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, 09 January 2012

China – Philippines
The Philippines accused China of violating the 2002 ASEAN-China Declaration on the Conduct of Parties in the South China Sea after Chinese vessels were spotted inside the Philippine territory in the Spratly Islands, an area also claimed as part of Chinese territory.

Germany
Germany’s President Christian Wulff continues to come under increasing pressure following allegations of a loan scandal. The President has so far rejected calls for his resignation but his political support could be waning as opposition leaders indicate they are willing to find a consensus candidate. His resignation could spark a crisis for Merkel’s coalition government as it struggles to maintain domestic support for its response to the Eurozone crisis.

Iran
Official reports stated that an additional major uranium enrichment facility will be established in a protected underground site near Qom. Enrichment and underground nuclear facilities are nothing new in Iran but the dispersal of such facilities in more than one well-defended site will make any military response by foreign countries much more difficult, thus strengthening Iran’s position on the nuclear issue.
Nigeria
Unknown gunmen killed at least 21 people, reportedly southern Christian worshippers, on 6 January in Adamawa state. Only a few days after Boko Haram’s threat for all Christians to leave the north expired, informal groups seem to be using publicly voiced sectarianism to conduct attacks on religious communities. The prospect of Christian groups arming themselves in the face of an ineffective state security response cannot be discounted.  
Peru-Venezuela
Petroperu has announced that it will invest in new project in the Orinoco belt. Although new President Ollanta Humala has been keen to downplay his links to President Chavez, a former mentor, the new ties, which represent a potentially hazardous investment, underline the ideological as opposed to pragmatic bonds between the two.

Philippines
More than 3 million Catholic worshippers marched through Manila on 9 January in an annual procession, despite a warning from President Benigno Aquino III that Abu Sayyaf (ASG) may try and target the marchers. Around 15,000 policemen have been deployed around the capital, amid the threat that there may be a growing likelihood that terrorists are looking further north to hit Manila.

Yemen
Cabinet proposed a draft immunity law protecting President Ali Abdullah Saleh, his family and aides from prosecution. It is still to be approved in parliament but many Yemenis are angry following extensive violence at the hands of the security forces, blamed on Saleh and members of his family. The UN also criticised the proposal as a violation of international law.

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Source: AKE