Americas: FARC disarmament could be further delayed; peace process unlikely to be derailed
Sectors: all
Key Risks: terrorism; insurgency; political stability
In Colombia, FARC leader Rodrigo Londono stated he was considering postponing the FARC’s disarmament following the arrest of a rebel by government forces. The government stated there was an identity ‘confusion’ over the arrest and that the situation would be resolved. The FARC should disarm by 20 June, following a 29 May agreement to extend the 30 May deadline due to logistical delays, particularly in the construction of the camps in which around 7,000 rebels are located. Agreed and potential further disarmament delays will remain a key challenge to the implementation of the 12 November 2016 peace accord. However, the process is unlikely to be derailed. The risk could increase should major disagreements over the behaviour of each of the parties erupt, but recent developments suggest that these are likely to be quickly addressed to prevent tensions from escalating.
Asia-Pacific: Counter-terrorism operations to intensify as president rules out peace talks
Sectors: all
Key Risks: terrorism
On 4 June, Philippines’ President Rodrigo Duterte ruled out dialogue with the Islamic State (IS)-linked Maute Group and Abu Sayyaf Group in Marawi City, and instead said he has ordered the military to bring him their heads. The two groups entered Marawi on 23 May and at least 170 people have died in the fighting that ensued. The announcement by Duterte came after an earlier ceasefire agreement intended to allow civilians to escape broke down. The coming days will likely witness intensified counter-terrorism operations not just in Marawi City but across the southern Philippines, and in particular the island of Mindanao, which is currently under martial law. Airstrikes targeting the militants’ positions in Marawi resumed after the collapse of the ceasefire, with fighting expected to continue at least over the coming days.
Eurasia: ICG details result of April 2016 clashes in Nagorno-Karabakh, highlighting increased risk
Sectors: all
Key Risks: interstate war
The International Crisis Group (ICG) published a report on Nagorno-Karabakh that warned the risk of a major conflict breaking out between Azerbaijan and Armenia was higher than at any point since the 1994 brokered ceasefire. The report also detailed changes in the line of control caused by major clashes last April, including highlighting that Azerbaijan had re-taken portions of Talish and the Lalaptapa heights, near the border with Iran in heavy clashes last April that left more than 200 dead. The former strategically overlooks the Sarsang Reservoir, the main water supply in the Armenian-controlled region and the latter is also seen as a strategic boost to Azerbaijan’s ability to carry out an attack on Armenian-controlled territory, as it would enable a flanking move towards the Lachin corridor.
Europe: British voters head to polls 8 June, French elections start on 11 June
Sectors: all
Key Risks: political instability; forex shortages
Voters head to the polls in the United Kingdom on 8 June in a snap election called less than two months prior by incumbent Prime Minister Theresa May. May’s Conservatives were seen to be on track for a significant boost to their majority given widespread discomfort with Labour leader Jeremy Corbyn, but a number of recent polls that have shown the Conservatives short of a majority have raised concerns that the vote could result in a hung parliament, although the most likely outcome remains a Tory majority. France’s upcoming 11 June parliamentary elections, and their 18 June second round, are comparatively more straightforward with the En Marche! movement of newly-elected President Emmanuel Macron seen as likely to win a parliamentary majority. If he falls short, a coalition with the centre-right Republicans is a distinct possibility.
MENA: Gulf dispute escalates to severing of diplomatic ties
Sectors: trade; air travel; maritime; energy
Key Risks: CEND; frustration of process; contract frustration
On 5 June Saudi Arabia, the UAE, Bahrain, Egypt along with several other countries announced they severed diplomatic ties with Qatar. Statements carried on state news agencies in most of the countries cited Qatar’s support for certain armed and political groups across the region, including the Muslim Brotherhood and al-Qaeda. Events follow a public disagreement after Qatar News Agency (QNA) carried comments attributed to the Emir, Tamim bin Hamad late on 23 May criticizing US President Donald Trump and implicitly criticising the new Saudi policy of courting America in the wake of Trump’s visit to Riyadh. QNA claimed it was hacked after criticism from regional governments filled local newspapers. Several countries have closed their air and maritime spaces to Qatari traffic. Saudi has closed Qatar’s only land border. The Russian and Iranian governments have called for calm. Further consequences are likely.
Sub-Saharan Africa: #Guptaleaks to shape President Jacob Zuma’s succession
Sectors: all
Key Risks: corruption; policy stasis; economic recession
Ratings agencies S&P and Fitch maintained their ‘junk status’ rating for South Africa following the downgrades prompted by President Jacob Zuma’s cabinet reshuffle. Further corruption scandals – linking Zuma and the wealthy Gupta family – surfaced, as investigative journalists at amaBhungane began publishing their collection of up to 200,000 leaked emails documenting widespread corruption involving Zuma and his family, the Guptas, African National Congress (ANC) politicians as well as executives from SOEs. The emails, dubbed #GuptaLeaks, have deepened divisions within the ANC. Nonetheless Zuma recently won a vote of no confidence and is expected to retain power until the December party conference, where a successor will be chosen. The stakes cannot be overstated, with Zuma’s successor dictating whether there will be policy continuity or change. Factions are emerging around Nkosazana Dlamini-Zuma, a Zuma proponent, and Cyril Ramaphosa, whose rhetoric has become increasingly anti-Zuma.
