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Coming Soon, June 2023

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PRS’ coverage of the Americas this month includes a report on Guatemala, where voters will go to the polls to elect a new president and the members of the unicameral legislature on June 25. With polls showing support divided among several candidates, the presidential contest will be decided by a run-off contest, the outcome of which is clouded by the still-uncertain eligibility of one of the leading contenders, Carlos Pineda. In any case, assuming the outcome of the congressional elections will track closely with the distribution of votes in the first round of presidential voting, whoever assumes the presidency is likely to face the daunting task of cobbling together a working majority from the numerous parties in a highly fragmented legislature.

The report will discuss the incoming administration’s policy priorities and assess its prospects for overcoming the political obstacles to implementing its agenda. PRS will also examine the next government’s prospects about tackling the longstanding problems of corruption and crime, which are among the biggest impediments to attracting the investment required to improve living standards and build a strong foundation for social stability.

Coverage of Western Europe in June features reports on Ireland, Norway, Portugal, and Italy, where the election of a far-right government headed by Giorgia Meloni has so far proven to be less disruptive than feared for the internal stability of the EU but remains a source of concern owing to a domestic agenda that diverges sharply from liberal norms and creates the potential for future clashes over the bloc’s rule-of-law requirements. The risk analysis will include an assessment of the danger that Italy might be denied full access to available EU funding, as well as a discussion of the implications of the coalition’s nationalist inclinations for the treatment of foreign investors. The report will also weigh up how the government’s policy agenda is likely to impact macroeconomic performance and the risks related to a heavy sovereign debt burden.

In Eastern Europe, featured countries include Ukraine and Hungary, where the always controversial Prime Minister Viktor Orbán remains locked in a power struggle with the EU, which has made access to billions of euros in financial support contingent on the implementation of reforms to improve transparency and accountability and otherwise suspended the country’s access to regular EU funding over the Fidesz-led government’s failure to meet rule-of-law requirements. Orbán has made some concessions but remains resistant to following orders from Brussels. The analysis will include a discussion of what the impasse means for Hungary’s near-term economic performance and the implications for political stability, as well as an assessment of the prospects for substantive progress on reforms demanded by the EU over the medium term.

Our coverage of the region will also include reports on Estonia and Serbia, where we assess the stability of the Serbian Progressive Party (SNS) government led by President Aleksandr Vučić in the wake of a series of anti-government protests following two mass shootings in May, including one at a Belgrade school killing nine students and a security guard. Our report also delves into the heightened tensions between Serbia and Kosovo following the violence that followed an uncontested election of four local ethnic Albanian mayors in northern Kosovo after resident Serbs (in a majority there) boycotted the vote. As well as looking into the prospect of these tensions spilling over into something more sinister, bearing in mind the implications for NATO, with Russia’s war in Ukraine still raging, we also assess the salient economic risks the country is facing, setting out prospects for economic growth, inflation, and fiscal and current account balance of payments metrics in 2023 through to 2024.

Turning to the Middle East and North Africa, PRS will report on Algeria, which has become a target of western diplomatic wooing since the Russian invasion of Ukraine created an imperative for Europe to seek out alternative sources of oil and gas. Algeria’s improved financial position and enhanced diplomatic leverage point to favorable conditions for implementing structural reforms that will be essential to creating a basis for long-term economic stability. An assessment of whether President Abdelmadjid Tebboune seems to be prepared to meet the challenge will include a close examination of the recently approved finance law, which lays out the government’s priorities with regard to national security, social stability, and economic development, and provides insight into the administration’s strategy as it prepares for next year’s presidential election.

Coverage of East Asia and the Pacific this month features reports on Malaysia, South Korea, and Taiwan, where political risk is rising amid China’s stepped-up intimidation of the island, which is likely to become more intense with the approach of presidential and legislative elections in early 2024. Although there is little immediate danger of destabilizing Chinese aggression, the possibility of a miscalculation that triggers open conflict (potentially involving the US) cannot be dismissed out of hand.

In any case, the threat from the mainland will cast a shadow over a presidential election that is shaping up as a closely fought three-way contest, a prospect that figures to amplify China’s ability to have an impact on the outcome. Our report will discuss the incumbent DPP’s likely policy strategy as it seeks to extend its tenure in power, as well as the implications for both policy direction and relations with China under an administration headed by the pro-reunification KMT or the “third way” TPP.

Finally, our coverage of sub-Saharan Africa includes an up-to-date assessment of Mozambique ahead of October provincial elections that the ruling party, the Mozambique Liberation Front (Frelimo), is routinely expected to win through fair means and foul ahead of the presidential and legislative voting scheduled for next year. Our report looks into current prospects for stability in a country where cyclones and disease are also taking a toll, with the spread of cholera in the north of the country leading to violent protests and even some fatalities. Our report goes on to assess an improving economic situation, with the return to growth of key sectors, assisted by the liquefied natural gas industry following the inauguration of production at the Coral South project last October. Our report looks into progress on reforms and the fiscal pressures caused by an expensive civil service wage bill, while noting the prospect of resuming the troubled TotalEnergies LNG project in Cabo Delgado that was put on hold in 2021 amid regional violence and is crucial to the country’s ability to service its debts.

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