Risk Updates

Brazil

Rio de Janeiro has been relatively calm since the beginning of a city-wide police strike on 10 February. In contrast to the strike in Salvador a week previously, authorities are intent upon cracking-down on striking police officers, insisting they are breaking their covenant with the public. Despite the current calm, however, the potential for an increase in low-level crime and looting remains. 

China

China reported slowdowns in both imports and exports for January 2012, resulting in a trade surplus of US$27.3 billion, a six-month high. Imports dropped by 15.3 per cent while exports dropped 0.5 per cent. Continuing economic crises in the US and the EU, China’s largest export markets, will be a major challenge to continued Chinese economic growth in 2012. 

DRC

President Joseph Kabila’s top presidential aide, Augustin Katumba Mwanke, died in a plane crash in Bukavu on 12 February.  ‘AKM’ was extremely influential in Congolese business politics, particularly in mining deals. His death will provoke an internal power struggle, compounded by the current delay over the formation of a new government. Mining firms should expect increased confusion over decision-making processes in the coming months.

Greece

Parliament approved further austerity measures in a vote on 12 February in a bid to secure a further tranche of financing before a bond redemption on 20 March. The vote will see minimum wage floor lowered by 22 per cent, the cutting of 15,000 public sector jobs and a further trimming of the government’s spending budget. Despite wider cuts, Greece’s ability to control its debts as the economy stalls remains under question.

Iraq

The Iraqi government banned ExxonMobil from participating in the country’s fourth oil and gas bidding round scheduled for May. The move is in return for contracts signed between the oil major and the Kurdish Regional Government in October which the government regards as illegal.

Tibet

A Tibetan nun was confirmed dead in Sichuan province, south-western China, after setting herself on fire on 11 February. One of over 20 reported self-immolations over the past year, this latest casualty comes amidst growing unrest in the region. Violence and protests may worsen leading up to the Tibetan new year on 22 February.

Turkmenistan
Incumbent candidate Gurbanguly Berdymukhammedov reportedly won a landslide victory in the 12 February presidential election, with most votes counted. Berdymukhammedov’s victory comes as no surprise in a country with little legitimate opposition to the regime and he is unlikely to face any significant challenge to his rule in the medium term.

Zimbabwe
The first draft of Zimbabwe’s new constitution was rejected by the ruling ZANU-PF party as it barred any future electoral candidate who had already held power for 10 years. As Mugabe continues to push for 2012 elections, regardless of reforms stipulated in the 2008 political agreement, Zimbabwe is set for a tumultuous year.

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Source: AKE

World Risk Updates

Bahrain

Security forces dispersed several hundred Shia demonstrators near the capital Manama on 18 December. The demonstrators gathered near a roundabout on the Budaiya highway for the fourth day in a row, until police stormed the area forcing them out. Tensions continue to simmer in Bahrain and are unlikely to dissipate until the opposition feel that they are being listened to by the government.

Côte d’Ivoire

Following a local dispute, at least six people were killed by the government's new army, the Republican Forces of Côte d’Ivoire, after armed youths raided military barracks on 17 December in Vavoua in the west. The undisciplined and fragile nature of the country's armed forces - comprised of former warring factions - has sparked regular clashes since the end of post-election hostilties. Rebuilding the security apparatus is President Ouattara's biggest challenge.

DRC

After the Supreme Court confirmed Kabila's re-election, opposition leader Etienne Tshisekedi called for the DRC armed forces to stop obeying Kabila. Kabila is due to be sworn in on 20 December, but Tshisekedi has declared himself president. Tshisekedi has departed from conciliatory calls for peaceful protest and is stepping on dangerous ground, risking a full-scale return to widespread violence.

Egypt

Security forces wielding batons and firing teargas clashed on 19 December with rock-throwing demonstrators who continue to call for an end to military rule. At least one person was killed in the latest clashes, bringing the total number of casualties in the recent spate of violence to 11. The demonstrations have been largely confined to the Midan Tahrir area of the city; however, there is potential for clashes to spill-over into adjoining streets in the downtown area.

Kazakhstan

15 people were reportedly killed following riots in the western region of Mangistau. The unrest was sparked on 16 December by striking oil workers in the town of Zhanaozen during independence celebrations; the violence subsequently spread to Shetpe and the regional capital, Aktau. Security personnel are likely to take an increasingly heavy-handed approach to quelling any further possible outbreaks of unrest.

North Korea

Kim Jong Il's abrupt death leaves his son Jong Un as his designated heir, although attention is likely to focus on his brother-in-law Jang Song Taek, who is expected to act as caretaker while Kim Jong Un consolidates control. South Korea’s military, supported by 28,500 US troops, is currently on high alert as developments are monitored. The current expectation is for a continuation of the status quo, where Pyongyang will continue to use its nuclear programme to leverage foreign aid where the potential for increased foreign policy tensions and the possibility of small scale military attacks on South Korea continues. It is likely the DPRK’s foreign policy will remain erratic.

US

President Obama has signed in a spending bill which will avoid forcing the closedown of certain government agencies such as defence and labour, as previously agreed. The move prevents tax rises for most workers but protects the emergency welfare benefits currently received by millions of Americans. Although the legislative battles on Capitol Hill are expected to continue, this bill provides for government financing through to September 2012, which will come as a relief to Obama as he heads into the elections.

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Source: AKE