Americas: Chile’s far-left Gabriel Boric takes office on 11 March, orderly transition expected 

Sectors: all
Key Risks: policy uncertainty; political stability; business risks; civil unrest

In Chile, an orderly transition of power is expected on 11 March when far-left President-elect Gabriel Boric is set to take office. While the stock and currency markets plunged following Boric’s victory in the highly polarised December presidential runoff due to his pledges to reform the country’s ‘neoliberal’ economic model, he has since softened his tone and formed a relatively centrist cabinet. Boric’s administration will oversee and participate in the consolidation of major reforms to the Chilean state and his policies are expected to be broadly aligned with the new constitution currently being drafted by the Constituent Assembly – led by leftist and independent figures who are set to empower the state. The draft constitution will be put down to a referendum most likely in H2 2022 amid high political uncertainty. Significant policy shifts including regulatory changes are expected over the coming months.

Asia Pacific: China unveils a GDP target of ‘around 5.5 per cent’ and US$209bln defence budget

Sectors: all; defence
Key Risks: economic risks

In China, Premier Li Keqiang unveiled a growth target of ‘around 5.5 per cent’ for 2022 at the opening of the annual National People’s Congress. The target marks the country’s lowest in recent decades amid a number of challenges and uncertainties. At home, a beleaguered property sector and underperforming private consumption would mean more monetary easing and more infrastructure investment to boost growth. However, this in turn could exacerbate systemic risk and undermine government efforts to deleverage. Additionally, a defence budget of CNY1.36tn (US$209bln) was unveiled at the NPC, an increase of 6.8 per cent from 2021. The increase in defence budget is hardly surprising given that it is closely linked to the country’s economic development and perceived security demands. Actual military expenditure could be 40 per cent higher than the official figure.

Eurasia: Protests against the Kremlin’s invasion of Ukraine continue in Russia

Sectors: all; media
Key risks: civil unrest; arbitrary detention

In Russia, opposition against President Vladimir Putin’s decision to invade Ukraine continues to spread. According to independent organisation OVD-Info, at least 4,888 people in 69 cities were detained for protesting against the war on 6 March. At least 2,319 people were detained in Moscow. The organisation also reported that protests and arrests took place in Siberian cities – including Tomsk where at least 20 people were detained – despite the fact that civil unrest in the far east of the country is relatively uncommon. In the past 11 days, over 13,387 people have been detained at anti-war demonstrations. Growing disquiet – albeit relatively tepid – is also apparent among the country’s oligarchs. On 7 March billionaire Oleg Deripaska said peace was needed ‘as soon as possible’. With far-reaching economic sanctions imposed on the country, further civil unrest is highly likely.

Europe: EU leaders to meet in France; Denmark calls referendum on EU common defence policy

Sectors: all; oil and gas; defence; European Partnership (EaP)
Key Risks: trade; business risks; sanctions

On 10 and 11 March, European Union (EU) leaders will hold an informal meeting in Paris hosted by France’s President Emmanuel Macron to discuss how the bloc can mitigate the impact of Russia’s invasion of Ukraine on EU economies. Measures could include a further relaxation of state aid rules and the reallocation of post-pandemic recovery funds. On 6 March US Secretary of State Anthony Blinken said Washington and its European partners were discussing a potential ban on Russian oil exports, but there could be opposition to such a move among some EU member states. Meanwhile, on 6 March Denmark’s Prime Minister Mette Frederiksen announced that Copenhagen would increase its defence budget and aim to become independent of Russian natural gas. Denmark will hold a referendum on 1 June on whether to join the EU’s common defence policy.

MENA: Islamic State strikes again in Syria’s desert

Sectors: all
Key Risks: war on land; terrorism; political violence

In Syria, on 6 March 15 regime soldiers were killed and a further 18 were injured after their military bus was targeted by Islamic State (IS) militants in the Palmyra desert. According to the UK-based Syrian Observatory for Human Rights, the latest IS attacks on pro-regime fighters and soldiers has resulted in 61 deaths since the beginning of 2022. IS regularly conducts hit-and-run operations in remote areas of Syria often targeting regime soldiers, Iran-backed militias and US-backed Kurdish Syrian Democratic Forces (SDF). The group is showing increased abilities in planning and executing attacks, with the January 2022 Ghweran prison-break attempt highlighting the group’s increased capabilities. Even with the killing of IS’ leader in February following a US special operation, the group continues to show signs of resurgence, However, it remains unlikely to become as strong as it was before its defeat in 2019.

Sub-Saharan Africa: Continent-wide economic woes likely as Russian-Ukraine invasion impact felt

Sectors: all
Key Risks: economic; policy uncertainty; civil unrest

In Sub-Saharan Africa, concerns regarding the economic impact of Russia’s invasion of Ukraine are steadily worsening. Since the invasion, the price of brent crude has increased to almost US$140 per barrel. Russia’s invasion, therefore, has significant macroeconomic implications, including those relating to balance of payments’ sustainability affecting the continent’s large number of net oil importers. As well as oil, the continent’s high volume of agricultural trade with both Russia and Ukraine – worth US$6.9 bln in 2020 – has severe implications for food security as global wheat prices soar. The combined impact of simultaneous food and fuel supply shocks – just as the continent remains in the early stages of its long recovery from the economic impact of the COVID-19 pandemic – will damage many livelihoods, with severe knock-on risks pertaining to popular unrest, criminality, vulnerability to extremism and, in some potential instances, political stability.