Americas: Risk of disruptive unrest and potential clashes in Argentina on 20 December
Key Risks: civil unrest; violent clashes; traffic disruption
In Argentina, on 20 December unions and social organisations plan to protest President Javier Milei’s austerity measures in the capital Buenos Aires. On 12 December the Economy Ministry devalued the peso by 50 per cent to 800 pesos to the US dollar and announced that energy and transportation subsidies would be cut. On 14 December former presidential candidate and current Security Minister Patricia Bullrich announced a new “anti-picket protocol”, stating that blockades of roads, highways and/ or companies would not be allowed, with all federal security forces instructed to respond with the “minimum and sufficient force (…) in proportion to the resistance” offered by protesters. The country faces 161 per cent annual inflation, a 40 per cent poverty rate, a gaping budget shortfall and a trade deficit of US$43bln. The risk of unrest with the potential to turn violent will remain heightened.
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Asia Pacific: Japan’s Prime Minister Kishida’s support plummets amid party fundraising scandal
Key Risks: corruption; government instability; policy continuity
In Japan, on 18 December a Mainichi newspaper poll showed disapproval ratings for Prime Minister Fumio Kishida hitting 79 per cent – the highest since Mainichi began such polls over seven decades ago – while the Cabinet’s approval ratings slid to 16 per cent – the lowest since Kishida took office in October 2021. The polls came as Kishida reshuffled his cabinet and the ruling Liberal Democratic Party (LDP) leadership on 14 December after four ministers from the party’s powerful Abe faction resigned amid a widening fundraising scandal. Tokyo prosecutors launched a corruption probe into the faction over alleged unreported kickbacks of JPY500m (US$3.5m) in party fundraising proceeds. While the impacts on political stability will be mitigated by LDP’s continued political dominance, the scandal will likely hurt Kishida’s policy programme and greatly diminish his position as party leader and premier.
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Eurasia: Cold weather causes heating shortages, raises risk of protests in Central Asia
Sectors: all; oil and gas
Key Risks: civil unrest; energy shortages
In Kazakhstan, on 13 December state news outlet Kazinform reported that 1,200 homes in Zhambyl region were left without gas for heating after a pipeline was damaged by severe cold weather. This came after residents in several cities reported heating shortages on 10 and 11 December after power stations were taken offline by freezing temperatures. Several protests over heating shortages were held in late November and early December in Almaty and Mangystau regions. The disruptions highlight the country’s fragile infrastructure – a problem that extends to the rest of the region. In January electricity shortages amid the region’s coldest winter in 15 years prompted Uzbek residents to storm local energy facilities in Tashkent and other towns. Unrest over energy shortages is likely to increase as Central Asia’s outdated energy system struggles to cope with extreme weather conditions.
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Europe: Netherlands agrees to Bulgaria joining Schengen; Austria opposed to full entry
Key Risks: border security
In the Netherlands, on 15 December the government agreed to end its long-standing objection to Bulgaria joining the Schengen zone over migration and corruption concerns, stating that Sofia had met the conditions to join the visa-free zone. Austria and the Netherlands blocked Romania and Bulgaria’s applications to join the Schengen zone in December 2022. Austria remains opposed to their full entry. On 11 December Vienna stated that it would accept only visa-free air travel in exchange for several measures, including tighter border security along Sofia and Bucharest’s external EU borders and a threefold increase in EU funding to manage migration. Vienna also wants more asylum seekers to be transferred from other EU countries to Bulgaria and Romania for application processing. Brussels and Bucharest welcomed Vienna’s proposal, while Sofia was sceptical and reiterated its demands for full Schengen membership. Tensions over the issue will persist.
MENA: Huthi attacks make shipping industry baulk at Red Sea transit
Key risks: external conflict; regional escalation; business risks
In Israel, on 16 December the southern port of Eilat was targeted by a Huthi drone swarm attack. The incident is part of a broader Huthi campaign to put pressure on Tel Aviv to cease the ongoing bombardment of Gaza. In addition, in recent weeks, Yemen’s Huthis have attacked and seized several commercial vessels believed to be Israeli-linked or headed to Israeli ports in the Red Sea and Bab al-Mandab Strait – some of the world’s busiest waterways. Consequently, fearing for the safety of their fleets and cargo, leading shipping companies including MSC, Maersk and CMA CGM – as well as oil company BP – recently suspended Red Sea operations until further notice. Disruptions to global shipping are likely to continue as reported Washington-led efforts to set up a broad international naval task force to patrol the Red Sea are unlikely to immediately materialise.
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Sub-Saharan Africa: Chad holds referendum on new constitution to end military rule
Key risks: political instability; insecurity
In Chad, a constitutional referendum to end military rule was held on 17 December. The vote came after transitional leader Idriss Deby, whose junta has governed since 2021, promised to hand over power to civilians and hold elections in 2023 before postponing them to 2024. The proposed constitution which will likely be accepted introduces a semi-presidential system with a head of state, a head of government, autonomous communities with local assemblies and councils of traditional chiefdoms – among other changes. Opposition parties boycotted the vote, claiming it was a military ploy to consolidate power. The referendum’s provisional results – expected on 24 December – and validated by the Supreme Court – which is packed with junta loyalists – on 28 December. The referendum is unlikely to resolve the political crisis. Opposition-led protests can be expected when results are announced.
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