Americas: Argentina’s political, economic crises to deepen as economy minister resigns

Sectors: all
Key Risks: political instability; policy continuity; governability; sovereign default

In Argentina, ongoing political, economic and financial crises are set to deepen following the surprise resignation of Martin Guzman as economy minister on 2 July. Guzman’s decision risks further destabilising President Alberto Fernandez’s government amid rising tensions within the ruling leftist Frente de Todos (FdT) coalition. Guzman quit as disagreements widened between the FdT’s moderate wing – the ‘albertistas’ – and the more radical ‘cristinistas’ supporting Vice President Cristina Fernandez de Kirchner (CFK). Guzman was one of the main architects of the recent US$45bln debt restructuring deal with the IMF and one of the President’s key allies. On 3 July Fernandez appointed economist and government official Silvina Batakis as Guzman’s successor. Batakis is more closely connected to CFK, who will likely strongly influence economic and financial policy further denting Fernandez’s power ahead of the October 2023 general elections. Political instability and polarisation will increase.

Asia Pacific: Indonesia’s Parliament passes legislation to divide West Papua and Papua

Sectors: all
Key Risks: civil unrest

In Indonesia, the Parliament passed legislation to establish three new provinces in the Papua region on 30 June, adding South Papua, Central Papua and Highland Papua. The government stated its aim is to to accelerate development and improve public services, however, fears that the plan will deepen resentment among ethnic Papuans toward the central government are rife. It is expected that activists will stage demonstrations across the Papua region, particularly in urban centres. Protestors claim that the legislative process did not involve ethnic Papuans and that any economic developments will only benefit the political elites. Authorities are expected to implement augmented security measures, including the deployment of additional personnel at potential sites of protest. There is a heightened risk of protests and civil unrest in the coming days.

Eurasia: At least 18 people killed in violent unrest in Uzbekistan’s Karakalpakstan

Sectors: all
Key risks: civil unrest; political stability

In Uzbekistan’s semi-autonomous repas internet and phone services have been restricted and local journalists prevented from reporting on the event. While the government claimed that groups of violent protesters attempted to seize government buildings, videos shared on social media suggest that security forces launched stun and smoke grenades at the crowd. Although on 2 July President Shavkat Mirziyoyev announced that the proposed changes would be scrapped, tensions will remain high.

Europe: North Macedonians protest against compromise with Bulgaria to unlock EU bid

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

In North Macedonia, tens of thousands of people rallied in the capital Skopje on 2 July to protest against a French proposal that could see Bulgaria lift its veto on the formal opening of North Macedonia’s European Union (EU) accession. Bulgaria has blocked the country’s bid to join the EU over disputed language and history. On 1 July Skopje indicated that it accepted the French proposal despite having previously described it as ‘unacceptable’. The VMRO-DPMNE opposition party led the protest and has vowed to continue its opposition to the proposal which it regards as making unacceptable concessions to Sofia. Although the government could approve of the deal without parliamentary approval, the proposal would require changes to North Macedonia’s constitution, which would ultimately require a two-thirds majority in parliament. Further protests in a bid to force the government to alter course are likely.

MENA: Libya’s eastern legislature stormed as protests erupt nationwide, further protests planned

Sectors: all
Key Risks: political stability; civil unrest

In Libya, the Tobruk-based House of Representatives (HoR) was stormed by demonstrators, who ransacked the legislature setting parts of the building on fire on 1 July. In the capital Tripoli and Benghazi – the cradle of the 2011 revolution – thousands took to the streets in the largest protests in recent years, spurred by power cuts and deteriorating living conditions. Major roads were blocked with burning tyres between central Tripoli and the city’s western suburbs. Demonstrations were also reported in Beni Walid and Misrata port. The electricity crisis comes as oil production is blockaded, tied to a standoff between the Tripoli-based Government of National Unity (GNU) and the HoR-backed Government of National Stability (GNS). Further protests are likely, with demands increasingly focused on elections and the dissolution of rival administrations. There is a heightened risk of escalation and violent clashes.

Sub-Saharan Africa: 29 people arrested in anti-government protest in Ghana

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

In Ghana, 29 protesters were arrested for reportedly attacking and damaging public property in Accra on the second day of anti-government protests on 29 June. On 28 June police dispersed demonstrators with tear gas and water cannons when a clash erupted in which 12 police officers were injured. Anti-government sentiment has grown in recent months amid high inflation, the introduction of an E-levy – a tax on electronic payments and the depreciation of the Cedi. On 1 July the government announced it plans to hold formal talks with the IMF on a support package amid depreciating currency and rampant inflation – which rose to 27 per cent in June. The government had previously refused to seek IMF support. A potential package would significantly support economic recovery. However, further protests cannot be ruled out in the short term.