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An Oxford Analytica Briefing Book Global prospects Specially curated for: Oxford Alumni Weekend – September 17, 2016 Oxford Analytica Daily Brief ® Global Prospects CONTENTS Prospects for US foreign policy to end-2016 ..................................................................................................... 3 June 13, 2016 US-Mexico wall will divide, whether it is built or not ........................................................................... September 6, 2016 Prospects for Turkey to end-2016 .................................................................................................................................. June 17, 2016 Global discourse on terrorism needs revision .......................................................................................... August 16, 2016 Prospects for Russian politics to end-2016 ..................................................................................................... June 30, 2016 7 8 12 13 External shocks accentuate Central Asian weaknesses .............................................................. 16 July 21, 2016 Prospects for Africa's economies to end-2016 ........................................................................................... June 6, 2016 17 EU and African xenophobia may hurt remittance flows ............................................................. 21 August 25, 2016 Prospects for India to end-2016 ..................................................................................................................................... 22 June 9, 2016 China reaches political crossroads as economy matures ....................................................... June 23, 2016 26 Prospects for Venezuela to end-2016 .................................................................................................................... 27 June 16, 2016 India's energy demand set to soar by 2040 ................................................................................................. 30 June 16, 2016 Low investment restricts Latin American infrastructure .......................................................... September 8, 2016 31 Prospects for emerging economies to end-2016 .................................................................................... 32 June 15, 2016 © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact 2 Oxford Analytica Daily Brief ® Global Prospects Prospects for US foreign policy to end-2016 Monday, June 13 2016 An Oxford Analytica Prospect The June 12 mass shooting in Orlando will sharpen US partisan divisions ahead of November's elections, making it more challenging for President Barack Obama to focus on international developments in his final months in office. Before his successor is inaugurated in January 2017, Obama will seek to build political support in Washington for his distinctive view of the United States' global role, convey steady stewardship of US national security ahead of the election, preserve the foreign policy achievements of his presidency and manage any regional challenges. What next Legacy issues will loom large before Obama departs the White House in January 2017. Given the progress made thus far, preserving the Iran nuclear deal and the Paris climate pact are likelier candidates for success than other presidential initiatives. Those with less chance of success include establishing clear global and domestic rules for the use of armed unmanned aerial vehicles (UAVs) and bolstering international nuclear governance. Analysis While Republican control of Congress will check most of the White House's domestic agenda, Obama will pursue a number of goals on the world stage, with an eye to leaving his successor a strong international position -- and to lock in some of his individual accomplishments. This is motivated in part by Obama's desire to reduce the financial, military and political cost to the United States of its overseas commitments. However, battles with Congress over the use of the Overseas Contingency Operation (OCO) 'war fund' for regular defence expenditure illustrate the political difficulty of reducing the Pentagon's budget. Overseas Contingency Operation (OCO) funding Other Proposed funding (OCO proposed funding only available for 2017) 800 600 400 200 0 2001 2005 2010 2015 2020 US defence spending, 2001-21 (billion dollars) Source: Office of the US Under Secretary of Defense (Comptroller) © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact A US 82nd Airborne Division soldier passes by a Poland's 6th Airborne Brigade soldier during the NATO allies' Anakonda 16 exercise near Torun, Poland (Reuters/Kacper Pempel) Strategic summary • Economic incentives are likely to trump ideological opposition to closer ties with Cuba and Vietnam. • Aversion to ground intervention abroad will persist as a factor in US domestic politics. • Leaving the EU would diminish the United Kingdom's clout in Washington. • US support for Indian membership in the Nuclear Suppliers Group will sway some Western sceptics, but not China. • US protectionist opposition will check progress on the TPP and TTIP trade pacts, frustrating a key goal of the Obama administration. • The COP22 climate summit in Marrakesh will probably be used by the Obama administration as a forum for garnering domestic political legitimacy for the Paris Agreement. 