Narrow win limits new Jamaican government's options

Subject Outlook for the new government. Significance Despite opinion polls before the February 25 election indicating a victory for the incumbent People's National Party (PNP), the opposition Jamaica Labour Party (JLP) won a narrow one-seat victory and JLP leader Andrew Holness was sworn in as prime minister for a second time on March 3. The PNP ran a lacklustre campaign that failed to galvanise its core supporters. In contrast, the JLP offered a positive message of tax cuts and job creation. Impacts Absent rapid economic improvements, public opinion may turn against the new government. Juggling IMF targets and popular demands may prove beyond the JLP's capabilities. The government has only a narrow window of opportunity before the PNP recovers from its surprise defeat.

Significance The process looks in danger. Serious local conflicts in south-eastern Turkey are straining tensions between Kurds and the government, even though guerrilla warfare has not resumed. Kurdish self-confidence is rising because of its fighters' success in expelling Islamic State group (ISG) from Kobani. However, dialogue between the government and imprisoned PKK leader Abdullah Ocalan continues, and Prime Minister Ahmet Davutoglu seems more sensitive to Kurdish aspirations than his predecessors. Impacts Ocalan's leadership of the PKK is unshakable, but his ability to persuade his followers to avoid clashes on the streets is weakening. The conflict between the Kurds and Islamists inside Turkey will grow. Public opinion, including conservative religious elements, will block significant concessions to the Kurds, limiting the government's scope. The Kurds are emerging as a key regional opponent of Islamist politics.


Subject Implementation of India's new Insolvency and Bankruptcy Code. Significance Shrinking bank credit is hindering India’s ability to finance spending. The Reserve Bank of India (RBI) is relying on the recently instituted Insolvency and Bankruptcy Code (IBC) as the principal instrument to address the problem of stressed assets in the banking system. Impacts The government may accelerate plans to merge stronger and weaker PSBs. Indian corporates may increase their issue of bonds denominated in domestic currency. Prime Minister Narendra Modi will emphasise job creation rather than investment until the next election.


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.


Subject Middle-class economic and political aspirations. Significance Prime Minister Narendra Modi's government came to power in 2014 with strong support from middle-class voters, drawn by his development and good governance rhetoric. This promised to move stalled middle-class aspirations forward, after the economy slowed from 2011. Whether Modi can deliver on his promises of a revived economy and middle-class employment opportunities will determine his government's political fortunes in the medium term. A secure middle class able to spend and invest is also key to reviving the economy. Impacts Manufacturing has the greatest job-creation potential, but the government has yet to advance a concrete strategy to achieve this. Growth of middle-class jobs in service industries is likely to become even more regionally skewed. Middle-class voters frustrated with national parties will switch allegiances, scuppering BJP hopes for one-party dominance.


Significance As intended, the changes will temporarily ease the Conservative Party's internal atmosphere, most importantly before the October annual party conference. However, they are unlikely to alter the fundamentals of the referendum or its outcome. The more significant internal party battle will be over the terms of Prime Minister David Cameron's EU membership renegotiation. Impacts The government could still face a September 7 House of Commons defeat over 'purdah', despite its reversal on the issue. This would boost eurosceptic elements in the Labour Party before the September 12 leadership election result. Cameron's wish to discourage migration from the Middle East could intensify his foreign policy focus on the region.


Significance The result is a stunning setback for Prime Minister Theresa May. The Conservative Party secured a notably larger share of the vote, but it was outpaced by the Labour Party, which achieved a much larger increase. The Scottish National Party (SNP) suffered substantial losses to both the Conservatives (which had been expected) and to Labour (which had not). The Liberal Democrats managed only a modest increase in their representation. Impacts If Sinn Fein once more refuses to take its seats at Westminster, a Conservative-DUP accord would command a slim but not unstable majority. If May survives she will be much less dominant and have to adopt a more collegial style. In different circumstances, the obvious solution might be a second general election in relatively short order. With the UK economy showing signs of slowing, however, the Conservative Party may be reluctant to risk that option.


Significance The report comes as Prime Minister Scott Morrison lobbies his National Party partners in the governing coalition to back a target of net zero emissions by 2050 prior to next month’s COP26 climate conference in Glasgow. Impacts Much-needed investment in the renewables sector may not materialise without a more positive government approach to the sector. Australian businesses may face trade sanctions as a result of the government’s failure to adopt binding emission targets. Public subsidies for investment in coal and gas could lead to higher power bills for consumers.


Significance The government vows that freeports will represent “hubs of enterprise which will allow places to carry out business inside a country’s land border but where different customs rules apply”. The creation of freeports are a central component of Prime Minister Boris Johnson’s government to facilitate global trade and promote regional regeneration in the post-Brexit era. Impacts With Brexit, London will have more flexibility regarding the concessions it can offer businesses operating in freeports. The government vows to create freeports in the devolved regions but faces the difficult task of cooperating with the devolved governments. Some poorer regions will miss out on freeports, which could leave them even more deprived and stoke local resentment against London.


Significance The five-party coalition enters office at a time of intense economic and social uncertainty resulting from the COVID-19 pandemic, rising debt and soaring energy prices. Prime Minister Petr Fiala's greatest challenges involve negotiating between the five coalition partners and restoring respectability to Czech politics. Impacts The new government will be less sceptical about closer EU integration, given the upcoming Czech EU presidency from mid-2022. The government will try to reopen EU Green Deal chapters to renegotiate compensation for highly industrialised member states. Former Prime Minister Andrej Babis may run for president in 2023. Babis will strive to avoid losing parliamentary immunity from prosecution relating to the Stork’s Nest affair and alleged EU subsidy fraud.


Significance The government led by the Slovenian Democratic Party (SDS) is under mounting pressure as Slovenia prepares to take over the European Council presidency. This is due mainly to hostility in parliament and society to Prime Minister Janez Jansa, who promotes a popular but divisive form of national conservatism. Impacts A successful no-confidence vote in the government followed by early elections would complicate Slovenia’s handling of its EU presidency. The fall of the current government and its replacement by the centre-left would improve Slovenia’s relations with the EU and United States. Hungarian Prime Minister Viktor Orban would lose an ally at EU level if Jansa lost office.


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