Planned merger may unravel Ethiopian ruling coalition

Subject Proposed reforms in the ruling coalition. Significance Prime Minister Abiy Ahmed is leading a drive to restructure the ruling Ethiopian People’s Revolutionary Democratic Front (EPRDF), a coalition of four ethnic-based regional parties, into a single national party. Despite Abiy’s leadership on the issue, intra- and inter-party contestation may protract or even prevent the merger. Impacts An EPRDF merger is unlikely to impact opposition politics and strategies significantly but may add urgency to coalition-building efforts. The EPRDF’s affiliate parties would be major beneficiaries of a merger and a potential source of support for Abiy. Even without a merger, the Tigray People’s Revolutionary Front (TPLF) may eventually opt to leave the EPRDF.

Subject Coalition-building ahead of Ethiopia's 2020 elections. Significance Following months of negotiations, the leaders of the three biggest Oromo opposition parties -- the Oromo Federalist Congress (OFC), Oromo Liberation Front (OLF) and Oromo National Party (ONP) -- on January 3 announced the formation of the Coalition for Democratic Federalism (CDF). This new platform will pose a serious electoral challenge to Prime Minister Abiy Ahmed’s newly formed Prosperity Party (formerly the Ethiopian Peoples’ Revolutionary Democratic Front (EPRDF)) in Oromia, Abiy’s home state. Impacts As the OFC is already a member of the Forum for Democratic Dialogue in Ethiopia (MEDREK) opposition alliance, the CDF may also join. Ethiopia’s first-past-the-post electoral system will encourage further coalition-building, especially among opposition parties. If the CDF pushes claims of Oromo ‘ownership’ over Addis Ababa, this would complicate relations with other actors.


Significance The report comes as Prime Minister Scott Morrison lobbies his National Party partners in the governing coalition to back a target of net zero emissions by 2050 prior to next month’s COP26 climate conference in Glasgow. Impacts Much-needed investment in the renewables sector may not materialise without a more positive government approach to the sector. Australian businesses may face trade sanctions as a result of the government’s failure to adopt binding emission targets. Public subsidies for investment in coal and gas could lead to higher power bills for consumers.


Subject Outlook for the new government. Significance Despite opinion polls before the February 25 election indicating a victory for the incumbent People's National Party (PNP), the opposition Jamaica Labour Party (JLP) won a narrow one-seat victory and JLP leader Andrew Holness was sworn in as prime minister for a second time on March 3. The PNP ran a lacklustre campaign that failed to galvanise its core supporters. In contrast, the JLP offered a positive message of tax cuts and job creation. Impacts Absent rapid economic improvements, public opinion may turn against the new government. Juggling IMF targets and popular demands may prove beyond the JLP's capabilities. The government has only a narrow window of opportunity before the PNP recovers from its surprise defeat.


Subject Sri Lanka's stalling constitutional reforms and Tamil politics. Significance The Tamil National Alliance (TNA) is resisting overtures from Prime Minister Ranil Wickremesinghe to join a new ‘national government’ led by his United National Party (UNP). Sri Lanka’s recent constitutional crisis, which saw President Maithripala Sirisena replace Wickremesinghe before eventually reinstating him, saw the TNA playing a key role in the balance of legislative power. More generally, a process to reform the constitution and promote reconciliation between Sri Lanka’s Sinhalese majority and Tamil minority has stalled. Impacts A delay in procuring financial support from the Bank of China could increase pressure on Wickremesinghe’s government. The country will likely see bouts of anti-Muslim violence ahead of the next provincial council elections and parliamentary poll. Sri Lankan tourist numbers will likely rise after missing last year’s annual target due to the constitutional crisis.


Subject Outook for Sri Lanka's opposition ahead of a parliamentary election. Significance President Gotabaya Rajapaksa on March 2 dissolved parliament and called a parliamentary election for April 25. Interim Prime Minister Mahinda Rajapaksa, Gotabaya’s brother, will be aiming to return to power. The main challenge to the pro-Rajapaksa alliance, the Sri Lanka Nidahas Podujana Sandanaya (SLNPS), is set to come from an alliance formed by members of the opposition United National Party (UNP), the Samagi Jana Balawegaya (SJB). Impacts Concerns over COVID-19 are unlikely to disrupt the election. The SJB will likely win more votes in the north and east, where ethnic Tamil voters are concentrated, than in the south and west. Elections for provincial councils will probably be held after the parliamentary poll.


