21 December 2018

2018 Global Risk Review

In 2018, the Riskline Informer released 29 articles, serving corporate travellers and decision makers around the world. As the year comes to an end, we reflect back on 2018's most significant political developments and look towards the security environment in 2019.

Asia-Pacific

In Afghanistan, government efforts to end the long-standing conflict with the Taliban ended in utter failure. In February 2018, President Ashraf Ghani invited the Taliban for peace talks, with the deal including political recognition of the Taliban, hoping to enlist the Taliban’s support to cull the Islamic State (IS) militancy and other terror groups who have increased attacks in recent years. There were over 8,000 civilian casualties from insurgency and militancy-related attacks on soft targets like hotels, mosques and public squares nationwide from 1 January to 31 October 2018. Government troops backed by foreign combat forces failed to prevent attacks due to rising defections of Afghan security personnel to militant and insurgent camps. Finally, the Taliban rejected Ghani’s offer because the government refused the insurgents’ demands of a full withdrawal of US forces from Afghanistan before year-end. Ghani and US President Donald Trump maintained that US forces would remain as long as insurgents and militants were active in the country. Overall, the stalemate between Ghani and the Taliban indicates that a resolution to the conflict is not possible through military means and Ghani will have to offer more lucrative incentives without US involvement to bring the insurgents back to the negotiating table.

Bilateral relations between North Korea and South Korea witnessed remarkable progress in 2018, which came as an unexpected development following North Korea’s aggressive rhetoric and multiple nuclear and missile tests throughout 2017. North Korean leader Kim Jong-un’s efforts towards reconciliation, influenced by Beijing, were observed as early as February, when he expressed an interest to participate in the 2018 Winter Olympic Games in South Korea. Ever since then, North Korea has continued with positive and collaborative gestures, resulting in the first inter-Korean summit in decades on 27 April. This in turn, had a positive impact on United States-North Korea relations, with the new South Korean leader Moon Jae-in acting as an active facilitator, and on 12 June, Kim Jong-un and US President Donald Trump met in Singapore in an unprecedented bilateral summit. Pyongyang and Seoul continued with their conciliatory efforts, holding two more summits in May and September, where they discussed key issues like denuclearisation and strategies to continue talks between North Korea and the US. In late November, South Korea sent a train across the heavily militarised border into North Korea to mark the beginning of a joint venture to reconnect railway lines between the two Koreas. Thus, the Korean conflict seems to have simmered down to a great extent and the stage is set for making further improvements in the coming year. However, Pyongyang maintains that it will not get rid of its nuclear weapons unless the United States removes its anti-missile system from South Korea and total denuclearisation on the peninsula remains therefore unlikely.

Outlook for 2019:

While geopolitical tensions in the Korean Peninsula have eased with the rapprochement between Pyongyang and Seoul, relations between Washington and Beijing have continued to deteriorate under the pressure of US President Donald Trump’s trade war that has seen multiple tariffs being levied on Chinese products. The trend is expected to continue in 2019 as Washington hopes to improve the framework of trade relations between the countries. The arrest of Huawei’s CFO Meng Wanzhou on 1 December increased tensions, with the move seen as being part of a larger US diplomatic and commercial effort to stop the rise of China’s tech giants, such as Huawei, in developed and undeveloped countries alike, part of a looming ‘technological war’ between the two superpowers to secure the control of new communication technology. At the same time, geopolitical tensions in the wider Asia-Pacific region remain elevated, with the South China Sea and Taiwan seen as possible flashpoints. In the latter’s case, there remains the possibility of China seizing Taiwan militarily, particularly after Xi Jinping cemented his leadership and strengthened his power at the 19th CPC Congress: if domestic conditions should become unfavourable and the right international opportunity arise, incorporating Taiwan might well be Xi’s move to retain legitimacy. Such a gambit would be an opportunistic move that an isolationist US might be unable to prevent, especially if unprepared. In the meantime, the balance of power in the Pacific continues to tip to Beijing’s advantage.

