Camisea nationalisation threat may hit Peru's Castillo

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.


Subject Sudan's new cabinet. Significance The prime minister has appointed a new unity government, in accordance with a disputed 'national dialogue' framework completed last year. For the past five years, Sudan has been facing the combined economic pressures of budget cuts, reduced foreign investment, a weakening currency and rising inflation. The former government pushed through some subsidy cuts, despite public protests over the ensuing economic hardship. In January, Washington announced a lifting of economic sanctions on Sudan, raising Khartoum's hopes that it will become easier to attract foreign investment. Impacts Gulf institutions will provide new financing for energy and infrastructure projects. Mining and agriculture opportunities in the north and centre of the country could also attract some new investment. However, major Western companies will remain wary of doing business in Sudan.


Significance Although the economy is still faring better than others in North Africa, public discontent has increased. Significant segments of the population, especially in rural areas, are economically marginalised and development favours the upper middle class. Protestors blame politicians for democratic stalling, economic hardship and unequal development; the authorities attempt to address these demands with superficial reforms mostly aimed at specific economic sectors. Impacts A consumer boycott aimed at figures close to the Palace, such as Agriculture Minister Aziz Akhannouch, could intensify. Endemic economic and political instability may deter foreign investment in 2018-19. The new finance minister will seek to reduce corruption and improve working conditions, with mixed success. Former Prime Minister Abdelilah Benkirane is unlikely to weaken his party by standing against the current premier.


Significance Negotiations between coalition government parties and other major political players to agree on a new document outlining the government’s path forward (the ‘Carthage II Agreement’) stalled in late May over whether to replace Prime Minister Youssef Chahed and reshuffle the cabinet. A faction of the ruling Nidaa Tounes party led by its executive chairman, Hafedh Essebsi (son of Tunisia’s President Beji Caid Essebsi), called for the dismissal of the prime minister, who is also from Nidaa Tounes. Nidaa’s government coalition partner, the Islamist Ennahda, opposed the move. Impacts Insecurity over the government’s future will complicate key economic and security reforms. The political crisis will deter foreign investment. Friction between rival Nidaa Tounes factions will weaken popular confidence in politics.


Subject India's policies on domestic and international arbitration. Significance The proposed Indian Arbitration Council Act seeks to institutionalise domestic arbitration procedures and make the country a centre for international arbitration practice. Delhi is seeking to protect its state agencies from future accountability before international arbitration courts. Impacts Accusations of partiality against India’s judiciary are likely to increase. Prime Minister Narendra Modi will appeal to foreign investors despite the legal risks they face in India. India’s reputation for ease of doing business is likely to improve only gradually.


Significance Attacks against intellectuals and activists since 2013 have generated widespread international outrage. However, the priorities of Prime Minister Shaikh Hasina's government lie elsewhere. Relative political stability has improved the economy, emboldening the government to aim for 'middle income' country status by 2021. Impacts Growth of garment exports will accelerate, creating opportunities for foreign investment. Deeper economic ties with China will reduce Dhaka's responsiveness to Western criticisms on human rights. Bangladesh-China ties will worry India, but the BJP will not soften its stance on Bangladeshi migrants for political reasons.


Significance However, it does not resolve the state of limbo in which Mongolia’s domestic politics, international relations and economic development has remained for the past several years. Prime Minister U Khurelsukh will consolidate his dominance of the MPP, largely continuing past policies. Impacts Legal uncertainties and corruption inquiries surrounding Oyu Tolgoi and other mining projects will negatively affect foreign investment. There will be Chinese pressure, and serious Mongolian consideration, of full membership in the Shanghai Cooperation Organisation. Factional conflicts within the main opposition party may undermine Battulga’s hope for re-election as president next year. Climate change will put increasing pressure on Mongolia’s ecology and economy.


Significance On December 18, two months after Michel Aoun was elected president of Lebanon, Prime Minister Saad Hariri finally announced agreement on a ‘government of national accord’. The new Lebanese cabinet, which is strongly tilted towards Hezbollah, a Shia political-military grouping, has begun drafting a policy statement of its political and economic goals, which must be presented to parliament within 30 days. Impacts The new government will focus on internal stability and security, including control of Syrian and Palestinian refugees. Rising economic confidence could boost foreign investment. Syrian and Iranian influence over Lebanese foreign policy could increase. The new cabinet will support Hezbollah’s military role within the state and abroad.


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.


Subject Azerbaijan's rising profile in South-eastern Europe, both as hydrocarbons supplier and source of investment. Significance Serbian Prime Minister Aleksandar Vucic's visit to Baku on April 13-15 to promote Azerbaijani investment in strategic infrastructure, agriculture and the chemicals industry is only the latest in a series of contacts. Relations with Azerbaijan are principally about the delivery and transit of gas, with the Trans-Adriatic Pipeline (TAP) coming on stream in 2019-20. However, Balkan countries are increasingly looking to Baku as a source of foreign investment and an export destination. Impacts Balkan countries will be key for the transit of Caspian gas to the EU. Azerbaijan will continue working with them, in order to diversify its diplomatic and economic relations. In a region still suffering prolonged recession, governments will scramble to build and capitalise on ties with Baku.


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