Americas: Haiti’s president to be sworn-in; instability risks to persist
Key Risks: social unrest; exposure to incidental violence; political instability
In Haiti, president-elect Jovenel Moise is expected to be sworn-in on 7 February after a lengthy and controversial electoral process which began in late 2015. Moise, a businessman with no previous public office experience, was handpicked by former president Michel Martelly as the candidate of his Tet Kale (PHTK) party, and won 55.6 per cent of the vote in the November 2016 elections. Previous rounds were annulled due to fraud allegations and rising violent unrest, particularly in Haiti’s main urban centres. Violent clashes erupted following the publication of preliminary results in November, with further incidents of unrest reported after the publication of final results on 3 January. Potentially violent demonstrations will remain likely in the lead up to and following Moise’s inauguration. The incoming president has recently been questioned over money laundering allegations. The risk of political instability will remain high at least over the coming months.
Asia-Pacific: opposition must make common cause at ‘Save Malaysia’ meeting
Key Risks: political instability
On 8 February Malaysia’s opposition political parties will meet for the ‘Save Malaysia’ roundtable, which aims to develop a new political blueprint for the country’s politics. There is strong support for such a movement; last May over 1.3 million citizens signed the related “Citizen’s Declaration” calling on Prime Minister Najib Razak to resign. However, Malaysia’s opposition is fractious and struggling to develop a consensus. The leader of the primarily ethnic-Chinese Democratic Action Party (PAS) angered many of his supporters when he suggested that he could work with the Islamists in PAS. Many viewed Prime Minister Mahathir Mohamad as the opposition’s saviour as his new party Pribumi Bersatu Malaysia could bring ethnic Malays to the cause. However, recent comments against Chinese investment has alienated PAS. Despite the difficulties, the opposition must quickly find a consensus if they are to succeed in general elections that may be called this summer.
Eurasia: Russian and Belarusian tensions spike as border implemented
Sectors: potash; energy; transportation
Key Risks: borderisation; frustration of process
Belarusian President Alexander Lukashenko warned that Russia’s unannounced 1 February implementation of border controls with Belarus violated the 1995-97 treaties establishing the Russian-Belarusian ‘Union State’. Lukashenko, who held a 7 hour press conference on the issue, also warned deteriorating relations could harm Minsk’s economy, particularly if gas rebates are not extended. Lukashenko has made moderately pro-Western overtures of late, but has historically shuffled between Moscow and the West only to return to the Russian fold when in need of economic assistance. However, the current nadir is unprecedented in recent years and could force Minsk to make additional concessions to the IMF, with long-running talks about resuming aid currently at an impasse. Russian-Belarusian tensions could also stoke a new price war in the potash industry.
Europe: Romania’s protests and Fillon’s scandal continue
Key Risks: protests; political instability; regional stability; protectionism
Hundreds of thousands of people across Romania continued to demonstrate over the weekend, despite the government’s revocation of a decree accused of being an attempt to retroactively legalise corruption. However, many opposition supporters have not been placated. While protests may abate somewhat, some protesters are likely to continue to demand the government resign. Protests could escalate further if the government introduces alternative legislation or in the event of a constitutional standoff between President Klaus Iohannis and the government. France also remains embroiled in a corruption scandal, with Republican presidential candidate and former frontrunner Francois Fillon facing widespread calls to stand down after the revelation of alleged illegal payments to his wife and other family members for working as his parliamentary aides. While centrist Emmanuel Macron is seen as the immediate beneficiary, and holds a larger lead than Fillon over the far-right Marine Le Pen in the second round, Macron’s own background as a banker and member of France’s elite will raise fears Le Pen will ultimately benefit.
MENA: Israel’s Netanyahu to seek support from Britain
Sectors: defence; energy; technology
Key Risks: protests; terrorism; regional stability
Israeli Prime Minister Benjamin Netanyahu is due to meet British Prime Minister Theresa May on 6 February for the first time since May ascended to the premiership. The government has formally maintained its critical position on settlement construction in the West Bank, clear in the three responses to Israeli announcements in the last fortnight. However, the government, through its delegation at the UN and multiple Foreign Office statements, has flip-flopped since the end of 2016 suggesting the prime minister may be confused as how best to use the government’s position on the peace process to curry favour with the new Trump administration. This is unlikely to impact the close bilateral cooperation on cyber security and advanced manufacturing. Netanyahu will likely be successful in his attempt to secure a kindred spirit in May on Iran.
Sub-Saharan Africa: US$1.6bln undisclosed expenses to complicate Ghana-IMF discussions
Key Risks: renegotiation/suspension of multilateral assistance; increased debt; investor sentiment
In an early headache for the newly-elected New Patriotic Party (NPP), the government stated that Ghana’s extended credit facility programme with the IMF may require ‘tweaking’ after the disclosure of US$1.6bln in expenses, unaccounted for by the previous administration. Ghana’s 2016 budget deficit is now expected to be close to double digits. Minister of Finance Ken Ofori-Atta stated the country was in talks with the IMF, which is due to conduct its first visit to Accra since the December elections, and would seek to finalise an audit of the undisclosed spending by 15 February. There is an increased risk of the IMF imposing penalties on Ghana, and the Fund is likely to be tough in any request for further transparency. Meanwhile, additional austerity measures should be expected, placing the implementation of newly-elected President Akufo-Addo’s campaign promises under pressure, including the popular one-district one-factory policy.