Americas: Colombia reaches revised final peace deal with the FARC
Key Risks: insurgency; terrorism; political stability
In Colombia, the coming weeks will be crucial in securing the 12 November revised final peace deal reached between the government and the FARC. The accord came six weeks after the rejection of an earlier agreement in a national referendum. It includes changes in 56 out of the 57 thematic areas covering the proposals of those who opposed the initial deal, who will analyse the new agreement over the coming days. A new referendum is unlikely and the government is expected to present the new deal to Congress for ratification. The deal is likely to be supported although implementation challenges will remain. The coming weeks will be crucial in lowering high levels of uncertainty over the future of the peace process and securing the opposition’s support for the accord.
Asia-Pacific: India’s radical demonetisation risks continued economic disruption
Key Risks: economic slowdown
On 8 November, India’s Prime Minister Narendra Modi announced that Rs500 and Rs1000 notes would no longer be accepted as legal tender. The surprise move has little precedence, with the notes making up 86 per cent of the cash in circulation. The logic for the decision is an attempt to reduce the size of illegal cash holdings. As citizens have until 30 December to deposit the old notes in bank accounts, the government hopes to flush out tax evaders. In theory, if more Indians need to declare their income the tax base would rise and India’s fiscal position would strengthen. However, it is likely that the return of black money will occur, and it is far from clear that the economic disruption is a cost worth paying. Importantly, after two years of incremental and measured policy, this radical measure risks undermining public confidence in the government and could threaten its ability to pass further reforms.
Eurasia: elections in USA and Bulgaria raise likelihood Russia sanctions will be loosened
Key Risks: sanctions, frustration of process
The election of Donald Trump to the US presidency and Rumen Radev to the Bulgarian presidency decreases the likelihood that US and EU sanctions on Russia will be extended in full next year. Although sanctions are unlikely to be comprehensively lifted, Trump actively campaigned against them and in favour of a more pragmatic relationship with Moscow. Radev also called for Bulgaria to vote down an EU agreement to extend sanctions, and although his authority will be limited, his election caused Prime Minister Boyko Borisov to resign, increasing the likelihood new elections will be held that could see a more Moscow-friendly government come to power. Any move to loosen sanctions, particularly on state-owned corporations, would provide much needed relief to Russia’s budget. Conversely, it will raise security concerns in Ukraine and Georgia as well as the Baltics. Some EU members such as Germany and the UK could individually maintain sanctions in full if the bloc lifts or loosens them.
Europe: amid bleakness elsewhere, positives emerge in Greece and Cyprus
Sectors: energy, telecommunications, banking, shipping
Key Risks: economic stability, political stability, political violence
As much of Europe and the US seem mired in negative political headlines, Greece and Cyprus, the focus of many of the bleakest headlines in the aftermath of the global financial crisis, have turned comparatively positive. In Cyprus, President Nicos Anastasiades and Mustafa Akinci, the president of the Turkish Republic of North Cyprus, have continued their regular talks on finalising a peace agreement and both Akinci and Anastasiades are expected to hold talks with Greek Prime Minister Alexis Tsipras and Turkish President Recep Tayyip Erdogan over the coming week. A final agreement by the end of the year remains a possibility. The Greek government meanwhile was reshuffled last week in a manner to which markets reacted positively, while talks to reach a staff level agreement between Greece and its international creditors are expected to be comparatively smooth to previous rounds.
MENA: realities of battle for Mosul revealed
Sectors: power and road infrastructure, energy, humanitarian
Key Risks: terrorism; political violence
As Iraq’s counter-terrorism units have made headway into Mosul city proper, the reality of removing Islamic State (IS) is becoming clearer to the surrounding communities. Refugee levels remain relatively low four weeks into the offensive, with around 45,000 at IDP camps largely to the south and east, although there are reports of increasing numbers to the north. The strain of the intense fighting over the last four weeks is beginning to show as IS continues its attacks against civilians and fighters behind less secure frontlines with IEDs and shooting attacks facilitated by extensive tunnel networks. Ethnic cleansing of areas of Kirkuk indicate the mountain social relations face. Continued attacks in the next week will further undermine the riven community in northern Iraq.
Sub-Saharan Africa: Boko Haram fighters surrender as military offensive progresses
Key Risks: suicide bomb attack; ambush; kidnap; terrorist attack
Over 240 Boko Haram fighters and their families surrendered in Chad, a sign that the Multinational Joint Task Force, which launched a regional operation in July, is making some headway in combating the group. Boko Haram defections have increased in recent months, including in neighbouring Nigeria. The Lake Chad region remains an important recruitment hub for the group. The fighters were likely forcibly recruited or abducted by Boko Haram. Alongside the military campaign, Boko Haram has recently become increasingly factionalised. Further surrenders of combatants can be expected in the coming weeks, while Boko Haram are likely to step up retaliatory attacks across the Lake Chad Basin including suicide bomb attacks, razing of towns and villages, road ambushes, and kidnaps targeting humanitarian workers and government officials.