Americas: Venezuela-Colombia border reopens; Olympic security; utility hike in Argentina

Venezuelans will likely continue to cross en masse into neighbouring Colombia to buy mostly food and medicine following the 11 August bilateral agreement to gradually re-open the border, which was unilaterally closed by Venezuelan President Nicolas Maduro nearly a year ago over security concerns. Both countries agreed to open five border crossings for pedestrians from 6am to 9pm every day. Over 100,000 Venezuelans crossed into Colombia between 13 and 14 August due the widespread scarcity of basic goods in crisis-ridden Venezuela. No violent incidents were reported although tensions should not be ruled out as the gradual re-opening continues.

In Brazil, recent incidents in Rio de Janeiro confirmed that civil unrest and violent crime remain key security risk posed to visitors and athletes as the Olympic Games enter their second week. On 12 August violent clashes were reported between protesting students and the security forces in the Meier neighbourhood. Students attempting to march to the Maracana Olympic stadium were dispersed by police with tear gas and stun grenades. On 14 August four US swimmers were robbed at gunpoint when their taxi was stopped by armed men posing as police. The risk of a lone wolf terror attack will also persist.

In Argentina, the government’s controversial utility fee hikes are expected to continue to fuel unrest and political tensions. Hearings in Congress and an upcoming Supreme Court decision on the issue will likely add weight to both risks. Unions, opposition groups and social movements demonstrate on a weekly basis in Buenos Aires to protest against economic reforms. Most protests are peaceful, although severe travel disruption tends to affect the city centre and some entry points to the capital. Strong security presence during demonstrations indicates potential for localised clashes, although these have not been recently reported.

Asia-Pacific: Mongolia’s economic woes; bombs in Thailand; gas disputes in Papua New Guinea

The next few months will be crucial for the economic prospects of Mongolia. Last week the newly elected government’s finance minister warned that his administration had inherited an economic crisis. Public debt is now over three-quarters of GDP and growth has collapsed. The previous coalition shattered investor confidence in the resource-rich country by attempting to renegotiate the government’s stake in mining projects. When investment subsequently dried up, the government borrowed heavily to finance its populist campaign pledges. The commodity-price collapse has exacerbated the problem. The government has emphasised avoiding default, but its upcoming actions will likely give a good indication of its ability to tackle the unsustainable debt pile.

In Thailand the coming weeks will see significant speculation over the identities and motives of the perpetrators of the 11 bombs that hit tourist towns across the country’s south on 11-12 August. The bombs killed four people and injured dozens in Hua Hin, Trang, Surat Thani, Phuket and Phang Nga. No group has claimed responsibility. The timing close to the queen’s birthday and the constitutional referendum suggests hard-line anti-junta ‘red shirt’ activists, while the tactics bore several hallmarks of the deep south’s Muslim-Malay separatists. A confirmed separatist link would represent a significant escalation of the insurgents’ campaign.

In Papua New Guinea there will be continued tension around the US$19bln PNG LNG project over the coming days. Local landowners from Hela province have been blocking access to a gas-conditioning plant for over a week, demanding allegedly unpaid royalties from the government. The project’s main operator ExxonMobil claims production has been unaffected, but some reports suggest the most recent export shipment contained only half as much gas as usual. A complete and long-term shutdown of the project remains unlikely, but output could significantly drop if the protest drags on, especially as other landowner groups with similar complaints are reportedly considering joining the movement.

Eurasia: tensions around Crimea continue to increase

On 10 August Russia accused Ukrainian saboteurs of having carried out two attempted ‘provocations’ in Russian-controlled Crimea on 6 and 7 August, with President Vladimir Putin going so far as to accuse Ukraine of terrorism. Ukraine denies the claims and says any clashes reported in northern Crimea were between Russia and a group of deserters from the Russian military. Ukraine’s State Border Service Chief Viktor Nazarenko announced the deployment of reinforcements to the de facto border between mainland Ukraine and Russian-held Crimea.

The weekend of 12-14 August also saw Russia deploy its advanced S-400 anti-aircraft missiles to Crimea, while Ukraine alleged Russian-backed separatist forces used experimental laser weaponry in eastern Ukraine. Ukrainian intelligence services have also attempted to downplay the risk of an all-out Russian invasion, saying it did not have forces in position to do so. Nevertheless, there risk of renewed conflict around Crimea or southern Ukraine is at its highest since Russia’s covert invasion and subsequent annexation in February-March 2014.

Europe: anti-terror proposals in Germany; insecurity in Switzerland; Poland – EU tensions

On 11 August in Germany, Interior Minister Thomas de Maiziere announced a series of anti-terror proposals. They include expanding the domestic security forces’ personnel and enhancing surveillance powers for the police. Promoting terrorism will also be made a criminal offence. Enhanced surveillance powers may face legal challenges; German courts have frequently cited privacy legislation in curtailing surveillance powers in recent years. Security concerns have spiked in Germany, which faces a high risk of terrorism carried out by Islamic State (IS) and potentially other Islamist extremist groups, in recent months.

