jakarta governor Basuki Tjahaja Purname, also known as Ahok, will be tried for blasphemy on 13 December in a case that will test the strength of Indonesia’s democratic institutions. As an ethnically Chinese Christian, Ahok’s political office has been viewed as indicative of high levels of religious tolerance in the Muslim-majority nation of 240 million. However, while Ahok is seen as a capable governor, hundreds of thousands of demonstrators have taken to the capital’s streets in recent months after misleading footage of him quoting from the Qur’an was posted online with the relevant context removed. With a gubernatorial election in February, some of Ahok’s Muslim rivals have taken advantage and painted him as a blasphemer. Indonesia has a history of politically-motivated blasphemy trials, and Tuesday’s outcome will reveal much about pluralism and rule of law in the country.

Eurasia: Rosneft deal portends likelihood sanctions will be lifted but business risks remain
Sectors: all
Key Risks: sanctions; political uncertainty

The shock 7 October announcement that Rosneft would sell a 19.5 per cent stake in Russian state-owned energy giant Rosneft to Glencore and Qatar demonstrates the likelihood that sanctions on Russia will be loosened once US President-elect Donald Trump formally takes office. This has been further evidenced by Senator Bob Corker, head of the Senate Foreign Police Community, refusing to schedule a vote on extending Crimea sanctions, viewed as the least controversial, before Trump takes office. The Glencore-Qatar deal also foreshadowed the 12 December announcement that JPMorgan, SMBC and Mizuho would lend EUR800m over four years to Gazprom, further evidence Western financial institutions will extend activity in Russia. Nevertheless, the Glencore-Qatar deal’s structure has raised questions and could eventually see Russia take back part of the stake through the associated call options, demonstrating the continuing complications of doing business in Russia. Moscow also still maintains a majority stake in Rosneft.

Europe: Prime minister-designate in Italy faces risk as populists continue rise across Europe
Sectors: all; banking
Key Risks: political stability; economic

On 11 December Italy’s President Sergio Mattarella appointed Foreign Minister Paolo Gentiloni as prime minister-designate. Gentiloni is a member of the Democratic Party of outgoing Prime Minister Matteo Renzi, who resigned after losing the 4 December constitutional referendum. He is expected to seek to maintain the current government or form a government of national unity although an early election cannot be ruled out. Uncertainty will continue to weigh on Italian banks, although a Gentiloni-led government would likely seek new bailout talks with the EU. Nevertheless, developments in the Netherlands demonstrate the continued risk of populist parties across the union. On 9 December a court found far-right populist politician Geert Wilders guilty of inciting violence by calling for the Netherlands to ensure the country had ‘fewer Moroccans’ at a rally in March 2014 but imposed no punishment. Wilders’ Freedom Party (PVV) now leads the polls ahead of next years elections, and there are fears his planned appeal could boost his public appeal.

MENA: forthcoming challenges for Kuwait legislature highlighted in Amir’s speech
Sectors: public sector investment, private sector investment
Key Risks: economic, payment delay; non-payment

Amir Sabah al-Ahmad al-Jabir al-Sabah opened the new sitting of the National Assembly on 10 December with a speech highlighting the challenges to Kuwait’s economy. There will be significant resistance in the legislature for budgetary cuts, boosted by the wave of popular support for continued state spending despite the notable fiscal deficit. However, economic diversification projects put forward by the government will be received positively. The opposition’s inability to unite behind a single candidate in opposition to the influential speaker of parliament, Marzuk al-Ghanim, highlights its relative weakness, and the potential for the government to exploit the policy differences among different opposition groups. The government’s prominent infrastructure “mega projects” such as the al-Zur refinery project and airport expansion will stay on course.

Sub-Saharan Africa: President to challenge election results
Sectors: all
Key Risks: political instability, civil unrest, political violence

Gambia’s President Yahya Jammeh announced he will challenge the results of the 1 December presidential election, which he narrowly lost to opposition candidate Adama Barrow, in the Supreme Court. Jammeh claimed there were ‘serious and unacceptable abnormalities’, just days after initially accepting the result. The decision has the potential to spark a protracted political crisis, while it will almost certainly lead to a short term spike in civil unrest. Much will depend on the loyalty of the military, which has already heightened its presence in key urban areas to mitigate potential unrest. Although the head of the military pledged allegiance to Barrow in the aftermath of the election, key personnel remain loyal to the president and there is a risk Jammeh will attempt to remain in power through force.