This month’s coverage in the Americas will include a revised report on Peru, where President Pedro Pablo Kuczynski’s failure to achieve some sort of political agreement with the main opposition FP, a right-wing party that controls an outright majority of seats in the Congress, has stalled the implementation of a reform agenda designed to revive an economy that has been weakened by a prolonged slump in global prices for metals.  Kuczynski’s troubles are compounded by a corruption scandal involving Odebrecht, the Brazilian construction giant, which at the very least will result in the suspension of several public works projects that the president was counting on to stimulate the economy, and carries a risk of fueling public disgust with the political establishment that benefits the FP.  The report will examine Kuczysnki’s political options as he seeks to overcome the legislative hurdle posed by the PF’s majority status, and discuss the fallout of the Odebrecht scandal for Peru’s investor reputation, and provide forecasts of what the political risks portend for economic performance and fiscal stability over the medium term.

In the Middle East and North Africa, our June coverage includes a fully revised report on Iraq, where the political challenges faced by Prime Minister Haider al-Abadi figure to be compounded as parties and blocs gear up for local elections in September and a general election in April 2018.  The report will examine how the election cycle is likely to affect the balance of power among the main Shiite, Sunni, and Kurdish factions, which will have significant implications for the stability of the central government over the next five years.  In addition, PRS will also assess the government’s prospects for addressing numerous immediate challenges—including public frustration over rampant corruption and the abysmal quality of public services, the continuing battle to dislodge ISIL from its last remaining stronghold in Mosul, and the sectarian and ethnic hostilities that pose an ever-present threat to national unity—and the longer-term task of devising a policy formula that enables Iraq to fully realize the economic potential of its massive hydrocarbons reserves in a manner that Shiites, Sunnis, and Kurds all judge to be fair.

Our extensive coverage of Asia this month includes detailed reports on Indonesia, the Philippines, and Thailand, as well as an update to our report on South Korea that will examine the risk implications of the recent election of Moon Jae-in, the candidate of the liberal MPK, in an early vote necessitated by the impeachment and removal of Park Geun-hye.  In addition to assessing the prospects for corporate governance reform and employment creation, the two pillars of the new administration’s domestic policy program, the report will discuss the implications of rising tensions with North Korea sparked by a series of tests that point to an acceleration of Pyongyang’s efforts to operationalize its nuclear defenses.  Analysis will focus on the legislative hurdles that the new administration must overcome, and what Moon’s stated aim of defusing peninsular tensions will mean for relations with China, Japan, and the US, as well as the future of the Terminal High Altitude Area Defense (THAAD) system.  The report will also examine the government’s economic strategy, and provide forecasts for key macroeconomic variables that could affect the overall climate for investment and trade.

In Western Europe, our focus this month is on France, where centrist Emmanuel Macron’s victory in the recent presidential election points to the pursuit of a decidedly more inclusive, investor-friendly, and pro-EU agenda than those offered by his defeated far-right and far-left opponents.  Our report looks in detail at the implications of Macron’s reform proposals, not only for tax policy and job creation, but also for social peace, taking into account the historically strong influence of the country’s trade unions, an already high unemployment rate, and tensions caused by public hostility to austerity and the terrorist atrocities.  The analysis will also discuss the results of the legislative elections that will be held in mid-June, and will determine whether Macron can gain sufficient parliamentary backing for his platform in the likely event that his fledgling La République En Marche! bloc falls short of winning a majority of seats in the Parliament.  Our report goes will also assess whether Macron can deliver long-lasting solutions to the sovereign debt problem, and looks at the main macro-indicators, including GDP growth and inflation, to derive a complete picture of investor potential.

In sub-Saharan Africa, PRS will issue an update on Zimbabwe, which is edging closer toward elections to be held in 2018, at which the nonagenarian autocrat Robert Mugabe is officially slated to stand as the presidential candidate of the incumbent ZANU-PF.  Our report looks at internal party divisions, and the prospect of opposition forces removing Mugabe and his party from power in the light of a prospective cooperative alliance forming between Morgan Tsvangirai’s MDC and Joice Mujuru, a former vice president and at one time a leading candidate within ZANU-PF to succeed Mugabe.  We analyze the various possibilities, what the government is doing now to influence the business climate and economy, and how the elections will affect the outlook for social stability in a country hobbled by corruption and a lack of access to international credit markets.  Key topics will include the prospects for a coherent policy program that addresses the substantial risks to the security of investments stemming from a controversial indigenization policy, and an assessment of whether the inevitable departure of Mugabe holds the promise of producing a regime that adopts a more welcoming attitude toward foreign participation in the local economy.

The regional coverage also includes an update on Cameroon, where authorities have been stepping up their crackdown on dissent as the government grows increasingly nervous ahead of the 2018 presidential election. Security forces have displayed little tolerance for protests in the English-speaking regions fueled by perceived discrimination on the part of the Francophone-dominated government, and the government’s heavy-handed approach risks enflaming the situation further.  The principal threat to political stability remains the lack of clear plan for replacing President Paul Biya, who has yet to state his plans for 2018 and beyond.  The report will discuss the risk implications of each of the options available to Biya, and how the path chosen will impact the prospects for the successful achievement of a financing program with the IMF, which has become a priority as reduced oil income has contributed to worrisome growth of the public-sector debt burden.

For details Contact Us, or explore a subscription to PRS Online and/or ICRG Online today to receive full updates.