Poe will be decisive in Philippines 2016 election

Subject Update on the outlook for the 2016 presidential elections. Significance Opinion polling in June saw current Vice-President Jejomar Binay, presently the only declared 2016 presidential candidate, lose his front-running position. Although allies cite ongoing investigations of Binay as the cause, interpreting these polling results as minor and transitory, Senator Grace Poe-Llamanzares is emboldened, while Liberal Party president and current interior secretary Manuel 'Mar' Roxas is the probable Liberal Party choice. Binay is the clear opposition candidate, while Roxas and Poe will compete or cooperate for the mantle as the most likely to continue incumbent President Benigno 'Noynoy' Aquino's economic reform agenda. Impacts Binay's present polling difficulties portend further losses of support, although he could recover by 2016. A Poe or Roxas presidency would probably see greater continuity with Aquino's economic reforms and foreign policy. Perceptions of Philippines macroeconomic stability would probably be higher under a Roxas or Poe presidency. A Poe or Roxas presidency would probably see continuity in Aquino's good governance and anti-corruption agenda.

Subject Pakistan's divestment drive. Significance Prime Minister Nawaz Sharif's government describes divestment of public sector enterprises (PSEs), involving 69 firms, as an essential part of its 2013-18 economic reform agenda. Progress thus far is limited, but the government faces rising pressure from the IMF, which made divestment a core condition of its 6.6-billion-dollar, three-year loan in September 2013. Impacts Another government led by Sharif would continue gradual divestments after 2018. Since PSEs are an important vector for distributing political patronage, structural reforms will face stiff resistance. Divestment of profitable PSEs defeats the purpose of the exercise, but the government will use them for a short-term cash boost.


Subject Political crisis in South Korea. Significance President Park Geun-hye, whose leadership has been characterised foremost by scandals and the failure of every major policy initiative, faces her worst crisis yet. She admitted on October 25 to sharing official documents with Choi Sun-sil -- a long-time associate who has no formal post or security clearance. Park sacked all her senior secretaries on October 28, and the next day prosecutors searched the presidential office, and demonstrators called on Park to resign. Yesterday Choi flew back from Germany, where she had been lying low since July, saying she will co-operate with investigations. To opposition outrage, no move was made to arrest her upon arrival. Impacts The crisis is deeply negative for governance, domestically and abroad, especially if lines of authority in Seoul become contested. Park now has no standing left to press any elements of her fraying economic reform agenda. The National Assembly, normally secondary to the executive branch, will become the main locus of power for the time being. Though the ruling party seeks to distance itself, the scandal boosts the opposition's chances of regaining the presidency. The already flagging push (which Park spearheaded) for greater international pressure on Pyongyang will lose further momentum.


Subject Changes to the political landscape. Significance This year’s general election has transformed the political landscape that prevailed for over two decades in Brazil. The centre-right Social Democrats (PSDB) were pushed away from the mainstream by a surging far-right led by President-elect Jair Bolsonaro. After winning four straight presidential elections, the Workers’ Party (PT) was defeated in the runoff. It retains some leverage, but now faces increasingly serious challenges to its hegemony on the centre-left. Impacts Ineffective management of relations with Congress could undermine Bolsonaro’s ability to pass key legislation. Protest movements not aligned to established parties could proliferate in the coming years. Bolsonaro’s Social Liberal Party (PSL) will fail to establish itself as a leading party in the longer term.


Significance US President Donald Trump has left the Trans-Pacific Partnership and escalated trade frictions with China. The USMCA, by contrast, shows a trade deal renegotiated, the implementation of which will be watched for its implications for other US trade activity, especially with the presidential election coming in November. Impacts COVID-19 disruptions mean some aspects of the USMCA, such as rules of origin, will be delayed. If Trump is re-elected, he will continue his tariff-driven efforts to secure Chinese economic reform for US firms. Biden would aspire to strengthen US-Asian trade ties but would focus first on smoothing trade with existing partners. China and neighbours should assume a Mexican challenge to their production, especially of autos, steel and textiles. Trump will tout the USMCA as evidence his trade reform agenda works.


