Americas: Government rules out cash compensation after seizing private firm’s railway in Mexico

Sectors: transport; all
Key Risks: business risk; confiscation; frustration of process

In Mexico, on 24 May leftist President Andres Manuel Lopez Obrador (AMLO) stated that government compensation to Grupo Mexico would not include cash after his government “temporarily” seized part of the company’s railway at the Coatzacoalcos-Medias Aguas section in Veracruz state on 19 May. AMLO declared the facility to be of “public interest”, citing a presidential decree which the Constitutional Court invalidated on 22 May. AMLO has assured that the government intends to reach an agreement with the firm to “restructure the concession”. On 14 March the government seized a seaport owned by US firm Vulcan Materials in Punta Venado, Quintana Roo state. The latest takeover raised concern over AMLO’s policies, with state interventionism likely to increase as AMLO seeks to cement his legacy and garner support for his successor in the lead up to the July 2024 general elections.

Asia Pacific: Rift over house speakership threatens to fracture Thailand’s pro-democracy coalition

Sectors: all
Key Risks: political instability; political impasse; civil unrest

In Thailand, representatives from the Move Forward Party (MFP) and Pheu Thai Party – the two largest pro-democracy parties following the 19 May general election – met amid rumours of a fracturing in their prospective coalition government. While the coalition is likely to nominate MFP leader Pita Limjaroenrat as its prime ministerial candidate, the house speakership role remains contested between the two parties. Concerns have emerged in recent days over the coalition’s ability to form a government amid speculation that a high-profile Pheu Thai figure is secretly assembling an alternative coalition with military-aligned parties. An Election Commission probe into Pita’s ownership of shares in a media company has also hung like a sword of Damocles as it could ultimately disqualify him as a prime ministerial candidate. Political instability risks are likely to persist in the coming weeks.

Eurasia: Drone strikes against targets in Russia on the rise ahead of Ukraine’s counteroffensive

Sectors: all
Key risks: war on land

In Russia, on 30 May the Ministry of Defence claimed that eight drones had been intercepted in and around Moscow, while pro-war social media channels reported that as many as 32 drones were involved in the attack. One drone was reportedly downed near Razdory, close to President Vladimir Putin’s Novo-Ogarevo residence. Three buildings in the city centre were reportedly struck and officials claimed that two people were injured. Even the figure of eight attack drones is far higher than has ever been reported in the city and the incident appears to be retaliation for Moscow’s drone and missile attacks on Kyiv. There has been an uptick in drone attacks against targets in Russia in recent weeks, which could be part of Ukraine’s shaping operation ahead of its planned counter-offensive. Officials will likely use the attacks to mobilise public support for Moscow’s invasion.

Europe: Tensions in northern Kosovo remain high after violent clashes

Sectors: all
Key Risks: civil unrest; violent clashes

In northern Kosovo, on 29 May at least 25 NATO Kosovo Force (KFOR) soldiers and 53 protesters were reportedly injured in violent clashes in the ethnic-Serbian majority town of Zvecan, Mitrovica district. Clashes reportedly broke out after protesters attempted to enter the local municipality building. KFOR attempted to disperse the crowds, with protesters hurling objects and Molotov cocktails at the soldiers. Protests first erupted on 26 May in response to ethnic Albanian mayors taking office following the April municipality elections boycotted by ethnic Serbs. Police fired tear gas and stun grenades to disperse the crowds, prompting US and EU officials to condemn Pristina for using force. Following the clashes on 26 May, Serbian President Aleksandar Vucic placed the military on high alert and deployed troops closer to borders with Kosovo. Tensions will remain high and further escalation cannot be ruled out.

MENA: President Erdogan wins re-election, further consolidates power in Turkey

Sectors: all
Key Risks: political stability; economic risks 

In Turkey, on 28 May President Recep Tayyip Erdogan emerged victorious from the second round of presidential elections, beating opposition leader Kemal Kilicdaroglu with 52.14 per cent of the vote. Erdogan is thus set to extend his 20-year rule with a further five-year term. Kilicdaroglu led a six-party coalition – the ‘Nation Alliance’ – in an unsuccessful bid to unseat Erdogan. Kilicdaroglu is widely believed to have erred by shifting to the right between the first and second rounds thereby losing much of the Kurdish vote. The electoral outcome now grants Erdogan a renewed mandate to carry on his domestic and foreign policy agendas, which are expected to include tackling the effects of an ongoing severe economic crisis, managing the fallout from the recent earthquakes on the southern provinces and continuing peace talks with the Syrian regime in Moscow.

Sub-Saharan Africa: Protesters clash with police in Senegal ahead of Sonko trial verdict

Sectors: all
Key Risks: political stability; civil unrest

In Senegal, on 29 May opposition protesters clashed with the police in the capital Dakar during protests to denounce the detention of opposition leader Ousmane Sonko. Demonstrators set fire to at least eight vehicles and a government building and blocked roads with barricades. The clashes came after gendarmes diverted Sonko to his house as he attempted to lead a caravan on 28 May from the town of Ziguinchor – where he serves as mayor – to Dakar ahead of a verdict in his sexual assault trial expected on 1 June. Sonko has denied the allegations stating that they are a political plot by President Macky Sall to prevent him from contesting the upcoming February 2024 presidential election. If convicted, Sonko will be ineligible to run in the upcoming vote, raising the risk of nationwide unrest.