We lead our coverage on Asia this month with an update on Indonesia that focuses on the legislative and presidential elections that are scheduled to take place in April and July, respectively. The result will determine who succeeds President Susilo Bambang Yudhoyono, who is preparing to step down after concluding his second and final five-year term. The report will survey the various possible outcomes of the voting, along with an assessment of what investors can expect in terms of policy direction in the event of a victory for each of the main presidential candidates.

The front-runner at this stage is Joko Widodo, the popular governor of Jakarta, although his candidacy still faces an obstacle in Megawati Sukarnoputri, the leader of the opposition PDI-P, who appears to still harbor presidential ambitions of her own. The Constitutional Court has rejected a proposal to loosen the country’s stringent electoral laws, which require candidates to secure the backing of a parliamentary party.

More generally, the reporting will discuss the outlook for internal stability, business regulations, and the elimination of structural impediments that represent a constraint on long-term growth, as well as the risks associated with the tightening of global liquidity, which has contributed to a recent wobbling of the rupiah and has implications for efforts to address the country’s fiscal and current account imbalances.

In Taiwan, Ma Ying-jeuo continues to suffer from abysmal approval ratings. PRS’ report will focus on the implications for Kuomintang party in the time between now and the next elections in 2016. Our analysis will also include an assessment of the future course of cross-strait relations following a February meeting in Nanjing, the first government-to-government talks between Taiwan and China since 1949.

Our coverage of the Americas includes updates on two countries where the economic imbalances created by populist policies implemented over the span of more than a decade are becoming impossible to disguise, and the resulting discontent is fueling bouts (or the growing the threat) of popular unrest. In Venezuela, student groups and a militant faction of the opposition MUD have spearheaded a campaign of street protests that have grown more intense, and more violent, as support for the anti-government demonstrations has grown.

On the surface, the situation is reminiscent of the conditions that prevailed shortly before elements within the military carried out a brief coup against President Hugo Chávez in April 2002. However, given the evident cracks in the unity of the opposition, the comfortable legislative majority of the governing PSUV, and the absence of any signs of disquiet among military commanders, President Nicolás Maduro’s position appears to be secure for the moment. However, the risk of a governability crisis will grow the longer the government delays taking steps to address the root causes of the unrest.

PRS’ update will explore the options available to contain the steep rise in consumer prices and improve supplies of basic foodstuffs, which entail either embracing more orthodox fiscal and monetary policies that imply greater economic pain in the near term, or sticking with a populist approach that may temporarily relieve pressure on prices, but will only exacerbate the underlying weaknesses. The political risks associated with each of those alternatives will be a central focus of the analysis.

Conditions in Argentina are not nearly as intense at the moment, but the looming specter of stagflation points to a serious risk of social tumult over the coming months, and President Cristina Fernández is in a much weaker position than her Venezuelan counterpart to face down a crisis. Although her legislative allies won the October 2013 mid-term elections, the president lacks the support in Congress needed to secure the constitutional changes that might enable her to extend her tenure beyond the end of her current term in December 2015, and any development that contribute to a sharp downturn in her popular support will leave her vulnerable to being abandoned by her congressional allies as they weigh their options ahead of the next round of elections in fall 2015.

With inflation surging, unions are threatening to strike for large wage increases, and the capacity of both the government and private-sector employers to appease their workers will be constrained by economic weakness. The unemployed and the poor are also adopting a more militant posture, creating the potential for episodes of general social unrest.

As in Venezuela, the building social tensions in Argentina suggest that heading off more serious trouble will require a shift in policy course. The update will discuss the likely alternatives, and assess Fernández’s ability to steer policy in any given direction, as well as the impact that various policy responses would have on the climate for business.

In the Middle East and North Africa, the spotlight will be on Iran, where the administration of President Hassan Rouhani continues to pursue constructive engagement with western powers in a bid to free his country from the constraints of international sanctions. PRS will examine the progress in implementing an interim agreement on Iran’s nuclear activities that went into effect last month, and assess the potential for the conclusion of a more comprehensive agreement later this year.

Rouhani’s foreign policy initiatives have met strong resistance from hard-line political factions back home, and he is counting on economic improvement made possible by the partial lifting of sanctions to sustain popular support behind his diplomatic efforts, which will be crucial to ensuring that Rouhani continues to enjoy the backing of Ayatollah Ali Khamenei. Key points addressed in the update will include a discussion of the near-term economic outlook, and what the relaxation of sanctions means for international firms interested in doing business with Iran.

