Ones to Watch, 7 January 2019

Americas: Venezuela’s Maduro to take office for second term amid growing tensions

Sectors: all
Key Risks: political instability; civil unrest; crackdown on dissent

In Venezuela, President Nicolas Maduro is scheduled to take office for a second six-year term on 10 January amid increasing regional pressure for him to refrain from doing so and amid growing tension with the opposition. On 4 January all Lima Group countries except Mexico issued a statement urging Maduro not to take office, adding that they would not recognise Maduro’s next term arguing that the 2018 election was ‘illegitimate’. The Lima Group is a 14-member regional bloc seeking to put pressure on the Venezuelan government to implement democratic reforms. The opposition-led National Assembly also stated Maduro would be an ‘usurper’ and ‘illegitimate’ president. Maduro will remain defiant, with government officials stating he would be sworn in as planned. Tensions and international pressure are expected to continue to increase ahead of and after 10 January.

Asia-Pacific: Thailand’s general election thrown into renewed uncertainty

Sectors: all
Key Risks: political instability; civil unrest

On 4 January, Deputy Prime Minister Wissanu Kreangam confirmed that the provisional date for Thailand’s long-awaited general election will be pushed back. The junta and the election commission had set the provisional voting day for 24 February but the royal decree officially calling the election was not published on 2 January as expected. The junta has raised concerns that the timing of the vote could disrupt preparations for the King’s coronation, as the official results would be announced in late April and the ceremony will take place in early May. The junta-led government said a vote will be held before the 9 May constitutional deadline. However, on 7 January about 150 anti-junta activists protested the new delay in Bangkok. Renewed uncertainty over the elections will result in further protests, and there is a risk of disproportionate use of force by security personnel.

Eurasia: Uzbekistan moving to issue first eurobond; Ukrainian church independence

Sectors: all
Key Risks: civil unrest; political instability

Uzbekistan is expected to issue its first-ever sovereign Eurobond in the coming months, if not weeks, likely to amount to between US$300 and US$500m to serve as a benchmark and promote investment in the country after it received its first-ever sovereign credit rating last month. Meanwhile, the 5 January move by Ecumenical Patriarch Bartholomew, prima inter pares amongst Orthodox church leaders, to grant autocephaly to the Orthodox church in Ukraine could have widespread political ramifications in the region. It may boost Ukrainian President Petro Poroshenko’s attempt to secure re-election in March 2019, despite the myriad challenge he presently faces. The move will likely impede Russia’s attempts to use the Orthodox Church as a soft power tool, although many parishes in Ukraine, particularly its east, will remain loyal to Moscow.

Europe: France’s Yellow Vest protests escalate, early elections possible in Spain and Sweden

Sectors: all
Key Risks: political instability; civil unrest

5 January saw the ‘yellow-vest’ movement in France escalate when demonstrators fiercely clashed with police in numerous locations in central Paris and forced their way into a government building. A defiant President Emmanuel Macron may introduce tough new security measures to try and avoid a repeat at the next scheduled demonstration on 12 January. Meanwhile, Sweden is set to enter its fourth month without a government as both the main centre-right party and main centre-left party have been unable to attract support from the others’ coalition to form a government, with both still adamant they will not form a government with the far-right Sweden Democrats. Early elections are likely, and are seen as increasingly likely in Spain as well, despite the rise of the far-right Vox party in polls there.

MENA: Saudi Al-Gosaibi hearing to be first ever hearing held under new bankruptcy law

Sectors: banking
Key Risks: frustration of process

A commercial court in Dammam is holding a hearing on an estimated US$22bln debt settlement for the conglomerate Ahmad Hamad al-Gosaibi and Brothers (AHAB), the first such hearing under Saudi Arabia’s new bankruptcy law, enacted in August 2018. AHAB was the first company to file for a settlement under the new law, seeking to resolve Saudi’s longest-running and largest debt dispute which has been ongoing since 2009. The collapse of al-Gosaibi was one of the largest collapses of the global financial crisis. The Saad group empire run by Maan al-San’a, the financier for the al-Gosaibi group is thought to have siphoned off billions in “inexplicable” payments to the Saad group. Representatives from around 150 of AHAB’s creditors will be present at the hearing and are looking to receive about 10-15 cents on the dollar.

Sub-Saharan Africa: Gabon coup attempt foiled, but risks remain

Sectors: all
Key Risks: coup d’etat; political instability; civil unrest

In the early hours of 7 January, members of Gabon’s Republican Guard took control of the public broadcaster and announced they had seized power in order to ‘restore democracy’. In a communique, the putschists referenced President Ali Bongo’s New Year’s speech, in which he appeared to be slurring his words and unable to move an arm, as evidence he is unable to continue to lead the country. Bongo has been out of the country since October 2018 for medical treatment after suffering a stroke. The putschists’ call for an uprising went unheeded, and security forces loyal to the government were able to arrest all five of the military officers involved without bloodshed. Nonetheless, Bongo’s continued absence risks further undermining the government’s legitimacy and raises the threat of political instability and potential further coup attempts in the coming months.