PRS’ coverage of the Americas this month includes a revised report on the United States, where the surprising victory of Republican Party candidate Donald Trump has delivered a shock to the political system and created the potential for a significant shift in the long-term role of the US on the world stage. During the campaign, Trump stated that he would pull out of the Trans-Pacific Partnership and slap punitive tariffs on Chinese imports, while renouncing the Iran nuclear deal as a “disaster” that must be renegotiated or scrapped and questioning whether NATO provides benefits that justify the financial burden borne by the US. His broadly isolationist posture represents a complete departure from internationalist strategy that has characterized US economic and foreign policy for more than seven decades, and that if abandoned would challenge many of the assumptions that have informed the policy decisions of governments around the world.

Whether Trump will actually do the things he has proposed is an open question, given his tendency to advocate contradictory positions on issues from one day to the next, and sometimes within a single interview. There is also the matter of what he is capable of doing, taking into account the boundaries of presidential authority and the ideological leanings of his conservative party colleagues in the Congress. Our analysis will focus on distinguishing serious intent from mere bluster and the achievable from the fanciful, and assessing what the former in each case implies for the domestic business climate, the prospects for the US economy, and relations with key trade partners.

Looking at the Middle East and North Africa, PRS will issue an update on Saudi Arabia, where the government continues to grapple with the fiscal pressures resulting from a steep fall in oil income at a time when preparations for a generational transfer of royal power is contributing to a heightened risk of instability at the top of the political hierarchy. The update will examine the steps the government is taking to strengthen the fiscal foundation and the internal dynamics of what has effectively become a ruling triumvirate of King Salman, Crown Prince Mohammed bin Nayef, and Deputy Crown Prince Mohammed bin Salman. The analysis will also include an assessment of the implications of a recent move by OPEC to impose production quotas on its members, and what the victory of Donald Trump in the recent US elections portends for relations between Riyadh and Washington in the coming years.

This month our coverage of Western Europe looks at what outcome investors can expect when presidential and parliamentary elections are held in France next year. Our report assesses the recent surprise victory of dark-horse candidate Francois Fillon in the leadership elections of the center-right Republicans and the decision by President Francois Hollande to forego a re-election bid, which has opened the door for Prime Minister Manuel Valls to head the Socialist Party ticket. Our report identifies and examines the implications of key possible scenarios, including the prospect that National Front leader Marine Le Pen might emerge as the unlikely victor in the presidential contest on a wave of anti-immigrant and anti-austerity populism that is sweeping across Europe, and is reinforced in the French case by terrorist attacks that have contributed to a perpetual state of emergency. The analysis also includes an examination of the divergent policy courses that would be pursued under alternative regime scenarios, and how each would impact the business environment and economic prospects more generally.

Turning to Eastern Europe, PRS will issue a report on Hungary, where Prime Minister Viktor Orbán’s government has adopted a rigid anti-immigration stance in a bid to fend off competition from the far-right Jobbik party. Orbán had hoped to get the upper hand by sponsoring a referendum on a proposal to reject the EU’s quota system for resettling refugees, but the effort failed to draw enough voters to make the result valid. His more recent attempt to insert a ban on refugee resettlement into the constitution failed when Jobbik demanded too high a price for its support. Although the governing Fidesz party faces no immediate threat to its dominant position, Orbán is keen to avoid finding himself in a position where he relies on Jobbik’s cooperation, and his effort to stay ahead of Jobbik on the refugee issue risks provoking punitive action by Brussels if he pushes too hard.

The report will examine the state of the government’s relationship with the EU, and the risk that Orbán’s strategy poses to the stability of the bloc, which was dealt a blow by the UK’s vote to leave the union, and has been shaken again after Italian voters rejected a package of political reforms designed to facilitate the approval and implementation of structural reforms seen as crucial to preventing Italy from moving inexorably toward a debt crisis. PRS will also assess the fiscal implications of tax cuts and other proposed budget measures that the government is counting on to keep the economy on a steady growth trajectory.

Our extensive coverage of key emerging markets in Asia this month leads on South Korea, where President Park Geun-hye’s difficulties have intensified in the wake of a financing scandal drawing several hundred thousand protestors to the streets of Seoul, as opposition impeachment proceedings for the abuse of power gain traction with the support of government members turning against her. Our report looks at the next steps in the legal process, which are unprecedented for Korean democracy, identifying when the next elections are likely to be held and what the outcome of that will be. Our report focuses, first, on the implications for foreign policy, which are dominated by inter-Korean relations, and are likely to be further complicated by rising US protectionism under President Donald Trump. Second, we look at the implications for an economy which has some problems, ranging from weak GDP growth and inflation pressures gradually rising, to a huge personal debt burden, and incidences of industrial action affecting the auto manufacturing sector.

We also include in-depth coverage of Malaysia this month, where Prime Minister Najib Razak, looking to shore up his own reputation in the wake of the 1MDB scandal, is clearly concerned by the threat of opposition forces coalescing ahead of the next elections. The prime minister has adopted a more overtly nationalist stance with the aim of appealing to the ethnic Malays constituency that is the popular base of UMNO, the lead party in the governing National Front. The analysis includes an examination of the potential for an early election held in 2017, and what that could mean for UMNO and Najib if the opposition parties manage to form a united front. The report also devotes attention to what a Donald Trump presidency in the US will mean for regional trade policy affecting Malaysia, and how that might affect economic performance and the stability of the ringgit, which has been one of Asia’s weakest currencies in recent months.

The ruling African National Congress (ANC) is facing deepening internal divisions following a series of corruption scandals involving President Jacob Zuma, and municipal elections in August which showed continuing erosion in popular support for the party. Zuma survived a no-confidence vote in the ANC’s top executive body in late November, but he faces fresh allegations of improper ties to powerful business interests. The political uncertainty is likely to continue until at least December 2017, when the ANC meets to choose its candidate for the 2019 presidential election.

In a positive development for South Africa’s policy outlook, state prosecutors dropped fraud charges against Finance Minister Pravin Gordhan, a widely respected reformist locked in a feud with Zuma’s supporters. In his mid-term policy budget statement, Gordhan slashed the 2016 growth forecast to 0.5%, and vowed to raise an extra $3.1 billion in tax revenues in the next two years. International credit rating agencies have kept South Africa at investment-grade status, but more political turmoil in the coming months could add to borrowing costs and further dent investors’ confidence.

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