Brazil's political risk may rise sharply post-2018

Subject The longer-term outlook for political stability. Significance Between the 1994 and 2014 presidential elections, Brazil was governed under a complex but functional 'coalition presidential system', with the presidency controlled by either the centre-left Workers' Party (PT) or the centre-right Social Democrats (PSDB). Both parties had much in common -- from a broad agreement on economic policy to a strategy of forming large and heterogeneous coalitions to deal with the highly atomised Congress. In recent years, this system suffered an implosion provoked by the severe recession and the corruption investigations that have undermined the electoral prospects of much of the political mainstream. Impacts A focus on Rousseff's impeachment misses the key political risks in Brazil. Without a comprehensive political reform, politics will tend to instability. This structural risk is often not on the radar of key economic players.

2019 ◽  
Vol 2 (2) ◽  
pp. 101-114
Author(s):  
Enaam Abdullah Mohamed

Purpose The study aims to deal with three theoretical approaches to answer the research question: Does political reform in rentier States (Kuwait as a model) lead to political stability? The first approach: Following the steps of political reform in rentier States leads eventually to political stability. The second approach: Political stability in rentier States does not necessarily lead to political reform. The third approach: In rentier States, the decisive factor in interpreting the correlation between political reform and political stability requires explaining other intermediary factors. Design/methodology/approach David Easton’s input-output model: Easton defined the political system as the interactions related to the authoritarian allocation of values in society, that is, the distribution of resources by decisions adopted by individuals, and provided a framework for analysis of the political system in which it sees an integrated circuit of a dynamic nature that starts with inputs and outputs feedback, input and output. Inputs refer to the effects of the environment on the system. Outputs are the effects of the system on the environment, which are the decisions and policies taken by the system to meet the demands. Reverse feedback is the flow of information to the system about the results of its actions, the results of its decisions and policies. Generate new inputs in the form of a demand or support, and the system’s feedback feeds a kind of movement. Findings It can be said that the future of the rentier state is particularly dangerous in the Arab countries where the problem today is the sharp drop in oil prices, which requires the need to enter into the stage of major transformations and work to bring about fundamental changes and enter into radical constitutional, economic, political and social reforms before turning them from the state rent to countries that lack political stability. Research limitations/implications The aim of this research is to present a theoretical study of political reform. The study began to consolidate the concept of political reform, which was and still is the goal of many political and social reform leaders and movements, in addition to being a major topic in political theories. Reform can be carried out by violence and by peaceful change. In any case, reform remains a humanitarian need that cannot be ignored or avoided, because the alternative is worsening and deteriorating political and social conditions. Practical implications The Arab Spring revolutions set many challenges for the Arab countries. These countries had to start political reforms. The State of Kuwait was one of the most important rentier countries that, after the Arab Spring revolutions, was concerned with ensuring that individuals and groups exercised their political rights through political participation in decision-making. It guarantees the human existence of society and protects it through the law and its legislation, and grants rights and freedoms and does not oppose it. Social implications Political reforms lead to accommodating the demands of the opposition, increasing the political participation of citizens, activating the political role of women, activating the role of civil society and increasing political mobility. Originality/value The importance of the research paper is to emphasize the term rentier state and confirm the importance of reform in rentier countries and the paper asks whether the expansion of political rights, citizenship and participation will lead to stability or instability in these countries.


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 If the referendum passes, it will lead to significant changes to the political system, including new executive posts, the devolution of more national revenues to county governments and measures to ensure more women are elected to parliament. Impacts Fully implementing the BBI’s wide-ranging reforms may take years, and if mishandled could delay the 2022 elections. The proposals will significantly increase the cost of government, which in turn will exacerbate the shrinking fiscal space. An enlarged executive encompassing a broader range of leaders may boost political stability, but it will likely also aggravate graft.


