Market conditions will shape Tanzanian gas exports

Significance Tanzania has high hopes for developing offshore gas reserves, but a combination of oversupply in global markets and a difficult domestic operating environment has lowered investors' interest. Prospects are better for the domestic gas market, but international power developers are cautious about dealing with President John Magufuli's government. Impacts Shortcomings in high-profile LNG developments will damage investor confidence in other large-scale investments. Faltering confidence could threaten financing for regional projects such as an oil pipeline from Uganda or a planned railway. Further delays in gas development carry greater consequences for Tanzania than Shell and Statoil, which can prioritise other projects.

Significance Although large-scale social protest in Bahrain has been cowed over the ten years since the ‘Arab uprisings’, small-scale demonstrations recur, reflecting a base level of discontent. Mobilising issues include economic pressures, limited political representation (especially of the Shia majority) and, most recently, ties with Israel. Impacts Despite protests, Israel’s and Bahrain’s respective ambassadors will keep up high-profile activity and statements. The authorities are likely to exaggerate the role of Iranian interference in order to deepen the Sunni-Shia divide. If Riyadh manages to extricate itself from the Yemen war, that could partly reduce the pressure on Manama.


Significance The governor cited goals for the government to pursue over the coming year including anti-corruption efforts, the encouragement of investment and the enthusiastic adoption of Cobro Digital (CoDi) -- a digital payments system he claims could “transform the financial system”. His remarks come as President Andres Manuel Lopez Obrador (AMLO) pushes for greater financial inclusion to bolster the economy. Impacts The push for greater financial inclusion is likely to have a positive impact on the country’s least developed areas. AMLO’s willingness to work closely with bankers could strengthen otherwise weak investor confidence in his government. Security could become an issue for potential digital banking users -- the SPEI suffered a series of high-profile cyber-attacks last year.


Subject Somalia's oil sector. Significance Somalia plans to hold a licensing round for permits off its southwest coast this year; the blocks to be offered in 2017 are not yet delineated. While the acreage to be offered will likely prove uncontentious, the auction will highlight tensions and uncertainties as the federal government seeks to establish its federal and regional authority. Firms looking to enter the nascent sector may confront a difficult operating environment. Impacts Operating in Somalia will require managing high reputational and practical risks, including security. Maritime piracy has diminished, but oil developments could spur new forms of insecurity, including from al-Shabaab. Large-scale corruption could prove more damaging compared to other states given Somalia's minimal track record in the energy field.


Significance Grandi is the latest high-profile figure to urge the government to reconsider its position. Should Dadaab close, over 340,000 refugees would in total be forced from Kenya, creating a potential humanitarian crisis with security implications. Impacts Kenya may leverage the refugees to secure greater financial and political assistance from the international community. The West's struggle to manage migration crises elsewhere will pressure donors to prevent another large-scale displacement. The UN may increase the rate of assisted returns of Somalis if conditions in Somalia improve. Kenya would remain susceptible to future al-Shabaab attacks even if Dadaab closes.


Significance The July 19 law’s limiting of the right of national self-determination in Israel to the Jewish people has angered the Arab minority and provoked international criticism, including comparisons to South Africa’s apartheid-era legislation. Impacts Human rights risks may deter some investors, particularly for high-profile or large-scale projects such as in the oil and gas sector. Projects in towns and cities with large Arab populations such as Jerusalem, Haifa, Jaffa and Nazareth will face particular scrutiny. To ward off criticism, compliance with the UN Guiding Principles on Business and Human Rights will be increasingly important.


Significance They face trial for “complicity in acts of terrorism, insurrection, rebellion and the propagation of false information”. Anglophone Cameroonians in the Northwest and Southwest regions have been staging strikes and protests against discrimination as a linguistic minority in the past months. This prompted a government shutdown of the internet in January, which was restored in April. Although large-scale protests have stopped, many schools remain closed, the larger cities in the region continue weekly ‘ghost town’ strikes and several high-profile protesters are still under arrest. Impacts Pre-election government spending will likely increase, specifically targeted at the Northwest and Southwest regions. Attacks in the north by Boko Haram will persist and pose a growing threat to Lake Chad counterterrorism efforts. Diplomatic tensions could grow between Cameroon and Nigeria over the resettlement of refugees.


Significance Russia played a high-profile role mediating the landmark Iran nuclear agreement announced on July 14. As such, the deal represents a diplomatic victory for Russia and its aim of preventing Iran from acquiring nuclear weapons. The deal also offers the prospect of increased opportunities for Russian business, and for Russian diplomacy in the Middle East, particularly Syria. However, the agreement also raises concerns in Moscow that Iran's detente with the West will weaken Russia's political and economic ties with the Islamic Republic, and see Moscow lose a valuable ally in its stand-off with Washington. Impacts Russia will try to strengthen cooperation with Iran within the Eurasian Economic Union framework. Potential for cooperation in oil and gas will be limited, although Moscow will try to coordinate energy policies with Tehran. Return of Iranian crude to global markets will dampen prices further, increasing Moscow's economic woes. Russia will use promised delivery of air defence systems to Iran as a bargaining chip in its stand-off with the United States.


Significance The case highlights the challenges facing President Muhammadu Buhari's anti-graft campaign, which may face significant political blowback. Impacts Reforms to the judiciary, led by Vice President Yemi Osinbajo, will be slow given the large scale of integrity problems in the courts. This could complicate high-profile corruption cases by raising doubts over the validity of court judgments. Symptoms of the ailing economy, including fuel and foreign exchange shortages, will prove damaging for the ruling APC.


Subject Bukele and congress. Significance Salvadoran troops on February 9 occupied the Legislative Assembly at the invitation of President Nayib Bukele. The occupation was intended as a high-profile stunt to pressure legislators into approving Bukele’s request for extra security funding. In reality, it revived memories of the country’s brutal civil war, sparking domestic and international criticism, undermining Bukele’s domestic and international image and probably bringing his honeymoon period to an abrupt end. Impacts The military is now less likely to take part in large-scale security operations given concerns raised by its visible presence. Bukele’s new anti-corruption body is set to receive less funding and powers via congressional grant. Bukele will maintain his antagonistic stance ahead of the 2021 elections, where he hopes to boost his party’s legislative presence.


Subject COVID-19's impact on the global humanitarian system. Significance The COVID-19 pandemic is generating immense new humanitarian needs at the same time as negatively affecting the quantity and quality of humanitarian aid. Meanwhile, countries with existing humanitarian crises are highly vulnerable to the effects of the pandemic and ill-equipped to prevent its spread. Impacts Funding for responses to ongoing emergencies, particularly slow-onset and low-profile ones, may suffer amid competing priorities. Even large-scale and high-profile emergencies, such as the conflicts in Yemen or Syria, may struggle for funding. Unmet humanitarian needs will increase vulnerability to the effects of climate change and fuel ongoing conflicts.


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