Significance In his inauguration speech, he expressed commitment to reforms that he believes can help the country attract investment and escape a middle-income trap. Meanwhile, there are indications that several parliamentary parties want to amend the constitution to reduce presidential power. Impacts Jokowi will probably delay implementing some of his controversial reforms to the country’s leading anti-corruption body. Any constitutional amendment to end direct presidential elections would raise fears among investors about good governance in Indonesia. Most investors will welcome Jokowi’s retention of Sri Mulyani Indrawati as finance minister.


Subject Philippines political outlook and electoral update. Significance The House of Representatives on April 7 re-convened its Mamasapano massacre hearings. The massacre's fallout is fusing the Bangsamoro Basic Law (BBL), 2016 presidential and legislative elections and President Benigno 'Noynoy' Aquino's legacy in a damaging manner for Aquino, his Liberal Party, Muslim Mindanao and the Philippines. The Bangsamoro peace deal was to have been Aquino's triumph, bolstering his high popularity and aiding his chosen heir in 2016 against United Nationalist Alliance (UNA) leader and current vice-president, Jejomar Binay. The opposite is unfolding. Impacts Aquino will seek political rehabilitation, perhaps using 2016's budget; modest results are probable. Frictions between the legislature and executive may grow, further constraining legislation and Aquino's reforms. With no current front-runner, the Liberal-led coalition will seek presidential candidates, potentially exacerbating internal frictions.


Subject The Cuban economy. Significance Less than three months before President Raul Castro is due to step down from the state leadership, Cuba’s economy is in decline and its reform process has stalled. Castro’s heir apparent, Vice President Miguel Diaz-Canel, is keeping a low profile and promising continuity. An emerging independent media is causing concern in government circles but has not yet led to a crackdown. Impacts The economic downturn will strain society but an outburst of social unrest remains unlikely for now. As US pressure and domestic tensions rise, Havana will strive for cohesion, even if this stalls economic reform. Trump's confrontational politics force Havana to seek foreign investment elsewhere and to maintain good relations with the EU and Canada.


Subject Political update. Significance Primaries are to be held on January 27 to define candidates for the October presidential elections. In practice, these are largely perfunctory since most contending parties have already selected their slates for president and vice-president. Incumbent President Evo Morales leads in opinion polls, but opposition parties continue to claim that his candidacy is unconstitutional, citing the results of a referendum on presidential term limits held in February 2016. Impacts The opposition can unite around the bid to stop Morales running, but it suffers strong personal rivalries. The plethora of old faces challenging Morales will complicate any efforts to campaign based on calls for fresh politics. Bolivia’s continued strong economic growth will assist Morales. Morales will become increasingly isolated on the wider regional stage, particularly as Venezuela’s crisis deteriorates.


Subject Macron’s economic reform agenda. Significance President Emmanuel Macron views his reforms through the prism of power: by strengthening the economy, he hopes to win credibility with Germany, whose support he needs to reform the EU and euro-area. However, the apparent ease of his labour regulations reform in September does not diminish the risk of his next two targets: unemployment benefits and pensions. Impacts With a shrinking share of euro-area exports, France will see limited benefit from the stronger global economy. Business confidence may increase if the government eases the regulatory burden on medium-to-large businesses. Financing an innovation fund by selling off some state assets will take time and likely have little impact on confidence.


Significance Previously, Lourenco had shown official deference to his predecessor, former President Jose Eduardo dos Santos (in office 1979-2017). However, since becoming head of the ruling People’s Movement for the Liberation of Angola (MPLA) in September, a year after his election as state president, Lourenco has hardened his anti-graft rhetoric. Impacts Lourenco will try to mend strained relations with former colonial power Portugal; this could partially ease the debt crisis. Diplomatic tensions between Angola and the Democratic Republic of the Congo could worsen over the former's expulsion of Congolese migrants. Former Vice-President Manuel Vicente's reputation as a Lourenco confidante will hamper the president's good governance message.


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