Americas: Haiti faces fresh wave of violent anti-government protests

Sectors: all
Key Risks: civil unrest; political instability; business disruption

In Haiti, waves of nationwide violent anti-government protests are expected to continue. At least 17 people have been killed since 18 November, when clashes intensified as demonstrators blocked streets with burning tyres in the capital Port-au-Prince and other cities. Schools, shops and private businesses remained closed in Haiti’s main urban centres. On 21 November six people were killed after a government car allegedly accidentally drove into a group of protesters. The incidents was followed by lethal clashes in Malpasse town on 24 November. On 29 November the US authorised the departure of non-essential personnel from the country The protests are part of an anti-government movement that started accelerating in August. Demonstrators demand President Jovenel Moise step down over his failure to investigate corruption allegations involving government officials. Further violent unrest, rioting and looting will remain likely over the coming weeks.

Asia-Pacific: Truce on the Sino-US trade war to be welcome cautiously

Sectors: all
Key Risks: trade war; tariffs

US President Donald Trump and Chinese President Xi Jinping agreed a 90-day pause to the trade war at a meeting on the sidelines of the G20 Summit. The US will refrain from increasing tariffs from 10 to 25 per cent on US$200bln of Chinese imports on 1 January while both sides continue negotiations. Beijing has indicated that it will increase imports from the US and agreed to minor concessions. However, the two leaders remain far apart on basic issues of market access and trade policy, and there was no sign that either planned to back down on those. If progress isn’t made within the 90-day deadline, then Trump will raise the tariffs to 25 per cent. A lasting agreement on trade remains far off though the truce is an indication political pressure is coming to bear on the Trump Administration.

Eurasia: New Russia sanctions likely; Ukraine escalates; Gazprom & Turkmenistan advance talks

Sectors: all
Key Risks: sanctions; credit risk

New sanctions are likely against Russia after the 26 November attack on three Ukrainian Navy ships and its subsequent jailing of detained Ukrainian sailors. Meanwhile the security situation in Ukraine is set to further escalate following the imposition of martial law in eastern, north-eastern, southern, and south-western border areas on 28 November, which will last for one month as things stand. Moves to extend it could prompt unrest. There is some potential positive news for Ukraine in that Russia’s state-owned natural gas giant Gazprom and Turkmenistan are resuming talks on the former buying natural gas from the latter, which would potentially be bumped via Ukraine to Europe and thus not end Ukraine’s status as a gas transit nation, although levels would undoubtedly be far below what they are now.

Europe: Brexit turmoil continues eight days ahead of first parliamentary vote

Sectors: all
Key Risks: political instability; trade frustration

On November 30 European Council President Donald Tusk warned British MPs that the EU Withdrawal Agreement negotiated by Theresa May which is due for its first vote in parliament on 11 December was the ‘only possible one’ and that the alternatives would only be ‘no deal or no Brexit at all’. Dozens of MPs from May’s own Conservative party have stated that they will vote against the deal, as has the leadership of the Liberal Democrats, Scottish National, Democratic Unionist, and Labour parties. Nearly simultaneous with Tusk’s declaration came Conservative MP Sam Gyimah’s resignation as science and universities secretary over Brexit. He said that a second referendum on the matter may be the only way to resolve the expected parliamentary impasse over the matter. Gyimah’s defection highlights growing opposition to May’s deal within her own party. Political instability and exchange rate volatility will likely escalate around the 11 December parliamentary vote.

MENA: Qatar to leave OPEC

Sectors: oil and gas
Key Risks: oil prices

Qatar announced that it would withdraw from OPEC, the cartel of oil producing nation states. The announcement came only days before an OPEC meeting at which renewed oil production cuts appear likely. The Qatari oil minister claimed that the move came after the emirate reviewed its role abroad, but the decision was likely driven by Qatar’s ongoing feud with its Gulf neighbors led by Saudi Arabia. Qatar is the world’s largest liquified natural gas producer, and is looking to increase output further. However, its decision to leave OPEC is unlikely to have a notable effect on oil prices, as Qatar is a minor oil producer – pumping only around 600,000 bpd – or around 2 per cent of OPEC’s total output, and less than 1 per cent of output when Russia is included.

Sub-Saharan Africa: South Africa’s Eskom’s problems continue

Sectors: electricity
Key Risks: non-payment; policy continuity

South Africa’s public utility Eskom posted an 89 per cent drop in profits to US$49m for the first half of the financial year through September, in which revenues are typically higher. The company had previously flagged a loss of US$800m for the full year. A turnaround strategy for the company was due to be presented in November but has been postponed to February. A further delay could lead to serious liquidity issues. While Eskom’s financing needs for the current financial year are 75 per cent secured, the company will likely find it increasingly difficult to attract funding unless it implements decisive changes including job cuts and the renegotiation of supply contracts. Eskom has also announced that it would be implementing rotating cutbacks to electricity production over the coming months.