Ivory Coast’s legislative polls will test reform claim

Significance The poll was marred by pre- and post-election violence, resulting in scores of arrests (including some opposition leaders) and over 85 deaths. Ouattara has officially begun a process of reconciliation alongside attempts to restore public confidence in his administration. Impacts Ouattara will turn his attention to grooming a successor, most likely Prime Minister Hamed Bakayoko. Oversubscription of a recent Eurobond issuance underscores strong investor confidence in Ivory Coast’s economic future. Ouattara will continue efforts to attract increased foreign investment, alongside forthcoming major infrastructure projects and upgrades.

Significance The closing of internal and external borders in response to COVID-19 has heightened a longstanding skills deficit in key industries, with implications for wage levels, prices and broader economic growth. However, a general increase in immigrant numbers may not provide the skills that are needed. Impacts Labour shortfalls may delay government infrastructure projects that were designed to lead the post-pandemic economic recovery. Foreign investment may be affected by skills shortages in key areas such as mining and metallurgy. Debate on immigration levels could influence voting in the general election that is now likely to be held in April.


Significance Prime Minister Guido Bellido’s threat to nationalise Camisea has further stirred debate at the heart of government, this time about implementing a campaign pledge to this end, notwithstanding the government’s professed aim to create a secure environment for foreign investment. Bellido’s announcement did not have the backing of the cabinet as a whole. Impacts Bellido’s position will suffer if he is seen to backtrack on a key issue contained in Peru Libre’s manifesto. Polarised disagreements within the cabinet will persist. Castillo’s position will suffer from the lack of clear leadership.


Subject E-commerce in India. Significance Following nationwide protests from small traders in late 2014, key sections of the Bharatiya Janata Party (BJP) government have demanded that Prime Minister Narendra Modi act against India's rapidly growing e-commerce platforms. Particular targets are the largest e-commerce players, mostly Indian, but including Amazon India, which have benefitted from large infusions of foreign capital and stand accused of side-stepping India's strict limits on foreign investment in multi-brand retail. Impacts Any improvement in transport and distribution infrastructure will boost e-commerce. Proliferation of mobile and banking facilities is key to expanding online retail. Small traders will oppose the expansion of e-commerce, causing greater political losses for the BJP than any other party.


Significance Whoever succeeds outgoing President Ellen Johnson Sirleaf will have to tackle widespread state corruption, cut recurrent government expenditure and boost infrastructure spending to spur economic growth. Impacts Post-election violence could spike if the opposition loses and accuses a partial electoral commission of manipulation. Low capital spending and poor infrastructure will remain a persistent deterrence to long-term private and foreign investment. International financial institutions will pressure the new government to cut public spending. Further delays to a proposed constitutional referendum are likely.


Significance This followed a prominent display of placards at the PKR's conference in favour of the imprisoned Anwar Ibrahim becoming prime minister, a position the party has long held. Impacts The BN-led government will likely support another push by the PAS to pass Islamic criminal punishment reforms in parliament. This would add to pressure on the PH, as Amanah also favours Islamic politics. Ahead of the election, the government will likely prioritise East Malaysian infrastructure projects.


Subject Local and municipal election results. Significance The largely united opposition made a major breakthrough in local elections on October 13, taking Budapest and other cities and towns and eroding Prime Minister Viktor Orban's Fidesz party’s predominant position since 2006. A sex scandal plus changes within the opposition have apparently lost Fidesz the middle class, further emphasising the already stark divide between cities and the countryside. Impacts Orban’s weaker position will dent the confidence of the global right-wing populist movement, of which he is a figurehead. Domestic capital associated with the Orban government is at risk as investors price in a potential loss of government support. The decline in political stability may at least momentarily moderate investor confidence in Hungary.


Significance The package of 39 projects, worth MXN297bn (USD14.5bn), aims to boost post-pandemic economic growth through privately funded investments or strategic alliances between private entities and state governments in infrastructure, energy and communications. Several government flagship infrastructure projects also receive increased resources in the proposed 2021 budget. Impacts The ARE will not solve Mexico’s long-term energy needs as it excludes major areas such as hydrocarbons exploration and production. The 190,000 jobs that the ARE may create will do little to offset the 2 million formal jobs lost due to the pandemic in March-August. Most of the employment that will be created by the ARE and government priority projects will be temporary, low-paid jobs. Concerns regarding contractual security under the current administration will continue to dampen investor confidence.


Subject The economic outlook for Papua New Guinea. Significance The outlook for the leading commodity exports from Papua New Guinea (PNG) -- natural gas, oil and gold -- remains positive, but by most counts the economy is deteriorating and will worsen as Asia’s aggregate demand for resource commodities falls. Impacts The new government may pass legislation to obtain higher returns to PNG from foreign investment. Perceived corruption and declining governance will directly damage investor confidence. As financial and economic pressures mount, there may well be changes in macroeconomic policy.


Subject Jokowi's reform packages. Significance President Joko 'Jokowi' Widodo last week announced the first of three economic packages designed to re-invigorate the economy and attract foreign investment. The remaining two packages will be announced later this month and in November respectively. Similar packages have been devised by past administrations, but to little effect. To gain investor confidence, Jokowi will need to specify how his administration intends to implement its plans. Impacts Financial market volatility will continue until US monetary policy begins to normalise (probably no earlier than December). The power balance in Jokowi's cabinet militates against institutional reform. Policies to boost infrastructure development promise longer-term gain, but little boost to 2015 GDP growth.


Subject Iran investment outlook. Significance Foreign investment in Iran's non-oil sector is poised for growth following the nuclear deal announced with world powers on July 14. If implemented successfully the agreement will see Iran reintegrated into the world financial system, some 100 billion dollars of its foreign assets unfrozen and US sanctions removed from firms from third countries that trade with it. While foreign companies and investors will move cautiously, they will begin exploring a market that has been performing well below potential for years. Impacts European companies will be in pole position to re-enter the Iranian market. Main non-oil and non-gas sectors of investor interest will include healthcare, financial services, telecoms, consumer goods and transport. Government's strong economic team will encourage investor confidence.


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