3 Oxford Analytica Daily Brief ® Global Prospects Middle East Having inherited the Iraq conflict from his predecessor and facing a January leadership transition of his own, Obama will seek to inculcate caution when it comes to military intervention in the region and shape the domestic debate on Middle East policy, a debate which is likely to become more raucous and incoherent during election season (see UNITED STATES: Politics will check retrenchment abroad - March 21, 2016). Politically, Obama will attempt to demonstrate that the United States need not have as active a presence in pursuit of long-standing regional interests, such as: • guaranteeing Israel's security; • countering the proliferation of weapons of mass destruction; • preventing the spread and entrenchment of jihadist groups; and • maintaining steady shipments of hydrocarbons from the Gulf. To this end, the White House will support selective application of low-intensity military action, such as special forces raids, drone strikes and supporting local proxies, but avoid difficult-to-reverse commitments to the unique agendas of regional partners. Frustrated allies Frustrated US allies are likely to wait out Obama's 'lame duck' period, and seek to refresh their relationship with the United States once he is out of office: Israel Prime Minister Binyamin Netanyahu's famously poor relationship with Obama and hardliner policy stance on the Palestinians will preclude any diplomatic breakthroughs until the next administration (see ISRAEL: Harsher security policy may strain military - May 26, 2016). Turkey Washington's support for Kurdish fighters will deteriorate ties with Ankara, as will Turkish President Recep Tayyip Erdogan's increasingly autocratic domestic rule(see TURKEY/US: Relationship will become more transactional - April 19, 2016). Gulf states The tone of US diplomatic ties with the Gulf states -- particularly with Saudi Arabia -should improve under the next president; however, the substance of the relationship is highly unlikely to return to the pre-Obama status quo. Obama will attempt to block congressional pressure on Saudi Arabia over Riyadh's ties to extremist groups for the sake of basic cooperation on core issues. 'Destabilising' actions taken by allies -- such as backing extremist groups, domestic repression or military adventurism abroad -- will be viewed dimly by the White House. © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact 4 Oxford Analytica Daily Brief ® Global Prospects Islamic State group (ISG) The White House will continue to support military action against Islamic State group's core territory in Iraq and Syria, but will let regional military partners take the lead as ISG comes under internal and external pressures (see MIDDLE EAST: Jihadist states will struggle to survive - May 19, 2016). Syrian civil war The Obama administration, while not hostile to the idea of an international settlement to the Syrian civil war, is probably anticipating some form of 'soft partition' to be managed by the next US president. Thus, in its final months, it will primarily focus on avoiding a destabilising spill-over of hostilities from the current status quo (see SYRIA: Civil war will lead to soft partition - May 17, 2016). Iran As a key 'legacy' concern, the Obama administration will devote significant political capital to preserving the integrity of the Iran nuclear deal by thwarting domestic efforts to undermine sanctions relief. Missile testing, proxy conflict, the hesitation of Western companies to invest in Iran due to US unilateral sanctions, and detention of Iranian dual nations are significant points of contention. However, the political leaderships of both countries have significant incentives to maintain the nuclear deal, even in the face of substantial domestic opposition. Asia-Pacific Despite domestic pressures, the core commitments of the Iran nuclear deal are likely to survive Obama's departure Obama's refocusing of US foreign policy on Asia will be continued by his successor, whether Democrat or Republican, though closer trade and defence ties will have complicating knock-on effects for the region. China Election-year uncertainties portend a further deterioration of China-US relations through end-2016, especially if the UNCLOS tribunal rules contrary to Beijing's maritime interests in the South China Sea (see PROSPECTS H2 2016: China - June 7, 2016). Washington wants to avoid any military