Our coverage of the Americas includes a new report on Bolivia, where President Evo Morales appears to be poised to win a third term in October 2014. The leftist leader will be keen to repair frayed ties with key constituencies that have helped to carry him to victory in the past, an objective that points to a risk of populist gestures from the administration ahead of the October vote. A key element of the analysis will be an assessment of Morales’ longer-term objectives, and their implications for a possible shift in policy course over his next term.
PRS’ reporting on Asia includes an update on Singapore, where spreading disenchantment with the People’s Action Party has injected a degree of uncertainty into the outlook for long-term political stability in one of the safest investment destinations in the world. The report will examine the latest militant protests over the government’s immigration and labor policies, and assess the implications of the government’s response, which has included populist policy measures. Economic analysis will focus on the 2014 budget bill, which emphasizes the corporate sector and measures to assist small and medium-sized enterprises, and an evaluation of the challenges posed by slowing growth and financial sector risks inChina for the city-state’s own economic performance.
Looking to Africa, PRS will examine the latest developments in Nigeria,which has attracted a great deal of attention in recent weeks, for both positive and negative reasons. A revision to the methodology for measuring the national accounts has elevatedNigeria to the status ofAfrica’s largest economy, but a rising tide of violence has highlighted the state’s inability to maintain security in a country troubled by sectional, religious, and tribal divisions. President Goodluck Jonathan’s apparent intention to run for re-election in 2015, in defiance of a principle of alternating control of the governing PDP between the mainly Christian south and the Muslim north, has had a polarizing effect on a political climate already troubled by an increasing aggressive Islamist insurgency. Our report will assess the risk implications of these developments for both potential investors and those already operating in the country, and for macroeconomic stability.
In the Middle East and North Africa, the spotlight will be on Iraq, which held its first general election since the withdrawal of US military forces in late April. Our coverage will include an examination of the various possible configurations of the next government, which could take months to establish, and the implications of the different regime options for the policy direction and, perhaps more important for the international investment community, domestic security conditions. Whether there remains any basis for sustaining a national unity coalition, which is essential to containing the risks to internal stability and national integrity posed by overlapping ethnic, sectarian, and sectional divisions, will be a central focus of the analysis.
Our coverage of Western Europe this month takes a close look at the Netherlands, where indications of an improving outlook for unemployment and housing prices have given rise to optimism that the worst of the downturn is over. With the government’s austerity program having reduced the general government deficit to less than 3% of GDP, we will assess the potential for backsliding as the two-party governing coalition seeks to revive its popularity. In that vein, the report will address the implications of upcoming elections to the European Parliament, at which the centrist D’66 Liberals and the far-right PVV, led by the controversial Geert Wilders, are on track to make noteworthy gains. Other potential risk factors that will be examined include a mounting controversy surrounding Prime Minister Mark Rutte’s alleged threat of a Dutch withdrawal from the euro zone back in 2012, the “cluster risks” that the Dutch central bank suggests are affecting the financial system, and the implications of the escalating crisis in Ukraine for investments in the Netherlands.
Looking at East Europe, PRS will issue a new report on Hungary, where Prime Minister Viktor Orban’s populist Fidesz government won re-election by a landslide at a general election held in April. The party’s strong showing ensures that Orban will not require the cooperation of the far-right Jobbik party, but Fidesz’s ability to alter the constitution without the need to consult other parties in the Parliament poses risks for domestic political stability, relations with the EU, and foreign investors, who have been a frequent target of Orban’s populist policies. Our report will assess the severity of those risks, taking into account the fiscal strains confronted by officials in Budapest and the distractions arising from growing tensions between the EU and Russia.
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