This month’s coverage of the Americas includes a new report on Cuba, which re-established normal diplomatic relations with the US for the first time in more than 50 years in early August. The easing of restrictions on travel from the US to the island has already given a boost to the tourism industry, and an increase in the limit on remittances will increase the purchasing power of Cuban households, to the benefit of consumer-focused retailers and service providers. However, the economic impact of the diplomatic thaw will be limited by the maintenance of the US embargo on bilateral trade and investment, which is unlikely to be relaxed in the absence of substantive political reform in Cuba. The report will assess the prospects for near-term progress on that front, and will also discuss the broader trade and investment implications for President Raul Castro’s ongoing program of economic reforms, examining in particular developments related to the Mariel port and free-trade zone to illuminate the opportunities and pitfalls for foreign firms looking to do business on the island.

Our detailed coverage of Western Europe includes a new report on Finland, which was the only member of the EU to register an economic contraction during the second quarter of 2015. The analysis will include an exploration of what has gone wrong for an economy that was one of the world’s star performers during the high-tech boom, but which is now stuck in recession, and an assessment of the potential for the policy prescriptions offered by the center-right coalition government formed after the April 2015 elections to reverse the declining trend. The decline of Finland’s traditional electronics and forestry products industries point to an urgent need for structural reforms, including changes to labor rules that are strongly opposed by the unions, but Finland also faces challenges stemming from a breakdown in relations with neighboring Russia, a principal trade partner, and the policy constraints imposed by the country’s euro-zone membership. Our report also assesses whether the three-way coalition can survive for a full-term, given the likelihood of policy disagreements between pro-EU elements and the more euroskeptic Finns party, which is also stirring controversy with its hardline position on immigration.

PRS’ coverage of Eastern Europe will feature an update on conditions in Ukraine, where the pro-western government elected last year is struggling to meet the challenges posed by a badly damaged economy and Russia’s not-so-subtle efforts to destabilize the regime in Kiev. The government has managed to reach a debt-restructuring agreement with international creditors, one of the key conditions attached to an IMF-sponsored bailout program. However, President Petro Poroshenko’s push for legislation that grants limited political autonomy to eastern regions controlled by Russian-backed rebels, in fulfillment of the terms of a cease-fire agreement concluded earlier this year, has already provoked the defection on one of Prime Minister Arseniy Yatsenyuk’s coalition partners, and is fueling broader political tensions, a fact highlighted by the eruption of deadly violence in Kiev, where armed right-wing nationalists protesting the legislation clashed with police. Our update will examine the government’s prospects for implementing the reforms outlined in the IMF agreement, which hold the potential to create significant opportunities for foreign investors. Key elements of the analysis will include an assessment of the outlook for government stability, which will be essential to achieving parliamentary approval of reforms, as well as relations with both the EU and Russia, which will significantly affect economic performance.

Turning to the Middle East and North Africa, PRS will focus on Iraq, where a fragile coalition government already struggling to contain the spread of the Islamic State insurgency and grapple with the financial challenges posed by a steep decline in the global price for oil has more recently confronted large-scale protests animated by frustration over government corruption and the abysmal state of public services. Prime Minister Haider al-Abadi has at least temporarily staved off a broader crisis by securing approval of far-reaching political reforms, but the deep mistrust between the country’s Sunni and Shiite communities poses an ever-present threat to the survival of Abadi’s inclusive government, the collapse of which would create a very real risk of national fragmentation. In addition to assessing the Baghdad administration’s viability, PRS will analyze security conditions in the country, in particular, the potential for pushing back Islamic State jihadists whose control of major cities and important oil facilities creates an impediment to ensuring stability even in the areas still under government control.

Nigeria is the principal focus of our sub-Saharan Africa coverage this month, as we take the opportunity to assess the first 100 days in office for President Muhammadu Buhari, the All Progressives Congress opposition candidate and former army general who beat Goodluck Jonathan in a surprisingly calm transfer of power at the elections in March. Our report hones in on Buhari’s slow start to governance, highlighting the regional bias evident in the still-incomplete process of forming his Cabinet, and what investors might expect in terms of the policy response to Nigeria’s increasingly desperate economic situation, which thus far has been painfully slow. Our report weighs up whether Buhari is capable of bridging sectional and regional divisions, and whether he possesses the political strength and leadership ability to effectively clamp down on corruption and address the security risks posed by the Boko Haram insurgency. Our report looks for pointers to any other prospective improvements in the investor climate given the equally considerable challenges to fiscal-macro stability presented by the continuing negative oil shock, which is still putting pressure on the currency and is now threatening recession.

Elsewhere, US President Barack Obama’s visit to Kenya in July put the country under global spotlight, allowing President Uhuru Kenyatta and the governing Jubilee Alliance to boast of growing US support for Kenya’s anti-terrorism efforts, while concluding a series of business deals with US companies. However, the visit also served to highlight the government’s mixed record on governance, as Obama prominently warned of a “cancer of corruption” that is costing the country 250,000 jobs a year. Soon after, Kenya’s auditor general revealed that 26% of the 2013/2014 budget cannot be adequately accounted for.

The parliament is set to debate the long-awaited legislation on petroleum and mining industries, with the constitutional deadline for this and other key bills recently extended till August 2016. But corruption and security will remain the key issues as Kenya’s political establishment starts gearing up for the August 2017 presidential election. The economy remains extremely vulnerable to terrorist violence, although the absence of high-profile attacks by extremist Islamists linked to Somalia’s Al Shabaab group has created space for a tentative pickup in the tourism industry.

Corruption, security concerns and lower tourism receipts will remain a drag on the economy, denting the boost from infrastructure investment and lower energy prices. The government’s growth target of 6.9% in 2015 will likely have to be revised closer to the 6% mark, with downside risks posed by a tightening monetary policy in response to a depreciating shilling. At the same time, higher spending on security and on the Mombasa-Nairobi railway project forced the government to raise the budget deficit target to 8.7% of GDP, adding to concerns related to rising levels of public debt.

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