Subject Outlook for the Janata Parivar. Significance In mid-April, six leading regional parties merged to form the 'Janata Parivar' (or People's Family, JP) to challenge Prime Minister Narendra Modi's Bharatiya Janata Party (BJP) government. The JP has been provoked, in part, by the way that the BJP is pushing reforms to land acquisition laws despite widespread opposition, and converting its 2014 general election triumph into many regional election victories. Impacts The JP will oppose subsidy cuts and the BJP's Hindu nationalist cultural agenda. The land acquisition amendment may be the most serious casualty of political opposition to Modi. Regional parties will attempt to balance market and welfare interests, highlighting (but not mitigating) rising inequality.


Significance President Maithripala Sirisena’s Sri Lanka Freedom Party (SLFP) and Prime Minister Ranil Wickremesinghe’s United National Party (UNP), which form the National Unity Government (NUG), performed poorly in last month’s local elections, in which former President Mahinda Rajapaksa’s Sri Lanka Podujana Peramuna (SLPP) -- popular among Sinhalese Buddhist nationalists -- swept to victory. Sri Lanka’s next presidential and parliamentary elections are due in 2020. Impacts Tourism and foreign direct investment are likely to be adversely impacted by frequent communal clashes. Amid concern over social media’s use to orchestrate violence, Sri Lanka could introduce legislation that curbs free speech. Further violence would increase friction between Sirisena and Wickremesinghe, threatening the NUG’s stability.


Subject Political instability in Sri Lanka. Significance Parliament resumed early last month after being prorogued by President Maithripala Sirisena. Sri Lanka’s National Unity Government (NUG), formed after the 2015 legislative elections, is a coalition between Sirisena’s Sri Lanka Freedom Party (SLFP) and Prime Minister Ranil Wickremesinghe’s United National Party (UNP). Former President Mahinda Rajapaksa’s Sri Lanka Podujana Peramuna (SLPP) leads the Joint Opposition (JO). According to the constitution, a two-thirds parliamentary majority would be required for Sirisena to bring forward the next legislative elections due in 2020. Impacts The breakdown in party discipline in parliament suggests instability will be a long-term feature of Sri Lankan politics. Judicial campaigns against the Rajapaksa family will intensify, despite its sustained political influence. Political uncertainty will cause the Sri Lankan rupee to fall further against the dollar.


Significance Increased economic optimism will be welcomed by Prime Minister Bill English, who is hoping that his National Party will win a fourth consecutive term in government this September. Finance Minister Steven Joyce presented a confident budget for the 2017-18 fiscal year in May that focused principally on low-to-middle-income taxpayers, laying out the government’s economic agenda. Impacts A tight labour market will push up wages and paint a positive picture of National rule for the electorate. High levels of household debt could undercut consumer confidence once monetary policy begins to tighten. No shifts in climate policy are anticipated until a June 2018 Productivity Commission report is released.


Significance This came after Sirisena dissolved the National Unity Government (NUG) that included his Sri Lanka Freedom Party (SLFP) and Wickremesinghe’s United National Party (UNP). Sirisena unseated Rajapaksa in the January 2015 presidential election and Rajapaksa’s Sri Lanka Podujana Peramuna (SLPP) splintered from the SLFP after the latter joined the NUG following the August 2015 parliamentary election. The SLPP, popular among Sinhalese Buddhist nationalists, wants 2020 parliamentary polls brought forward, for which two-thirds of lawmakers would need to be in favour. Impacts The crisis could derail efforts to promote reconciliation between ethnic Sinhalese and Tamil communities. A sustained Rajapaksa prime ministership would likely see Sri Lanka court more investment from China. Joint development projects involving India are likely to slow further, raising concerns in Delhi.


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