This month’s coverage of the Americas is highlighted by an update on Brazil, where the PT-led administration headed by President Dilma Rousseff appears to have avoided any crippling mistakes related to the country’s turn as host of the World Cup. However, the combination of resentment over the high cost associated with the games (and the prospect of an even bigger bill when Brazil plays host to the Summer Olympics in 2016) and rising social discontent in a climate of weak economic growth and high inflation is pushing the president’s approval rating downward as she and her party seek a renewal of their mandate in October.

With polling data pointing to an increasing likelihood that the presidential race will be decided by a run-off contest, the analysis will focus on who Rousseff is likely to face in the second round, what a victory for her opponent would mean in terms of changes to policy in 2015 and beyond, and how the threat to her re-election hopes might affect the president’s policy stance in the near term, in all cases paying close attention to the implications for the climate for foreign investment and trade.

Coverage of the Middle East and North Africa includes a report on Libya, where fears that the country is sliding toward civil war have not been eased following legislative elections held in late June that were marred by deadly violence. Any pretense that the government is in control of the country’s security apparatus has evaporated since May, when a renegade retired general backed by elements of the armed forces and quasi-official militias launched a crackdown on militant Islamist groups without authorization from the administration in Tripoli.

Reports that Gen. Khalifa Al Haftar enjoys the backing of the new government in Cairo, as well the Persian Gulf monarchies, only reinforces the very real risk that the failure of secular and Islamist political forces to find a basis for cooperation will spell the end of Libya’s short-lived experiment with democracy and its replacement by another military strongman. PRS will assess the near-term implications of the political crisis for both the investment climate and the prospects for ending a regional rebellion in the east of the country that has resulted in a steep fall in oil exports.

Our Western European coverage this month focuses on yet another brewing political crisis in Belgium triggered by the holding of a federal election. As in 2010, Bart de Wever’s Flemish nationalist N-VA finished on top, but de Wever failed to form a government within the one-month deadline set by King Philippe, a reflection of the geographical and linguistic divisions that represent a threat to the unity of the federal state. The analysis will include an assessment of the next steps, and their implications for asset prices, including the possibility that Socialist Party leader Elio di Rupo could return as prime minister, despite his party’s loss of parliamentary seats.

Our report evaluates whether another lengthy impasse is in prospect, and what the possible exclusion of the Flemish separatists from the government would mean for political stability and policy-making, in light of the need for extensive reform to address the nation’s fiscal imbalances and the failure of extensive devolution to quell regional discontent. The analysis rounds out with a review of the main economic risks as the hopes of a euro-zone recovery fail to match expectations.

Over in Eastern Europe, our latest update on Russia analyzes President Vladimir Putin’s next steps in a dangerous and rapidly evolving crisis in Ukraine, four months on from the annexation of Crimea. We evaluate the implications of the damaged cross-border relationship and broader regional tensions against the backdrop of an economy on the brink of recession, the rouble propped up by foreign exchange market intervention, escalating inflation, and an expanding fiscal deficit that demands urgent government action with creditor engagement on hold.

PRS will examine how the economic impact of the crisis might begin to affect Putin’s popularity, in light of the increasing tendency toward media censorship and state interventionism, including politically driven central bank financing of commercial bank lending and plans to raise taxes to boost state revenue amid a background threat of tighter western sanctions. We ascertain how the myriad political and economic risks will likely affect asset prices and debt financing into 2015, and also whether a de-escalation of the crisis is still the most likely prospect.

Turning to Africa, our look at Ghana this month evaluates an increasingly desperate situation testing one of the more successful and respected democracies in sub-Saharan Africa, as President John Dramani Mahama confronts labor strikes and peaceful protests from a population that has become increasingly intolerant of government corruption and a decline in living standards resulting from the inflationary effect of a falling currency and central bank deficit financing.

The analysis will also include a discussion of the regular power outages that are constraining the economy’s growth potential, high unemployment, and a rising debt burden, and will assess whether Ghana can weather the pressures without an IMF bailout, a development that would have significant implications for the government’s energy policies and its ability to contain social unrest. In addition, the report will look at how this unsettling backdrop might shape the balance of political power leading up to the next elections in 2016.

PRS will also evaluate the political risk in Gabon in view of the defection of senior officials from the ruling Gabonese Democratic Party who fell out with President Ali Bongo Ondimba. There is speculation that some of the dissidents may be planning to challenge for the presidency in 2016, although there are few signs of Gabon’s famously fractious opposition uniting into a credible political force.

Bongo’s immediate challenge is in reconciling ambitious government investment plans with a costly maintenance of a bloated public sector, against the backdrop of stagnating oil production and rising discontent with living standards. The government is unlikely to achieve its 7% medium-term growth target, with recent strike action by customs workers posing downside risks in the near term.

An international investment forum held in May opened the possibility of new venues for foreign businesses. The government has also reopened negotiations on the long-delayed Belinga iron ore deposit. But the impact on growth of most of these plans will not be felt for several years. Uncertainty over government regulation remains a problem, with a bill recently issued to France’s Total for $805 million in back taxes being a case in point.

Coverage of Asia and the Pacific includes a new report on the Philippines, where, despite a history of presidents facing substantial turbulence as their term approaches its conclusion, Benigno Aquino appears to be in a strong position to wield significant influence through the run-up to elections scheduled for mid-2016. With political stability appearing likely, PRS will focus its report on the implications of potential changes to the constitution to allow more foreign investment into the country. It will also analyze recent changes to the banking sector.

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