Risk Updates

Bangladesh
The death of Bangladesh's president Zillur Rahman on 20 March may fuel further unrest as it occurs at a time of increased political instability. However, since the president is largely a figurehead in Bangladesh's parliamentary democracy, Rahman's death will not significantly affect the government or policy.

Bolivia
Negotiations between the government and the Guarani indigenous groups over the construction of a gas plant in eastern Bolivia are likely to be prolonged. As long as protests by the Guarani indigenous people's assembly continue, production will be disrupted and the state will lose US$350,000 per day. Bolivia's gas exports to Brazil and Argentina may also be threatened.

Central African Republic
Rebels killed up to nine South African peacekeepers as they advanced into Bangui. The rebels, known as the Seleka, also seized the presidential palace, forcing President Bozize to flee the country, reportedly into the Democratic Republic of Congo. French soldiers secured the airport and advised expatriates to remain in their homes. A political transition now looks inevitable. Seleka leader Michel Djotodia announced himself as the new president and he is likely to co-operate with incumbent Prime Minister Nicolas Tiangaye.

Chile
A strike by workers at the northern port of Angamos could spread to other ports amid failed talks between the government and union leaders. The Angamos strikes left the world's top copper producer Codelco unable to export large metal shipments and further strikes will likely affect other mining companies operating in Chile.

China
While China has experienced several food scandals in the past, the discovery of almost 14,000 dead pigs in the Huangpu River network coincides with increasing concern over pollution and thus could become an issue around which anti-government protests coalesce.

Colombia
Attacks similar to the 21 March bombing of a section of the Ecopetrol-owned Caño-Limon-Coveñas oil pipeline in the north-eastern province of Arauca are likely as the ELN continues to demand being included in the peace talks being held with FARC rebels.

Cyprus
Cyprus reached a last minute agreement on 25 March with international lenders to secure a EUR10 billion bailout which protects small deposit holders, allows the country to remain in the Eurozone and means that the European Central Bank will continue to provide liquidity to the banking sector. In exchange, Cyprus will restructure its two largest banks, effectively forcing huge losses on deposits of over EUR100,000 at Laiki Bank and the Bank of Cyprus. Significantly, the agreement does not need parliamentary approval as it is a formal 'reconstruction' rather than a tax. Nonetheless, the deal will likely cause mass capital flight from the country as large deposit holders flee all banks, as well as a structural shock as the financial sector contracts and heavy austerity that will choke demand.

Dominican Republic
The massive raid by the Dominican National Drug Control on 21 March that resulted in the detention of a lieutenant colonel in the air force and customs agents based at the main international airport will do little to overcome the ongoing corruption that continues to make the Dominican Republic a major hub for drug trafficking.

France
If a formal investigation against former president Nicolas Sarkozy for allegedly receiving illegal funding from the heiress to the L'Oreal business empire results in charges, his hopes of running for the presidency in 2017 could be undermined.

Iraq
Oil production is set to continue rising at over 20 per cent per year for several years. However, a reliance on hydrocarbon revenues means that the country will remain susceptible to oil price shocks and possible instability in its main oil-producing regions (Basrah and Kirkuk).

Israel - Iran
The composition of Prime Minister Binyamin Netanyahu's new security cabinet could hamper any decision to carry out military strikes on Iran. The seven-minister body includes a number of novices who will have little background in the details of the Iranian threat, meaning they may be less likely to back a decision to strike.

Kosovo - Serbia
Pressure for Pristina and Belgrade to reach an agreement to normalise relations will continue to build as the prospect of greater European integration is on the table for both parties.

Lebanon
Prime Minister Najib Mikati announced his resignation and that of his government on 22 March after a cabinet dispute with allies of Shi'ah group Hizbullah over preparations for parliamentary elections and the reappointment of a senior security official. The Hizbullah-led faction blocked moves for the creation of a supervisory body for the parliamentary vote and opposed extending the term of a senior security official.

Sri Lanka
The former army chief who led the victory against the Tamil Tigers, Sarath Foneska's willingness to answer allegations of war crimes may undermine President Rajapaksa, his electoral adversary in 2010, who still denies war crimes.

Syria
Moaz al-Khatib, the head of the National Coalition for Syrian Revolutionary and Opposition Forces, resigned on 23 March ahead of an Arab League summit due to be attended by Syrian opposition leaders. The summit's purpose is to determine whether the coalition has a right to take up Syria's seat at the Arab League. However al-Khatib, seen as a moderate ally by the West, is reported to have resigned due to criticism and pressure from the more conservative elements of the coalition.

Tanzania - China
Chinese Premier Xi Jinping's visit to Tanzania demonstrates China's continued commitment to East African investment and indicates the region's growing importance in the oil and gas sector. More generally, large reserves offshore Mozambique and Tanzania are likely to be pivotal in the coming years, with blocks already seeing significant investment by oil majors.

Turkey
Even following imprisoned Partiya Karkaren Kurdistan (PKK) leader Abdullah Ocalan ordering a ceasefire and a withdrawal from Turkish territory, it remains possible that small but extreme elements will not follow the mainstream of the movement. There is thus still a risk of violence, particularly in Turkey's south-east.

United Kingdom
While the UK government hopes that a more expansionary monetary policy, facilitated by a change in the Bank of England's mandate, will offset the effects of contractionary fiscal policy, it is unlikely that by itself further quantitative easing will be sufficient to support growth.

Venezuela - United States
Venezuela's decision to cut off an informal channel of communication with the United States, which took place after a State Department official commented that opposition candidate Capriles could be a good president, highlights that difficulties in the relation persist even following President Chavez's demise and tensions are likely to increase as officials continue to accuse the US of planning a coup against the ruling Socialist Party.

Zimbabwe
Following the approval of a new constitution, supported by both Mugabe's Zanu-PF party and Morgan Tsvangirai's MDC-T party, a general election will probably be held in July. The election will dissolve the uneasy alliance of Zanu-PF and the MDC-T and there are concerns over a possible repeat of violence, as seen in 2008.

Source: AG