Bangladesh’s drug war helps ruling party in short term

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 Politics in India's north-east. Significance In the forthcoming general election, 25 seats in the parliamentary lower house will be contested in the north-east. Four of the region's eight states have chief ministers from Prime Minister Narendra Modi's Bharatiya Janata Party (BJP) while the other four have ones representing parties aligned with the BJP. However, BJP policies aimed at appeasing certain ethnic communities have provoked protests across the area. Impacts Muslim Rohingya refugees in India will increasingly attempt to cross into Bangladesh, further damaging relations between Delhi and Dhaka. Delhi will encourage Tokyo to increase investment in India's north-east, hoping to push back on Beijing's ambitions in the region. Modi, if re-elected, will step up his 'Act East' policy, seeking enhanced connectivity between the north-east and South-east Asia.


Subject Tensions between the co-chairs of Nepal's ruling party. Significance In recent weeks, tensions have grown between the Nepal Communist Party (NCP)’s co-chairs, Prime Minister KP Oli and PK Dahal (‘Prachanda’). Ahead of the NCP’s formation early last year through a merger of the two leaders’ erstwhile parties, Oli and Prachanda reportedly agreed to lead the government for equal periods. As Oli comes under pressure to ensure he complies, former Prime Minister Madhav Kumar Nepal, who wields strong influence within Oli’s faction in the NCP, has spoken out against the incumbent. Impacts Oli and Prachanda will in the short term probably put on a show of solidarity, aiming to dispel any notion of governing instability. The main opposition Nepali Congress may try to form closer links with India’s ruling Bharatiya Janata Party, hoping for its tacit support. If Prachanda takes power, he may face calls to take a harder line on former comrades within the Communist Party of Nepal (Maoist).


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 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 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 Presenting his government's programme on November 25, Prime Minister Ahmet Davutoglu promised to keep his election campaign pledges, complete major infrastructure projects, maintain fiscal stability and implement structural change. Impacts Domestic demand will strengthen in the short term. However, firms in labour intensive sectors may face financial difficulties, and new job creation may be slow. Currency and capital markets are likely to remain volatile and overreact to trends in monetary policy and the current account. Opportunities exist for those investors able to tap into the government's priorities and avoid political risks.


Significance Opposition leader Raila Odinga and supporters of his National Super Alliance (NASA) have long since lost faith in the capacity of the IEBC to deliver a free and fair election and have regularly alleged that the ruling party plans to steal the vote. Opposition supporters claim Msando was killed because he was determined to ensure that the technology designed to prevent electoral fraud worked -- his murder lends credibility to Odinga's narrative that the process is being undermined from within. With only a week until the election, attention is focused not on political platforms but on the potential for voter fraud or a contested result. Impacts Electoral controversies and the delegitimisation of the electoral commission increase the risk of post-election violence. Widespread ethnic clashes on the scale of 2007-08 are unlikely due to heavy deployments of state security forces. Political instability, even if limited, will deter tourism and investment, hurting short-term economic growth.


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 Impact of COVID-19 on Sri Lanka's debt situation. Significance Sri Lanka depends heavily for its foreign exchange on remittances and tourism, both of which have been hit hard by the COVID-19 crisis. Even before the pandemic, the country was struggling with debt and reliant on IMF support to shore up its economy. Impacts President Gotabaya Rajapaksa’s government will pursue balanced diplomacy, seeking strong ties with both Beijing and Delhi. Prime Minister Mahinda Rajapaksa will likely secure a mandate for a full term as premier in a parliamentary election scheduled for June. Colombo will struggle to cast aside its dependence on short-term borrowing.


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