Indian middle-class support for Modi may prove fickle

Significance Proponents of Prime Minister Narendra Modi's economic agenda await the political responses of India's urban middle classes. It was above all the urban middle-class vote at the 2014 general elections that took Modi's Bharatiya Janata Party (BJP), and its National Democratic Alliance (NDA), to its sweeping victory. Impacts BJP could become isolated by relying too much on the middle-class vote. Its lack of interest in rural voters is reflected in its neglect of agrarian strife. Middle-class voters seek quality employment, which Modi's economic policy is failing to generate.

Subject Prospects for India to end-2016. Significance Policymakers are counting on improved agrarian performance, cheaper credit and economic diplomacy to drive growth in coming months. On the political front, after a modest triumph in the last round of regional elections, Prime Minister Narendra Modi and his Bharatiya Janata Party (BJP) are emboldened but still politically encumbered.


Subject Election outlook in Uganda. Significance President Yoweri Museveni is confirmed as the National Resistance Movement's (NRM) official presidential candidate for February 2016 general elections. His most threatening challenger is former Prime Minister Amama Mbabazi, whose defection is the most significant in a decade. However, in the wake of the NRM party primaries and delegates conference, Museveni has shown his ability to consolidate support among the political elite. Impacts Uganda's elections will distract focus from its official mediation role in Burundi's deteriorating security crisis. However, Museveni may also guard Uganda's position as the regional mediator for fear of losing influence. Burundi is at high risk of civil conflict, with repercussions for regional stability ahead of Uganda's elections.


Subject Prospects for India in the fourth quarter. Significance Flustered by a stock market collapse and continuing currency depreciation, Prime Minister Narendra Modi's government will enter the fourth quarter with some trepidation. Like all emerging markets, India faces economic uncertainty, with growth slowing and foreign capital exiting. Little relief is forthcoming on the political and policy fronts for Modi's Bharatiya Janata Party (BJP). The only bright spot may be diplomatic outreach.


Subject Caste politics in India. Significance In a sign of Prime Minister Narendra Modi's ability to shape the political agenda, the National Democratic Alliance's candidate Ram Nath Kovind was sworn in as India's 14th president on July 25. With attacks on Dalits (low castes) in the north Indian heartlands of the ruling Bharatiya Janata Party (BJP) surging, the nomination of a Dalit for the presidency was designed to strengthen the party's appeal to the community ahead of state elections. Impacts Support for the main opposition Congress party among Dalits will decline in Gujarat. Beef and leather exports will fall despite the Supreme Court suspending the ban on trading cattle for slaughter. Anti-Muslim violence may increase across the country.


Subject Effect of politics on the economy. Significance Morocco’s main sources of foreign exchange showed healthy increases across the board in 2017, according to the most recent balance of payments data released in January. However, these positive indicators have been overshadowed by a cloudy political outlook. An intervention by Abdelilah Benkirane, the charismatic former prime minister, has created ructions both within his Justice and Development Party (PJD) and it its governing coalition with five other parties. Impacts Political squabbling plays into the hands of the king: it presents the palace as the most stable and effective institution. However, the devaluation of parliamentary politics could further erode trust in the system, and swell the ranks of protest movements. The political wrangling undermines the government’s economic policy and could sabotage positive investor sentiment.


Significance Each of these states except Punjab has a government led by Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP). Punjab is one of just three states with a chief minister that belongs to India’s main opposition Congress party. Impacts A poor showing by Congress would further reduce its leverage with other opposition parties in talks over forming a broad anti-Modi alliance. Victory in UP would enhance Chief Minister Yogi Adityanath’s national profile. Election campaigning will likely lead to a spike in COVID-19 cases.


Significance Sirisena's victory is a potential game-changer: instead of entrenching the autocratic tendencies of his predecessor Mahinda Rajapaksa's administration, the election results hold out the promise of democratic consolidation under a new government with a robust mandate for constitutional and policy reform. However, the diversity of the coalition backing Sirisena and the sharing of power with newly appointed Prime Minister Ranil Wickremasinghe augur a period of volatility. Impacts If Tamil parties emerge as 'kingmakers' in April, governance of war-torn Northern and Western provinces is likely to be overhauled. Delhi, Washington and Brussels will welcome the political transition. Long-term growth prospects will turn on the precise rebalancing of budgetary allocations.


Subject E-commerce in India. Significance Following nationwide protests from small traders in late 2014, key sections of the Bharatiya Janata Party (BJP) government have demanded that Prime Minister Narendra Modi act against India's rapidly growing e-commerce platforms. Particular targets are the largest e-commerce players, mostly Indian, but including Amazon India, which have benefitted from large infusions of foreign capital and stand accused of side-stepping India's strict limits on foreign investment in multi-brand retail. Impacts Any improvement in transport and distribution infrastructure will boost e-commerce. Proliferation of mobile and banking facilities is key to expanding online retail. Small traders will oppose the expansion of e-commerce, causing greater political losses for the BJP than any other party.


Subject The future of secularism in of Turkey. Significance The speaker of the Grand National Assembly, Ismail Kahraman, provoked uproar on April 25 when he called for secularism to be dropped from the proposed (but as yet unpublished) new constitution. There were instant protests and demonstrations by middle-class opponents and, perhaps more surprisingly, President Recep Tayyip Erdogan and Prime Minister Ahmet Davutoglu. Both rejected the idea that secularism -- which has featured in the Turkish constitution since 1928 -- should be discarded. Impacts Society's pro-Western orientation is being slowly eroded, and latent hostility to the United States and United Kingdom is growing. Turkey's main secular universities -- Bosphorus (Bogazici) and Middle East Technical -- are under increasing pressure to change. Government preference for Middle Eastern, especially Saudi and Qatari, business partners and investors will continue.


Subject Outlook for the post-transition political system. Significance The August 7 constitutional referendum will be conducted under tightened controls on political organisation, making a 'yes' vote more likely. Although the Democratic Party criticises the draft for its attempt to return Thailand to a semi-authoritarian state, efforts by deposed former Prime Minister Thaksin Shinawatra's 'red-shirt' supporters to organise protests offer the only real opposition to the junta's plan. This struggle foreshadows the political system that is likely to emerge after the next parliamentary elections. Impacts Regulatory risk to investors post-transition would be limited: the military, the Democrats and the PTP are pro-business. China will not alter the status quo in its Thai relations, but will need to invest in building ties with the next monarch. Washington will tolerate most eventualities, except a violent crackdown against the military's opponents.


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