Thai premier’s political strategy will be flexible

Significance The government parliamentary bloc is led by the Phalang Pracharat Party, formed to support Prayut’s transition from junta leader to civilian premier. While dampening speculation about an early general election, Prayut apologised for the brief suspension of the country’s recently commenced COVID-19 vaccine roll-out, which was due mainly to slow local production of jabs. Impacts Factionalism within Phalang Pracharat will intensify, exacerbating government instability. Prayut will say little about the crisis in Myanmar, to avoid comparisons between the recent coup there and his own seizure of power in 2014. Controversy over the local company making AstraZeneca shots could complicate Thai-UK relations.

Significance He had been arrested for disrupting public disorder and attending an illegal demonstration after protests erupted as he responded to a court summons concerning rape allegations. His arrest and detention has triggered wider unrest and a public backlash against President Macky Sall and his government. Impacts Sall will increase budgetary spending to try to appease the growing numbers of unemployed youth. Deep public mistrust of the government could hamper COVID-19 vaccine roll-out. With anti-French sentiment increasing, French businesses will be at risk of further targeted attacks during protests.


Significance The RBA has cut its growth forecasts amid rising job losses, weakening demand and increasing signs that the latest COVID-19 lockdowns will continue to slow the economy until the pace of the vaccine roll-out programme can be increased. Impacts Although the RBA is independent, the government will hope it keeps rates low ahead of the elections due next year. Commercial lenders could raise interest rates independently of the RBA if inflation remains high. Wage pressures will re-emerge as labour markets tighten but may be mitigated by the extent of underemployment. Economic growth will be uneven across the country in coming months as pandemic-related restrictions vary by location.


Significance The government hopes greater domestic and foreign investment can help turn around the pandemic-hit economy. The governor of Bank Indonesia (BI), the central bank, last week said GDP should grow by 4.6% in 2021, compared with last year’s 2.1% contraction. Impacts Indonesia will count on private vaccination, whereby companies buy state-procured jabs for their staff, to help speed up its roll-out. The Indonesia Investment Authority, a new sovereign wealth fund, will prioritise attracting more investment into the infrastructure sector. Singapore will continue to be Indonesia’s largest source of FDI in the short term.


Significance The new government will have only 34 of the 179 seats, because policy differences among the right-wing parties, and the political strategy of the electorally strengthened anti-immigration, Euro-sceptic Danish People's Party (DF), mean DF will remain outside. Policy-making will be difficult. The government will be more economically liberal and pro-EU than it would have been with DF, but to make policy it will rely on partners across the political spectrum, especially the ousted Social Democrats -- who remain the largest party -- and DF. Impacts If DF is seen as a welfarist protector of ordinary citizens, it is more likely to repeat, at least, its 22% vote in the next election. The much-tighter immigration regime which is in prospect could taint Denmark's image and make it less attractive to foreign investment. The new government is likely to be an ally for much of UK Prime Minister David Cameron's EU reform agenda.


Subject Denmark's immigration impact. Significance Denmark's opposition Social Democrat party has adopted a hardened stance on immigration, reflected by its support for several populist policies implemented by the government. The party will use its toughening position on immigration as a campaign strategy ahead of Denmark's general election in 2019. Impacts Increased competition over the leadership of the incumbent Venstre party could undermine its chances of retaining power. A Social Democrat government backed by the DPP would mark an unprecedented political realignment. A government involving the DPP would be marked by popular protests and political instability.


Subject Situation regarding Myanmar's ethnic armed organisations. Significance The government and military in Myanmar and leaders of ten ethnically based guerrilla groups that have signed the Nationwide Ceasefire Agreement (NCA) last week pledged to step up their commitment to the peace process, to transform the NCA into a lasting settlement. Several other armed groups are still in conflict with the state, notwithstanding occasional ceasefires. State Counsellor Aung San Suu Kyi’s National League for Democracy (NLD) will very likely retain control over the civilian part of government following this year’s general election, but ethnic parties will probably make parliamentary gains at its expense. Impacts Suu Kyi is very unlikely to face pressure to step down even if the NLD’s parliamentary majority is heavily reduced. Even with increased seat share in parliament, ethnic parties will struggle to influence policy. China and India will double down on their support for the Myanmar military.


Significance It reports less than 100 cases and one death, but official figures probably underestimate the reality. PNG’s health system was already in serious decline before the pandemic and the government acknowledges a high probability that community transmission continues. Impacts What may slow infections is the fact that much of PNG’s population lives in rural and remote areas. The roll-out of internet access to provincial cities and rural areas will help integrate PNG’s fragmented economy and society. Despite the Bougainville region voting strongly for independence in a non-binding referendum last year, actual independence is years away.


Significance The centrist, 'Blairite' section of the party has been defeated and largely excluded from leadership positions. Corbyn's past statements and policy stances are widely believed to render him implausible as a potential prime minister, and thus the Labour Party unelectable with him as leader. The likelihood of the governing Conservatives winning the 2020 general election has increased. Impacts Corbyn is likely to back continued UK EU membership in the referendum, helping to protect him from an early party coup. Because of his previous ambivalence, Corbyn's backing for continued EU membership will make it harder for the left to back 'Brexit'. Foreign policy issues will be among the most difficult under Corbyn, both within the party and with the government. Given the government's small majority, Corbyn's win will make parliamentary support for air strikes against Syrian targets harder to secure. Corbyn's win is unlikely to restore Labour's fortunes in Scotland, potentially boosting support for independence.


Significance Malaysia’s next general election is due by August 2018 but could come before May. The vice-president of the opposition Islamist party Amanah has accused the government of politicising the flooding, which has seen seven die and 9,000 people evacuated (Hamidi denied this criticism). With the election cycle gaining momentum, religious controversies are likely to play an important role. Impacts The announcement of an election pact between the BN and PAS could signal the general election’s imminence. Heightened religious rhetoric in politics could see business pressure on alcoholic drinks and casino providers in Malaysia. Malaysian Islamist groups will avoid Islamic State (IS) connections, instead being influenced by local politics. The Penang floods’ political fallout could weaken the opposition Pakatan Harapan coalition which runs the state.


Subject Mozambique economic update. Significance The cabinet recently announced that three new exploration contracts would be signed in September for gas blocks. This is welcome news for President Filipe Nyusi's administration after terrorist attacks in the northern Cabo Delgado province delayed several final investment decisions, while the government's long-running fiscal and debt troubles continue. Impacts FRELIMO may triumph in the forthcoming local polls but will struggle to retain power in the 2019 general election. A new media law, which includes vastly increased accreditation fees for journalists, will raise fears of a growing clampdown on dissent. The government and gas companies will struggle to complete projects in Nampula and Zambezia provinces amid sizable local opposition. Youth resentment of the authorities could worsen.


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