Ones to Watch, 1 April 2019

Americas: Venezuela to face heightened tensions, risk of escalation     

Sectors: all
Key Risks: political instability; military intervention; sanctions; arbitrary arrests; civil unrest

In Venezuela, tensions are expected to continue to heighten as discontent over persistent massive nationwide blackouts and water shortages add weight to the ongoing unprecedented crisis. Moreover, the recent arrival of Russian troops to Caracas prompted US President Donald Trump to reiterate that the US was keeping “all options open” to force those troops out of Venezuela, with National Security Advisor John Bolton labelling the deployment a “direct threat” to regional stability. Partially-recognised interim president Juan Guaido has vowed to “accelerate the transition” over the coming weeks. The announcement was made days after presenting the details of ‘Operation Freedom’, the opposition’s strategy to force President Nicolas Maduro out of office. The military remains loyal to Maduro, but numerous defections have been observed. An escalation amid growing US-Russia tensions over the crisis should not be ruled out.

Asia-Pacific: Separatist rebel attacks likely in Indonesia’s Papua province as elections near

Sectors: all
Key Risks: political violence

Separatist rebels in Indonesia’s far eastern Papua province released a video on 28 March threatening more attacks targeting the government-backed Trans-Papua Highway project. A faction of the Free Papua Movement (OPM) led by Egianus Kogoya carried out an attack on the project in Nduga regency in December 2018, which killed at least 19 construction workers. To counter the risk of further attacks, the military deployed 600 soldiers to Nduga in early March. There is a high likelihood of further OPM attacks in the Papuan highlands ahead of general elections on 17 April. While the Freeport Grasberg mine and the Trans-Papua Highway remain the primary commercial targets at risk over the coming weeks, the majority of OPM attacks will impact security forces and non-indigenous personnel deployed to the area given their accessibility.

Eurasia: Zelenskiy likely to be Ukraine’s next president after winning first round

Sectors: all
Key Risks: political stability; civil unrest; access to financial markets; corruption

Initial results from Ukraine’s presidential election show opposition candidate Volodymyr Zelenskiy, an actor who plays the country’s president on a satirical TV show, with just over 30 per cent of votes. Incumbent President Petro Poroshenko was in second, with 16 per cent. There was no major unrest during the voting, defying expectations. However, Zelenskiy’s win raises a number of concerns – particularly regarding his ties to  oligarch Ihor Kolomoisky, whose PrivatBank was nationalised in 2016, costing the state billions of dollars. Kolomoisky is challenging the nationalisation as well as Kiev’s efforts to claw back funds from him, which could further weaken the country’s already tenuous access to financial markets. However, President Poroshenko is also undoubtedly corrupt but unlike Zelenskiy is supportive of IMF-mandated reforms. It is likely Zelenskiy will win the 21 April runoff election.

Europe: Slovakia’s presidential election could herald liberal rise; Brexit tumult continues

Sectors: all
Key Risks: political stability; trade frustration

The election of anti-corruption activist Zuzana Caputova as Slovakia’s president on 31 March is likely the first step in a major political realignment in the country. Her pro-European and socially-liberal candidacy gained steam after activists united to support her in an effort to send a message to the nation’s political class that the February 2018 murder of an investigative journalist and his fiance, and resulting revelations of ties between the ruling Smer-SD party and organised crime, had delegitimised much of the political elite. The opposition is likely to win the next parliamentary elections, due by March 2020. Meanwhile, the United Kingdom remains beset by political turmoil over Brexit, and the risk of a no deal Brexit on 12 April remains very high, which could also affect the economies of all EU member but in particular Ireland, Belgium, the Netherlands, France and Germany.

MENA: Final week before Israel’s snap elections on 9 April

Sectors: all
Key Risks: political stability

Election campaigning in Israel is coming to a head as citizens prepare to vote in the 9 April snap election. A poll found that over half of Israelis predict that incumbent Prime Minister Benjamin Netanyahu will lead the next government and that Likud’s right wing block will have a majority in the Knesset. The centre-left Blue and White Party led by Benny Gantz is challenging Netanyahu for premiership but polls indicate that only 22 per cent believe Gantz will succeed to beat Netanyahu for the post. Netanyahu’s win will see the incumbent start his fifth term as prime minister, surpassing Ben Gurion to become the longest serving premier in Israel’s history. Netanyahu leads in polls despite indictments of graft and breach of faith by the Attorney General after which Gantz led polls. Any change in leadership is unlikely to spark a dramatic shift in Israel’s economic policies.

Sub-Saharan Africa: President Bashir concedes protesters’ concerns ‘legitimate’ amid rumours of unity government in Sudan

Sectors: all
Key Risks: political instability; civil unrest

Sudan’s President Omar al-Bashir conceded that some of the economic concerns voiced by protesters rallying for his resignation since December were ‘legitimate’. The statement came after the ruling National Congress Party (NCP) indefinitely postponed its national convention, during which it was to elect a new chairman to replace Bashir, who delegated the party’s leadership to his deputy Ahmed Harun in early March. On 31 March reports emerged that the NCP and opposition groups had agreed to start negotiations on a transitional government of national unity, although details remain scarce. Meanwhile, the government freed two AFP and Reuters journalists detained last week for covering the protests. Whilst recent developments could indicate that Bashir might not seek re-election in 2020, Bashir might also be playing for time, with negotiations for a unity government potentially serving as a pretext to call off the elections altogether.