Politics will undermine Algerian economic policy

2016 ◽  
Keyword(s):  
Economic Policy ◽  
Central Bank ◽  
The Political ◽  
Economic Policies ◽  
Foreign Exchange Reserves ◽  
Content Type ◽  
Political Struggles ◽  
International Borrowing ◽  
The Government ◽  
Central Bank Governor

Subject The effect of the sacking of the central bank governor. Significance The Algerian cabinet decided on May 31 to replace the long-serving governor of the central bank, Mohammed Laksaci, with Mohammed Loukal, the CEO of the government-owned Exterior Bank of Algeria. The cabinet did not explain the decision, which was issued in the name of President Abdelaziz Bouteflika, but the governor had come under criticism from political figures because of the sharp depreciation of the Algerian dinar, and the erosion of foreign exchange reserves. Impacts Loukal will come under pressure to ease import controls, while defending the dinar. Given weak external accounts, further depreciation of the dinar on the black market is likely, along with further erosion of reserves. The government will soon need to resort to international borrowing, which will bring fresh scrutiny of its economic policies. The central bank governor sacking is most likely related to the political struggles within the establishment on who will succeed Bouteflika.

Divisions plague Libya's financial institutions

2016 ◽  
Keyword(s):  
Central Bank ◽  
Financial Institutions ◽  
Oil And Gas ◽  
Political Crisis ◽  
The Political ◽  
Economic Policies ◽  
Strong Basis ◽  
Content Type ◽  
Basic Services ◽  
Oil And Gas Companies

Subject Divisions in financial institutions. Significance The finance ministry of the UN-backed Government of National Accord (GNA) on December 21 called for an urgent meeting of the board of the Central Bank of Libya. More effective financial institutions could provide a strong basis for political reunification and economic revival. Yet the political crisis, corruption and pre-existing weaknesses undermine these institutions. Impacts The GNA will struggle to finance consistent basic services and implement coherent economic policies. Libyans will continue to lose confidence in the GNA, especially if the economy does not pick up. The NOC will still court international oil and gas companies to attract new investment.

Bolivia's business elites have shifted to Morales

2017 ◽  
Keyword(s):  
Business Groups ◽  
Political Stability ◽  
Economic Conditions ◽  
The Political ◽  
Political Elites ◽  
Economic Policies ◽  
Business Elites ◽  
Content Type ◽  
Collaborative Working ◽  
The Government

Subject Government-business relations. Significance President Evo Morales’s government has established a collaborative working relationship with the country’s most powerful business elites that belies its leftist rhetoric. This is based on an understanding that while government offers large corporate interests favourable economic conditions, business groups will refrain from conspiring against the government in the political sphere. Thus, the government has managed to minimise the sort of pro-regional tensions that characterised its first term in office (2006-10), driving a wedge between economic and political elites. Impacts The economic policies pursued by the Morales administration will continue to prove, broadly, good for business. Smaller-scale businesses have been less beneficially treated, but lack political lobbying power. Avoidance of strife with the more powerful business groups will continue to help underpin political stability.

Candidates promise continuity, not change in Peru

2015 ◽  
Keyword(s):  
Mass Media ◽  
Party System ◽  
Decisive Role ◽  
The Political ◽  
Economic Policies ◽  
Main Thrust ◽  
Content Type ◽  
Business Executives ◽  
Voter Preferences ◽  
The Government

Significance The leading candidates for the presidential contest set out their agendas at the annual meeting of business executives (CADE) on December 3-4. The campaign, aggressive and personalised, had so far lacked policy substance. With each candidate supporting the continuance of business-friendly economic policies and backing measures to clamp down on public insecurity and corruption, they were at pains to distinguish themselves one from another. The dispersion of parties and candidates still makes a second round likely. Impacts With the political focus increasingly on the election, support for the government may recover slightly over the next six months. The main thrust of campaigning will remain highly personalised. The lack of any strong party system means that the mass media will play a decisive role in shaping voter preferences. The left, lacking funding and organisation, is unlikely to flourish.

Greece’s political and economic prospects are fragile

2018 ◽  
Keyword(s):  
Economic Policy ◽  
Sovereign Debt ◽  
Direct Investment ◽  
Private Investment ◽  
The Political ◽  
Content Type ◽  
Political Situation ◽  
Privatisation Programme ◽  
European Stability Mechanism ◽  
The Government

Significance Thus ends eight years of economic policy oversight by the ECB, European Stability Mechanism and IMF, in exchange for some 275 billion euros (315 billion dollars) in soft loans. To obtain authorisation for the final disbursement, the government had to agree to what amounted to an unofficial fourth package of reforms without further financial assistance. Impacts Markets will demand a premium to purchase Greek sovereign debt until economic policy crystallises and the political situation clarifies. An increase in the minimum wage and the restoration of collective bargaining could revive private consumption. Private investment will depend on the availability of foreign direct investment for the privatisation programme.

