Americas: Venezuela’s Maduro and Guaido mull fresh talks; meaningful results to remain elusive
Sectors: all
Key Risks: political instability; economic risks; sanctions; protests
In Venezuela, efforts to re-launch negotiations between President Nicolas Maduro and the opposition will continue to face significant challenges. On 11 May opposition leader Juan Guaido – recognised by the US and several regional and Western countries as Venezuela’s legitimate leader – proposed talks with Maduro with the aim to schedule free and fair snap presidential and legislative elections. The suggestion marked a stark departure from a previous stance of abstaining from participating in any elections including Maduro. After initially expressing his readiness for such talks, on 14 May Maduro stated that the opposition should be ready to return control of PDVSA’s US subsidiary Citgo amongst other conditions for the dialogue to progress. Previous Oslo-mediated talks were suspended in August 2019. Despite having broadly boycotted recent elections, the opposition is reportedly mulling participating in the upcoming 21 November regional and local elections.
Asia Pacific: Hong Kong authorities seize Jimmy Lai’s assets; China bans foreign curricula
Sectors: all; education
Key Risks: business risks; confiscation
Crackdowns against Western influence continued in China and Hong Kong, SAR. In Hong Kong, authorities seized HKD500m (US$64m) of assets belonging to pro-democracy media tycoon Jimmy Lai under Beijing’s National Security Law (NSL). Lai, a vocal critic of Beijing, was charged on suspicion of collusion with foreign forces and could be sentenced to life if convicted. The seizure, the first time in which authorities invoke Article 43 of the NSL, is likely to further raise business risks in the financial hub amid suppression of pro-democracy movement. Meanwhile, in China, the State Council unveiled new laws that would bar foreign curricula and foreign ownership in private schools from kindergarten to grade 9, a move aimed at strengthening control of the country’s education sector and boosting patriotic education amid tensions with the West. Educational institutions will face heightened scrutiny.
Eurasia: Kumtor takeover in Kyrgyzstan; renewed tension between Armenia and Azerbaijan
Sectors: mining and metals; all
Key Risks: nationalisation; confiscation; sanctions; political violence; political instability; civil unrest
In Kyrgyzstan, on 17 May parliament voted to impose a three-month period of external management on the Kumtor gold mine, making swift use of a law signed by President Sadyr Japarov on 14 May. The legislation alone, which allows the government to intervene in operations on environmental grounds, triggered an international arbitration filing from Centerra Gold, the mine’s Canadian owner. Parliament’s decision is likely to draw further international condemnation. In the longer term, Japarov’s simultaneous privatisation drive may also raise eyebrows. Meanwhile, negotiations between Armenia and Azerbaijan over the latter’s recent territorial incursions, thus far fruitless, are set to resume on 19 May. While escalation into interstate violence of the kind seen in late 2020 remains unlikely, the latest incursions indicate that a durable resolution to the conflict is equally as unlikely to materialise.
Europe: EU countries begin to open up; Poland’s new stimulus package approved
Sectors: all
Key Risks: political stability; terrorism
Many EU countries have begun to lift COVID-19 restrictions as vaccination programmes begin to accelerate. France, Spain, Germany and Italy have eased restrictions and further measures are likely to be lifted in the coming weeks, including greater opportunity for foreign travel. However, concerns remain over whether such changes are taking place too soon. Meanwhile, in Poland, the ruling Law and Justice (PiS) party announced increased spending on healthcare and housing as part of a new stimulus plan financed mostly by EU funds. The ‘new deal’ will increase healthcare spending to 7 per cent of total economic output and more credit for home loans will be available. Though aimed at economic recovery, the plans are also an attempt to reverse the decline in PiS’s popularity over widespread controversy related to its changes to abortion laws and the long-underfunded healthcare system.
MENA: No progress for mediation in Israel and Gaza as conflict escalates tension elsewhere
Sectors: all
Key Risks: political risks; political instability; economic risks
The US is increasing mediation efforts to resolve the ongoing violence between militants in the Gaza Strip and Israeli Defense Forces. Targeted Israeli Air Force airstrikes should be expected throughout the Gaza Strip and are possible even in locations where Hamas is not known to have a presence. Rocket attacks from Hamas towards Israel will continue, with some rockets permeating Israel’s Iron Dome missile defense system. Urban areas have been targeted and sporadically hit. Southern Israel’s Ashkelon and Ashdod have borne the brunt, but Tel Aviv, Lod, Jerusalem and other areas have also been hit by rockets. Clashes are escalating in mixed Arab-Jewish cities, East Jerusalem and in the West Bank. Thousands-strong protests have occurred in Jordan and Iraq. Escalation is likely as Israeli Prime Minister Benjamin Netanyahu doubles down.
Sub-Saharan Africa: Government postpones Ethiopia’s 5 June elections due to logistical issues
Sectors: all
Key Risks: political instability; civil unrest; political violence
In Ethiopia, on 15 May the government postponed the 5 June general elections citing logistical, staffing and data issues. Originally scheduled for August 2020, the vote was initially postponed due to the COVID-19 pandemic. However, critics have accused Prime Minister Abiy Ahmed of using the delays to illegally extend his term. In September 2020 the Tigray People’s Liberation Front (TPLF), the ruling administration in the region, defied the postponement and held regional elections that contributed to an ongoing conflict with the federal government which has killed an estimated 52,000 people and displaced more than three million. Several opposition parties including the Oromo Liberation Front are planning to boycott the election amid claims that the federal government has detained opposition leaders. The postponement will likely further intensify ethnic tensions across the country and could spark anti-government unrest.
