Americas: Guyana to hold long-delayed snap general elections on 2 March
Sectors: all; oil & gas
Key Risks: political stability; contract frustration; policy continuity; civil unrest
In Guyana, long-delayed snap general elections will take place on 2 March following a December 2018 vote of no confidence against President David Granger’s government. The vote will be tightly contested between the ruling APNU+AFC coalition with Granger seeking re-election and opposition People’s Progressive Party (PPP) presidential candidate Mohamed Irfaan Ali. The result will determine how the fledgeling oil producer will manage the resource. Opposition parties have criticised Granger’s 2016 deal with ExxonMobil to develop the massive Stabroek offshore block as too onerous, followed by a recent Global Witness report suggesting that Guyana may have lost around US$55bln in the deal. Although on 20 January Ali stated that ExxonMobil’s contract would be exempt from reviews should the PPP win, such reviews cannot be ruled out should he secure the presidency. Policy and political uncertainty will remain heightened.
Asia-Pacific: Malaysia thrown into political upheaval as Prime Minister Mahathir resigns
Key Risks: political instability; civil unrest; economic risks
In Malaysia, Prime Minister Mahathir Mohamad abruptly resigned following an internal coup to form a new government coalition, triggering political chaos. Mahathir’s Parti Pribumi Bersatu Malaysia (PPBM) quit the ruling Pakatan Harapan (PH) coalition, as the long-simmering rift with presumptive successor Anwar Ibrahim boiled over. Mahathir also resigned as PPBM chairman. The developments came 21 months after the PH coalition secured a major victory over the long-ruling Barisan Nasional bloc, but tensions within the coalition over the promised handover of power to Anwar in 2020 soon emerged. The king subsequently appointed Mahathir as interim prime minister until a new leader was appointed and a cabinet formed. It remains unclear whether Mahathir would form a new administration with other political parties, whether Anwar retains enough lawmakers to lead the government, or whether snap polls will take place.
Eurasia: Afghan clashes threaten prospective US deal, Serbia risks US over Russian defence deal
Key Risks: internal conflict; war on land; sanctions; defence
On 21 February US President Donald Trump declared that he wants to make a deal with the Taliban as the agreed five-day ‘reduction in violence’ period aimed at facilitating such a pact begins in Afghanistan. However, TOLO – the country’s leading news source – reported violence since then, including in Uruzgan, Badakhshan, Faryab and Balkh provinces. Trump could pull the plug on the latest talks if violence continues during this period. In Serbia, Russia delivered a Pantsir S1 air-defence system to Belgrade. The move has previously been criticised by the US, which has threatened sanctions if Belgrade purchased the weapons. However, the Trump administration’s enforcement of sanctions has been lacklustre, illustrated by its reluctance to sanction allies which have purchased arms from Russia. Regardless, Belgrade is likely to receive criticism for its recent purchase.
Europe: EU budget spats continue; Slovakia goes to polls on 29 February
Key Risks: political stability; tender/contract cancellation
EU leaders failed to agree the bloc’s next seven-year budget during a series of meetings on 20-21 February. The bloc will now look at substantial cuts from major programmes, likely to include substantial cuts to defence spending and international efforts. Slovakia goes to the polls on 29 February for the first general election since Peter Pellegrini became prime minister in 2018, succeeding longtime party leader Robert Fico after the murder of journalist Jan Kuciak prompted mass protests. Support for their Smer-SD party has since fallen from around 30 to 20 per cent but it is still likely to be the largest party. The centre-left Progressive Slovakia party, which secured the capital’s mayoralty in 2018 and won the 2019 European Parliamentary elections despite only being founded in 2017, may finish in second, polling around 15 per cent.
MENA: Lebanon’s IMF plan; Iraq’s cabinet approval; Israeli elections; Syria’s Idlib negotiations
Key Risks: business disruption; political instability
Lebanon’s economic rescue plan is expected to be announced imminently after an IMF emergency session continued past its 23 February end date. Prime Minister Hassan Diab’s new cabinet is seeking solutions on how to tackle a US$1.2bln Eurobond maturing on 9 March. A restructuring looks most likely. Iraq’s prime minister-designate Muhammad Allawi seeks confirmation for his cabinet of ‘independents’ on 27 February amid mass protests, calls for snap elections and expedited reform. Violent protests will persist. Israel is due its third election in 11 months on 2 March. Polls indicate a similar deadlocked outcome as the previous two. Turkey, Russia, France and Germany will meet on 5 March over the battle in Syria’s Idlib. Ankara and Moscow appear to continue seeking to avoid direct engagement despite Turkish casualties, yet the plethora of militaries raises the risk of miscalculation.
Sub-Saharan Africa: Rebel leader Machar appointed South Sudan’s vice president in bid to end war
Key Risks: internal conflict; political violence; political instability
On 22 February rebel leader Riek Machar was appointed as Vice President to South Sudan’s President Salva Kiir, a key provision of an agreement signed in September 2018 to end the country’s six-year civil war. The deadline to form a joint government had been delayed twice over fundamental disagreements between the two leaders. It is unclear how outstanding contentious issues, including the delimitation of state borders and the incomplete unification of armed fighters into a national army, will be resolved. Kiir’s troops are to provide protection for opposition politicians, a questionable pledge given that clashes between Machar’s and Kiir’s forces led to the collapse of a previous truce in 2016. Peace remains extremely fragile. There is a risk that minor clashes between forces loyal to the opposing leaders could trigger large-scale violence, derailing the newly-formed unity government.