Americas: Strikes loom in Chile’s copper mines
Key Risks: labour strikes; unrest; business interruption
In Chile, a strikes loom in copper mines as contract negotiations with workers has yet to reach an agreement. On 19 July negotiations between Lumina Copper’s Caserones mine and its workers’ union broke down, with the union calling for government mediation and stating that it would reject a final company proposal expected to be submitted by 24 July. As of 21 July negotiations at BHP Billiton’s Escondida copper mine, the world largest, remained stalled. The negotiation period ends on 24 July and worker’s have criticised BHP for showing the ‘stubbornness’ that led to a historic 44-day strike in 2017. Labour tensions in Chile’s mining sector are expected to continue as several contracts at key facilities are being renegotiated. Such tensions might continue to add to overall copper market uncertainty amid the recently launched US – China trade war.
Asia-Pacific: Philippines House Speaker ousted as Congress opens its third regular session
Key Risks: political instability
On 23 July the Philippines House of Representatives deferred the ratification of the Bangsamoro Organic Law, a long-awaited piece of legislation to grant greater autonomy to the Muslim-majority region of Mindanao, House Speaker Pantaleon Alvarez was ousted. Lawmakers voted for former president Gloria Macapagal Arroyo to replace Alvarez as Speaker. Arroyo, who was imprisoned for allegations of corruption during the time of President Benigno Aquino III before she was acquitted under President Duterte, has publicly expressed her support for the president. The change, which has been in the pipelines since at least March 2017, came hours ahead of the planned ratification of the BOL and President Duterte’s third State of the Nation Address. While it remains unclear as to whether Alvarez will challenge the takeover, his allies are expected to contest the vote and there is a risk political instability in the weeks ahead.
Eurasia: Additional sanctions likely as a result of Trump’s efforts to improve US-Russia relations
Key Risks: sanctions;
Additional US sanctions against the Russian government are likely, despite the camaraderie between the two countries’ presidents on show during their 16 July Helsinki summit and underlined by Trump’s subsequent invitation for Putin to visit Washington DC. Immediately after the summit, Senate Republican leader Mitch McConnell noted the chamber would likely take up the DETER act introduced by Republican Senator Marco Rubio, which would sanction Russian debt issuances. Additionally, on 19 July two other Republican Senators introduced a new bill that would explicitly sanction European energy companies loaning funds to Gazprom’s Nord Stream 2 project – Engie, Uniper, OMV, Wintershall and Shell. Meanwhile further British sanctions on Russia should also be expected following investigators reportedly identified several Russian suspects behind the March poisoning of ex-Russian double agent Sergei Skripal and his daughter.
Europe: US Ambassador opens door to resettlement of Serbia-Kosovo territorial disputes
Key Risks: political violence; political instability
In a 19 July interview with Kosovar television, US Ambassador Greg Delawie refused to give a direct answer as to whether Washington believed that a potential partition of Kosovo could be part of a solution to the fledgling state’s dispute over its sovereignty with Serbia. Belgrade has never recognised Kosovo’s independence, declared in 2008. Delawie only said that Kosovo would have to be in agreement with any final pact. The following day a former Yugoslav Army member, Predrag “Madzo” Vukovic, who is wanted in Serbia was arrested in the Montenegrin town of Bar. He is wanted in Serbia for committing war crimes, most notably taking part in the murder of 46 Kosovar Albanian civilians in the town of Ljubenic (Lybeniq), which is now in Kosovo’s Pec district. Failure to extradite or prosecute Vukovic could cause further tensions. While Kosovar President Hashim Thaci and Serbian President Aleskandr Vucic are set for further EU-mediated meetings, they have not made any progress of late, nor are they expected to in the short-to-medium term
MENA: Dostum returns to Kabul; contentious elections approach in Pakistan
Sectors: Oil and gas; aviation; ports
Key Risks: Civil unrest; SRCC; violent clashes
Afghanistan’s Vice President Rashid Dostum returned to Kabul following 14 months of exile. Dostum’s return was likely approved by his erstwhile ally, President Ashraf Ghani, as the country moves towards elections, expected in October but at high risk of being delayed. Dostum has been one of the country’s most powerful warlords for more than three decades and is highly influential in the Uzbek community. A suicide bombing targeting Dostum’s’ welcome party killed 14. While his return may temper growing anti-government sentiment amongst some ethnic Uzbek Afghans, it could also set off renewed fighting for influence in the community. Meanwhile, elections in Pakistan will be held on 25 July. There are widespread accusations that the military is supporting Imran Khan’s PTI, and actively opposed to the ruling PML-N. There are no clear indications as to which party will win, although if the army is actively opposed to the PML-N, it is likely that it will suffer. Irrespective of the outcome there is an elevated risk of violent protests. Any party (or parties) that form a government will also have to deal with an economy in crisis, struggling with a depreciating rupee and foreign exchange shortages.
Sub-Saharan Africa: Prime Minister reportedly calls for transition to multiparty democracy
Key Risks: political stability
Fitsum Arega, the chief of staff of Ethiopian Prime Minister Abiy Ahmed, stated that Abiy believes Ethiopia needs to transition to a “multiparty democracy supported by strong institutions.” Ethiopia has de facto been a one party state, with all parliamentary seats presently held by the Ethiopian People’s Revolutionary Democratic Front (EPRDF). Since Abiy became prime minister a 100 days ago, Ethiopia has embarked in a change of direction. The government has lifted the ban on opposition groups that were considered terrorists, pushed economic liberalisation measures, began a process of normalising relations with Eritrea, and released political prisoners. However, given the magnitude of the changes implied by these remarks with should be met with scepticism and reforms are likely to be slow.