Americas: El Salvador’s Bukele set to secure controversial second term in 4 February election

 Sectors: all
Key Risks: political stability; policy continuity; democratic backsliding

In El Salvador, on 4 February voters will head to the polls to elect the next president and all 60 deputies of the Legislative Assembly. A 16 January poll showed President Nayib Bukele comfortably leading the presidential race with 71 per cent of support. Polls project that Bukele’s New Ideas (NI) party is set to increase its stronghold in Congress from 57 to 60 seats. In September 2021 the Court – which is composed of judges appointed by NI lawmakers – overturned previous rules that prevented a president from serving two consecutive terms. Bukele – who owes his popularity to hardline security measures that have led to the arrest of 75,000 gang members – was cleared to run for a consecutive term by the Supreme Court, with four votes in favour and none against, on 3 November 2023. Overall policy continuity is widely expected.

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Asia Pacific: Hong Kong High Court orders liquidation of debt-laden Evergrande property giant

Sectors: all; real estate
Key Risks: economic risks; business risks; financial contagion

In Hong Kong SAR, on 29 January the High Court ordered the liquidation of property developer China Evergrande Group following repeated failed attempts to restructure its debt. The decision came over two years after Evergrande first defaulted in December 2021. Evergrande has around US$328bln in total debt, outweighing its US$240bln worth of assets. With real estate contributing to around 25 per cent of China’s economy, the firm has become the poster child of the sector’s debt crisis which has stymied further economic growth. Trading in Evergrande stock was suspended after the firm’s shares fell 21 per cent following the court order. Evergrande is expected to continue operating in China as its projects are operated by local units. A provisional liquidator has since been appointed, although they will likely face challenges in implementing the court order in China. The firm is expected to appeal the decision.

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Eurasia: Ukraine uncovers US$40m embezzlement scheme in arms procurement

Sectors: all; defence
Key Risks: corruption

In Ukraine, on 27 January the Security Service (SBU) announced that it had uncovered a scheme to embezzle US$40m worth of funds designated for mortar shell procurement for the military. Five people – identified as Defense Ministry officials and managers of arms supplier Lviv Arsena – were charged in connection with the case. One suspect was detained at the border while trying to leave the country. The funds were embezzled in the purchase of 100,000 shells that were never delivered. On 9 January Kyiv uncovered military corruption schemes with missing funds exceeding US$262m in the last four months of 2023 and foiled a corruption scheme to purchase ammunition worth US$39.3m in December 2023. Kyiv is intensifying its anti-graft crackdown to systematically eradicate corruption and adhere to NATO standards for arms procurement as it seeks to join the EU and NATO. Further crackdowns are likely.

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Europe: Nationwide farmer protests set to continue in France despite government concessions

Sectors: all; agriculture
Key Risks: civil unrest; supply chain disruption

In France, on 26 January the largest farmers’ union FSNEA stated that farmers would continue nationwide protests that began on 16 January over rising prices, taxes and environmental regulations despite government’s concessions, which included scrapping plans to gradually reduce subsidies on agricultural diesel. Prime Minister Gabriel Attal also pledged to simplify regulations for farming, request an easing of EU rules for fallow land and oppose signing the Mercosur free trade deal. Farmers demanded the government to respond to all their demands and threatened to blockade Paris. On 23 January one person was killed and two others were injured in a traffic collision with a farmer blockade. Farmers also allegedly damaged imported goods in the country’s south. Far-right parties are seeking to capitalise on farmers’ discontent ahead of European Parliament elections scheduled for June. Further disruptive protests are likely.

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MENA: Three US soldiers killed in ‘Islamic Resistance in Iraq’ drone strike in Jordan

Sectors: all
Key risks: regional escalation; political instability; political violence; war

In Jordan, on 28 January three US soldiers were killed and at least 25 others were injured in a drone strike on Tower 22 military outpost, close to the Syrian border. ‘Islamic Resistance in Iraq’ claimed responsibility for the attack after US President Joe Biden attributed the strike to Iran-backed Shi’ah militias operating in Syria and Iraq. The incident marked a significant escalation in regional tensions and was the first one to kill US soldiers in the Middle East since the ongoing Israel-Gaza war began. The group stated that the attack was in retaliation for Washington’s support of Tel Aviv and aimed to push US forces out of the region. Although 24 January reports stated that Baghdad and Washington were set to hold talks on the withdrawal of US-led International Coalition (IC) forces in Iraq, the group vowed to continue targeting US forces.

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Sub-Saharan Africa: Insecurity likely to persist in the eastern DRC in the coming months

Sectors: all
Key risks: civil unrest; political instability; internal conflict

In the Democratic Republic of Congo on 25 January 20 civilians were killed in fresh clashes between the Armed Forces of the Democratic Republic of Congo (FARDC) and Rwanda-backed March 23 Movement (M23) rebel group in the town of Mweso in Masisi territory, an estimated 80 km from the city of Goma in North Kivu province. Both sides accused each other of launching the attack. On 27 January the UN announced that it had deployed troops to secure a corridor for people fleeing violence in Masisi territory. Clashes between M23 and the FARDC have increased since October 2023, resulting in a deteriorated security environment in the eastern provinces. On 11 December 2023 the US negotiated a temporary ceasefire with parties to the conflict. However, fighting has since escalated. Hundreds more civilians will likely be displaced in the coming months.

Click here to access the Democratic Republic of Congo’s Global Intake country profile.