Monthly Risk Spotlight: January 2024


From Economic Prosperity to Economic Uncertainty
2023 was a year of strong economic growth for the Western Hemisphere. Economic activity in the region was at its highest levels since the start of the COVID-19 pandemic, and the region was able to grow at a rapid 4% rate, making it one of the fastest-growing regions globally. Guyana, a South American nation that has recently begun the extraction of oil resources off its coast, boasted the fastest economic growth in the world, growing over 38% year over year. However, as we move into 2024, most economists believe that the region will decelerate and could even decline in some instances.

There are several reasons for the potential deceleration of economic growth in 2024. The most impactful has been the consequences of monetary policies in major markets around the world, which have kept interest rates high. High-interest rates could influence businesses and individuals across the region as less capital is available to fund the growth of businesses. Furthermore, a lack of inexpensive credit options will likely force corporations and individuals to produce and consume less, leading to a decline in tax revenue for the region. What’s more, trade is expected to decline globally, which has always had a major impact on South American economies as commodity-exporting makes up a large portion of economic growth in the region.

Another major headwind for economic growth in the region is climate change and its economic impacts. Climate shocks have already had a major effect at the conclusion of 2023 and into the first month of 2024; for example, crop failures have been reported in Brazil due to heatwaves. In Central America, record-breaking drought has disrupted the operations of the Panama Canal, a major corridor for global trade and economic prosperity in the region. Nations across the Western Hemisphere would need to start investing now in climate mitigation projects, exactly at a time when national fiscal budgets are constrained.

Lastly, political shocks can have dire economic effects, and so far this year, Argentina’s election of a libertarian president, Javier Milei, has brought with it radical changes to the economy, which will bring short-term economic pain to Argentina, but may also lead to longer-term economic progress for the nation. Venezuela’s aggressive claim on the oil-rich Essequibo region of Guyana also threatens to bring economic ruin to both countries if the political situation evolves into a military one.

Although the year ahead will likely be a challenging one economically for the Western Hemisphere, the slowing economy may be an indicator of potential increased travel risk, particularly regarding opportunistic criminal activities. Stagnating economies, along with price shocks due to climate change and restrictive monetary policy, may result in greater risks for travelers as petty theft becomes a crime of survival for some.


A Challenge for Democracy – Tunisia’s Upcoming 2024 President Elections
Tunisia is frequently acknowledged as the sole Arab nation to have effectively embraced democracy, particularly in the aftermath of the Arab Spring uprisings in 2010. However, since the election of President Kais Saied in 2019, most of the democratic principles adopted by the country have been rescinded. With the upcoming presidential election scheduled for the fall of 2024, questions of whether Tunisia will revert to authoritarianism linger. Several political activists have announced their intention to run in the upcoming presidential election – Olfa Hamdi, the President of the “Third Republic” party, and Nizar al-Shari, the President of the New Carthage Movement. Other political parties are preparing to elect new political figures to contest in the presidential election.

There are concerns among Tunisians and election observers of likely election interference in the coming polls. Saied’s previous moves indicate a strong likelihood of such incidents. According to a recent presidential announcement, foreign election monitors will not be allowed for the impending presidential election this year. The simultaneous threat of opposition parties opting for a complete boycott, fueled by the perceived high probability of election interference, is evident. According to the Independent High Authority for Elections (ISIE), the country reported a low voter turnout rate for the December 2023 local elections. Of the 9 million eligible voters in the country, only 11.66% participated in the local elections. The low turnout rate is in correlation to a nationwide petition opposing a futile election that was signed by more than 260 prominent Tunisians. The petition’s signatories implied that the election exercises served no other purpose than to allow for further consolidation of power and policies by the incumbent executive.

Tunisia’s opposition often resorts to electoral boycotts as a manifestation of their discontent with perceived governmental authoritarianism, advocating for a similar boycott during the 2022 referendum. This strategic recourse, while reflecting a steadfast commitment to democratic values, poses the risk of inadvertently facilitating President Saied and his adherents in their endeavors to potentially reverse democratic gains in the nation. The imminent presidential election thus stands as a pivotal juncture, requiring vigilant observation both domestically and internationally as Tunisia navigates the complexities of its political landscape.