General elections will be held in India and Indonesia, the world’s largest and third largest democracies respectively, in the first half of 2019. In India, growing communal tensions instigated by Hindu extremists coupled with hostilities between the ruling Bharatiya Janata Party (BJP) activists and supporters of rival regional political parties, means it is highly likely that the general election cycle will witness incidents of violence and possible unrest, especially in political hotspots such as West Bengal, Maharashtra, Jammu and Kashmir and northeast India. In Indonesia, presidential and parliamentary elections will be held simultaneously on 19 April, increasing the risk of possible electoral violence. It is likely that Muslim religious extremist sentiments will be played-up within certain quarters during the campaign period, with mass political rallies possible in Jakarta and other cities. There also remains a strong threat of violent unrest and clashes in the Papua region, especially during the election period, where armed secessionist activity has flared up.

Europe

In Italy, elections held on 4 March 2018 saw the collapse of the centre-left Democratic Party of former prime minister Matteo Renzi and the success of both the populist Five Star Movement (which placed first) of Luigi Di Maio and the far-right Lega of Matteo Salvini, which came in third but ahead of their coalition ally, Silvio Berlusconi’s Forza Italia. After almost three months, Five Star Movement and Lega gave birth to the first populist government in Western Europe, with Di Maio and Salvini both made vice-prime ministers of little-known Giuseppe Conte; the coalition was launched despite very different identities between the two parties and party bases. The government was created on the promises of radical anti-immigration policies and expansive public expenditure (despite the dire state of Italy’s public debt), putting the government on a collision course with the European Union (EU). The weeks-long arm-wrestling with the EU to get approved a hyper-expanded 2019 budget – later reduced – despite the huge public debt was seen as a tactical move by the anti-EU government coalition to stir anti-EU sentiment ahead of the elections for the EU Parliament in May 2019, and also ahead of possible early national elections. The anti-EU and populist rhetoric was largely successful in reducing the level of support for the EU – traditionally high in the country – and any election is expected to see a landslide victory for the Lega, which could become the top party in Italy, and a decline of the Five Star Movement.

Outlook for 2019:

2019 is expected to see new uncertainty and successes of populist, nationalist and anti-systemic forces across Europe, thus deepening contradictions among the 27 members of the European Union (EU) and within the EU institutions. However, the extent to and ways in which the EU will change remain difficult to predict. With the crucial date of 29 March 2019 set for the United Kingdom to leave the EU looming, complete uncertainty remains regarding the type of relation that the two will have and the subsequent level political stability in the UK. That crucial date will be followed on 23-26 May by elections for the European Parliament (EP), when a total of 705 Members of the European Parliament (MEPs) will be elected to represent around 500 million people from the 27 member states. The elections will likely have an outsized impact on EU politics, with the new EP legislature losing 46 of the 73 seats once allocated to the UK; the polls will also greatly influence EU institutions, particularly the EU Commission, as the parliament elects the president of the Commission. Although the success of anti-EU parties at the EP elections is almost certain, in part caused by traditionally low turnout rates, it should be noted that populist and nationalist forces across the EU have national and EU goals that can vary greatly. This may lead to agendas for the EU being remarkably different from what was debated domestically in the election campaign.

In March 2019, Ukraine will choose a new president. One of the main issues that will feature during the presidential campaign will be the status of the Russian-occupied Crimea and breakaway republics in Donbass, especially after the confrontation with Russia near the Kerch Strait in November 2018. In November, Russia-Ukraine relations sank to a new low when Russian forces captured three Ukrainian navy vessels and detained 24 Ukrainian sailors on board near the Kerch Strait off the peninsula. Other than the 30-day imposition of martial law, Kiev had little means to pressure Moscow into restoring passage through the Kerch Strait. Despite Poroshenko’s calls to send ships to the Sea of Azov, NATO ruled out such plans while western states proved reluctant to impose a new round of sanctions that would increase their economic burden. While Moscow eventually reopened the strait to shipping, the confrontation showed that the Kerch Strait was firmly in Russia’s hands. In the upcoming election, candidates will need to propose voters a path to regaining control of Russian-occupied territories. Despite varying promises, it remains uncertain whether any approach would be possible after the confrontation highlighted Ukraine’s vulnerability to Russian provocation and western indifference.

