Monthly Risk Spotlight: July 2023

AMERICAS

Strong El Niño Event Expected for 2023 

Often misunderstood and globally impactful, El Niño, the naturally occurring phenomenon that warms the waters off the Pacific Coast of South America, is due to begin this year and will likely have major effects across the globe. Under normal circumstances, the Pacific experiences a consistent movement of warm water and air from South America toward Asia. The warm water that is pushed away from the Americas is replaced by colder, deeper water, leading to optimal water temperatures for large fish populations off the coast of places like Peru and Chile. However, this ‘normal’ atmospheric cycle can be disrupted by El Niño.

El Niño, a phenomenon that is naturally occurring and cyclical, stops the flow of warm air and water from the Americas to Asia. With no wind pushing warm water away from the Americas, the ocean surface around the Americas warms dramatically, killing fish populations off the coast of Peru and redirecting rain and moisture that was destined for Asia to turn eastward and instead head over parts of the Americas. Less moisture in the air also means less wind over the ocean, so the Pacific waters will continue to warm as a lack of cool air raises the temperature of the water. As a result, El Niño becomes a feedback loop. Warmer water leads to less westerly wind, which leads to even warmer water. The effects of El Niño tend to peak during December.

The effects of El Niño are far-reaching. Drought conditions in Southeast Asia as well as Indonesia can be expected from El Niño as can dry conditions in northern areas of Brazil. El Niño will also cause warmer temperatures in Western Canada and Alaska while causing major flood risks in areas like Peru, Chile, Argentina, Paraguay, and California.

The impacts of El Niño are not limited to East Asia and the Americas.  In Europe, El Niño can cause the United Kingdom and Northern Europe to experience very cold winters. In India, El Niño can lead to much warmer conditions and even drought. In Africa, El Niño can result in drought conditions in the southern part of the continent while also producing large amounts of rain for Central Africa, increasing the risk of flooding. Over the Pacific, stronger hurricanes can form because of El Niño and the warmer air, however, Atlantic hurricanes are less likely to form due to the lower temperature. The exact global consequences of El Niño are difficult to predict ahead of time, but global weather pattern disruption is guaranteed.

El Niño has extensive effects across the globe outside of weather patterns. El Niño can cause a worldwide reduction in fish output and therefore increase the price of fish around the world. Additionally, many agricultural areas across the world can experience either drought or floods that can cause major disruptions to agricultural production and create food price related inflation, which in turn may trigger social unrest among affected populations. Agriculture and food security across the Americas are particularly vulnerable to a strong El Niño effect. Other knock-on effects can occur with strong El Niño conditions, such as increased levels of moisture in many areas across the globe leading to spikes in the population of mosquitos, which in turn can lead to a large increase in mosquitoes as a vector for disease transmission across the globe. Dry conditions in other parts of the world can lead to large fires, especially in areas like Central America that do not have the resources or experience to combat large, uncontrolled fires in otherwise normally tropical wet nations.

As the world registered its hottest day since records began this July, the next El Niño may prompt governments around the world to start building climate resiliency in the face of global warming and shifting climate patterns. However, in the immediate future, the El Niño phenomenon and its potential devastations around the globe could cause major safety and economical shifts globally.

MIDDLE EAST AND NORTH AFRICA

Captagon Smuggling in the Middle East
The drug Captagon has grown in popularity in the Middle East over the past five years and is now one of the most trafficked narcotics in the region. It was first manufactured in 1961 as an alternative to amphetamine and methamphetamine used, at the time, to treat narcolepsy, attention deficit disorder, and as a central nervous system stimulant. The drug can be highly addictive and dangerous when abused. Most countries discontinued the use of Captagon as of 1971. When official production of the drug concluded, some of the remaining stocks were smuggled out of Eastern Europe into the Middle East.

Syria continues to be the Captagon producing hub. According to a UK government statement, 80% of the world’s Captagon is produced in Syria. Syrian President Bashar al-Assad continues to deny any involvement in the drug trade. Observers say production and smuggling of the narcotic has brought in close to 10 billion dollars for his government. It is believed the production is worth approximately three times the combined trade of the Mexican cartels to Assad. A New Lines Institute report suggests the Syrian Government uses Hezbollah and other armed groups for technical and logistical support in narcotics production and trafficking.

