PRS’ coverage of the Americas includes a new report on Brazil, where President Dilma Rousseff’s second term has gotten off to a very rocky start, with a widening corruption scandal at state-owned Petrobras that poses a threat to the unity of Rousseff’s legislative coalition. Her political troubles come at a most inopportune time. A sluggish economy and a pre-election spending spree contributed to a widening of the fiscal deficit last year, and the government is under pressure to reassure the markets by imposing austerity measures that will not only be unpopular but also figure to delay the timing of a recovery. There are growing doubts as to Rousseff’s ability to marshal the legislative support required to get the job done. The report will assess the government’s prospects for sustaining a legislative majority, and will examine the policy options that will be available to Rousseff if she is deserted by her coalition allies.

Turning to the Middle East and North Africa, PRS will issue a new report on Iran, where reports of progress toward the resolution of an international dispute over the country’s nuclear program could pave the way for Iran’s medium-term reintegration into the global community, but may contribute to an increased risk of domestic political instability and international conflict in the near term. There is much at stake for President Hassan Rouhani, whose ability to fend off challenges to his authority from conservative hard-liners within the political establishment hinges on his more conciliatory diplomatic approach producing concrete results. In particular, officials in Tehran are seeking a significant easing of sanctions that have crippled the Iranian economy, a matter of even greater urgency given the slide in global oil prices.

The report will assess the prospects for a near-term breakthrough in the negotiations, and what the success or failure of talks would mean for the political climate inside Iran. In addition to discussing the potential opportunities resulting from a thaw in relations with the US and the EU, the analysis will also address the risks associated with the security concerns of regional neighbors and threats to the vested economic interests within Iran that could emerge in the aftermath of a multilateral deal that positions Iran to shed its pariah status.

Our Sub-Saharan Africa coverage this month casts the spotlight on Nigeria, the continent’s largest economy and one of its most dangerous polities, where a general election originally scheduled for February 14 has been delayed until March 28. The vote will occur against a backdrop of investor losses stemming from a negative oil shock, the falling naira, and plunging equities. The election race is a close call between the People’s Democratic Party incumbency led by Goodluck Jonathan, seeking a second and final presidential term, and the All-Progressives Congress, a four-party opposition alliance that is seeking to build a constituency that transcends the country’s ethnic, religious, and regional divides. The alliance’s presidential candidate, Muhammadu Buhari, is a retired general and former military ruler who has promised to wage a campaign against corruption and deliver greater benefits to those Nigerians who have benefited the least from Nigeria’s oil wealth. The report assesses the prospects for further delays in the electoral process, the possibility of a peaceful transfer of power and other likely, but more worrisome, scenarios, including the risk of an explosion of violence within a deeply divided society already troubled by an Islamist insurgency led by Boko Haram that is causing havoc in the northeast of the country.

PRS will also examine the risks in the Democratic Republic of Congo in view of continuing uncertainty over the political future of President Joseph Kabila. The election commission has set November 27, 2016 as the date for holding presidential and legislative polls that will mark the end point of a protracted electoral cycle that kicks off with provincial elections in October 2015. Although Kabila is barred constitutionally from seeking a third term in office, his failure to provide firm assurances that he plans to step aside has fueled speculation that his allies in the legislature are preparing to push for constitutional changes.

There remains a strong chance the government might attempt to delay the elections, citing financial issues or security concerns. On the one hand, that scenario would almost certainly provoke street protests by the opposition. A failed attempt by the government to push through a bill to conduct a population census—a move that would necessitate the rescheduling of the vote to a later date—provoked deadly riots in January, and exposed divisions within the ruling coalition on the question of extending Kabila’s tenure beyond the current term. On the other hand, Kabila’s departure could trigger a destabilizing power struggle among his senior allies.

Against this background, the prospect for greater transparency in Congo’s business environment appears close to zero over the next two years. Relations between Kabila and mining companies are strained after the government broke off talks on changes to the mining code, prolonging uncertainty over potential increases in mining royalties. The details of a draft mining bill remain unclear, but it is safe to say that any increases to operational costs will act as a further deterrent for investors in light of existing political risks to doing business in Congo.

Our extensive coverage of Western European risk returns to Spain this month where we investigate whether the sudden emergence of the anti-bailout, left-wing protest movement Podemos can upset the odds to repeat the success of its Greek counterpart, Syriza. Support for Podemos has surged in recent months in spite of the welcome and sustained return to economic growth for the first time since the banking crisis and real estate market collapse in 2008-09, taking it above the opposition Socialists in line with the Popular Party of Prime Minister Mariano Rajoy, which is still floundering. A well-supported rally in Madrid attracting some 100,000 attendees further demonstrates Podemos is successfully capitalising on the groundswell of opposition to the government’s orthodox policies, notably among the disenfranchised paying the price for the country’s excesses with high levels of unemployment still prevailing. The parliamentary elections are not due until December, but already the stakes are high in light of the provocation to central government authority from Catalonia threatening a status referendum for the region in September, and the onset of a snap election for the Andalucia regional parliament this month providing an important test for the political actors, all of which is creating an unsettling environment for investors.

We also focus on the unprecedented developments in Sweden that have seen Prime Minister Stefan Lofven’s minority centre-left government forced into snap elections only months into a new parliamentary term (our worst-case scenario last fall), only to rescind that decision after reaching an agreement to form a six-party coalition. The establishment of a broad alliance will at least temporarily neutralize the influence of the far-right Sweden Democrats, which was thrust into a king-maker role following its successes at the election last fall. PRS’ analysis will include a discussion of the terms of the coalition deal, and what they portent for both political stability and economic performance in the near term. PRS will also assess what changes can be expected when the government releases its spring fiscal bill (a chance to amend the opposition-sponsored budget Lofven was forced to accept) and the various parties press for consideration of their pet policies. The report will also assess the implications of recent economic indicators, including a surprisingly strong GDP report and the central bank’s attempts to engineer moderate inflation.

Finally, our look at Eastern Europe includes a revised report on Russia, where the shocking assassination of Boris Nemtsov, an outspoken critic of President Vladimir Putin, has produced an issue around which opponents of the United Russia administration are beginning to organize. Even so, it will take more than urban protests to shake the foundation of Putin’s regime. International sanctions imposed in response to the president’s aggressive diplomacy vis-à-vis Ukraine have compounded the negative economic effects of a steep slide in global oil prices since mid-2014, but Putin continues to ride a wave of nationalist zeal that has boosted his already strong popularity among the broader population.

The analysis will include an exploration of the various policy measures that can be expected as Putin seeks to limit the risk of negative political fallout from worsening economic conditions, and what recent and anticipated moves portend for the domestic business climate. The report will also assess the potential for the emergence of a viable challenger to the president and his party over the medium term.

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