Nepal’s Oli may soon pass on power to partner

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).

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.


Subject Prospects for India in 2016. Significance Prime Minister Narendra Modi's government has accelerated its agenda of piecemeal and sequential reform following his Bharatiya Janata Party (BJP)'s defeat in the Bihar elections last month. As difficult state elections approach in the first half of 2016, the government is banking on these reforms and headline growth to secure voter and investor support. In foreign policy, the government is likely to focus on regions of strategic importance, especially Russia and the Middle East.


Subject Prospects for India in 2018. Significance India’s ruling Bharatiya Janata Party (BJP) has responded to the recent economic slowdown by drawing up plans to recapitalise public sector banks (PSBs) and invest in infrastructure. Prime Minister Narendra Modi is also under pressure to create jobs. The government will be expected to deliver on its promises with elections due in around 18 months’ time.


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 Sexial violence in India. Significance At a recent parliamentary debate over a no-confidence motion against the government, Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP) began its defence by focusing on its achievements in protecting women. India has seen a recent surge in reports of high-profile, violent sexual crimes. Modi will be seeking a second term in the general election due in early 2019. Impacts Modi will face protests over India’s treatment of women especially during his trips to Western countries. Civil society organisations will intensify calls for better training and scrutiny of police. Human rights groups will urge India to reject the death penalty, encouraging judicial reform instead.


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 Expansion of India's ruling party across the country. Significance Victories for candidates of the ruling Bharatiya Janata Party (BJP) in recent elections for the president and the vice-president of India signal the consolidation of Prime Minister Narendra Modi’s authority. Modi and party President Amit Shah aim not only to win the general election in 2019 but also to control as many states as possible and make the BJP the ‘party of the nation’. Impacts India’s Election Commission may have to investigate increasing claims of electoral impropriety. If Modi is re-elected, the BJP may attain a majority in the Rajya Sabha (upper house of parliament) in his second term. Shah's popularity will rise, though he is unlikely to want to succeed Modi in the long term.


Subject The political and economic outlook. Significance GDP expanded by 2.7% in 2017 and is projected to grow by some 3.0% this year. However, public opinion is becoming increasingly negative and uncertain over future economic prospects. This echoes President Tabare Vazquez’s falling approval ratings, which have reached the lowest point since the Frente Amplio (FA) came to government in 2005. At the start of the fourth year of his five-year term, Vazquez faces the difficult challenge of improving his government’s popular standing. Impacts The government is facing its worst moment to date, and there are few short-term prospects for any improvement. Vazquez may not make new policy announcements this year, clinging instead to policies already the subject of negative appraisals. The FA looks increasingly likely to lose the presidency in next year’s elections.


Significance The pandemic has strengthened Prime Minister Viktor Orban’s position in the short term. However, the government has done little on the economic front; a conservative stimulus package raises doubts that a lasting downturn can be averted and is driving medium-term risks to ruling Fidesz’s position. Impacts Tensions within the European People’s Party over Fidesz will deepen, but probably not lead to the party’s exclusion. China’s soft power will be boosted as its role in combating the virus is contrasted with Western indecisiveness. Large multinational manufacturing and services firms could penetrate the economy further but may not be able to drive a quick rebound.


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