The drug is produced on an industrial scale in chemical factories inherited by the Assad government. It can be sold for around $10-$25 USD per pill. While most of the world’s Captagon production is in Syria, the primary destination of the pills is the Gulf states. Jordan, Lebanon, and Türkiye are also serving as important transit points for trafficking groups.

Security forces around the region intercept millions of pills each week. In June, the Royal Oman Police (ROP) seized more than 6 million pills of Captagon while arresting an international drug smuggling gang. In May, Saudi authorities stopped an attempt to smuggle nearly 1.4 million Captagon pills through the Jeddah port. Even last year, Jordanian authorities killed 30 drug smugglers in the first two months of the year and thwarted attempts to smuggle 16 million Captagon pills coming from Syria.

As security forces have stepped up raids and arrests in the region, drug trafficking groups have evolved in response. In Iraq, several militias under the umbrella of the Popular Mobilization Forces (PMF), such as Asa’ib Ahl al-Haq and Harakat Hezbollah al-Nujaba are trafficking the drug across the Iraqi-Syria border. The militias use PMF-marked vehicles and identification cards to evade detection through border crossings into Iraq. The drug trafficking trade in Iraq is particularly complex as corruption and complicity in the government complicate efforts by counter-narcotic authorities to perform properly. Experts believe that some of these factors are contributing to Iraq’s plunge toward becoming the next narco-state.

Captagon is not as well known in other regions of the world, yet. Regardless, the United States and the United Kingdom have expressed concerns over its production and distribution in Syria. Both countries recently imposed new sanctions on Syrians with connections to the drug trade and in December 2022, the U.S. introduced The Captagon Act which mandates U.S. agencies to target the illicit trade. As Syria was welcomed back to the Arab League in May despite the country’s shortcomings, it is highly unlikely that the production and distribution of Captagon will stop at the source. The most likely outcome will be to continue the status quo in hopes that security forces around the region can intercept the drug’s intended destination at the same time drug trafficking groups adopt new tactics in evading detection.

ASIA-PACIFIC

China’s New Anti-Espionage Laws
On July 1st, 2023, China’s revised counter-espionage law went into effect allowing the Chinese government more power to detain foreigners and travelers. This law, officially known as the Anti-Espionage Law, is the latest in a series of fifteen laws related to national security, in an effort to strengthen China’s security. However, this law has turned heads as many people suspect it could create new risks for foreign businesses, companies, and travelers.

Under this recent revision, the law expands the definition of espionage from covering state secrets and intelligence to any documents, data, or materials related to national security interests. The law, however, does not define the terms of national security and interests, allowing China significant leeway to investigate and prosecute foreign travelers and companies. On June 30th, the United States government sent out a warning regarding the new law stating that American and other foreign companies could face increased penalties from Chinese authorities for conducting regular business activities, which now risk being considered espionage.

Although China is notorious for arbitrary detentions and exit bans for travelers, this new law provides the country with more legal coverage and grounds to do so. The broad provisions of this law and its ambiguous scope could have significant implications for corporations and businesses in China. It has also created more uncertainty and legal risks for foreign journalists, academics, and researchers. Any kind of research documents, data, and materials could be considered relevant to China’s national security due to ambiguities in the law.

The revised law gives the state and local counterparts unprecedented power to enter and inspect electronic devices and facilities. Many experts fear that it will also enable the government to gather sensitive data from foreign corporations under the guise of preventing espionage. Some analysts also believe that topics related to COVID-19 and even attempt to collect or discuss accurate data on China’s pandemic death toll could fall under the revised law and be considered espionage or a threat to national security interests.

With these new revisions planting the seed for the investigation of foreign corporations, businesses with operations in China should examine and update their existing policies to address this new change. It is also important for businesses to have clear crisis management programs and processes in place and be prepared for unannounced visits by government officials. Businesses in China will need to perform continual risk assessments as the legal landscape in the country continues to evolve.

