Kazakh leader ponders future but tackles urgent tasks

Subject Political changes in Kazakhstan. Significance President Nursultan Nazarbayev has carried out the largest government reshuffle in two years, promoting Deputy Prime Minister Bakytzhan Sagintayev to head the cabinet and placing the outgoing prime minister, Karim Massimov, in charge of the security ministry. Nazarbayev's aims are twofold: to bring in fresh faces to tackle grave economic challenges, and to ensure his security services are able to clamp down on a rising terrorism problem. Impacts The government's top priorities will be to avert protests driven by economic conditions and deal with militant threats. Massimov's security measures will be complemented by the religious affairs ministry's scrutiny of radical Islam. Nazarbayev will seek to manage the succession to preserve his political legacy and his family's interests.

Significance Bringing the poll forward could be risky for Prime Minister Lee Hsien Loong's People's Action Party (PAP), as it faces a new opposition party and worsening economic conditions. Impacts Tan Cheng Bock will at the next election attempt to unite the opposition behind his Progress Singapore Party. Deputy Prime Minister Heng Swee Keat will likely succeed as prime minister when Lee eventually leaves the post. Singapore's economy is unlikely to benefit from any large-scale redirecting of investment from Hong Kong, despite the protests there.


Significance The reshuffle involves some significant changes, including the promotion of Economy Minister Nadia Calvino as first deputy prime minister. Other notable changes include new ministers at the head of foreign policy and territorial policy, which deals with relations with Catalonia. Impacts Sanchez has increased the number of women and young people in the new cabinet; this could broaden his appeal among centrist voters. While Madrid will continue to respect EU policy parameters, Sanchez’s continued reliance on UP and ERC support will worry investors. Sanchez’s leadership of the PSOE could come under threat if he is seen as ‘giving too much’ to Catalan nationalists.


Subject The economic challenges facing the Ukrainian government. Significance Ukraine's new prime minister, Volodymyr Groisman, must manage competing demands, domestic and external. External lenders, principally the IMF, are pressing him to carry out overdue reforms that are likely to bring pain to the average Ukrainian hoping for swift improvements in living standards. As well as the ongoing conflict in the east, structural problems are constraining growth. Impacts A resumption in IMF payments will help the balance of payments and work towards currency stability. Slow and patchy recovery is unlikely to translate into higher wages and incomes. The Groisman government is unlikely to win public approval if conditions improve. Its survival will be at risk if there is no discernable change for the better.


Significance Canada's main opposition parties -- the Conservatives and the NDP -- are entering a period of reconstruction and reinvention in the wake of October's election victory by Prime Minister Justin Trudeau's Liberal Party, with implications for the government's political room for manoeuvre. Impacts Federal-provincial gridlock and economic concerns from the oil downturn will hinder Canadian climate policy-making. Should poor economic conditions persist despite the government's stimulus programme, the Conservatives could strengthen as a result. National-level scepticism of free trade in many countries will sap momentum in international negotiations, such as for TTIP.


Subject Cambodia's 'culture of dialogue'. Significance Interior minister and deputy prime minister Sar Kheng, of the ruling Cambodian People's Party (CPP), will meet opposition Cambodia National Rescue Party (CNRP) co-leader Sam Rainsy on October 1 after a similar September 23 meeting. Publicly, such meetings, notionally to discuss forthcoming legislation, characterise the 'culture of dialogue' between the CPP and CNRP. However, the July imprisonment of opposition-linked activists, passage of a controversial civil society law and the August arrest of an opposition senator, raise concerns about the robustness of the rapprochement. Impacts The opposition will focus on sensitive popular issues to gain support, including official corruption and judiciary politicisation. The CPP will use the security forces and judicial apparatus to constrain its opponents. Limitations to civil society freedoms could stoke local unrest over land and human rights.


Significance The falling lira coincides with signs of policy disagreements and rumours of Deputy Prime Minister Mehmet Simsek's resignation. President Recep Tayyip Erdogan and his Justice and Development Party (AKP) want to maintain rapid GDP and employment growth ahead of the 2019 electoral cycle. However, given the unfavourable global financial environment, pro-growth policies could exacerbate lira weakness, high inflation, financial risks and the wide current-account deficit, and eventually cause a sharper slowdown in the economy. Impacts Economic performance will continue to depend largely on external factors including Turkey’s relations with the West and its neighbours. GDP will slow from last year’s extraordinary level but the timing, steepness and disruption caused are less certain. Investor wariness and sliding lira may help a soft landing, sending a warning signal, cutting import demand and increasing external debt.


Significance Medvedev and most of the faces in the new cabinet show a high level of continuity, although technocratic figures have replaced several political heavyweights at deputy prime minister level. The overall selection reflects a desire for political stability and careful economic stewardship in the face of domestic and international challenges. Impacts Demands from high-spending ministries will challenge the government's resolve to exert fiscal control. As Putin's term progresses, cabinet changes will be interpreted for signs of a succession process. Any unrest arising from economic problems or unpopular social reforms is likely to lead to the removal of the relevant ministers.


Significance Jordan is surrounded by conflict and struggling to accommodate over a million Syrian refugees. The economy is faltering and the country’s security services are fully occupied with potential salafi-jihadist threats from without and within. Regional crises in Syria and Israel-Palestine exacerbate rising domestic discontent. Impacts Domestic security measures, including surveillance of online activism and curbs on the media, will be ramped up. Tourism is unlikely to recover in the short term. Efforts will intensify to secure international financial aid, already at record levels. Lack of progress on Israeli-Palestinian peace could alienate Jordan's majority-Palestinian population.


Significance The ordinance aims to facilitate land acquisition for infrastructure development as well as Prime Minister Narendra Modi's 'Make in India' manufacturing campaign. Launched recently amid a bleak industrial growth scenario, the campaign seeks to make India a global manufacturing hub. However, measures such as the land ordinance are inadequate to realise this as yet largely undefined goal, especially given the tough global economic conditions that have developed since 2008. Impacts There is limited room to boost export competitiveness with currency devaluation due to India's heavy import dependence. The government is likely to dilute labour laws to woo investors, at the expense of its own longer-term vision for manufacturing. The new ordinance could facilitate land acquisition in some states, but the wider infrastructure deficit is an abiding constraint.


Subject The Malaysian cabinet reshuffle's implications. Significance Prime Minister Najib Razak is reasserting himself politically amidst the 1Malaysia Development Berhad (1MDB) investment fund controversy. On July 28, he reshuffled his cabinet, removing the deputy prime minister and other officials investigating the affair; and on August 3, he called on the Malaysian Communications and Multimedia Commission to develop tighter controls against slander in online political speech. Impacts Najib will use the reshuffle to reassert his national development goals, but Malaysian economic difficulties may constrain him. Najib will continue moving against critics, potentially attempting to remove state chief ministers perceived as challenging him. A state-level backlash against Najib is possible; policy disruption could follow.


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