Americas: Corruption fallout in Brazil far from over

Sectors: construction; oil and gas
Key Risks: non-payment; reputational risks

In Brazil, corruption fallout is far from over. On 8 October local media reported that the government was seeking US$12.7bln from Andrade Gutierrez as part of an agreement to settle claims related to its involvement in kickback schemes. The fine appears to be a condition for signing a leniency agreement that would allow the company to continue bidding for government contracts. The terms of the agreement are still being negotiated. Meanwhile, Previ Caixa de Previdência, Brazil’s largest pension fund, is scheduled to decide on whether to join an arbitration case opened by a group of investors against state-owned oil company Petrobras over the coming days. Investors reportedly claim to have lost around 5bln reais through Petrobras’ shares due to actions taken by the company that violated capital market laws. Should pension funds join, the claims could significantly increase.

Asia-Pacific: Cambodian government moves to dismantle democracy          

Sectors: all
Key Risks: internal conflict; rule of law

Prime Minister Hun Sen’s Cambodian People’s Party (CPP) government has done much to dismantle Cambodia’s democratic institutions this year, in preparation for June 2018’s national elections. By the end of this week, there might not be an opposition party left to contest them. In early September, Kem Sokha, leader of the opposition Cambodia National Rescue Party (CNRP), was arrested on politically-motivated treason charges. His deputy, Mu Sochua, and at least half of CNRP national assembly members have fled abroad. Then on 6 October the CPP initiated legal proceedings to dissolve the CNRP altogether. Without a significant opposition group to direct growing public discontent, dissidents are unlikely to come out onto the streets in protest. This week will give a much clearer indication of whether Cambodia will be a one-party state by the time elections come around.

Eurasia: Kyrgyzstan’s presidential elections on 15 October, Russian demonstrations

Sectors: all
Key Risks: political stability

Voters in Kyrgyzstan go to the polls on 15 October to elect a new president to succeed outgoing Almazbek Atambayev, who is term-limited from running again but could transition to the prime minister’s post. Ex-prime minister and Atambayev protege Sooronbai Jeenbekev is seen as the favourite, although Omurbek Babanov, one of the country’s richest men, is also a leading candidate. Unrest, particularly in the ethnically-mixed south, around and after the vote remains a risk. Meanwhile in Russia, on 7 October thousands demonstrated to call for reform on President Vladimir Putin’s birthday, although the protest in Moscow was smaller than opposition leaders hoped. Nevertheless, the demonstrations show opposition activists will likely ramp-up such activity ahead of the 18 March 2018 presidential vote.

Europe: Kurz likely to become Austria chancellor-elect by week’s end, Bulgarian scandal

Sectors: all; aerospace / defence
Key Risks: political stability; contract frustration; frustration of process

Bulgaria’s ruling GERB party moved to reopen a provisional award of a contract to Saab to supply the country with fighter jets, alleging that President Rumen Radev, an ally of the opposition Socialist Party, accepted a bribe in the deal. The move could lead to further reviews of defence contracts agreed by Radev, a former prominent Air Force general. Austria will hold its general election 15 October, with the People’s Party widely expected to comfortably win a plurality of seats under the leadership of outgoing foreign minister Sebastian Kurz, who has adopted highly populist rhetoric to reclaim votes from the far-right Freedom Party, although he may well be forced to form a coalition with them to form a government. Kurz will likely align with the Euroscepticism and anti-immigrant stances of Poland and Hungary’s governments.

MENA: Turkish army launches operations in Syria’s Idlib to counter Kurds

Sectors: military; government; hydropower
Key Risks: terrorism; war on land

On 9 October the Turkish military confirmed ground troops launched reconnaissance activities in Syria’s Idlib province the previous night. The operations are nominally part of an offensive against the al-Qaeda affiliated-militia coalition Tahrir al-Sham which was announced on 7 October by President Recep Tayyip Erdogan. The offensive includes Russian air support and Free Syrian Army fighters, and is part of an agreement with Russia and Iran to create ‘deconfliction zones’ across Syria. However, the offensive is a disguise under which the Turkish military and other Syrian allied groups will conduct operations against the Kurdish-controlled Afrin canton, in a long-awaited sequel to Operation Euphrates Shield carried out in 2016. The Turkish deployment in Syria is likely to increase during the week and there is potential for violent confrontations with the Kurdish People’s Protection Units (YPG). The risk of terrorist incidents inside Turkey also increases with this offensive.

Sub-Saharan Africa: Electoral race wide open in Liberia as voters head to the polls

Sectors: all
Key Risks: second round runoff; sporadic post-election unrest

Following the end of a vibrant campaigning period, on 10 October voters will go to the polls in Liberia in a historic election that will see President Ellen Johnson Sirleaf stand down after the second of her two six-year terms came to an end. The elections mark the first time since 1944 that a democratically appointed leader will hand over power through the ballot box. Fourteen years on from the end of the devastating civil war, reconciliation remains a key issue, as do corruption, infrastructure development and youth unemployment. Indeed, many aspirants played a role in Liberia’s civil war, and/or retain links with imprisoned former president Charles Taylor. The race remains wide open, with 20 presidential candidates competing, and a second round runoff is likely. Frontrunners include former football star George Weah and Vice President Joseph Bokai.