If the voter turnout rate of December’s local elections remains low, and voter interference occurs during the presidential elections, the future of Tunisia’s democracy could be tested. The trajectory set by Saied, marked by the suspension of parliament, the extension of emergency powers, and the controversial constitutional changes, raises concerns about the erosion of democratic principles. The exclusion of foreign election monitors and the potential for significant interference further compound worries over the fairness of the upcoming presidential election. The opposition’s historical reliance on boycotts as a form of protest underscores the deep divisions within the country. As Tunisia approaches its election season, the nation stands at a critical juncture, where the choices made by both the government and the opposition will likely shape the future of its democratic progress.


Myanmar: A Nation in Turmoil
Following a coup d’etat in 2021, Myanmar has faced significant socio-political instability. The ruling junta’s heavy-handed tactics have led to the arrest of tens of thousands, including key political figures like Aung San Suu Kyi, on dubious charges. The crackdown extends beyond political dissidents to encompass artists, journalists, and peaceful protestors, creating an atmosphere of widespread fear and oppression. Furthermore, ongoing ethnic tensions against varied tribal groups, located on the geographical fringes of the country, by the majority Burmese-controlled military only exacerbate the fragile security state.

During the first 20 months following the coup, at least 6,000 civilians have been killed. This seemingly vast number underscores the severity of the security environment. This violence permeates across Myanmar, with all branches of the security services allegedly involved in extrajudicial killings.

Adding to this, anti-coup resistance groups have contributed to the bloodshed, responsible for around 2,000 civilian deaths.

In Rakhine state, the Rohingya community has faced particularly severe persecution. The military’s brutal crackdown in 2017 forced many Rohingya to flee to Bangladesh. There, they live in what has become the world’s largest refugee camp, a supposed sanctuary that has turned into a site of desperation and danger. Some Rohingya, driven by their dire circumstances, have risked dangerous journeys to Thailand or Malaysia, seeking safety.

Amidst this turmoil, China’s role is crucial and intricate. Beijing has recently facilitated peace talks between the Myanmar junta and ethnic minority armed groups, including the Arakan Army (AA), the Myanmar National Democratic Alliance Army (MNDAA), and the Ta’ang National Liberation Army (TNLA). These talks, aimed at finding a political solution to the conflict, underscore China’s influence in the region. However, Beijing’s relationship with the junta has been strained, particularly over the junta’s failure to address online scam operations targeting Chinese citizens. Despite these tensions, China remains a crucial ally and arms supplier to the junta.

China’s involvement in Myanmar has significant regional implications. The clashes in Shan state are of particular concern to Beijing, not only because of the violence but also due to the region’s strategic importance, which includes oil and gas pipelines and a planned billion-dollar railway link. The future of Myanmar, therefore, hinges on how China navigates its strategic interests and its role as a regional peace broker.

As Myanmar continues to struggle with internal conflict and external pressures, the international community observes with growing concern. The resolution of this conflict will not only determine Myanmar’s future but could also serve as an indicator of China’s evolving role in regional geopolitics.


Ethiopia Officially Recognizes Somaliland
On January 1, Ethiopia’s Prime Minister Abiy Ahmed signed a preliminary agreement with the self-proclaimed independent state of Somaliland to obtain access to its port facilities on the Red Sea. The signed memorandum of understanding (MoU) was immediately met with international criticism because the territory of Somaliland is recognized as de jure part of the Republic of Somalia. Somalia’s president Hassan Sheikh Mohamud called the MoU an act of aggression and on January 7, signed a bill declaring the MoU as null and void. Although Ethiopia and Somaliland are celebrating the MoU as a victory, the agreement has precipitated concerns that the infringement on Somalia’s sovereignty has escalated tensions and may perpetuate another conflict in the region.

