Ireland’s Varadkar faces serious election challenge

Subject Ireland election preview. Significance Ireland will hold a snap general election on February 8. According to various polls, Prime Minister Leo Varadkar is facing a narrow defeat. The election will most likely result in a large coalition led by the opposition Fianna Fail (FF) or Varadkar’s Fine Gael (FG), involving a number of smaller parties. Impacts Ireland’s strong economic performance could be derailed by Brexit and the implementation of an EU-wide corporation tax. Firms and universities in Dublin will struggle to attract foreign nationals if housing shortages and soaring rental costs persist. Neither FG nor FF would push for a referendum on Irish reunification in the next five years, at least.

Significance Although former Prime Minister Matteo Renzi is confident of winning, the PD, condemned after the 2013 general election to govern Italy without a majority, has faced growing problems of cohesion and electoral credibility since last December’s referendum defeat. Impacts Local elections in June will indicate electoral sentiment towards the PD and M5S ahead of the general election in early 2018. Continued weak economic performance is fuelling populist sentiment and tying government hands. Tensions with the EU could increase when the government presents its 2018 budget later this year.


Significance The government tabled its budget at the end of March, announcing major investments in skills development, innovation, the environment and infrastructure. The budget aims to strengthen the long-term growth potential of the Canadian economy. However, more immediate economic challenges are likely to occupy the administration of Prime Minister Justin Trudeau over the remaining three years of its electoral mandate. Impacts Washington's free-market and protectionist push will hinder regulatory convergence with Canada. A likely cut to US corporation tax could erode Canada's competitive advantages. NAFTA negotiations are more likely to focus on technical tweaks to procurement and rules of origin than dramatic overhaul of its structure.


Significance Two pro-independence forces and the unionist Citizens party lead the field. Whether the election will break the impasse over independence and return regional autonomy to Catalonia will depend on a complex balance of forces within the Catalan parliament and on Madrid’s response to the result. Impacts For Spain's prime minister, the elections are an attempt to restore constitutional government in Catalonia. An end to rule by a pro-independence coalition would strengthen business confidence in the Catalan and Spanish economies. The predicted improvement in the PSC-PSOE’s standing would enhance the prospects of the Socialists in the next Spanish general election.


Significance As the 2019 general election approaches, Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP) is trying to secure the backing of India’s rural population, which is some two-thirds of the country’s total. Modi has encouraged state governments to waive farm debt worth up to 2.8 trillion rupees (39 billion dollars); suggested a procurement formula guaranteeing farmers a return of at least 1.5 times their costs of production; and promised to double farm incomes by 2022. Meanwhile, landowning castes are increasingly demanding opportunities in education and employment away from rural areas. Impacts State governments will try to pay off farm debts by issuing bonds. In election campaigning, opposition parties will claim to champion rural interests. An average 2018 monsoon should boost agricultural output.


Significance This move came as a surprise, as the prime minister had previously repeatedly denied that she was even contemplating such a step. Impacts A larger Conservative majority could leave May less dependent on backbench hardcore Brexiteers, possibly giving her more flexibility. Delaying the following general election until 2022 buys May time for a transitional agreement and a cliff-edge exit becomes less likely. The prospect of a Conservative UK government ruling with an increased majority till 2022 will bolster support for Scottish independence. The election will delay the start of the Brexit negotiations by one month.


Subject Singapore's political challenges. Significance The ruling People’s Action Party (PAP) has begun what will be a lengthy leadership handover from Prime Minister Lee Hsien Loong to Heng Swee Keat, currently finance minister and the PAP’s first assistant secretary-general. Speculation is mounting that Lee could bring forward the general election due by January 2021. In recent months, Singapore’s relations with Malaysia have soured. Impacts Turbulent relations with Malaysia will have no impact on the PAP’s leadership handover. Malaysia-Singapore ministerial ties will mitigate the effects of Malaysian Prime Minister Mahathir Mohamad’s erratic foreign policy. Judicial verdicts against legislators from the opposition Workers’ Party (WP) could worsen the WP’s already weak position in parliament. A prolonged US-China trade war would lead to a further decline in exports to China from Singapore.


Subject Modi's post-election cabinet appointments and likely policy trajectory. Significance Following a landslide victory in the general election, Prime Minister Narendra Modi last week announced his new cabinet. There were new appointments at the head of the defence, foreign, home and finance ministries. Impacts The merger of the Central Statistics Office and National Sample Survey Office could further undermine trust in India’s GDP growth figures. If a crackdown on ‘illegal’ migration alienates neighbouring ally Bangladesh, Dhaka could draw closer to Delhi’s rival Beijing. Modi’s alliance will likely have a majority in the parliamentary upper house by 2021.


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.


Subject Norway's economy. Significance Even as the global price for oil recovers slowly, Norwegian Prime Minister Erna Solberg's government hopes to encourage Norway to transition to a post-petroleum economy. The main contours of the 2017 budget suggest that the Norwegian economy has turned two significant corners: the prognosis for economic recovery is promising, and the Norwegian economy will slowly transition to a broader base. Impacts Spending rules for the GPFG could be tightened next spring. The expansive budget may help Solberg's Conservative Party win back votes in the run-up to the 2017 general election. The Christian Democrats could emerge as kingmakers from the 2017 election and possibly facilitate a centre-left coalition.


Significance This follows Prime Minister Najib Razak speaking at a rally on December 4 in support of Myanmar's stateless Rohingya Muslim minority, which is currently experiencing a security crackdown that is straining the Malaysia-Myanmar relationship. The issue is one of several foreign policy considerations facing Malaysia going into 2017. Impacts Chinese and Malay construction, finance, engineering and tourism firms will benefit from deeper bilateral ties. China-Malaysia defence ties will deepen but will be largely symbolic in coming years. The Philippines is unlikely actively to dispute Sabah State's sovereignty, avoiding a relations problem. Defending Muslims' rights could help Najib politically in Malaysia's 2018 (or earlier) general election.


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