Americas: Truckers and farmers set to strike across Peru over rising fuel, fertiliser prices
Sectors: all; cargo transport
Key Risks: supply chain disruption; civil unrest; strikes
In Peru, truckers and farmers are set to strike across the country starting on 27 June to protest rising fuel and fertiliser prices. The disruptive measure was agreed on 26 June between sector and union leaders after the latter failed to reach agreement with government representatives over demands to mitigate the impact of escalating costs. The government has indicated its openness to talks. However, even if agreements are reached, rising prices, fertiliser shortages and inflation at a 24-year high all have the potential to stoke unrest. This could lead to violent road blockades which, in turn, may disrupt cargo transportation across the country in the coming weeks.
Asia Pacific: Indonesia’s national carrier Garuda completes debt restructuring negotiations
Sectors: all; aviation
Key Risks: credit risk
In Indonesia, Jakarta’s commercial court ratified national carrier Garuda Indonesia’s US$9bn debt restructuring deal on 27 June. The ratification process was scheduled to take place on 20 June but was delayed due to a disagreement between aircraft lessors over the method and the calculation of their respective claims. The court accepted around US$155m in claims from the lessors, below the requested US$404m. The court’s ratification marks the end of Garuda’s debt restructuring negotiations. A new capital injection US$936m is needed to improve its finances and business is likely to be much smaller following restructuring – its domestic market share shrunk to 5 per cent in June. A potential monopoly by the Lion Air Group is also a concern for the national carrier.
Eurasia: Russian forces capture Severodonetsk; launch missile attacks against western Ukraine
Key risks: war on land
In Ukraine, on 25 June officials confirmed that Russian forces had captured the entire city of Severodonetsk. The announcement came after the governor of Luhansk Oblast, Serhiy Haidai, announced on 24 June that Ukrainian forces had been ordered to withdraw from the city. The fighting in Luhansk Oblast will now centre in Lysychansk – the last Ukraine-held city in the oblast – located less than 10 km from Severodonetsk, across the Siversky Donets river. Ukrainian forces reportedly managed to cross the river when withdrawing from Severodonetsk to Lysychansk despite earlier reports that all bridges had been destroyed. Russian forces also launched a series of attacks against cities in western and central Ukraine on 25 and 26 June, targeting Kyiv, Cherkasy, Rivne, Lviv, Volyn and Zhytomyr Oblasts. Further missile attacks are likely, particularly during the 28-30 June NATO summit in Madrid.
Europe: Spain hosts NATO summit in Madrid
Sectors: all; governance
Key Risks: political instability; electoral volatility; policy uncertainty
In Spain, between 28 and 30 June a widely anticipated North Atlantic Treaty Organisation (NATO) summit will take place in the capital Madrid. The summit comes against the backdrop of the war in Ukraine which has dramatically shifted the perceived threat that Russia poses to the security order in Europe. Reports indicate that NATO is likely to agree to plans to significantly bolster defences on the alliance’s eastern flank. On 22 June Estonia’s Prime Minister Kaja Kallas warned that the country’s capital, Talin, would be ‘wiped off the map’ in the event of a Russian invasion under NATO’s existing defence strategy. The summit is also likely to focus on the risks posed to the alliance’s southern flank from Africa. Optimism over whether Turkey will lift its veto on Sweden and Finland’s bid to join the alliance remains scant.
MENA: New legislators sworn into Iraqi Parliament after Sadrist MPs quit en masse
Key Risks: political stability; policy uncertainty
In Iraq, dozens of new legislators were sworn into office on 23 June in order to replace the 73 Sadrist bloc lawmakers who resigned their posts en masse on 12 June. The resignations, made at the request of populist Shi’ah cleric Muqtada al-Sadr, aimed to break an impasse that had plagued government formation negotiations since the October 2021 elections. At that time the Sadrist bloc emerged as the largest faction – with rival factions failing to find majority support for a government. With al-Sadr out of parliament for the first time since 2005, the empty seats defaulted to candidates with the second highest votes, strengthening the position of the pro-Iran Shi’ah Coordination Framework, now responsible for determining the next government. There is a heightened risk of protests and clashes between supporters of al-Sadr and those of his political rivals.
Sub-Saharan Africa: Further protests expected ahead of Senegal’s legislative elections
Key Risks: civil unrest; business disruption
On 22 June the opposition coalition, Yewwi Askan Wi, held a peaceful protest in Senegal’s capital Dakar over the disqualification of the party’s candidate list from the 31 July legislative vote. Protesters gathered peacefully banging pots and pans to highlight their dissatisfaction with the government. The demonstration followed the death of three people and the arrest of over 200 during clashes with security forces in Dakar and the Casamance region on 17 June. Political tensions will remain high as the opposition has accused President Macky Sall of sidelining his opposition before the 2024 presidential elections during which he is due to step down having reached his two-term limit. In March 2021, mass protests erupted after opposition candidate Ousame Sonko was detained on sexual assault charge – a charge widely viewed as politically motivated. Further protests are expected ahead of the legislative elections.