Two days later, in Switzerland, one person was killed and six injured after a 27-year-old Swiss man attacked passengers on a train outside Salez, in the canton of St. Gallen near the border with Austria and Liechtenstein, with a knife. Police noted they have no reasons as of yet to believe the act was motivated by terrorism but are investigating all possibilities. However, even if the attack turns out not to be terrorism related it is likely to prompt further calls about significantly increasing security measures on rail transport across Europe, coming less than a month after an Afghan refugee seriously wounded six in a knife attack on a train in Germany, an attack he reportedly carried out in the name of Islamic State (IS).

Political developments with regard to the European Union have been slower this past week, although the British press reported that an exit from the EU by the United Kingdom is increasingly likely to be delayed further, with Autumn 2019 now being seen as the earliest possible date. Tensions between Poland and the EU will also remain high after Poland’s Constitutional Court again ruled that provisions of the Law and Justice (PiS) party government’s latest constitutional reforms, which it had passed in a half-hearted effort to address EU criticisms over earlier similar reforms, are unconstitutional. The government immediately rejected the ruling claiming the court acted improperly by not following the constitutional changes in considering the ruling. The government’s strategy will be to hold out and wait until critical judges’ terms expire later this year.

MENA: Egypt – IMF deal; violence to intensify in Iraq; uncertainty surrounds Tunisia

In Egypt the IMF confirmed the agreement of a US$12 bln loan to Egypt, which will be linked to a package of potentially painful reforms to be brought in by the Egyptian government. The implementation is still subject to approval by the IMF’s executive board and the Egyptian government. These reforms, although positive for overall economic stability, will result in increased unrest in Egypt over the coming year. Greater instability could have a knock-on impact on growth in tourist numbers and ultimately overall economic recovery. However the financial support, combined with Gulf financing, will continue to underpin government finances.

In Iraq, violence is expected to intensify around Mosul as Iraqi and Kurdish security forces tighten the siege of the city. Kurdish security forces took control of a number of towns in the vicinity of Mosul over recent days, and preparations for an assault on the last major Islamic State (IS) stronghold in the country are ongoing. Sporadic clashes are likely to intensify and US-led air strikes will continue in an attempt to degrade the jihadist group’s ability to stand and fight. The final assault will likely be protracted if IS decides to stand its ground, while the rate of terrorist attacks may well increase in areas controlled by Baghdad and the Kurdish authorities as IS alters its tactics to focus more on infiltration and mass-casualty attacks over the coming months.

In Tunisia, an expected appeal by Jalel Ben Mubarak, head of the Dostourna political network, against the appointment of Youssef Chahed as Prime Minister by President Beji Caid Essebsi, in the apparent absence of the constitutional court, could heighten political instability and delay government decision making on key issues. Chahed’s appointment is unlikely to be determined as unlawful, despite critics alleging it to be nepotistic. However, the appeal demonstrates the division within the political establishment.

Sub-Saharan Africa: Zambia electios; South Africa’s economic outlook; Boko Haram 

Incumbent President Edgar Lungu defeated Hakainde Hichilema to secure another term in Zambia’s closely contested presidential elections. Lungu secured 50.35 per cent of the vote, narrowly avoiding a run-off. However, Hichilema has rejected the result, citing widespread voting irregularities in an election that has been largely peaceful despite sporadic clashes between supporters in its run up. Lungu will need to address the country’s economic woes, with the Zambian economy experiencing its slowest growth in 17 years as a result of falling copper prices, which have led to high unemployment, soaring food prices and mine closures.

South Africa’s African National Congress (ANC) called for the national budget to be “re-prioritised” to focus on tackling poverty, unemployment and inequality. The statement follows the party’s worst defeat since coming to power in 1994 in the municipal elections earlier in August, where the party lost its majority in key urban districts. However, the publication of unexpectedly positive economic data showing a higher-than-expected increase in manufacturing output, as well as a less marked contraction in mining production, have increased hopes of the South African economy staving off a recession, with the rand also holding firm. This is likely to improve market and public sentiment alike, at least in the short term.

In Nigeria, militant group Boko Haram published a video allegedly showing footage of dozens of schoolgirls kidnapped from their school in Chibok two years ago. The group sent a message to the federal government to release imprisoned militants in exchange for the release of the girls. While Boko Haram has lost territory following the ongoing campaign by the Nigerian military, over 200 of the kidnapped girls remain missing, and the risk of kidnapping and sporadic suicide bomb attacks in Nigeria’s north and the Lake Chad Basin is high. Boko Haram is suffering from factionalism following tensions following the replacement of Abubakar Shekau by Islamic State, with their future strategy – at least in the short term – uncertain.