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Elections will be held in five Indian states beginning on 10
February, with results declared on 10 March. These are scheduled
for Punjab, Goa, Uttarakhand, Manipur, and India's largest state,
Uttar Pradesh (UP). UP, where Prime Minister Narendra Modi's
Bharatiya Janata Party (BJP) is in power, will provide an indicator
of public voter sentiment for the central government. BJP's
performance in UP will, therefore, indicate its prospects in the
2024 parliamentary election, in which Modi will seek a third term.
So far, close to 10 members of the UP government have defected to
opposition parties, but party defections are routine in Indian
elections. The defections would potentially be replicated in the
central government only if BJP were to lose the UP election, which
would point to reduced support for Modi and is unlikely for now.
Outside UP, Punjab is one of the few states where the main
opposition Indian National Congress (Congress) still holds
government by itself and BJP has not registered any state election
victories. Repeating a victory in Punjab, therefore, is essential
for Congress to convey its relevance in the national political
consciousness. This would affect the prospect of a future coalition
of opposition parties, led by Congress.
Indicators to watch:
Public rallies by political parties of tens of thousands of
people ahead of the elections, likely increasing the number of
coronavirus disease 2019 (COVID-19) cases, would negatively affect
public perception of the parties conducting the protests.
India's Union Budget for 2022-23 will be announced on 1
February. Limited focus on rural social welfare schemes will have a
heavy impact on UP's rural population and damage public support for
the BJP.
South Africa's national address
South African President Cyril Ramaphosa will deliver the State
of the Nation Address on 10 February, outlining the government's
key priorities for 2022. Ramaphosa is likely to outline how the
government intends to unlock USD8 billion worth of pledged
financial assistance for the transition to renewable energy, agreed
with various Western nations at the UN Climate Change Conference in
November 2021. He is also very likely to announce new measures to
promote localization, particularly within the manufacturing sector,
and the steps to be taken in 2022 towards establishing a new basic
income grant. This is likely to initially entail the extension
beyond March 2022 of the current ZAR350 (approximately USD22)
Social Relief of Distress Grant that was introduced in May 2020 as
a means of alleviating the economic impact of
COVID-19-virus-related lockdowns on the unemployed.
Costa Rica's presidential election
Costa Rica's presidential and legislative elections will be held
on 6 February. Three opposition contenders are leading the field of
25 candidates, indicating that a government different from the
current ruling center-left Citizens' Action Party (Partido Acción
Ciudadana: PAC) is likely to take office on 8 May. The frontrunners
are former president José María Figueres of the centre-right
National Liberation Party (Partido Liberación Nacional: PLN),
Lineth Saborío of the centreright conservative Party of
Social-Christian Unity (Partido Unidad Social Cristiana: PUSC), and
Fabricio Alvarado of the conservative evangelical right-wing New
Republic Party (Partido Nueva RepúblicaL: PNR). If none of the
candidates obtain 40% of the vote, which is likely as no candidate
is currently polling above 20%, a second-round will take place on 3
April. The three leading candidates would probably encourage an
investor-friendly environment and prioritize attracting foreign
direct investment. They are likely to focus on fiscal consolidation
and to conduct renegotiations with the International Monetary Fund
(IMF) over its three-year USD1.78-billion Extended Fund Facility.
Further IMF disbursements are contingent on reaching a set of
fiscal targets and domestic approval of seven bills. The latter
will be difficult, since the proposed legislation includes several
unpopular measures, including tax increases. The future composition
of Congress will be an indicator of the new government's capability
to pass and implement pending fiscal consolidation bills.
Kazakhstan recovers from unrest
After experiencing the most significant unrest in more than
three decades of post-Soviet independence in the first week of
2022, the nationwide state of emergency has been lifted, even as
law enforcement authorities continue 'anti-terrorist operations' in
the biggest city Almaty, and the Almaty and Zhambyl regions, where
the level of terrorist threat was elevated to 'red'. Former
president Nursultan Nazarbayev's brief video message on 18 January
was probably meant to reassure foreign businesses operating in
Kazakhstan, particularly those that are members of the Foreign
Investors' Council, that they have nothing to fear even as his
influence in government and business circles is waning.
Nazarbayev's declining influence is manifested in institutional
changes, including President Kassym-Zhomart Tokayev's assumption of
the chairmanship of the Security Council, which was Nazarbayev's
lifelong privilege prior to the unrest. In addition, two of
Nazarbayev's sons-in-law lost influential positions in state-owned
companies and his younger brother Bolat allegedly fled the country
before the protests were suppressed. In his address to the
legislature on 11 January, Tokayev promised to dismantle the
oligarchic groups that prospered under the presidency of his
predecessor. The authorities are likely to intensify detentions of
civil society members under the pretext of pursuing those who
allegedly engaged in violence and looting during protests.
Other events to watch
African Union (AU) annual heads of state summit 5-6
February
Somalia's delayed legislative election concluding 25
February
Belarus to conduct a referendum on constitutional amendments on
27 February
New parliamentary session in Malaysia from 28 February
Posted 01 February 2022 by James Petretta, Country Risk Director, Economics & Country Risk, IHS Markit and