Americas

The mass exodus of hundreds of thousands of Venezuelans and Central Americans to neighbouring countries and those further afield dramatically increased political and social tensions in the region. While refugee camps are reluctantly being built in Colombia, Peru and Ecuador have imposed visa restrictions and states of emergency along their borders. Hundreds of refugees were driven back over the border into Venezuela from Brazil’s Roraima state in August following clashes between refugees and locals, while disease outbreaks among refugees have put authorities on alert. Coordination efforts among affected countries have, however, remained minimal. Venezuela is struggling through its worst economic crisis ever; inflation reached 1.3 million percent in November 2018 and is expected to reach a whopping 10 million percent in 2019. The re-election of President Nicolás Maduro in May 2018, the creation of Migration Police and quadruplication of passport prices in October 2018 are unlikely to stem the exodus in the long-term as long-standing economic and political crisis – which has led to a shortage of basic necessities and services – continues.

Tensions rose also in the Mexico-Guatemala and Mexico-United States (US) border areas during the fourth quarter of 2018 due to thousands of migrants travelling by caravan on one of the most dangerous migration corridors in the world. Besides persistent plans to build a border wall, US leaders have responded by sending troops, while Mexico has offered temporary work permits to dissuade the migrants from continuing their journey. Consequently, the Mexico-Guatemala border crossing in Ciudad Hidalgo, Chiapas, and the US’s San Ysidro crossing in California were temporarily closed following clashes. The governments within the Northern Triangle of Central America (El Salvador, Guatemala and Honduras) increasingly employ security forces to prevent emigration under the looming threat of a total cut-off of US aid. Migrant protests are like to continue along Mexico’s northern borders as thousands are expected to wait months before they can begin the lengthy asylum process, due to a daily limit to asylum applications set by the US administration. These measures are likely to do little to slow down the migrant flow as long as the conditions in the NTCA countries remain hostile for decent living.

Outlook for 2019:

The refugee crisis and its economic and political impact will remain a hot issue for newly elected presidents in Mexico, Colombia and Brazil as well as at the forefront of campaign platforms for 2019 presidential candidates in Argentina, Bolivia and El Salvador. Mexico’s new populist President Andrés Manuel López Obrador (AMLO) seeks more flexible migratory procedures, private investment from the US in southern Mexico and increased aid to Central America. If agreed upon with the US, this plan could bring much awaited opportunities for better living standards to southern Mexico and the Northern Triangle of Central America (NTCA) countries. It is yet to be seen if AMLO’s National Peace and Security Plan, which foresees legalisation of marijuana and emphasis on economic development and creation of labour, will be able to reduce spiralling levels of violence. Against all odds, relations between the two plain-speaking nationalists, AMLO and Donald Trump, are likely to remain warm, despite Trump’s determination to build a border wall. Political tensions are likely to increase in El Salvador ahead of presidential elections on 3 February;for the first time in three decades a candidate outside the ruling FMLN and main right-wing party Arena has a real shot of winning. The likelihood, however, that any of the candidates will be able to reduce gang violence is low. In this scenario, the current status quo will continue and further push migration flows. In Venezuela, the continuing exodus will further challenge the legitimacy of the government which is struggling amid hyperinflation and US sanctions. The United Nations (UN) estimates that two million Venezuelans will move out of the country in 2019 – increasing the number of refugees abroad to over five million. Taking this into account and considering recent developments in military-technical cooperation between Venezuela and Russia, a military intervention in Venezuela cannot be ruled out in the near to medium-term, despite Brazil, Colombia and the US having previously denied such option was under consideration. Such an intervention would most likely result in making the refugee crisis a permanent feature of the region.

Fiscal concerns in Brazil, Argentina and Colombia are likely to trigger social unrest in 2019. The election of far-right President Jair Bolsonaro increased the prospect for economic growth in Brazil, but it remains conditional on the fragmented Congress’s approval of fiscal reforms, such as the much-maligned pension plan. Protests and strikes are likely to continue amid increasing insecurity and inequality as well as against any authoritarian moves by Bolsonaro. His government will need to balance reforms to avoid strikes similar to the nationwide trucker strike that ground the economy to a halt for ten days in May 2018. On the other hand, the security situation is unlikely to improve unless state governments have the funds to respond to security challenges. In Argentina, the economic downturn and highly unpopular extra loan from the International Monetary Fund (IMF) have challenged President Mauricio Macri’s path to re-election in October 2019 – he will likely face ex-President Cristina Kirchner or another Peronist. Protests and strikes are highly likely in the coming months as unions bargain over pay rises amid a struggling economy that will have difficulty creating jobs ahead of elections in 2019. In Colombia, the situation will remain volatile amid escalating battles over territory between dissident groups and wobbling peace talks. Facing declining approval ratings, President Iván Duque will push the approval of a financing law to achieve economic stability in the short-term, while the government is likely forced to implement further tax hikes and spending cuts by 2020.

