Americas: Chile facing tightened lockdown, Codelco suspends projects over COVID-19

Sectors: all
Key Risks: business interruption; economic risks

In Chile, lockdowns and associated enforcement measures to try to contain the spread of COVID-19 are expected to continue to heighten. Although the government was initially reluctant to impose a mandatory national quarantine, full lockdowns have recently been put in place in several locations including Santiago, with restrictions on movement reportedly affecting around half of the country’s population and likely to continue to expand. On 20 June state-run miner Codelco announced plans to suspend construction projects in the northern regions following the second COVID-19-related death amongst its workers. The firm stated that efforts would be made to maintain production at its flagship Chuquicamata facility, although disruption cannot be ruled out. Unionised workers have continued to demand the firm improve its health protocols against the virus, threatening to take “further measures” which could include strikes.

Asia Pacific: Details of planned national security law unveiled, undermine Hong Kong’s autonomy

Sectors: all
Key Risks: political stability

On 20 June China’s National People’s Congress revealed details of the national security law that will allow Beijing to markedly expand its power and tighten its control over Hong Kong. According to the national security law, a national security commission is to be established in the city to analyse the security situation and to support the local government. Chinese agents will also be stationed in the city to deal with relevant cases directly. Moreover, Hong Kong’s Chief Executive will be granted the power to appoint judges to hear trials, sparking fears over the city’s judiciary independence and impartiality. China’s top legislature is expected to impose the new law when it congregates again on 28 June. Beijing’s determination to press ahead with the law will likely trigger an upsurge of civil unrest and associated disruption.

Eurasia: Baku and Nursultan reinstate lockdowns; Minsk sees protests

Sectors: all
Key Risks: trade disruption; political instability

Azerbaijan and Kazakhstan reinstated COVID-19-related lockdown measures in major cities over the weekend with measures likely to remain in place until August. Both countries have experienced a surge in confirmed cases since lifting lockdown measures at the end of May. Travel disruption is expected in both countries with travel restrictions reimplemented and shopping malls and restaurant access banned across large cities. Nur-Sultan’s and Baku’s reintroduction of lockdown measures could be emulated throughout Central Asia and the South Caucasus as governments hope to prevent a second wave of COVID-19 infections from damaging recovery. Meanwhile, in Belarus at least 2,000 protested in Minsk against the recent arrest of opposition candidates attempting to contest the 9 August presidential election. At least 270 were arrested on 20 June. There is a growing risk of a security service crackdown in the coming weeks.

Europe: Trump to boost Polish president before 28 June vote; Italy considers Autostrade license

Sectors: transport infrastructure; defence
Key Risks: various  

The Italian government has until 30 June to decide whether it will revoke significant toll and road concessions held by Autostrade d’Italia over the 2018 collapse of Genoa’s Monaldi bridge. The coalition of the populist Five Star Movement (M5S) and centre-left Democrats has toned down such threats compared to Prime Minister Giussepi Conte’s previous coalition between M5S and the far-right League, but passed a law to limit recompense to Autostrade. Autostrade has indicated it would challenge any such move at EU-level. Meanwhile, Poland’s president Andrzej Duda is due to visit Washington DC to meet with US President Donald Trump on 24 June. A shift of US forces from Germany to Poland will likely be announced at the meeting. Duda, a close ally of the right-wing Law and Justice government, is up for re-election on 28 June and is expected to win.

MENA: Socotra dragged into Yemen’s war; Egyptian military could enter Libya

Sectors: oil & gas; all
Key Risks: war on land; civil unrest; humanitarian crises; terrorism

The Arabian Sea island of Socotra could be the next flashpoint in Yemen’s war after the separatist Southern Transitional Council (STC) seized control of capital Hadibu on 21 June after days of fighting. The move compounds the STC’s declaration of self-rule on 26 April over southern Aden and surrounding provinces. Socotra’s seizure further hinders Saudi Arabia’s aims to prevent a second front opening in Yemen’s five-year war and threatens to disrupt security on shipping lanes through Bab al-Mandab Straits. Meanwhile, Egyptian President Abd al-Fatah al-Sisi threatened a cross-border military operation in Libya in support of the Libyan National Army. This could bring it into conflict with Turkey, who supports the Government of National Accord. Turkey’s recent action against France in the Mediterranean indicates Ankara’s appetite to engage with other international powers and threatens to break up NATO.

Sub-Saharan Africa: West African bloc proposes reopening of borders by end-July

Sectors: all
Key Risks: travel restrictions; economic risks; CIET

The Ministerial Coordinating Committee on Transport of the Economic Community of West African States (ECOWAS) recommended the bloc’s 15 member states reopen their borders for international travellers by end-July. According to the proposal, which still requires final approval from national governments, intra-regional travel would resume by 15 July while nationals of non-ECOWAS countries with low COVID-19 transmission rates would be allowed in from 31 July. The plan comes as an increasing number of West African countries begin to lift restrictions on domestic travel. The number of COVID-19 infections in the region is relatively low, though restrictions could be reimposed at short notice if cases were to surge. The resumption of international flights could bring much-needed hard currency income for countries with significant tourism industries – notably Senegal and The Gambia – though tourism is likely to recover only slowly.