Americas: Costa Rica’s general elections likely to lead to presidential runoff, divided Congress

Sectors: all
Key Risks: political instability; policy uncertainty; governability; civil unrest

In Costa Rica, highly uncertain general elections scheduled for 6 February are expected to lead to a 3 April presidential runoff. The presidential vote will be contested between a record number of 25 candidates, none of whom is expected to reach the 40 per cent threshold to win outright. Recent polls suggest that former centrist president Jose Maria Figueres is a clear frontrunner, followed by conservative Lineth Saborio and evangelical preacher Fabricio Alvarado, who lost the 2018 runoff to outgoing President Carlos Alvarado. The latter is not running for re-election while his centre-left Citizens’ Action Party (PAC) appears set to lose most of its seats in the legislative vote, expected to lead to a highly fragmented Congress. Whoever wins the presidency will need to rely on legislative alliances to face rising socio-economic challenges stemming from record-high unemployment and rising debt.

Asia Pacific: Pyongyang launches first IRBM since 2017 in latest missile test

Sectors: all
Key Risks:  interstate conflict; sanctions 

In North Korea, the state news agency confirmed the test launch of a Huasong-12 Intermediate Range Ballistic Missile (IRBM), the first such launch of the nuclear-capable missile since 2017 and the seventh missile test so far in 2022. On 20 January Pyongyang had indicated that it would effectively scrap its moratorium on tests of Intercontinental Ballistic Missiles (ICBMs) that it had imposed in 2017. While the latest test does not explicitly violate the moratorium, it reflects a notable escalation from recent launches and indicates a possible return of ICBM tests. The rapid escalation of Pyongyang’s missile tests is designed to raise the stakes and gain diplomatic leverage ahead of possible talks proposed by Washington. The test could also be a response to Washington’s reported consideration of Philip Goldberg, a proponent and coordinator of sanctions on Pyongyang, as the US ambassador to South Korea.

Eurasia: London, Washington to introduce new Russia sanctions legislation

Sectors: oil and gas; energy; banking; arms industry; mining
Key risks: sanctions; war on land

In the UK, Foreign Secretary Liz Truss stated that in the coming week the UK government would introduce new legislation to broaden the scope of sanctions that could be imposed on Moscow in case of Russian aggression towards Ukraine. The legislation would enable London to hit a wider variety of targets, including financial institutions, energy companies and oligarchs close to Russian President Vladimir Putin. Truss later added that oligarchs close to the Kremlin and UK investments would be hit by tough sanctions. Separately, US Senators stated they were close to reaching a deal on Russia sanctions legislation, including measures that could take effect before any invasion. Senior Biden administration officials will hold a briefing for all US senators on 3 February. More details on potential sanctions are expected, though the countries are unlikely to reveal a list of potential targeted subjects.

Europe: Montenegro’s government faces no-confidence vote; Hungary’s PM Orban to visit Russia

Sectors: all; oil and gas; energy
Key Risks: political instability; policy uncertainty; business; trade

In Montenegro, lawmakers are set to deliberate on a no-confidence motion filed against Prime Minister Zdravko Krivokapic’s cabinet on 19 January. The motion was filed by deputy Prime Minister Dritan Abazovic, the leader of the United Reform Action (URA) party which is a junior partner in the governing coalition, due to ongoing coalition disagreements. In turn, Krivokapic filed a vote of no confidence against Abazovic. With parliament’s next session scheduled for 4 February, the government could collapse by the end of the week, ushering in a minority government or a snap election. Meanwhile, Hungary’s Prime Minister Viktor Orban plans to meet with Russian President Vladimir Putin on 1 February and is expected to discuss gas purchases, the production of the Sputnik V COVID-19 vaccine in Hungary and the delayed construction of a nuclear plant in Hungary.

MENA: Third attack on the UAE in three weeks

Sectors: all; aviation, tourism; business
Key Risks: terrorism; targeting of strategic infrastructure

In the UAE, on 31 January Emirati air defences intercepted and destroyed a ballistic missile fired by the Yemen-based Huthi militia towards Abu Dhabi. No casualties or material losses were reported as the shrapnel from the missile fell over uninhabited areas. The General Civil Aviation Authority stated that aviation was not impacted by the attack. This was the third attack in three weeks against the UAE by the Huthi militia. The first one killed three civilians on 17 January. Huthi militia spokesperson Yahya Saree pledged further attacks on the UAE due to its participation in the Yemen war. Saree warned foreign companies against working in the UAE labelling it an ‘unsafe country’. The US updated its travel advisory on 26 January advising its nationals against travelling to the UAE, citing threats of missiles and drones. Further similar attacks cannot be ruled out.

Sub-Saharan Africa: UN struggles in Sudan as pro-democracy activists and military stand firm

Sectors: all; economic risks
Key Risks: political stability; civil unrest; political violence; business disruption

In Sudan, one protester was killed in Khartoum on 31 January in the latest clashes between pro-democracy demonstrators and security forces following the October 2021 coup. Protests were held in 20 cities and towns whilst activists blocked roads connecting Khartoum with Egypt and Port Sudan, causing disruptions which could further harm the already ailing economy following suspensions of international economic assistance and warnings of a possible crop failure. Yet, despite the economic outlook and UN mediation efforts, both sides appear ready to stand firm. Many activists have now ruled out the possibility of a compromise power-sharing settlement, whilst military leaders insist that they will remain in power until at least 2023 and, on 30 January, openly criticised the UN mediation as interfering in the country’s domestic affairs. Continued unrest, clashes and a sustained economic deterioration appear increasingly likely.