Middle East and North Africa

Since the end of major combat operations against the Islamic State (IS) in Iraq in 2017, demonstrators in southern provinces, particularly the city and governorate of Basra, have staged major protests demanding that the government tackle endemic corruption, pollution and joblessness in the oil-producing region. Protesters increasingly resent that since IS was declared “defeated” in northern and western Iraq and new elections were held in the spring of 2018, reconstruction efforts have not been extended to the south, which was untouched by the war but nonetheless still suffers from decades of official neglect and the violence of the 2003-2011 war. The protests have assumed an anti-foreign bent, primarily directed against both the United States and Iran, but also international energy majors operating in the region in general. Dozens of people have been detained or killed during riots, and international travel has been disrupted due to blockades targeting airports, transport companies and the border crossings with Kuwait and Iran. As of December 2018, the protests have resumed again in force, with demonstrators demanding the resignation of provincial officials and the withdrawal of federal security forces sent to maintain order. In light of the southern region’s dilapidated infrastructure, high unemployment and a growing public health crisis due to water pollution – problems also mirrored in neighbouring Iran’s own oil-rich, restive Arab-majority Khuzestan province – the protests are expected to continue in the medium-term absent major concessions from the government.

Since the beginning of 2018, weekly rallies have taken place along the Gaza-Israel security barrier, resulting in hundreds of casualties – primarily on the Palestinian side – and semi-regular escalations between the Israel Defence Forces (IDF) and Palestinian militant factions. Life has come to a standstill for weeks on end in communities on both sides of the border due to terror attacks and military operations, with the most serious escalation having taken place in mid-November when Hamas and other militant groups fired hundreds of rockets into Israel’s Southern district and won concessions from Prime Minister Benjamin Netanyahu in order to stop further escalation, concessions which have deeply divided his right-wing coalition and made early elections a possibility in 2019. Pressure is mounting in Israel to respond more forcefully, especially after a string of deadly terror attacks against Israeli citizens rocked the West Bank in December 2018, leading to the deployment of the IDF into Ramallah and other urban areas. Netanyahu and his critics both assert that the unpopular de-escalation deal with Hamas in Gaza cannot hold unless it is also observed in the West Bank. Further protests and terror attacks are certain in the medium-term, with the stakes rising higher should early Israeli elections take place.

Outlook for 2019:

While the ongoing Syrian Civil War has largely receded from the shared border among Israel, Lebanon and Syria, the potential for a regional conflict remains high. Hezbollah and Iran have, under the cover of the internal conflict and at Damascus’s invitation, moved their forces much closer to the Israeli border, and in response, the IDF has struck numerous convoys and installations in southern and central Syria believed to be linked to the Iran-Hezbollah alliance. While no major clashes have broken out, in part due to the continuing ‘conflict management’ of the skirmishes by Russia and the United States, Hezbollah’s military capabilities are believed by multiple intelligence agencies to have grown significantly, including its stockpile of long-range missiles and cross-border attack tunnels. Contending schools of thought exist within the Israeli security establishment as to whether further pinpoint strikes can contain the threat, or if a major operation and all the escalatory risks that that entails are needed to set back Hezbollah and Iran’s capabilities by several years. There is no guarantee that the United States and Russia can “manage” such a conflict, or even prevent it, should Israel or the ‘Axis of Resistance’ in Lebanon and Syria decide to take preemptive action, or, plunge into action without warning after a limited cross-border operation goes sour and then escalates.

