Topic Category: World

SPECIAL REPORT—The political upheaval that erupted after President Viktor Yanukovych opted against signing an association agreement with the EU in November 2013 escalated sharply in February, and the situation is spiraling out of control, with serious negative implications for Ukraine’s already poor risk profile. Yanukovych has fled the country, taking refuge in Russia, while Moscow has declared the political takeover in Kiev by pro-western political elements to be illegal.

Representatives of the Syrian government and the opposition Syrian National Coalition held two rounds of talks in Geneva, Switzerland in early 2014, initiating a long-delayed peace process sponsored by the U.S. and Russia, and backed by both the UN and the Arab League. Unfortunately, the talks, mediated by joint UN-Arab League envoy Lakhdar Brahimi, brought no tangible progress. They even failed to produce agreement on confidence-building measures, such as limited cease-fires to facilitate humanitarian services.

As Chinese engagement with Latin America and the Caribbean has expanded over the last decade, two of the greatest inconveniences for the P.R.C. government have been managing unique relationships with each of the 42 individual countries of the region, and doing so in the shadow of the United States. China’s approach to this problem demonstrates a new assertiveness.

We can't know yet how the markets will behave in Argentina after the announcements made by the economic team, except that the Blue dollar continues to rise. What is clear is that finally the government and its dreamers and/or its grim followers should openly acknowledge the problems that the country faces, at least in the economic area.

Political risk has increased significantly since the eruption of a corruption scandal in mid-December 2013. Triggered by the detention of more than two dozen suspects, including the sons of two Cabinet ministers on charges of graft related to questionable real estate deals, the scandal has breathed new life into a popular anti-government movement that had lost momentum following a bout of mass protests last summer.

In November 2013, the top leaders of the ruling Chinese Communist Party (CCP) unveiled an ambitious roadmap for economic and social reforms to be implemented by 2020. The policy strategy hammered out by the CCP’s Central Committee is the strongest signal yet of President Xi Jinping’s commitment to replacing the existing export- and investment-focused economic model.

The turmoil that erupted in Juba last month threatens to ignite a full scale ethnic civil war. If peace talks fail, a potential genocide may even result. Certainly, political risks for foreign investors and neighboring governments would increase under such circumstances. Given South Sudan’s position as a regional oil producing country, a civil war would also close transnational energy corridors throughout Central/East Africa and fuel regional instability.

Park Geun-hye’s first year in office was a bumpy one, marked by disruptive political scandals, worrisome tensions in relations with North Korea, and back-tracking on key components of her signature “economic democratization” agenda that have weakened her popularity and undermined her credibility. This new year is unlikely to be any easier, even assuming the continued recovery of the economy.

An article recently in the Argentine journal La Politica confirmed the collapse of talks between the Argentine government and Chinese financiers to help fund $21.6 billion in hydroelectric facilities to be built on the Santa Cruz river. This failure in negotiations is significant since it is one of the first times a Chinese denial of a major loan request by a “strategic partner” has been made public.