Archived post from legacy Decis reporting
Good morning.
Welcome to the mid-term country stability forecasts for February, 6 2024.
I’m working on a report on rare earth minerals (REM) for Thursday due to the importance of these elements foe everything electronic we use, and their particular importance with respect to the transition from fossil fuels to renewables.
China, the Democratic Republic of the Congo (DRC) and Brazil are all major sources of these essential minerals, so I’m sharing these assessments today.
(These mid-term stability forecasts compare the upcoming events in a location with the country’s baseline stability rating to determine how things may be trending. Read more on these assessments in last week’s email.)
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Now, on with the mid-term stability forecasts.
(Note: DCDR's analysis engine generates these reports and conditions apply. See the footer for more.)
Brazil: Mid-term Forecast
Current Stability Assessment: Brazil is Stable
Upcoming events
Upcoming events that might affect the political stability of Brazil include the aftermath of the recent presidential elections, the government's efforts to address deep societal polarization, economic challenges, and the ongoing impact of President Bolsonaro's tenure on democratic institutions. The recent presidential elections, marked by significant political violence and controversy, have left a legacy of heightened political tensions and societal polarization.
The economic outlook is increasingly somber, with the government facing difficult choices to fulfill its promises amidst a "lost decade" of stagnant GDP per capita, which could lead to increased public discontent and political instability. President Bolsonaro's actions have contributed to the deterioration of Brazilian democracy, posing a threat to democratic institutions and increasing overall social tension. The new administration's ability to navigate these challenges, address societal polarization, and restore faith in democratic institutions will be crucial for Brazil's political stability[1][2][5].
Citations:
Mid-term Stability Assessment
The anticipated impact of the upcoming events on the situation in Brazil is Degrades.
This conclusion is based on the potential for political violence and polarization following the presidential transition, as well as economic challenges that could impact political stability if not managed effectively.
China: Mid-term Forecast
Current Stability Assessment: China is Stable
Upcoming events
Upcoming events that might affect the political stability of China include the government's efforts to maintain macroeconomic stability, its response to mass demonstrations in Hong Kong, and the deepening repression across the country. The Chinese government is committed to preventing the emergence of democratic institutions and has been tightening control over all aspects of life and governance, including the state bureaucracy and the media. The ongoing tensions with the United States and Australia, as well as the regime's efforts to control the damage caused by COVID-19, are also factors that could impact the country's political stability.
Additionally, China's foreign policy, economic regulatory campaigns, and human rights violations are expected to continue shaping its political landscape. The resolution of these issues and the government's handling of internal and external challenges will likely have a significant impact on China's political stability in the near future.
Citations:
Mid-term Stability Assessment
The anticipated impact of the upcoming events on the situation in China is Degrades.
This conclusion is based on the following analysis: The government's efforts to maintain macroeconomic stability, its response to mass demonstrations in Hong Kong, and the deepening repression across the country are likely to exacerbate existing political tensions and lead to increased instability. The ongoing tensions with the United States and Australia, as well as the regime's efforts to control the damage caused by COVID-19, are expected to further strain international relations and impact domestic stability
Democratic Republic of the Congo: Mid-term Forecast
Current Stability Assessment: Democratic Republic of the Congo is Unstable
Upcoming events
Upcoming events that might affect the political stability of the Democratic Republic of Congo (DRC) include the aftermath of the recent elections, ongoing tensions with neighboring Rwanda, and the presence of numerous armed groups in the eastern provinces. The DRC held general elections on December 20, 2023, which were marked by controversy and claims of disenfranchisement, particularly in the eastern regions affected by insecurity. The elections disenfranchised swathes of the population, and there were concerns about the credibility, transparency, and inclusiveness of the electoral process. The aftermath of these elections could lead to increased political tensions and potential unrest, especially if allegations of electoral fraud and voter exclusion are not addressed.
The eastern provinces of the DRC continue to experience significant security challenges due to the presence of over a hundred armed groups. The human rights and security situation has deteriorated, with ongoing repression against journalists, activists, and peaceful protesters. There have been direct clashes between Rwandan and Congolese forces, and the situation in North Kivu could lead to deeper divisions within the region. The involvement of the East African Community (EAC) and the deployment of regional forces could either help stabilize the situation or exacerbate regional tensions, depending on the effectiveness of these interventions and the cooperation between member states.
The political stability of the DRC in the near future will likely be influenced by the government's ability to address the fallout from the recent elections, manage security challenges in the east, navigate regional tensions, and improve the human rights situation. The international community's response to these issues will also play a significant role in shaping the country's stability.
Citations:
Mid-term Stability Assessment
The anticipated impact of the upcoming events on the situation in Democratic Republic of the Congo is Degrades.
This conclusion is based on the following analysis: The aftermath of controversial elections, ongoing security challenges in the eastern provinces, and tensions with neighboring Rwanda have the potential to exacerbate political instability and lead to increased unrest
China dominates rare earth minerals as a whole, although some minerals are highly concentrated in a single country, e.g, cobalt in the DRC. These concentrations make supply chain diversification difficult and mean that events of a small number of countries have an outsized effect on the world’s access to these essential elements.
Moreover, there are significant challenges with any kind of extractives or mining, from the rights of indigenous peoples through conflict to labor practices and child exploitation, so the sector faces a range of issues.
That’s what Thursday’s report tackles along with suggestions for how companies can think about and address these issues, no matter where REMs fall into their supply chain. I’m looking forward to sharing it with you.
See you tomorrow with the short-term assessments.
All my best
~Andrew
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