In 2019, domestic tensions in multiple countries have the potential, albeit slim at present, to trigger major unrest and geopolitical realignments. In Iran, the reimposition of United States sanctions and rampant government corruption have triggered frequent, often violent, protests since the winter of 2017-2018, not just in Tehran, but in provinces that have hardly registered past protest movements. Jordan, despite the appearance of security, has faced an uptick in anti-government militancy and anti-austerity protests since 2017, problems that cannot simply be bought off with international donor aid and the frequent firing of unpopular prime ministers. There is also the case of the new Ethiopian government of Prime Minister Abiy Ahmed, who in opening the country since his election in 2018 has also had to contend with a significant increase in inter-communal conflict as suppressed regional disputes bubble up with mounting death tolls and mass displacement in multiple states. While Tunisia, having secured a hard-fought post-Arab Spring democracy, faces regular civil unrest over unfulfilled expectations that the end of the old regime would quickly improve the economy. And in Sudan, critical goods shortages have worsened significantly since the start of 2018 despite an improvement in the regime’s international standing, triggering mass exoduses from the countryside and urban protests. While it is not possible to predict the outcome of these pressures, the potential for such disturbances underlies the impermanence of the ‘gains’ made against urban professionals and rural poor who came together to demand change across the region in 2011.

Sub-Saharan Africa

The number of terror-linked attacks registered between 2017 and 2018 across the Sub-Saharan African region is nearly five times higher than in 2013, indicating a sustained destabilisation of the region. The insurgencies of both Boko Haram and its splinter faction Islamic State West Africa Province (ISWAP) in northeast Nigeria gained in intensity, particularly around the Lake Chad area and along borders with Niger and Cameroon, making Nigeria Africa’s worst country for terrorism in 2018, and third in the world, behind Iraq and Afghanistan. Authorities attempted to control the situation by reorganising military command of counter-insurgency operations, staging air attacks and boosting regional and international cooperation, yet they have been unable to contain the threat. Similarly, suspected jihadist groups stepped up attacks in Burkina Faso’s north and east regions, across the border in southwest Niger and in Mozambique’s northern Cabo Delgado province – though there are no indications these groups are working together – indicating the rise of new terror-linked groups in the region.

Fighting between armed groups and violence targeting civilians also surged in Nigeria with inter-communal clashes in the country’s Middle Belt leaving over 1,100 people dead in conflicts between cattle herders, usually but not solely belonging to the Fulani ethnic group, and farmers over land use in the first half of 2018 alone — making the phenomenon deadlier than the country’s Islamist insurgency. In Cameroon, clashes between government and the Anglophone separatists, who sprang up from peaceful protests two years ago against marginalisation of English speakers in the largely Francophone country, intensified, leaving hundreds of people dead and forcing tens of thousands to flee their homes in both Northwest and Southwest regions. Additionally, the whole of the Central African Republic and the eastern and northeastern regions of the Democratic Republic of Congo continue to battle violent infighting between armed groups, rebel factions and militias, which have also targeted both United Nations (UN) peacekeepers and civilians, with no signs of any peaceful resolution prospects in the near-term.

Outlook for 2019:

In the coming year, political and security issues in Sub-Saharan Africa will be dominated by the rising instability of democracies in some of the largest countries on the continent. While there were some hopeful moments in African democracy in 2018 – most notably Botswana’s smooth transition of power from Ian Khama to ex-vice president Mokgweetsi Masisi, and the swearing in of African National Congress (ANC) leader Cyril Ramaphosa as president following Jacob Zuma's departure in South Africa – anti-democratic trends started to intensify towards the end of 2018 and will likely overshadow the region’s political successes in 2019. More than a dozen national elections will be held across Africa next year and violent crackdowns by security forces on opposition supporters have already started., Meanwhile more long-time leaders are looking to extend their time in office, with President Faure Gnassingbé attempting to change term limits in Togo and President Pierre Nkurunziza in Burundi succeeding in doing so through a controversial referendum giving him the opportunity to govern until 2034 (while his current mandate continues to be troubled by allegations of secret torture camps for political prisoners). Elections in Nigeria, one of the biggest economies on the continent, will also be decisive regarding public confidence in the democratic process and national institutions.

However, the most controversial elections remain the long-delayed, high-stakes polls in the Democratic Republic of Congo, where preconditions for a democratic and transparent electoral process are far from secured. With the government refusing to address the legitimate concerns of the opposition and civil society about the fairness of the polls and continued armed groups’ violence in the east, the election results – if or when the vote is held – will likely be contested and lead to further violence nationwide. Elsewhere, secessionist movements will likely continue to be violently repressed, particularly Cameroon’s Ambazonia separatists, and Angola’s Lunda-Chokwe protectorate movement supporters in diamond-rich Lunda Norte province. 2019 is set to be an eventful year in Sub-Saharan African politics, particularly with regards to how leaders handle transitions of power, assuming that there are any.

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