Turning to Sub-Saharan Africa, the government in Kenya continues to grapple with the distractions arising from President Uhuru Kenyatta’s prosecution at the International Criminal Court on charges stemming from the deadly political unrest that erupted in the aftermath of the December 2007 presidential election. Lobbying by Kenyatta and the African Union to suspend the proceedings failed to sway the UN Security Council, which agreed in November that the trial should go ahead. Although prosecutors are struggling to gather credible evidence against Kenyatta, PRS believes the uncertainty over the president’s political future and the task of planning for the possibility of a conviction will sap the government’s energy in 2014.

The second major distraction for the government is the terrorist threat posed by Islamist militants linked to Somalia’s Al Shabaab group. Parliamentary enquiry into last year’s deadly shopping mall attack in Nairobi highlighted poor coordination between intelligence and security agencies, pointing to the need for urgent reform of the security services. At the same time, there is growing resentment among Kenya’s Muslim population over alleged intimidation and violence by security forces, raising the risk of a violent backlash that would deter investors and tourists.

Kenya finally joined the club of mineral-exporting countries in February, with the first shipments of ilmenite and rutile from the Base Titanium-operated Kwale mineral sands mine. The government estimates the potential of the sector at 10% of GDP, but the short-term outlook remains clouded by ongoing regulatory uncertainty. A new mining bill was approved by the Cabinet in January, but still awaits a parliamentary debate.

Looking at Eastern Europe, PRS will issue a revised report on Ukraine, where the toppling of President Viktor Yanukovych has triggered a crisis that is threatening the country’s territorial integrity, and has raised the possibility of armed conflict with Russia. The explosive situation reflects longstanding regional and ethnic tensions within Ukraine that have been brought to a head by the competing efforts of the EU and Russia to pull the country into their respective geopolitical spheres.

Pro-EU factions have rushed to fill the power vacuum created when Yanukovych fled the upheaval in Kiev and sought refuge in Russia, but pro-Russian elements in Crimea are preparing to engineer the region’s secession from Ukraine, under the protection of the Russian military. The US and the EU have countered by offering financial support to the new regime in Kiev, which Putin insists is illegitimate, and imposing sanctions on Russia for its intervention in Crimea.

It is not clear how far Putin is prepared to press his military advantage in the near term, but he will undoubtedly do what he can to undermine the western-backed regime, with the aim of forcing its downfall and replacement by a pro-Russian alternative. Our report will assess the prospects for the restoration of something approaching stability in the foreseeable future, with key considerations including the ability of the current regime to hold on to power without provoking further territorial encroachment by Russia, the potential for the near-term displacement of pro-EU political forces in Kiev by a pro-Russia government, and the risk of a full-blown armed conflict, including a possible civil war fought along an east-west front.

Our coverage of Western Europe this month leads with a detailed report on Spain that will assess whether the sovereign’s falling borrowing costs are accurately pricing in potential tail-risks linked to the political cycle and deflationary tendencies exacerbating the public and private debt stock. Our report outlines what investors can expect from the government—in the area of fiscal policy, especially—in the period leading up to the next general election, and examines the center-right government’s chances of serving out a full term with support for the PP and Prime Minister Mariano Rajoy still waning.

The report will also assess the potential for internal conflict as Catalonia prepares to hold a status referendum (opposed by Madrid) in November 2014. The recently improving economic growth indicators will be examined to ascertain whether the recovery is on track or prone to setbacks, and PRS will also look at the role government policy will play in mitigating social unrest in a climate of high unemployment and reinvigorating bank lending to alleviate pressures in the corporate sector.

Our report on Austria looks at the challenges facing the two-party coalition returned to government last September, with the euro zone now seemingly pulling out of its crisis but also on a sub-optimal recovery path. We assess the risk of tensions between the center-left Social Democratic Party and center-right Austrian People’s Party in light of their weakened parliamentary positions and differing political standpoints, especially as polls indicate that a growing percentage of voters is embracing more extremist views as the country prepares to elect representatives to the European Parliament in May. Their differences may become more apparent when a proposed tax reform is finalized later this year, pending an expert commission’s recommendations.

A more immediate challenge is the resolution of the indebted Hypo Alpe Adria Bank, which was nationalized in 2009 and is an increasingly unpopular burden on the taxpayer. Our report looks at the options available to the government and how the chosen solution will impact investors at a time when the Ukraine crisis is raising alarm more generally over cross-border banking sector exposures in central and eastern Europe.

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