 SUB-SAHARAN AFRICA

Presidential Election Results in Sierra Leone
On June 24th, Sierra Leone held the fifth presidential election since its civil war over a decade ago. President Julius Maada Bio won re-election, securing a second term in office. President Bio narrowly avoided a runoff election which was widely predicted to occur after receiving 56% of the votes. In Sierra Leone, one candidate must receive at least 55% of the votes to avoid a runoff election. Bio’s main opposition, Samura Kamara ran against Bio in the 2018 elections, where Kamara lost by 5% of the vote. In the most recent election, Kamara received about 41% of the votes. Prior to the election, Kamara cast doubt on the election commission’s capability to hold free and fair elections. Widespread unrest occurring prior to, during, and following the elections was a concern for many across Sierra Leone given the unrest that has occurred over the last year in the country.

On June 15th, just a week before the elections Kamara called on the electoral commission’s chief, and all regional commissioners to resign. Protests unfolded in some parts of Sierra Leone prior to the elections as the opposition called for the election commissioner to resign. Kamara wanted “an independent internationally accredited team” to replace the commissioners, however, the chief electoral commissioner stated no one would resign and the elections went ahead as scheduled. Due to the concerns of continued or increased unrest, large gatherings were banned in Sierra Leone until after the election. Kamara was not only critical of the election commission, but during the campaign, Kamara criticized President Bio’s handling of the economy. President Bio defended his response and blamed external factors such as COVID-19 and the war in Ukraine for the rising prices and Sierra Leone’s struggling economy.

The day of the election brought some instances of violence reported by the election commission and the All People’s Congress Party. During the election the opposition, the All People’s Congress Party (APC) reported that a few elected representatives had been attacked and intimidated. Additional instances of intimidation occurred, and beatings were reported by the election commission as well. Following the election, security forces responded to reports of gunfire at the All People’s Congress party headquarters in the capital of Freetown. At the headquarters, as a post-election conference was being held, shots were fired outside leaving one woman wounded and unresponsive. Multiple cars outside the headquarters were also severely damaged. The cause of the shooting had not been confirmed but the All Peoples Congress blamed the military for shooting at the headquarters and throwing tear gas at the building. Police reported that supporters of APC were in the streets claiming to have won the election and it caused police to use tear gas to disperse the group.

Sierra Leone has suffered high inflation rates not seen in two decades, one of the weakest national currencies in Africa, and has one of the worst youth unemployment rates in Africa over the last year. Due to the rising costs, the country has undergone violent protests over the last year that have turned deadly. While the election ended with relative calm, unrest is plausible as the country continues to struggle over rising costs and inflation. As President Bio starts his new term, the people of Sierra Leone will be watchful of his every move as the economic situation in the country has yet to improve.

EUROPE

Riots and the Impact on Transportation
The death of 17-year-old Nahel M, of Algerian descent, sparked longstanding grievances of police violence and racism in the French public, and resulted in over a week of major riots nationwide. When unrest unfolds, it can have a major impact on travel and transportation, particularly when the unrest becomes violent. The unrest that followed the death of Nahel M escalated across the country in just a few days, and protesters produced extremely high-profile, dangerous demonstrations.

Transportation infrastructure was quickly targeted when a tram was burned in the Paris suburb of Clamart. Authorities reacted by introducing a curfew in the suburb. The following morning, 12 buses in Aubervilliers, a northeast suburb of Paris, were burnt. The fires were caused by petrol bombs thrown at the transport depot in the early morning. The same day, a tram was set on fire in Lyon and a bus driver was pulled off her bus in Bordeaux by rioters attempting to light it on fire. As transportation continued to be targeted, authorities responded on a national level by pausing bus and tram transportation after 9 pm local time.

On July 2nd, rioters rammed a car into the residence of Mayor Vincent Jeanbrun of L’Haÿ-les-Roses, a suburb of Paris. The rioters then set fire to the car to burn the house, where Jeanbrun’s wife and two children also were at the time. While escaping the house, his wife and one of the children were injured and later hospitalized. The following morning, hundreds of people gathered to show support for the mayor as they held a banner that read, “Together for the republic!” Speeches were made by the mayor, and there were calls to calm the unrest. The demonstration remained peaceful; however, in the midst of this high degree of unrest, there was risk of escalation, highlighting the ability for protests to build on each other and result in further unrest. Family members of the murdered boy soon called for the unrest to stop. It is far more likely that calls from the family to stop the unrest will make a difference, as opposed to a governmental call to protesters who are proving their lack of trust in the government.

 

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