Weekly Political Compass 11.27.23 | Teneo

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Welcome to this week’s edition of Teneo’s Political Compass Political risk advice group.

This week, we’re taking a deeper look. Indonesia An upcoming election campaign. Meanwhile, The Vietnamese President is visiting. Japan, Italian The revised recovery plan received the green light from Brussels. Argentina The President-elect is in USAnd south africa It is experiencing port delays and power outages. Our graph of the week raises more about the arguments Innovations related to AI.

Global snapshot

The campaign season officially begins on November 28 Indonesia In the year February 14, 2023 elections. Our Southeast Asia expert Bob Herrera-Lim Analyze the situation.

Who is the first?

Defense Minister Prabowo Subianto is favored to top both the first round and the finals in June. It has gained some momentum in recent weeks. His vice-presidential running mate is President Joko Widodo’s eldest son, Gibran Rakabuming Raka.

What explains its success so far?

Earlier this year, Prabowo succeeded former Central Java governor Ganjar Prabowo. But his partnership with Widodo’s son is more than just a rebuff to criticism of dynastic politics. And while Widodo is nominally independent, 61% of voters see Prabowo as the preferred candidate, up from 38% several weeks ago – and the president’s popularity could help his chances in the coming weeks.

What should be seen

Asia Pacific

China

China will grant visa-free entry to citizens of France, Germany, Italy, Spain, the Netherlands and Malaysia for 15 days starting November 30, Beijing bid Business tripl and tourism. The one-year pilot program comes after President Xi Jinping and US President Joe Biden agreed at APEC to expand international flights between the two countries.

Japan/Vietnam

President Vo Van Tung is in Tokyo for a four-day working visit to celebrate the 50th anniversary of diplomatic relations. The main outcome of the trip could be a symbolic elevation of bilateral relations, with Vietnam announcing a ‘comprehensive strategic partnership’, mirroring similar agreements it has with China. Most recently, the US; Maritime security cooperation will also continue. Tokyo and Hanoi have recently seen growing interest in Japanese companies’ deepening manufacturing networks, migrant labor flows to Japan, and shared concerns about Beijing’s dominance over the South and East China Seas.

North Korea

Pyongyang’s new military spy satellite She stated that she will start the full-time job on December 1. State news agency KCNA said (without providing evidence) that the satellite it launched on November 22 had already captured initial images of ‘major target areas’, including US naval assets and facilities in South Korea, Guam and Hawaii. The launch set the stage for a tit-for-tat row over the 2018 North-South deal that will lead to increased military hardware build-up along the border.

Europe

Hungary

On November 27, European Council President Charles Michel will meet with Hungarian Prime Minister Viktor Orbán. They will discuss Budapest’s position on various Ukrainian issues ahead of a European Council meeting scheduled for mid-December. Orbán is threatening to block approval of the EU’s mid-term budget review, which includes a four-year 50 billion euro aid package for Ukraine, the opening of accession talks with Kiev and a 12th round of sanctions against Russia unless EU leaders act. Strategic Dialogue” about the alliance’s approach to Russia’s war in Ukraine. His obstructionist approach is primarily an attempt to pressure Brussels to release at least some EU funds from various streams. Other factors, such as relatively constructive relations with Russia in June and domestic political issues ahead of local and European Parliament elections, may also play a role.

Italy

On November 24, the European Commission gave a positive assessment of Italy’s revised Recovery and Resilience Plan, which includes the REPowerEU chapter. The plan is now worth EUR 194.4 billion (EUR 122.6 billion in loans and EUR 71.8 billion in grants). Italy has so far received €85.4bn under the RRF, but it is unclear whether it will receive the fourth tranche (related to H1/2023) worth €16.5bn at the end of the year. As part of the reform, the total amount for the fourth, fifth and sixth tranches has been reduced, while the final tranches have now paid 33 billion euros in completed installments.

Poland

Acting Prime Minister Mateusz Morawiecki (Law and Justice, PiS) will present his cabinet on November 27, which will consist mostly of technocrats. The proposed cabinet will have 14 days to get a full vote of confidence in the lower house of parliament (Sejm). This is highly unlikely as other details consider cooperation with PS. If Morawiecki uses all the time allowed by the constitution, the three pro-EU lists can nominate and approve Donald Tusk’s cabinet (Civic Coalition) on December 11.

Latin America

Argentina

President-elect Javier Millay will be in the US earlier this week, where he is expected to hold his first face-to-face talks with International Monetary Fund (IMF) officials. Along with Miley is the choice for economy minister: Luis “Toto” Caputo, who was the architect of Argentina’s 2016 before becoming finance minister (2017-18) and then briefly headed the Central Bank (BCRA) in 2018. Caputo’s appointment by Federico Sturzenegger, another BCRA president (2015-18) until recently nominated for economy minister by ex-president Maurico Macri, reflects a difference in how to deal with the large liability of short-term debt accumulated by the elite. debt instruments; Mille has been saying that Lelik’s issue must be resolved before capital controls are lifted.

Brazil

The leader of the Senate government is teaming up with Congress in a dispute with the Supreme Court to ensure a vote on important legislative agendas. The leader in question, Jacques Wagner, voted to replace the Court’s so-called sole decisions—that is, decisions made by just one of the eleven judges—with majority decisions by the full college. Although Wagner said his vote was personal and not on behalf of the government, the sign did not go down easily in court, causing delays in voting on matters of economic benefit to the government. Over the weekend, meetings were held between President Lula and some judges to calm the situation. The government’s focus now is to ensure that it clears Congress this week for both offshore and specialized funds (BRL 20bn or USD 4bn in revenue next year) and betting sites (BRL 2bn or USD 400mn next year).

Middle East and Africa

south africa

Severe port delays combined with a new round of power cuts will signal economic weakness this week. After a limited power outage, parastatal Eskom had to load-shed again to ‘Level 6’ this weekend, which was expected to be ‘Level 4’ this week. Meanwhile, worsening delays at key ports operated by logistics parastatal Transnet are affecting miners, agricultural producers and retailers. The opposition blames government mismanagement to further undermine the ANC’s voter support ahead of the 2024 election.

The graph of the week

Advantages and disadvantages Innovations related to AI They have dominated the news lately. Even among AI researchers and practitioners, differing views seem to be emerging regarding how fast AI should develop and societal concerns. A parallel debate is taking place among social scientists and economists over whether AI research should accelerate to realize its potential benefits or slow down to protect against labor market risks. Research shows that, for example, pre-existing skills differences (shaping workers’ ability to use these technologies) can add to already growing inequality. As citizens become more familiar with AI, concerns about it are growing.

The views and opinions in these articles are solely those of the authors and do not necessarily reflect those of Teneo. They are provided to stimulate thought and discussion and not as legal, financial, accounting, tax or other professional advice or counsel.



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