Americas: Cuba to undergo heavily controlled presidential transition

Sectors: all
Key Risks: political stability; policy continuity

In Cuba, 19 April will mark the end of the Castro era. The National Assembly’s 605 lawmakers endorsed in the 11 March one-party vote are expected to elect 57-year old First Vice President Miguel Diaz-Canel as the communist country’s next president. The transition to a non-Castro president for the first time in almost 60 years is expected to be heavily controlled. However, even if it will take place within the ruling Communist Party of Cuba (PCC), the country will be faced with the challenge of accommodating a new generation of leaders born after Fidel Castro’s 1959 revolution. Diaz-Canel, 86-year old President Raul Castro’s chosen successor, will have to find a balance between implementing reforms to avoid deepening a fragile economic situation, which could increase political risks, and ensuring stability within the PCC by further entrenching the revolution’s key values, which would heighten economic risks.

Asia-Pacific: Abe weakened at critical time for Japanese diplomacy

Sectors: all
Key Risks: political instability; geopolitical tensions

On 17 April Japan’s President Shinzo Abe will visit his US counterpart Donald Trump in a brief escape from Tokyo, where pressure for his resignation is mounting due to his involvement in the sale of state land to a family friend and then a subsequent effort to cover it up. At present it appears difficult to imagine how Abe could avoid standing down, but from an international perspective the timing is awkward. Japan is still attempting to negotiate an exemption from a range of US tariffs that cover Japanese steel and aluminium exports, and in the months ahead President Trump will take the unprecedented step of meeting with North Korea’s Kim Jong Un. Whatever comes out of that meeting will have major ramifications for Japan. A meeting is also scheduled between Abe and China’s Xi Jinping. Abe’s ability to influence negotiations appears compromised at a crucial time for Japan.

Eurasia: Further US sanctions expected, while Kremlin moots response

Sectors:  SOEs; energy; petrochemicals; metals; aircraft
Key Risks: sanctions

On 15 April US Ambassador to the United Nations Nikki Haley said that she expects the US Treasury to announce further sanctions on Russia over its support for Bashar al-Assad’s Syrian regime as early as 16 April. The measures may target alleged Russian support for Syria’s chemical weapons programme. There have been some claims that Russian petrochemicals companies such as Sibur, in which Russian President Vladimir Putin’s close associates and family own stakes, could also be impacted. However, overall the sanctions are not expected to be as significant as those enacted on 6 April. Further tensions will emerge as the Kremlin is considering its response to the measures, with proposals in front of its legislature ranging from bans on granting work visas to US nationals to titanium export restrictions, which could have an impact on US aircraft manufacturer Boeing, to limiting nuclear and space cooperation.

Europe: Italian uncertainty while EU summit further exposes bloc’s divisions

Sectors: all
Key Risks: political instability

On 13 April  Italian President Sergio Mattarella said there was “no progress” in talks regarding forming a government, five weeks after the inconclusive 4 March general elections. The largest party is the populist anti-establishment Five Star Movement (M5S) while the far-right Lega is the largest party in the right-wing coalition that overall received more votes than M5S. Mattarella said the process would continue but he may still seek to cobble together a national unity government, although there are major doubts this could be sustained. The uncertainty came ahead of an EU gathering of foreign affairs ministers being held on 16 April in Luxembourg that is expected to highlight divisions over whether to join the US in escalating sanctions against Russia. The bloc is ultimately expected not to join, at least for now. A number of other key foreign policy issues are also being debated, such as the expectation the US will cancel the Iran deal or the escalating conflict in Syria, and further cleavages within the EU could be revealed.

MENA:  Government forces to reinforce northern and southern fronts following Ghouta victory

Sectors: all
Key Risks: political violence; civil war; war on land

In the wake of the successful ousting of armed opposition groups from eastern Ghouta in Syria, pro-government forces will begin to redeploy in order to reinforce military operations underway north of Damascus in Idlib and around Homs and Hama. A campaign by the Syrian Air Force targeting the Islamist group Hay’at Tahrir al-Sham (HTS) in Homs, Idlib and Latakia provinces is likely to increase in tempo over the coming week. Government forces may benefit from fighting between HTS and other rebel groups in Idlib in which HTS is seeking to regain territory lost in recent weeks. The Air Force campaign will intensify in the countryside around Salamiyah. The redeployment of troops and resupply efforts south of Damascus as part of a impending operation against opposition groups in territory adjoining the Golan Heights will also continue.

Sub-Saharan Africa:  Encouraging signs in Ethiopia under new PM

Sectors: all
Key Risks: political infighting; security sector reform; civil unrest

New Prime Minister Abiy Ahmed’s first weeks have brought about renewed optimism that the government will make good on its pledges to address protesters’ grievances and end the instability that has rocked the country since late 2015. In his first days in power he visited Ambo, the epicentre of unrest, and was met by cheering crowds. He has also met with opposition groups that previously had little voice in Ethiopian politics and, at a meeting with residents of Addis Ababa, pledged to carry out security sector and judicial reforms. Ahmed also said he would review repressive laws that have restricted free speech and decimated civil society. Ahmed is under immense pressure to show he is not another TPLF puppet and so far the signs have been positive. However, he will no doubt still have to contend with elite interests as he seeks to deliver concrete reforms in the months ahead. Ahmed’s ability to turn rhetoric into reality is also constrained by the ongoing state of emergency, which gives significant powers to military officials.