Significance The new government will have only 34 of the 179 seats, because policy differences among the right-wing parties, and the political strategy of the electorally strengthened anti-immigration, Euro-sceptic Danish People's Party (DF), mean DF will remain outside. Policy-making will be difficult. The government will be more economically liberal and pro-EU than it would have been with DF, but to make policy it will rely on partners across the political spectrum, especially the ousted Social Democrats -- who remain the largest party -- and DF. Impacts If DF is seen as a welfarist protector of ordinary citizens, it is more likely to repeat, at least, its 22% vote in the next election. The much-tighter immigration regime which is in prospect could taint Denmark's image and make it less attractive to foreign investment. The new government is likely to be an ally for much of UK Prime Minister David Cameron's EU reform agenda.


Significance The political establishment has given strong backing to the budget cuts ordered by Abadi. The 2016 budget has been amended to account for the collapse of Iraq's planned 2016 euro-bond issue and spending cuts. However, even its amended final version has significant weaknesses. Impacts Petrodollar allocations to oil-producing provinces will be cut. Non-oil investment spending in Iraq will be almost entirely curtailed. The fiscal crisis will not directly affect the war effort against Islamic State group. Political pressure and protests may grow against the Abadi government.


Subject Government-business relations. Significance President Evo Morales’s government has established a collaborative working relationship with the country’s most powerful business elites that belies its leftist rhetoric. This is based on an understanding that while government offers large corporate interests favourable economic conditions, business groups will refrain from conspiring against the government in the political sphere. Thus, the government has managed to minimise the sort of pro-regional tensions that characterised its first term in office (2006-10), driving a wedge between economic and political elites. Impacts The economic policies pursued by the Morales administration will continue to prove, broadly, good for business. Smaller-scale businesses have been less beneficially treated, but lack political lobbying power. Avoidance of strife with the more powerful business groups will continue to help underpin political stability.


Subject The political impact of the coronavirus outbreak in China. Significance The extreme measures the Communist Party has taken in response to the COVID-19 outbreak are partly designed to instill faith in its governing capacity among ordinary citizens, but inertia and slow decision-making at every level have revealed a gap between official rhetoric and reality. Impacts China will increasingly treat public health as a matter of state security; regulation and more involvement by senior officials will follow. The main risk to political stability is indirect, via the outbreak’s negative effect economic growth and employment. Despite signs of public outrage, protests are unlikely due to the risk of contamination and intense activity by the security services.


Significance Headline growth was 6.7% for the third successive quarter -- neatly within the target range of 6.5-7.0%. However, the rate has not risen in any quarter since the last peak of 7.2% in the final quarter of 2014. Well into the 2010s, it was still widely claimed that growth of at least 8.0% was necessary to prevent widespread unemployment that could lead to serious social and political unrest. Growth has fallen short of this since late 2012, but the anticipated crisis has not arrived. Yet such concerns persist, albeit with a lower 'danger line'. Impacts Repression and anti-corruption operations risk sowing seeds of instability that would not otherwise be there. Political risks arising from the economy will increase in the near future as state-sector and military layoffs get properly underway. There is no sign that the state's repressive capabilities are set to weaken.


Subject China's overseas NGO law. Significance China's first law governing the activities of overseas NGOs affects some 7,000 overseas NGOs that now operate in the country. The law aims to channel the energies and resources of overseas NGOs towards fulfilling state policy objectives while controlling the political risks posed by their presence. Impacts The default position of illegality makes this a convenient juncture to screen overseas NGOs and drive out those deemed undesirable. Chinese citizens working with overseas NGOs will come under more scrutiny. Groups working on civil rights, criminal justice, ethnic, labour and gender issues or legal reform may not receive registration. NGOs working on education, conservation, climate change, poverty alleviation, development and health will find registration easier.


Significance The move, designed to help meet IMF loan conditions, triggered two weeks of protests by indigenous movements, trade unions, students and others, which brought the country to a halt and threatened to topple the government. Heavy-handed police and military action exacerbated the violence, which resulted in hundreds of arrests and at least eight deaths. Moreno’s U-turn has put an end to the unrest for now but deep divisions (and IMF requirements) remain. Impacts Correa and his supporters will seize on Moreno’s inability to maintain order and his decision to back down in the face of protests. Indigenous groups will be emboldened by Moreno’s U-turn and will continue resisting key elements of the government’s economic programme. Relations with the IMF have returned to centre stage and will shape the political landscape as the 2021 presidential elections approach.


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