clash and would closely manage any crisis, but deaths from an accident at sea or in the air could lead to a dangerous escalation of hostilities, particularly if Beijing perceives a potential loss of domestic legitimacy (see CHINA: Risk of conflict to rise in the South China Sea - November 3, 2015). Vietnam Hanoi's desire for a diversified set of foreign policy partners and Washington's criticism on human rights issues will preclude the development of formal US-Vietnam defence ties, which would prompt a significant reaction from China, albeit primarily directed at US 'destabilisation' of the region. However, the lifting of the US arms embargo and more robust economic links will provide ample opportunity for Obama's successor to build up the relationship. © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact 5 Oxford Analytica Daily Brief ® Global Prospects Afghanistan Obama -- having already been thwarted in his desire to end the US mission in Afghanistan before leaving office -- may not be able to advance the planned reduction of troop levels to 5,500 in early 2017 from 9,800 now. An escalation in attacks linked to the Taliban's leadership succession would probably prompt the Obama administration to rethink its current departure timetable. North Korea 5,500 Planned January 2017 US troop levels in Afghanistan Pyongyang's nuclear weapons activities will encourage the United States to pursue greater integration of Japan and South Korea into its missile defence network and ignore protests from Beijing, which will also be supportive of sanctions against Pyongyang (see EAST ASIA: Missile defence plans raise conflict risk - April 5, 2016). Europe and Russia At the July NATO summit in Warsaw, the United States will be caught between two goals - encouraging greater European commitments to their own defence, and underlining the credibility of the US security guarantee to the alliance's northern and eastern member states in the face of Russian military activity (see NATO: Russian A2/AD systems will undermine credibility - May 3, 2016). Washington is loath to upgrade its presence in the Baltics at the expense of other priorities, but its allies will take a dim view of scant military assets being deployed alongside lofty US verbal commitments. © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact Washington will have to bolster its credibility at the July NATO Summit 6 Oxford Analytica Daily Brief ® Global Prospects September 6, 2016 US-Mexico wall will divide, whether it is built or not As emotions run high, rhetoric about the border wall suggests that good fences do not necessarily make good neighbours Mexico to US 2,940 US to Mexico Illegal aliens from Mexico apprehended by US Border Patrol (thousands by fiscal year: October 1 through September 30) 1,500 1,000 1,370 1,390 870 670 1995-2000 2005-2010 1,000 2009-2014 500 0 FY2000 FY 2002 FY 2004 FY 2006 FY 2008 FY 2010 FY 2012 FY 2014 Geographical obstacles and legal challenges would see costs spiral well beyond materials and labour Key obstacles facing the proposed wall Rio Grande / flood plain protected by bilateral treaties Comparing proposals for the border wall with the Berlin Wall Berlin Wall Trump’s proposals United States 155km Mountains increase expense / Length 3,200km 20m Mexico Nature reserves will draw ire of environmental campaigners Height 9m Construction cost per metre $6,250 3.6m Private land will create legal issues over compulsory purchase $1,290 Allowing for inflation $4,688 - Estimated US Republican presidential candidate Donald Trump’s proposal to build a wall along the US-Mexico border and have Mexico pay for it is both ambitious and inflammatory. _ Criticism of Pena Nieto will rise in light of US Democrat candidate Hillary Clinton’s rejection of his invitation to Mexico. Much of the border cuts through remote territory, raising _ Should Trump win the US election, he will struggle to live up to his promise to build the wall. the concept will provoke strong emotions at personal and national levels until the US election on November 8, and possibly beyond. President Enrique Pena Nieto will be criticised for the remainder of his term for his failure to stand up to Trump, whom he hosted in Mexico on August 31. This could damage the chances of his Institutional Revolutionary Party (PRI) in Mexico’s 2018 presidential elections. _ too, resulting in legal challenges. _ See also: US-Mexico border links set to strengthen -- May 19, 2016 © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact 7 Sources: United States Border Patrol , Pew Research Pew Research Center, Media reports Estimated total Mexican migration to the United States (thousands) Oxford Analytica Daily Brief ® Global Prospects Prospects for Turkey to end-2016 Friday, June 17 2016 An Oxford Analytica Prospect The interaction between four dynamics may increase political and social fragility: introducing an executive presidency; escalating