Iran may abandon austerity to pacify protesters

2018 ◽  
Keyword(s):  
Exchange Rate ◽  
Central Bank ◽  
Foreign Investment ◽  
Status Quo ◽  
Small Scale ◽  
Economic Policies ◽  
Content Type ◽  
The Poor ◽  
The Status ◽  
The Government

Significance Beginning in the conservative city of Mashhad, the mostly small-scale and leaderless demonstrations spread across many provincial towns over several days, sometimes turning violent. Following the publication of President Hassan Rouhani’s proposed 2018/19 ‘austerity’ budget, key slogans protested government corruption and neglect of the poor and unemployed -- although the basis of the regime itself also came under fire. Impacts US support for the protesters and announcement of new sanctions will assist Tehran’s efforts to portray recent events as foreign ‘sedition’. Inflation could spike on the back of populist economic policies and exchange rate deterioration as foreign investment prospects recede. The central bank will not implement exchange rate unification plans, since the government profits from the status quo.

Morocco pushes business-friendly image with new budget

2019 ◽  
Keyword(s):  
Small Businesses ◽  
Economic Policies ◽  
Foreign Exchange Reserves ◽  
Content Type ◽  
Sovereign Bond ◽  
Doing Business ◽  
Special Fund ◽  
The World ◽  
International Investors ◽  
The Government

Significance Morocco’s reputation among international investors as one of the region’s more business-friendly locations has been underlined by a steady rise in the World Bank’s ‘Doing Business’ rankings. The government has sought to reinforce this through the latest budget, including tax cuts for domestic industries. Beyond that, it also includes increases in spending on health and education, as well the creation of a special fund for small businesses. Rabat plans to issue a sovereign bond in the next few weeks to bolster foreign exchange reserves and to finance part of the deficit. Impacts The boost to health and education is in keeping with the king’s recent call for economic policies that will reduce social inequality. The bond issue will offer an acceptable level of risk for most prospective investors. Popular perceptions of a rigged system, despite positive indications of economic performance, may drive further protests.

Low growth may undermine Abe's policy promises

2016 ◽  
Keyword(s):  
Economic Policy ◽  
Prime Minister ◽  
Public Support ◽  
Economic Policies ◽  
Content Type ◽  
House Election ◽  
Strategic Goals ◽  
The Government ◽  
To Come

Subject The Abe government's economic policies. Significance The passage of unpopular defence legislation overshadowed the Abe government for most of 2015 and caused its popularity to sink to record lows. Now, ahead of an upper house election in July this year, Prime Minister Shinzo Abe has sought to return attention to economic policy -- the source of his government's original popularity. His 'three new arrows' of Abenomics indicate a reconsideration of the government's economic policy priorities. Impacts The government will increasingly focus on specific demography-related problems, setting numerical targets to make achievements visible. Raising fertility and preventing depopulation will emerge as the major strategic goals for any Japanese cabinet for decades to come. Immigration on a large enough scale to address demographic pressures has negligible public support and is not seriously considered.

Election year may prove worst yet in Venezuela

2018 ◽  
Keyword(s):  
Economic Policy ◽  
Presidential Election ◽  
Socialist Party ◽  
The Political ◽  
Content Type ◽  
Holiday Period ◽  
Political Left ◽  
The Government

Significance The government is facing increasingly bitter schisms within the ruling United Socialist Party of Venezuela (PSUV) as it goes into a presidential election year. The holiday period saw street protests from traditionally loyal constituencies amid intensifying food and medical shortages. November inflation reportedly reached 56.7%, with accumulated eleven-month inflation estimated at 1,370.0%. Impacts There is little to unify the PSUV’s disparate constituencies, opening the prospect of intense conflict on the political left. Grassroots protests indicate dissatisfaction but not necessarily disaffection with the government. Despite a hyperinflationary spiral, no immediate change in economic policy is expected.

Seoul's rate hike and stimulus strike a balancing act

2021 ◽  
Keyword(s):  
Central Bank ◽  
Public Debt ◽  
Gdp Growth ◽  
Content Type ◽  
The Government ◽  
Central Bank Governor ◽  
At Home

Significance The central bank governor has signalled further tightening ahead. The economy is on track this year to exceed the 2019 level. The government has drafted a record budget that will lift public debt above 50% of GDP, to bolster the recovery and tackle inequality. Impacts The budget will pass with at most minor cuts. GDP growth this year may hit 4%, a ten-year high. As ever, strong exports will remain the chief driver of growth. A further rate hike is likely by March. Bottlenecks due to COVID-19 overseas pose a greater risk than outbreaks and countermeasures at home.

Pandemic may drive new wealth taxes in Latin America

2021 ◽  
Keyword(s):  
Latin America ◽  
Social Welfare ◽  
The Political ◽  
Content Type ◽  
Latin Americans ◽  
Tax Revenues ◽  
Wealth Tax ◽  
The Government ◽  
Political Spectrum ◽  
Tax Cuts

Significance The region’s current tax and spending policies redistribute very little. The COVID-19 pandemic brought a deep and persistent recession, despite new spending, tax cuts and monetary easing aimed at limiting the damage. In December, the government of Argentina, which was particularly hard hit, passed a temporary (and additional) net wealth tax on the very richest households. Impacts OECD-led transparency efforts offer the long-sought possibility of taxing the foreign assets of wealthy Latin Americans. The pandemic will increase both existing inequalities and the need for tax revenues to finance social welfare and stimulus spending. Efforts to strengthen tax collection more broadly will likely be undertaken by governments across the political spectrum.

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