Americas: Tech investment hit as SVB becomes second largest US bank to collapse
Sectors: finance, technology
Key Risks: banking crisis; slower investment
In the United States, on 10 March Silicon Valley Bank (SVB) collapsed. SVB was the provider of banking services to around half of all venture-backed tech and life science companies in the country. SVB’s collapse – the second-largest bank failure in US history – was due to a series of unhedged investments in long maturity US government bonds resulting in the bank losing around a quarter of all of its deposits. The government has promised to protect all depositors, including a large number whose deposits were uninsured. Action by the Federal Reserve should prevent SVB’s collapse causing widespread market panic, but its failure could slow investment in the tech space. The government will likely look at further regulatory reforms in the coming years to reduce the risk of similar banking collapses.
Asia Pacific: National People’s Congress concludes Chinese leadership reshuffle
Key Risks: policy continuity; economic risks
In China, on 11 March the 14th National People’s Congress (NPC) saw Li Qiang formally elected as the new Premier. While his appointment has been widely expected following the 20th Chinese Communist Party (CCP) National Congress in October 2022, it capped off a nine-day reshuffle of the country’s leadership in which many loyalists of President Xi Jinping were installed in leading government roles. Xi himself secured an unprecedented third five-year term on 10 March. In his first public speech in the position, Li affirmed his support for the private sector and entrepreneurship, pledging equal treatment for private and state firms – even as the NPC moved to consolidate oversight and influence of the country’s economy as well as its financial and technology sectors under the CCP. Nonetheless, the appointments are unlikely to result in significant policy changes in the near term.
Eurasia: Kazakhstan to hold parliamentary elections on 19 March
Key risks: political instability
In Kazakhstan, on 19 March citizens will cast their votes in a parliamentary election. The election is part of President Kassym Jomart Tokayev’s effort to consolidate power following the June 2022 referendum on constitutional changes and the November 2022 presidential election. Authorities claim that the vote is another step in Tokayev’s claimed push towards political liberalisation, highlighting that 607 candidates and seven parties have been registered to run for seats in the lower chamber of parliament – known as Majilis – and local assemblies – known as mashlikats. However, the major opposition party – the Democratic Party – has been refused an official status and the ruling Amanat party is expected to capture most of the votes. Although the election campaign appears to be more competitive than campaigns ahead of previous elections, widespread doubts that the election will be free and fair persist.
Europe: Talks to normalise relations with Kosovo set to continue amid protests in Serbia
Key Risks: political stability; civil unrest
Serbia’s President Aleksandar Vucic and Kosovo’s Prime Minister Albin Kurti plan to meet on 18 March in Ohrid, North Macedonia, to continue negotiating an EU-sponsored deal aimed at normalising relations between the two countries. On 27 February EU foreign policy head Josep Borrell stated that Belgrade and Pristina had agreed on the terms of the deal but added that further talks were needed on its implementation. The deal has previously sparked a backlash among Belgrade’s ultranationalist groups, leading to violent protests. It remains uncertain whether the two sides will reach a compromise given that on 10 March Vucic stated that he would not recognise Kosovo “in any way” and that he was certain that Kurti would not form the Serbian Municipalities Association as Belgrade requested. However, as the two sides continue to pursue dialogue, the risk of further protests with a potential to turn violent remains high.
MENA: Iran and Saudi Arabia restore ties, bring hope for regional stability
Key Risks: regional stability; war; internal conflict
On 10 March representatives of Iran and Saudi Arabia came to an agreement to restore diplomatic relations amid long-standing tensions between the two countries. On 6 March Iranian and Saudi diplomats started five-day talks, under Chinese auspices, which resulted in a deal to reopen embassies and diplomatic representations within two months. Diplomatic ties were severed in 2016 following violent protests targeting Saudi diplomatic missions in Iran in response to Riyadh’s execution of a Shi’ah cleric. Moreover, both countries are involved on opposite sides of several regional conflicts and are widely perceived as waging proxy wars to gain greater influence in the region. Although there will be contentious issues to resolve, the rapprochement is expected to carry broad and positive implications for regional security and stability, including immediate effects on the Yemeni and Syrian civil wars.
Sub-Saharan Africa: Malian military junta postpones 19 March constitutional referendum
Key Risks: sanctions; political stability
In Mali, on 10 March the ruling military junta announced the postponement of a constitutional referendum originally scheduled for 19 March citing the need to allow the interim-government sufficient time to install an election management body in all regions of the country. The delay was expected as no arrangements for the vote had been made and the draft constitution was only handed over to interim president Colonel Assimi Goita on 27 February. The vote to adopt the new constitution is the first step to hold presidential elections in February 2024 and return to civilian rule. A new date for the referendum is expected to be announced in the coming weeks following consultations with the independent election management authorities. Regional bloc Economic Community of West Africa States (ECOWAS) will likely threaten to re-implement sanctions if further key deadlines are missed.