Americas: Indigenous-led protests to put pressure on Ecuador’s government

Sectors: all
Key Risks: policy continuity; civil unrest; business disruption

In Ecuador, the powerful Confederation of Indigenous Nationalities of Ecuador (CONAIE) plans to go ahead with nationwide demonstrations scheduled for 26 October to protest against right-wing President Guillermo Lasso’s government. Social movements, trade unions, teachers and other groups plan to join the protests, triggered mostly by rising fuel prices but also by recent decrees seeking to expand oil and mining activities in the Amazon region. The demonstrations are expected to proceed despite Lasso’s decision on 22 October to suspend further monthly increases of gasoline and diesel prices, backtracking from his intention to cut fuel subsidies as part of efforts to shore up the budget. The previous administration’s attempt to scrap fuel subsidies led to nationwide unrest which brought the country to a halt in October 2019. Lasso will likely have to further accommodate to avoid a repeat of such events.

Asia Pacific: Japan’s LDP loses by-election, casts further cloud over general election outcome

Sectors: all
Key Risks: political instability

In Japan, the ruling Liberal Democratic Party (LDP) suffered a by-election setback prior to the 31 October general election. The LDP lost one of two by-elections for the Upper House after an independent candidate backed by the opposition won the contest in Shizuoka prefecture. The defeat represents a warning to the LDP as recent polls suggest the ruling party is unlikely to achieve an outright parliamentary majority. It is very likely that the LDP will lose seats, while the main opposition Constitutional Democracy Party could win as many as 30 additional seats in urban areas where the LDP is struggling, including Tokyo and Osaka. The LDP is expected to retain a majority with its junior partner Komeito although a major loss of seats on 31 October could increase the chance that Prime Minister Kumio Yoshida joins a long list of short-lived premiers.

Eurasia: Gas state of emergency in Moldova; No surprises in Uzbekistan’s presidential election 

Sectors: all
Key Risks: political instability; policy continuity; reform

In Moldova, on 22 October the government declared a 30-day state of emergency over gas shortages after Russia’s Gazprom claimed it could cut shipments since a long-term gas supply contract expired 1 October. While Chisinau is negotiating a new contract with Gazprom, Prime Minister Natalia Gavrilita said its subsidiary, Moldovagaz, was not maintaining sufficient pressure levels in the pipeline network. Chisinau is also in talks with Brussels to secure alternative supplies from Kiev and Bucharest. Chisinau is reluctant to agree new terms with Gazprom at higher prices and may also be seeking to reduce its dependence on Moscow in the long term. Preliminary results for Uzbekistan’s presidential election show that incumbent President Shavkat Mirziyoyev will return for a second term with 90 per cent of the vote. Despite opening up and reforming the economy, the political system will continue to remain unreformed.

Europe: Romania’s PM appointee Nicolae Ciuca seeks to form government amid COVID-19 crisis

Sectors: all
Key Risks: political instability; policy uncertainty; economic

In Romania, Prime Minister-designate Nicolae Ciuca will seek to form a government as the country’s political impasse continues alongside a crippling fourth wave of COVID-19 cases. Ciuca is now the second prime minister-designate since President Klaus Iohannis’s first nomination, Dacian Ciolos of the centrist Save Romania Union (USR), failed to gain the backing of lawmakers to form a new government on 20 October. The lack of effective government, triggered when Florian Citu’s government was toppled in a no-confidence vote on 5 October, has hindered efforts to tackle the COVID-19 pandemic. With the second-worst vaccination rate of any EU country, the health system is overrun with COVID-19-related hospitalisations. If Ciuca’s efforts to form a government fail, Citu’s interim cabinet could remain in office at least until December and 2022 snap elections would become increasingly likely.

MENA: Lira falls as foreign diplomats dismissed in Turkey; Draft election law rejected in Lebanon

Sectors: all
Key Risks: political instability; policy uncertainty

In Turkey, the lira, still reeling from the central bank’s surprise rate cut on 21 October, fell against the US dollar and hit an all-time low following President Recept Tayyip Erdogan’s removal of 10 foreign ambassadors on 23 October. The envoys, including the US, French and German representatives in Ankara, were declared ‘persona non grata’ in response to a joint statement calling for the release of jailed businessman Osman Kavala, imprisoned without conviction since 2017. Meanwhile, in Lebanon, President Michel Aoun rejected a draft electoral law approved by Parliament on 19 October. The law stipulated that upcoming legislative elections would be held on 27 March 2022, two months ahead of schedule. Aoun stated that this would cause logistical issues. His intervention and the risk of any delay in newly scheduled elections risks fresh political deadlock in Beirut.

Sub-Saharan Africa: Sudan’s PM detained; Sovereign Council, cabinet suspended in military coup

Sectors: all
Key risks: political instability; civil unrest; political violence; economic sanctions; business disruption

In Sudan, military officers detained Prime Minister Abdalla Hamdok, several ministers and other civilian officials on 25 October. Security forces also closed Khartoum airport, suspended internet access and deployed across the city to restrict residents’ movements. Lieutenant-General Abdel Fattah Al-Burhan announced a state of emergency, the dissolution of the Sovereign Council and Council of Ministers and declared that the military would lead the country until elections in 2023. News of the takeover stoked international condemnation and pro-democracy rallies across Omdurman and Khartoum, leading to clashes with security forces. The coup followed a deterioration in relations between military and civilian leaders that raised concerns of a possible attempt to preserve the military’s political and economic influence. Mass unrest and violent clashes are likely over the coming days and there is a significant risk of international sanctions.