Americas: Right-wing candidate De la Espriella narrowly wins presidential runoff in Colombia
Sectors: all
Key Risks: political stability; political polarisation; policy uncertainty
In Colombia, on 21 June conservative candidate Abelardo de la Espriella won the presidential runoff after securing 49.65 per cent of the vote against left-wing candidate Ivan Cepeda’s 48.71 per cent, with a margin of fewer than 250,000 votes after 99.8 per cent of polling stations had been counted. The result marked a shift away from leftist President Gustavo Petro’s administration. De la Espriella campaigned on a hardline security platform, emphasising efforts to tackle organised crime and strengthen state authority, in clear contrast to Petro’s ambitious ‘total peace’ agenda. Over 2,600 complaints and reports of electoral irregularities were submitted during the voting period, although polling was largely peaceful. Political tensions are likely to remain elevated during the transition period, while the narrow result points to a fragmented Congress, requiring the incoming administration to negotiate support to advance its legislative agenda.
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Asia Pacific: Indonesia risks reclassification of MSCI market status to “frontier” economy
Sectors: all
Key Risks: economic risks; business risks; disruptive unrest
On 19 June Morgan Stanley Capital International (MSCI) downgraded Indonesia’s information flow criterion to negative amid persistent concerns surrounding transparency and reported signs of “coordinated trading” in the stock market. On 28 January MSCI’s initial warnings triggered a temporary halt in trading, causing stocks to plunge by nearly 8 per cent in value. The warnings came amid ongoing protests against cost of living pressures and expensive government projects – including President Prabowo Subianto’s controversial free meals programme – placing considerable strains on public finances. The protests, which broke out on 12 June in Jakarta, have since spread to other major cities including Bandung, Medan, Yogyakarta, Pekanbaru and Makassar. MSCI stated that if economic conditions did not improve, it would re-classify Jakarta’s investment climate from an “emerging” to “frontier” market, potentially triggering capital outflows of over US$13bln amid increasing investor uncertainty.
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Eurasia: EU disburses EUR34m aid to Armenia following Russian trade curbs
Sectors: all
Key Risks: economic risks; supply chain disruptions; trade friction
On 19 June the EU disbursed EUR34m to Armenia to mitigate the impact of Russian trade restrictions on Yerevan. Moscow restricted imports of most food, seeds, flowers and fertilisers ahead of and after the parliamentary elections on 7 June, in which PM Nikol Pashinyan – who has sought to strengthen ties with Washington and Brussels – secured a victory against Russian-friendly opposition groups. On 29 May Russia, Belarus, Kazakhstan and Kyrgyzstan jointly stated that Armenian EU preparations would endanger the economic security of remaining Eurasian Economic Union (EAEU) members and demanded Yerevan hold a referendum on whether to join the EU or stay in the bloc. On 16 June Yerevan appealed Russian trade curbs with the Eurasian Economic Commission as a violation of the EAEU’s free trade rules. Further retaliatory measures by Moscow cannot be ruled out, including disruptions to gas, petroleum products and rough diamond supplies.
Click here to access Armenia’s Global Intake country profile.
Europe: Political crisis deepens in Romania as new PM-designate unlikely to win confidence vote
Sectors: all
Key Risks: political stability
In Romania, on 21 June PM-designate Adrian Vestea, from the National Liberal Party (PNL), submitted his list of ministers and governing programme to parliament, asking for a vote of confidence. Vestea was nominated by President Nicusor Dan on 14 June without the knowledge of the PNL, with PM Ilie Bolojan calling the move a “hostile act”. On 21 June the PNL confirmed Bolojan as party president, refused to support Vestea, and gave him until 22 June to resign or be excluded from the party. The PNL’s coalition partners – the Save Romania Union and the ethnic Hungarian UDMR party – also decided against supporting Vestea. Conversely, the Social Democrats, who withdrew from Bolojan’s government on 20 April voted to support the new government. However, without support from right-wing populist parties, Vestea’s government is unlikely to win the vote. Political stability risks will remain heightened, with snap elections increasingly likely.
Click here to access Romania’s Global Intake country profile.
MENA: FATF places Iraq on the grey list, raising financial and investment risks
Sectors: all; finance
Key risks: economic risks; business risks; corruption
In Iraq, on 19 June the Financial Action Task Force (FATF) placed Baghdad under enhanced monitoring, returning the country to the grey list due to deficiencies in its anti-money laundering (AML) and counter-terrorism financing (CTF) framework. The decision marked a reversal of Iraq’s 2018 removal from the list and signalled increased scrutiny of financial transactions linked to the country’s heavy cash economy. The designation could lead to stricter oversight of dollar transfers, higher compliance costs and reduced correspondent banking activity, particularly involving US-linked financial channels. Officials stated that Baghdad has adopted an action plan with the Central Bank of Iraq (CBI) to address identified gaps and avoid escalation to the blacklist. In the coming days, tighter banking controls, slower foreign investment inflows and increased pressure on the dinar are likely, with risks of deeper financial isolation if reforms stall.
Click here to access Iraq’s Global Intake country profile.
Sub-Saharan Africa: SAF strikes and RSF buildups near El-Obeid escalate civil war in Sudan
Sectors: all
Key risks: civil war; regional escalation; political violence; communal violence; violent clashes
In Sudan, on 20 June the Sudan Armed Forces (SAF) launched drone strikes on Rapid Support Forces (RSF) positions across North Kordofan state, targeting RSF forces along key roads near El Obeid, North Kordofan. The strikes came amid reports of large build-ups around El-Obeid, which has been a key target of the RSF due to its strategic position along a key highway connecting the west and south of the country to Khartoum. SAF successes in pushing back the RSF in the wider Kordofan region likely drove the RSF’s prioritisation of El-Obeid. Despite civil forces and international governments pushing for a resolution to the conflict, both sides have refused to de-escalate, raising the risks of further atrocities near El-Obeid in the short term. Further drone strikes and ground clashes are likely in the coming days, potentially escalating the wider conflict in the coming weeks.
Click here to access Sudan’s Global Intake country profile.