Ones to Watch, 17 December 2018

Americas: Government crackdown on dissent continues to intensify in Nicaragua

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

In Nicaragua, the government will likely continue to intensify the ongoing crackdown on dissent. On 13 December Congress stripped five NGOs critical of President Daniel Ortega of their legal status, meaning they can no longer carry out projects in the country. Some of them have been accused of seeking to overthrow the government. This was followed by police raids on multiple NGOs, human rights and media organisations, including independent newspaper Confidencial, which has been documenting the disproportionate use of force to quell unrest used by Ortega’s administration since April. Over 300 people have been killed since then amid nationwide anti-government protests. At least seven journalists protesting the raids outside police headquarters in Managua on 15 December were beaten by police. Further government-led crackdown against independent media and opposition to Ortega’s regime will remain likely at least over the coming weeks.

Asia-Pacific: Sri Lanka’s constitutional crisis ends as PM Wickremesinghe is reinstated

Sectors: all
Key Risks: political stability; protests; unrest;  investor confidence

On 16 December Sri Lankan President Maithripala Sirisena grudgingly reinstated Ranil Wickremesinghe as Prime Minister, ending a constitutional crisis that began on 26 October when Sirisena ousted Wickremesinghe and replaced him with former president and controversial civil war strongman Mahinda Rajapaksa. Rajapaksa failed to prove his majority in parliament and was twice defeated in no-confidence motions, while Wickremesinghe refused to relinquish his position. Rajapaksa eventually resigned on 15 December after the Supreme Court unanimously ruled against him, effectively clearing the way for Wickremesinghe’s return. Supporters of Rajapaksa blame recent events on a ‘Western-backed conspiracy’ against the pro-China former president. There is a risk of further instability as anti-Western rhetoric grows and could turn into resentment against the Tamil minority, who, after benefitting from considerable advantages under British colonial rule, were heavily persecuted by the Sinhala majority.

Eurasia: Azerbaijan and Russian gas pipeline projects face further challenges

Sectors: energy; infrastructure
Key Risks: sanctions; reputational fallout; project frustration

On 10 December Turkish-American businessman Kemal Oksuz pled guilty to lying to US investigators about the nature of funds used to finance a trip by 10 members of congress and 32 congressional staffers to Azerbaijan. Oksuz admitted that SOCAR, Baku’s state-owned energy firm, provided US$750,000 for the 2015 trip. Reputational fallout for SOCAR and other Azerbaijani government entities may follow, particularly if Oksuz cooperates fully with US authorities. Meanwhile the fate of the Nord Stream 2 pipeline – which Russia backs and which would in part compete with SOCAR’s supplies to the EU suffered a setback when the European Parliament voted to oppose the project on 12 December for being ‘a political project that poses a threat to European energy security’. However, the resolution will not block construction on the pipeline, though it will add to the still-mounting political pressure for Germany to revisit the already under-construction pipeline, which also faces US sanction threats.

Europe: Weekend of unrest from Brussels to Bucharest could herald further protests

Sectors: all
Key Risks: protests; civil unrest

Protests took place in numerous locations across Europe on the weekend of 16-17 December, although the most prominent – the so-called ‘Yellow Vest’ movement in France – appears to be losing steam, in part a result of a series of climb-downs by French President Emmanuel Macron. However, while the 16 December Yellow Vest protest in neighbouring Belgium was also smaller than that of the previous weekend, the subsequent day saw clashes between police and far-right protests in Brussels, as the latter demonstrated against a UN Migration agreement. Meanwhile protests against new overtime labour laws in Hungary escalated on 16 December, with demonstrators attempting to take over parts of state television’s headquarters in Budapest, causing police to employ tear gas. Finally, in Serbia, protesters rallied for the second consecutive weekend and vowed to return on 16 January. There are signs that a winter of discontent could ensue with a growing risk of protests across the continent and the UK.

MENA: Qatar Petroleum plans to invest US$20bln into United States

Sectors: oil and gas
Key Risks: oil prices; contract frustration; frustration of process

Qatar’s energy minister and the chief executive of state-owned Qatar Petroleum (QP) announced that the firm intends to invest at least US$20bln in US projects over the next five years, following Qatar’s withdrawal from OPEC. Doha may be seeking to enter the US market as US policies become increasingly hostile towards OPEC members. Qatar’s main target will be to revive the multi-billion dollar Golden Pass LNG terminal in Texas. QP owns 70 per cent of the project alongside ExxonMobil and Conoco. QP also said it had signed a deal with Italy’s ENI to acquire 35 per cent of three offshore oil blocks in Mexico and confirmed plans to announce foreign partners for new LNG trains by the mid-2019. QP aims to boost its output through foreign investment in upstream businesses to reduce its current regional isolation.

Sub-Saharan Africa: Presidential election could plunge DRC into crisis

Sectors: all
Key Risks: political instability; civil unrest; political violence; internal conflict

The Democratic Republic of Congo’s closely watched presidential election on 23 December could plunge the country into crisis. With electoral authorities and state media heavily biased toward the ruling party, President Joseph Kabila’s hand-picked successor Emmanuel Ramazani Shadary looks poised to win despite his lack of popular support. The destruction of 80 per cent of electronic voting machines meant to be used for voting in the capital Kinshasa in a suspected arson attack has done little to defuse concerns. Shadary’s victory would likely cause a violent backlash. The deaths of several supporters of opposition candidate Martin Fayulu at the hands of government forces in Lubumbashi on 12 December could be a preview of post-election unrest – the United States Department of State has already ordered non-emergency diplomatic staff and family members to leave the country.