East Timor’s ruling party faces election defeat

Significance The poll follows the collapse of the minority government led by President Francisco Guterres’s and Prime Minister Mari Alkatiri’s Revolutionary Front for an Independent East Timor (Fretilin). A parliamentary grouping led by Xanana Gusmao’s National Congress for Timorese Reconstruction (CNRT) had blocked Fretilin’s budget, with the CNRT now leading a Change for Progress Alliance (AMP). Impacts If Fretilin’s support drops below 30%, Alkatiri may come under pressure to relinquish leadership of the party. The dominance in East Timorese politics of resistance-era political elites will increase. Given Australia’s closer relations with ASEAN, the boundary treaty with East Timor will add to Canberra’s growing influence in the region.

Significance He was elected on June 9 with a record majority of nearly 68%, after stepping down as prime minister in January. The MPP now holds all the highest offices: the presidency, the office of the prime minister and the office of the speaker of parliament. Impacts Development plans and government finances will rely on rising copper prices. Despite high vaccination levels, COVID-19 is spreading and calls for more lockdowns are growing; these would threaten economic recovery. Beijing will see Khurelsukh as friendlier than his predecessors, but significant concessions to China are unlikely.


Subject Pre-election politics in Uganda. Significance The long-expected announcement on June 15 by sacked Prime Minister Amama Mbabazi that he will run for president will bring bitter tensions between him and President Yoweri Museveni out into the open. It is highly unlikely to threaten the latter's 30-year rule but may provoke internal disruption within the ruling party as Museveni makes an example of internal dissent. Impacts Loyalty among the military and police forces will remain central to Museveni's power. Museveni effectively distances himself from graft scandals, while Mbabazi's reputation remains tarnished by several high-profile cases. Oil firms could see some benefits, if Museveni decides to assure them of his solid hold on power. The government was already likely to unleash inflation-inducing spending during the election, but Mbabazi's campaign increases this risk.


Significance The unexpected departure of a popular prime minister opens up more space for opposition parties in the next election due by early November 2017. On Key’s watch, New Zealand weathered the 2007-09 global financial crisis, rebuilt from the 2011 Christchurch earthquake, strengthened public finances and kicked off negotiations for the now moribund Trans-Pacific Partnership (TPP) trade deal to tie its export-driven economy to growing markets on the Pacific Rim. Impacts A re-elected National coalition or minority government reliant on New Zealand First would lead to greater policy instability. The next prime minister could inherit the problem of rising interest rates hitting leveraged homeowners. US President-elect Donald Trump’s positions on security, trade and climate policy could see Wellington focus more on ties with Asia.


Significance His parliamentary approval only succeeded thanks to abstentions by the Socialist Party (PSOE). He will now form a minority government with the weakest parliamentary support for any prime minister since competitive elections returned to Spain in 1977. Impacts Tax rises, possibly in combination with spending cuts, may trigger a revival of social tensions. In the absence of major policy initiatives, economic growth is likely to slow down in 2017. Rajoy's dependence on PSOE and Citizens collaboration to pass a budget for 2017 by end-November will give them some leverage.


Significance Turnbull's governing Liberal-National Coalition is currently neck-and-neck with Leader of the Opposition Bill Shorten's Labor Party in opinion polls. If Turnbull is defeated, Shorten will become the sixth Australian prime minister in nine years. Impacts A Labor victory would provide East Timor with a more favourable partner for resolving the Timor Sea boundary dispute. Candidates backed by independent Senator Nick Xenophon could pick up some upper house seats. Government submarine-building contracts in South Australia may give the Coalition an electoral bump.


Subject The Abe government's new fiscal plans. Significance Prime Minister Shinzo Abe's government has set out a six-year programme that combines fiscal planning with social policies to promote economic growth under severe demographic pressure. Impacts The plans are unlikely to encounter serious opposition within the ruling party or parliament. Visa reforms will admit temporary foreign workers in much greater numbers, but will restrict the scope for immigration. Making education free of charge aims to boost fertility, but even if this works the demographic boost is decades away. Cutting taxes on car and house sales will reduce revenue unless it stimulates very significant increases in sales.


Subject Zimbabwe mining prospects. Significance President Emmerson Mnangagwa has repeatedly said Zimbabwe is open for business, but this has yet to be backed up by substantive legislative reform or efforts at tackling entrenched corruption. Without fundamental changes, Zimbabwe’s mining sector will continue to deter legitimate investors and remain dominated by military and political elites. Impacts Rejoining the Commonwealth could help improve the overall investment climate, but only if substantive democratic reforms are pursued. Minerals will be the key economic prospect that Mnangagwa can use to entice foreign investors in the short term. Should ZANU-PF triumph in the polls, ruling party infighting could intensify over Mnangagwa’s future successor.


Subject Bangladesh's narcotics crackdown. Significance Prime Minister Sheikh Hasina is overseeing a ‘drug war’, with security personnel targeting illegal trade in yaba (methamphetamines). The Office of the UN High Commissioner for Human Rights (OHCHR) has criticised the campaign, in which an estimated 150 people have been killed and at least 13,000 arrested since mid-May. The ruling Awami League (AL) is expected to retain power in the general election, due by late December. Impacts The yaba trade will worsen social conditions in Rohingya refugee camps. India’s north-east could face an increasing problem of yaba trafficking. Bangladesh’s election campaign is likely to involve widespread use of undeclared money.


Subject Canada's federal political outlook. Significance Canada’s three main parties have all selected the leaders with which they will contest the 2019 federal election. New Democratic Party (NDP) leader Jagmeet Singh, Conservative leader Andrew Scheer and Prime Minister Justin Trudeau of the Liberal Party now have two years in which to define themselves for the electorate and make a case for their parties to assume or resume control of government. Impacts Fallout from fundraiser links to the Paradise Papers tax avoidance controversy could undercut Trudeau’s Liberals. Trudeau’s strong Quebec ties will help him hold off the NDP, but Ontario losses could leave a Liberal minority government. Ontario’s 2018 provincial election will offer an early indication of the strength of Trudeau’s federal opponents.


Subject Dissolution of Sudan's former ruling party. Significance The transitional government on November 28 approved a law dissolving the National Congress Party (NCP), the former ruling party that held power since 1989 under deposed President Omar al-Bashir. The dissolution responds to a key demand of the protesters who forced the NCP and Bashir out of power. It also provides some temporary relief for a transitional government burdened by huge expectations and challenges on all sides. Impacts The new law is based on accountability but will not be a substitute for criminal justice proceedings against former NCP officials. Although the committee is not mandated to investigate individual responsibility for crimes, its work may inform criminal investigations. Tracing NCP assets may prove challenging given the number of deals that were transacted in cash.


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