Venezuelan migrant issue has wider regional impact

Significance Signs of modest domestic economic recovery will not offset the drivers of outmigration. Xenophobia and populist agitation are fuelling violence against Venezuelan and other migrants, as most recently seen in Chile’s presidential election contest. Impacts Near-term government continuity in Venezuela suggests that migrant outflows will continue. As governments turn to more restrictive immigration strategies, current patterns of intra-regional migration will intensify. Politicians in the region will increasingly leverage political capital from anti-immigrant sentiment.

Significance The negative effects of the COVID-19 pandemic are still affecting the Brazilian economy. After a sharp recession in the first two quarters of the year, the economy partially recovered during the third quarter following the easing of anti-coronavirus lockdown measures. However, third-quarter growth was below market estimates and GDP remains below pre-pandemic levels. Impacts Emergency welfare assistance may be necessary well into 2021, despite mounting concerns over the fiscal deficit. The fiscal cost of emergency assistance will worry investors, but an end to aid could undermine fragile recovery. Delays in launching a COVID-19 immunisation programme put near-term economic recovery at risk.


Subject Modest recovery in Moldova. Significance Moldova is experiencing a moderate economic recovery from last year's recession, helped by the government's commitment to European integration which is already manifested in a redirection of exports, particularly food, from Russia to EU markets. Financial assistance from the IMF and the EU support this policy direction. However, a pro-Moscow, anti-EU politician, Igor Dodon, is leading in the polls ahead of the October 30 presidential election. Impacts Moscow will seek to use allies like Dodon to draw Moldova closer in political if not economic terms. Ukraine is in a position to emulate Moldova by using agricultural exports to European markets to increase foreign currency earnings. Belarus, too, may see the benefits of engaging with the EU in political and economic terms.


Subject Russian opposition leader Alexey Navalny's election bid. Significance Opposition figure and anti-corruption campaigner Alexey Navalny announced in mid-December that he would stand in the 2018 presidential election. He is using social media to promote a programme of left-of-centre policies that seek to address popular grievances. Impacts If Navalny makes it to election day, the inclusion of at least one other opposition figure, Grigory Yavlinsky, would draw off votes. Modest economic recovery would favour Putin, assuming that average incomes start rising perceptibly. Pension and other changes lobbied for by reformers will be postponed until after the election to avoid public resentment.


Significance Violent protests engulfed the capital city last week as police clashed with demonstrators demanding President Joseph Kabila honour presidential term limits. The president's intransigence has driven the violent reaction, but divisions within the opposition are also fuelling the violence. Impacts Recent violence may have ended the prospect of opposition unity in the near term. The DRC is unlikely to experience a third civil war but security may deteriorate, especially in Kinshasa. The international community may broker peace talks led by the African Union. The increasing instability will almost certainly shatter the DRC's fragile economic recovery.


Subject A revival in Russian diplomatic interest in Afghan peace efforts. Significance Russia's efforts to expand its diplomatic role in Afghan conflict resolution have switched gear in recent months. Moscow is now investing much more energy and political capital, apparently with the aim of taking the diplomatic lead instead of the United States. Impacts Moscow's new engagement makes the presidential election even more important, especially if there are rival US and Russian contenders. Iran's current opposition to reconciliation efforts is a source of tension with Russia. The Russian initiative may win support from China, which has pushed for peace but is now against US control of the process.


Significance It was expected that the reshuffle would reflect a policy pivot towards social and environmental priorities in the wake of COVID-19 and as a response to the outcome of local elections this year. Instead, personnel change was very modest and underpinned Macron’s focus on managing the current crisis and consolidating right-wing support ahead of the April 2022 presidential election. Impacts Polls suggest the far-right National Rally is failing to take advantage of the COVID-19 crisis. Recent surges in COVID-19 cases suggest France’s economic recovery will be slower than expected. Rising COVID-19 cases across Europe will increase pressure on the EU to acclerate the rollout of its recovery fund.


Significance The three parties successfully negotiated a coalition agreement with a strong emphasis on modernising Germany’s economy. Throughout the negotiations, the parties presented a public image of stability and harmony, yet several divisive issues will test the new government's stability and effectiveness. Impacts The composition of the new government will make it harder for Berlin to win approval for the EU-China Comprehensive Investment Agreement. Chancellor Olaf Scholz will seek to prioritise more unity at the EU level when it comes to foreign policy decision-making. The spread of the Omicron variant will slow economic recovery and potentially delay the transition to a greener economy.


Subject Prospects for Turkey to end-2021. Significance Deepening popular discontent, a growing opposition bloc and internal rivalries have put the ruling coalition on the back foot for the first time, but also made it more unpredictable. The economic recovery has continued, notwithstanding policy tightening, but the lira has been weak and inflation high. Unemployment is a significant concern.


Headline BRAZIL: Water woes will drag on economic recovery


Significance With steep reductions in public spending affecting education and social programmes, the budget signals an era of austerity in what had been Canada’s wealthiest province. One consequence is likely to be greater tension between the provincial government and the federal government in Ottawa. Impacts Major international funds will continue to divest from the oil sands sector, further depressing output as subsidies are cut. Remaining oil sands production will be increasingly automated, meaning that structural unemployment will persist. Ottawa’s refusal to contest US cancellation of the Keystone XL pipeline has raised tensions with the UCP government in Edmonton. The national broad-based economic recovery expected this year will largely bypass Alberta.


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