Americas: General elections in Brazil to lead to polarised presidential runoff

Sectors: all
Key Risks: policy uncertainty; political instability; civil unrest; governability

In Brazil, general elections are scheduled to take place on 7 October with no presidential candidate expected to secure the 50 per cent needed to avoid a runoff on 28 October. Far-right frontrunner Jair Bolsonaro and leftist Workers’ Party (PT) candidate Fernando Haddad are increasingly likely to face of in the most polarised and uncertain election arguably in Brazil’s history. Support for Haddad has significantly increased since imprisoned former president and PT leader Luiz Inacio Lula da Silva backed his candidacy after his own was banned by electoral authorities. Nevertheless, other left of centre candidates could potentially also make it to 28 October. Bolsonaro has stated he will not accept defeat, with most polls indicating he would not win the potential runoff. Tensions are expected to increase in the lead up to and following the 7 and 28 October votes.

Asia-Pacific: Abu Sayyaf reportedly regrouping on kidnap-for-ransom operations

Sectors: all
Key Risks: kidnap; terrorism; political violence

Reports emerged on 27 September that Philippines-based Abu Sayyaf Group (ASG) militants are re-grouping and restarting kidnap-for-ransom operations in the Philippines’ Mindanao region and Sabah’s east coast in Malaysia after nearly two years of inactivity. ASG is planning to conduct cross-border kidnappings in the area. According to government reports, an ASG sub-commander thought to have been killed in 2016 is thought to be heading the operation. The group is reportedly being financed by southern Philippines warlords seeking to destabilise the region in response to the ratification of the Bangsamoro Organic Law in July, which allows parts of southern Philippines areas of Muslim-majority Mindanao to move towards self-rule. The warlords have allegedly financed two kidnap operations in Sabah’s east coast, one of which was the 11 September abduction of two Indonesian fishermen. The risk of kidnap remains high in the area.

Eurasia: Crisis-stricken Turkmenistan ends handouts while Uzbekistan marks cotton improvement

Sectors: all
Key Risks: contract frustration, sovereign default

On 26 September, state media in Turkmenistan published a decree announcing that President Gurbanguly Berdymukhamedov ordered the last vestiges of the country’s decade-old policy of providing free natural gas, electricity, and water – as well as some basic goods like flour and sugar – would be abandoned from the beginning of 2019. Berdymukhamedov’s order said utilities would still be available at preferential prices but did not provide further detail. More positive news was reported in Uzbekistan, however, given the US decision to remove the country from a blacklist of cotton producers after it reportedly made progress on the use of child labour in this year’s harvest. However, the ADB also lowered its growth forecast slightly for the country, to 5.5 per cent, citing the lingering impacts of inflation caused by last September’s currency liberalisation.

Europe: Macedonia referendum setback and UK political stability

Sectors: all
Key Risks: political uncertainty, civil unrest

The 30 September referendum in Macedonia on changing the country’s name to North Macedonia – which would enable it to seek NATO and EU membership as Greece would lift its longstanding veto – failed as turnout was well below the 50 per cent threshold. However, no major unrest was reported, and the government has indicated it will take the fact that more than 90 per cent of those who did vote supported the deal as reason to try and push it through parliament. This is unlikely to succeed given the opposition’s boycott but will likely lead to a snap by years’ end. The annual conference of Britain’s ruling Conservatives also began 30 September amid squabbling between Prime Minister Theresa May and her former foreign minister, Boris Johnson and his allies over how to pursue Brexit. It cannot be ruled out the conference will result in a leadership challenge.

MENA: Iraq Kurdish presidential announcement scheduled for 2 October

Sectors: all
Key Risks: political stability

The president of Iraq is scheduled to be announced on 2 October as the Kurdish people went to vote on 30 September. Although the presidential position is largely ceremonial, it kicks off the 2 week constitutional countdown for the election of the Iraqi Prime Minister, the highest seat of power in Iraq. Front runners are Barham Salih, former prime minister Kurdistan, and Fuad Hussein, chief of staff to former president Masoud Barzani. Rumours abound as to the shape of the government in Federal Iraq in which Shia’ah cleric Muqtada al-Sadr is touted as kingmaker. Coalition formation has been long and arduous, with reports coming in of up to 16 parties forming a coalition. These positive steps forwards enable legislation to be passed to start reparations for the country after IS was declared defeated a year ago.

Sub-Saharan Africa: Increased strike risk as February 2019 elections approach

Sectors: all
Key Risks: policy uncertainty; strikes

On 1 October the Nigeria Labour Congress (NLC) suspended a nationwide strike, called on 27 September, after the federal government agreed to relaunch talks over an increase of the national minimum wage. The NLC demands the wage floor be nearly tripled to about 50,000 naira (US$164) to compensate for rising living costs resulting from recent devaluations of the naira. The return to the negotiating table means an economically crippling cross-sectoral strike may be averted for the time being. Both the NLC and the government have indicated they would seek a compromise. However, the reprieve could only be temporary. With presidential elections approaching in February 2019 and President Muhammadu Buhari critically weakened by a string of defections from his APC party, labour unions and other interest groups are likely to exploit the campaign to win generous government concessions.