Political systems in the developed world are processing the economic challenges of globalisation and technology in dangerous ways. Although it’s happening with distinct local flavors, the recent phenomena of fringe parties and extreme personalities rising to power (or getting close) in places like Greece, France, Spain and even the US are all part of the same global trend.
It is nothing new to the world that inward-looking populism and confrontational nationalism become a growing force after episodes of economic disruption. While Brexit may be the most important global political event since the fall of the Soviet Union, it’s also a reminder of the popular mood in sophisticated and prosperous places like the UK.
In this context, the question has to be asked: When and how will this political tsunami hit emerging economies? And why haven’t emerging markets (EM) yet experienced the type of neo-populism seen in developed markets (DM) in a serious way? Read more
What is most surprising about the Venezuelan opposition’s overwhelming electoral victory on December 6 is that so many people were surprised. In any normal democracy, when a government is responsible for a massive economic recession, runaway inflation, endemic shortages and a collapse of personal safety, voters can be expected to dole out harsh punishment at the ballot boxes.
Venezuela—needless to say—is not a normal democracy. It is a country where checks and balances, military subordination to civilian authority, freedom of the press and the right to dissent have all but vanished. The opposition’s victory is therefore not the ultimate proof of Venezuela’s democratic virtues, as members of the government have argued, but instead an opportunity to rebuild democracy based on tolerance, pluralism, and republican principles, all of which were systematically disdained by chavista governments. Read more
Only five months after being narrowly reelected, Dilma Rousseff, Brazil’s president, faces a growing array of problems, including a major bribery scandal and myriad economic challenges. Hundreds of thousands of Brazilians have taken part in recent protests against her, with many calling for her impeachment. And it wasn’t the first time demonstrations have rocked the country during Rousseff’s tenure –millions also took to the streets in the run-up to the 2014 World Cup.
But Rousseff is hardly the only leader of an emerging market to face public anger in recent years. Protest movements have erupted in the Middle East, eastern Europe, Asia, and Latin America. Emerging markets have benefited in many ways from globalisation, but rising incomes have also led to rising expectations. Newly empowered citizens in the emerging world are demanding more accountability from their leaders, and as a result we are likely to see more protests and upheaval. Read more
A story told in the Bank of England goes like this. Shortly after the fall of the Berlin Wall, a group of Russian central bankers with solid grounding in Marxist economics came to London for a training course at the BoE. They patiently absorbed the theoretical run-down of supply and demand curves and how prices were determined, and then asked “But who sets the price?” A world without a state official with a clipboard announcing the cost of everything was unthinkable. Eventually the exasperated BoE economists took them on a trip to Smithfield meat market in the City of London to see the magic in action.
After the Wall came down in 1989 – triggered by a single unguarded remark by an East German Politburo member in a press conference – the speed and size of changes in the economies of central and east European (CEE) and the former Soviet Union (FSU) were unprecedented since the Second World War. Twenty-five years later, with currency crises wracking Ukraine and Russia, and FSU economies like Belarus and Moldova struggling to emerge from the Soviet era, the dispersion of performance has been dramatic. Read more
Presidential candidate Aécio Neves receives minor boost in polls
Brazil’s benchmark stock index staged one of its most volatile trading days yet in the lead-up to next month’s election ahead of a poll that showed upstart presidential candidate Marina Silva rebuilding her lead.
The Bovespa index finished up 2 per cent at 59,114.66 after earlier gains of nearly 4 per cent on hopes that the poll would indicate incumbent President Dilma Rousseff was losing, analysts said. Read more
By Dalibor Rohac and Nouh El-Harmouzi
Campaigners for Abdelaziz Bouteflika, the 76-year old Algerian president who is seeking re-election for a fourth consecutive term, promise “broad democracy” if their candidate wins. After decades of oppression and authoritarianism, Algerians have little reason to believe them. Read more
Kiska (left) and Fico: victory of the underdog?
By Tom Nicholson of bne in Bratislava
It’s been over a decade since Slovak Prime Minister Robert Fico has been an underdog in any election. But his assertive campaign to capture the country’s highest office – the presidency – in the March 29 crucial run-off ballot suddenly looks vulnerable to the challenge of a rank political outsider. Read more
The hotly contested Honduran election still hasn’t yielded a final official result. But maybe it’s not too soon to spot some lessons Mexico might offer the Central American state.
They boil down to: “Amlo” vs “Pacto”. Read more
By Clare Nuttall of bne
Unsurprisingly, Emomali Rakhmon, Tajikistan’s president, has been re-elected for a fourth term with an overwhelming majority, preliminary results of this week’s flawed election showed on Thursday.