The details of the MoU signed by Ethiopia and Somaliland have not been publicly released, however, statements by Ethiopia’s representatives have hinted at granting Ethiopia access to the port of Berbera and possibly a leased military base. In exchange, Ethiopia will progress toward official recognition of the Republic of Somaliland, as well as provide a stake in Ethiopia’s carrier company: Ethiopian Airlines.

Despite seceding from the Federal Republic of Somalia in 1991, Somaliland is not recognized by the African Union (AU) or the United Nations (U.N.) as an independent state. Since fighting for and declaring its independence over thirty years ago, Somaliland has peacefully elected three presidents in five different elections. In addition to being self-governing, the country has its own currency, prints its own passports, and maintains its own military. However, it is also one of the poorest countries in Africa, suffering greatly from political isolation and inability to conduct international trade, partially due to its independence not being internationally recognized. For Somaliland, the MoU agreement with Ethiopia has been welcomed as a long-awaited step towards recognition.

In 2023, Ethiopia’s GDP grew by 13% making it one of the fastest-growing economies in the world. However, Ethiopia is landlocked and dependent on a similar agreement for port access in Djibouti. In addition to costing Ethiopia approximately $1.5 billion annually in port fees, the use of Djibouti’s port has left Ethiopia in a very vulnerable position logistically, due to the singular route by which goods are transported in and out of the country. The danger of being overly dependent on one thoroughfare became apparent in 2020, during the Tigray conflict, when government forces were tasked with guarding the entire length of the National Highway against sabotage. For these reasons Ethiopia has pursued alternative and cheaper means of direct access to the Red Sea.

As Ethiopia’s population and economy continue to grow, so does its pressure for expansion. In October 2023, the president of Ethiopia claimed direct access to the sea as “natural rights” and an “existential matter”. The president’s comments led some to speculate of a possible annexation of Eritrea; however, in November of 2023, he clarified that Ethiopia would pursue peaceful and mutually beneficial solutions to maritime trade without invading neighboring countries. In light of Somalia nullifying the MoU, concerns are being raised once again that the prime minister of Ethiopia intends to fight, as previously stated, if denied Ethiopia’s alleged “natural rights.”


Increased Instability in Serbia
On December 17, 2023, snap elections were held in Serbia and accusations of election fraud imminently arose, the majority of which were directed at current President Aleksandar Vučić. In response, the opposition party, Serbia Against Power (SPN), called on its supporters to demonstrate against the election results. On December 30, 2023, thousands gathered in the Serbian capital of Belgrade to protest the results and President Aleksandar Vučić himself. Protesters attempted to storm the city hall in Belgrade by using flagpoles and rocks to break several windows. At least 35 protesters were arrested. Directly following the large-scale unrest, on December 30, Vučić made an emergency address to the nation blaming the unrest on foreign interference. The combination of rapid protester mobilization and governmental instability has presented an increased risk of instability throughout Serbia.

In reaction, the electoral commission announced a re-run election organized by opening only 30 polling stations, out of 8,000 nationwide. The exclusive utilization of only 30 polling stations was expected to improve the monitoring of the election process, deter election fraud, and solidify the election results for the country. On January 4, the re-run results were announced, and President Aleksandar Vučić’s Serbian Progressive Party (SNS) gained the majority vote, again.

Following the snap elections on December 17, the leader of the opposition party SPN, Marinika Tepić, began a hunger strike with five colleagues to protest the suspected election fraud and continued the strike as her health drastically deteriorated. This hunger strike drew a lot of media attention and was a large conversation throughout society for the duration of the re-run election process. Tepić spoke from the State Election Commission Office saying, “We want the election to be annulled and a new one to be held in 5-6 months but in better conditions.” Her statement gained large public support.

The opposition party, SPN, continues to call for daily protests against the finalized election results. The continuation of the opposition party’s negative dialogue and extreme measures of a hunger strike indicated that the governmental instability in Serbia is unlikely to decrease in the foreseeable future.


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