PRS’ coverage of the Americas will feature a revised report on the United States, which will hold presidential and legislative elections in early November. The Democratic Party is attempting to retain control of the presidency for a third consecutive term, which has historically proven to be a challenge for incumbents, and is counting on a favorable electoral schedule to help it win back control of the Senate. Despite the many shortcomings of the Republican presidential candidate, Donald Trump, who has relied on the adoption of extreme positions and inflammatory rhetoric to disguise the lack of substance in his proposals and an alarming degree of ignorance on most policy issues, the Democratic nominee, Hillary Clinton, has rather significant weaknesses of her own, mostly having to do with perceived character flaws, that have kept the race much closer than it should be on paper. Although Clinton is favored to win, she will confront an opposition majority in the lower house of Congress, and, quite possibly, in the Senate, as well. Moreover, it is impossible to rule out a Republican sweep, which, with Trump heading the GOP ticket, would produce a great deal of angst in international markets and foreign capitals.
Clinton has promoted a somewhat populist policy agenda during the campaign, and the report will assess her prospects for delivering on key promises in the highly probable event that she faces an opposition majority in at least one of the congressional chambers. A key focus of the report will be the fact that the next president will very likely fill two, and possibly three, vacancies on the Supreme Court, creating the potential for a decisive shift in the ideological balance of power within the body that will have significant implications for state regulatory power and other issues relevant to the climate for investment. In that vein, PRS will also examine the risk of a constitutional crisis arising from the Senate’s refusal to even consider Supreme Court justices nominated by a Democratic president.
Turning to the Middle East and North Africa, PRS will discuss the state of play in Iran six months after President Hassan Rouhani’s moderate allies scored an impressive victory in parliamentary elections and less than one year before Rouhani faces a test of his mandate in a presidential election that will be held in mid-2017. Our update will examine how the lifting of sanctions under a landmark nuclear agreement has affected economic performance, and the steps being taken by the government to fully realize the full potential of its international rehabilitation, which include an overhaul of the terms of oil contracts. More generally, the update will assess the policy steps Rouhani is likely to take as he seeks to overcome the political obstacles, including maneuvering by the country’s powerful non-elected bodies, that could influence impede his path to re-election.
Our European coverage includes a look at recent developments in Greece to discover how the political climate is faring as the governing coalition of Syriza and Independent Greeks overseen by Prime Minister Alexis Tsipras tries to manage public expectations for an improvement in economic conditions, manage more effectively the refugee crisis, and push through sufficient austerity measures to meet its creditor obligations. Our report looks at attempts to usher in political reforms, what they will mean for future government stability, and whether they are merely a means to deflect attention from the critical issues of a banking system on its knees, and a nation still struggling for a long-term solution to its overwhelming liabilities. In that light, we look at how the government’s privatization program is faring, and we take a forensic approach to recent economic data releases to assess whether Greek fortunes are, or soon will be, finally improving, with the aim of determining the country’s chances of remain within the euro zone.
In Eastern Europe, PRS will issue a post-election assessment of political risk in Russia, where the ruling party is all but certain to retain its majority status in the State Duma, assuring President Vladimir Putin of a rubber-stamp Parliament as he lays the ground for a re-election bid in March 2018. The analysis will focus especially on the risks associated with Putin’s aggressive foreign policy strategy, and will examine the government’s plans for reviving a stagnant economy, including the implications of a recently announced plan to cooperate with Saudi Arabia to stabilize the global oil market.
Over in Sub-Saharan Africa, our updated report on Nigeria this month looks at how the country is coping with the fallout from the oil crisis, as depressed prices for Nigerian crude exports cause untold damage to the economy and the nation’s ability to service its debt. We look at what recent changes in the foreign currency regime will do in terms of managing the situation, whether the recession Nigeria has now entered will be a prolonged one, and how other macro-variables, such as inflation, the fiscal metrics, and external balances are all likely to fare moving into 2017. Our extensive, forward-looking commentary moreover analyzes how this will all play out in the political domain, assessing the risk that President Muhammadu Buhari may resort to the use of force to silence domestic dissent as his government deals with the threat posed by Boko Haram in the north and by ethnic strife in other parts of the country that has historically resulted in damage to oil infrastructure that holds production far below potential.
In Asia this month we look at how the Democratic Progressive Party (DPP) government is shaping up in Taiwan after it managed to wrest control of both the presidency and legislature from the Nationalist Party (KMT) in elections held last January to deliver the majority it requires to facilitate legislation. Our report looks in detail at how this independent-minded party is tackling Taiwan’s weakening economy, which is still a source of acute concern for 2017. We look at what is being done to root out corruption in the former administration and how that will play out politically. Plus, importantly, we analyse how the government plans to handle relations with the mainland after Beijing severed diplomatic and economic ties following the election of the DPP’s Tsai-Ing-wen as President, whose pragmatic approach did not go as far as to endorse Beijing’s “One China” stance. Our report looks at the implications of all this for cross-strait relations and how it will impact on the economy considering the island’s dependency on Chinese tourism, capital flows and trade given that China receives broadly 40% of Taiwan’s exports, with the inclusion of Hong Kong.