While Tajikistan may be the poorest country of the former Soviet Union, its importance is set to grow. The region is preparing for the withdrawal of Nato troops from neighbouring Afghanistan in 2014, China is battling with Russia to increase its influence, and the Tajik government is pressing on with plans for a giant dam that could inflame tensions in an already jittery part of the world where water is an increasingly precious resource. Read more
Masked men storming polling stations, assaulting officials and voters and throwing gas bombs; ballot boxes disappearing; international observers fleeing for their safety; an atmosphere of intimidation. Sunday’s local elections in Kosovo were not quite the affirmation of new-found inter-ethnic cooperation and free and fair democracy the European Union had hoped for. Serbia will wish to disassociate itself from the violence swiftly, lest it prove a setback to its budding hopes of EU accession, and the investment related to it. Read more
Nobody seriously doubted that Ilham Aliyev would be re-elected for a third term as president of Azerbaijan in Wednesday’s poll. Indeed, Aliyev was so confident of victory, which he took with a resounding 84.55 per cent of the vote, that he did not even bother to campaign. “The fact that this election was free and transparent is another serious step towards democracy,” he said.
Camil Hasanli, the main opposition leader, cried foul and described the election as an exercise in vote-rigging. Despite representing a coalition of some 20 opposition parties, the 61-year-old historian received only 5.53 percent of the vote. Read more
By Vasyl Filipchuk of the ICPS and Amanda Paul of the EPC
The Yalta conference in Crimea, Ukraine, left a clear feeling of a geopolitical shift in Europe. Not the one 68 years ago at this Black Sea resort but the annual Yalta European Strategy conference organised last weekend by Ukrainian philanthropist Victor Pinchuk with the participation of Tony Blair, Bill and Hillary Clinton, Karl Bildt, Stefan Fule and many other European and global leaders and opinion makers.
Movers and shakers from both the EU and Ukraine left Yalta confident that the EU’s third Eastern Partnership summit to be held in Vilnius in November will see the signature of an EU/Ukraine association agreement. Read more
By Ivica Dačić, Prime Minister of Serbia
There are some lines by Albert Camus that apply perfectly to Serbia over the past two decades. They also help to explain why I decided, without fear, to accept the position of prime minister of a country with a dark and difficult historical heritage.
The lines are: “I shall tell you a great secret my friend. Do not wait for the last judgement. It takes place every day…” Read more
By Chris Weafer
The outcome of Sunday’s election for mayor of Moscow, and similar elections held in several other Russian cities, shows that the political landscape in Russia is changing. The protests of late 2011 and early 2012 are finally starting to deliver a positive legacy. The critics will of course say that the outcome in Moscow was predictable and nothing has changed. But they are wrong. Read more
As Zimbabweans prepare to vote in Wednesday’s fiercely contested election, their neighbours in South Africa will be watching closely. Its outcome will set the scene for the development of trade and investment between the two countries. Read more
This appears to have been a kiss and make up week for Venezuela’s president, Nicolás Maduro.
First, he married his long time “compañera”, former Attorney General, Cilia Flores. Then, he announced he will meet his Colombian counterpart, Juan Manuel Santos, for the first time since a diplomatic spat in late May threatened to derail relations between the two countries. Read more
There was not a lot of public regret about the recent defenestration of the centre-right government of outgoing Czech premier Petr Necas in a sex-and-spying scandal. One reason is that his austerity policies are blamed for sinking the country into its longest-running recession – one that began in the third quarter of 2011.
The new caretaker administration of Jiri Rusnok aims to change that. But it may find it hard to do anything of substance. Read more
With violence on the streets of Egypt coming hot on the heels of the public protests in Brazil and Turkey, it takes a brave man to write a report entitled: “EM is not much riskier than DM”.
But Simon Quijano-Evans of Commerzbank has done just that – arguing that while young populations put emerging markets at greater risk of political upheavals they also provide the energy that will power developing economies into the future while the developed world is held by back by the burdens of debt and old age. It’s probably true in the long run, but for a leader like Egypt’s Mohamed Morsi it’s the next few days that matter. Read more
So, Mexico will indeed enact constitutional reform to open its oil industry to the private sector. That is what Enrique Peña Nieto, the country’s president, told FT journalists during a visit to the newspaper on Monday.
“There are different options on what the reform should be, but I am confident… It will be transcendental,” he said, adding that the reform would include “the constitutional changes needed to give private investors certainty”.
This may be news to many readers in Mexico. Read more