conflict with Kurdistan Workers' Party (PKK) militants; prosecutions of the pro-Kurdish, left-leaning Peoples' Democratic Party (HDP); and efforts to defeat Islamic State group (ISG). Meanwhile, in the face of largely adverse external conditions and weak investor confidence, consumer spending has underpinned economic growth. What next Short of some unforeseen development, President Recep Tayyip Erdogan will set the stage for a strengthened presidency. If ISG suffers further defeats in Syria and Iraq, it may increase the frequency and severity of terrorist attacks on Turkish soil. GDP growth is likely to remain at 3.0-3.5% in 2016, unemployment at around 10%, inflation at 7% or more, and the current account deficit at 4.5-5.0% of GDP. Analysis The replacement of Ahmet Davutoglu as Justice and Development Party (AKP) chief and prime minister with Binali Yildirim is important for two reasons (see TURKEY: Davutoglu departure may unravel EU deal - May 9, 2016): • While the constitution stipulates that the president should be non-partisan, Erdogan is acting in a decidedly partisan manner, determined that it be he and not the nominal head who leads the AKP. • The appointment of Yildirim, who has the reputation of a 'yes man' under Erdogan's tutelage, suggests the president will interfere even more directly in the executive. Constitutional change Erdogan has succeeded in either marginalising or isolating competitors and challengers, ranging from the Gulen movement to HDP, and established himself as the unquestionable centre of political authority. He faces no significant obstacle to his ultimate goal: changing the constitution to acquire executive powers and control over and oversight of the judiciary. By playing the nationalism card -- the government's heavy-handed approach to Kurdish militants in both rural and urban areas of the Kurdish-dominated south-east -- Erdogan has marginalised both HDP and the main opposition People's Republican Party. The president has also silenced any opposition within AKP. He will push for constitutional change through one of two means, namely: A riot policeman at the scene after a car bomb attack on a police station in Midyat in southeastern Turkey (Reuters/Sertac Kayar) Strategic summary • The tension between Erdogan's push for a presidential system and opponents to it will drive politics in the coming six months. • Bombings of urban and civilian targets may increase, and clashes with the PKK will probably escalate, subsiding in rural areas with the coming of winter. • The pace of global liquidity tightening remains the key independent variable in the short term. • An acceleration of GDP growth also depends on political stability, favourable external demand and longterm structural changes. Erdogan appears to be holding most of the cards for achieving constitutional change that will greatly enhance his official powers • a referendum which would most likely grant him his wish; or • early elections which, as things stand, will most likely award AKP an overwhelming parliamentary majority. © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact 8 Oxford Analytica Daily Brief ® Global Prospects No Kurdish 'peace process' The so-called peace process with PKK is unlikely to recover soon. PKK's attempts to take the fight to urban areas met a very harsh response from the Turkish military and failed to instigate a popular rising among Kurds. The situation is a stalemate of some sort, with both Turkey and PKK refusing to de-escalate, but unable to accomplish their objectives. The increased frequency and severity of PKK bombings in urban areas is leading to civilian casualties, which then fuel nationalistic and anti-PKK sentiments, weakening the prospects for peace in the near future but also, paradoxically, strengthening AKP's hand in the short term. HDP's fate Riding on nationalistic and anti-PKK sentiments, AKP has initiated a process whereby members of parliament (MPs) with charges against them may be tried. While removing parliamentary immunity affects all parties in theory, in practice HDP will be affected much more, for two reasons: • Almost all HDP's 59 MPs have charges against them. • An overwhelming majority of these charges relate to the alleged association between HDP and PKK, suggesting that HDP MPs could face serious punishment and loss of their seats. If enough lose their seats, up to 5% of the total, early elections might be called; alternatively, HDP might walk out of parliament in protest. The former outcome might instigate widespread protests and even uprisings among the Kurds. ISG question The multinational coalition against ISG has been gaining ground. The group's reaction to loss of territory has been terrorist attacks on soft targets in other countries, including Turkey. Jeopardising HDP's presence in parliament would increase political instability and tensions between the state and the Kurds Considering Turkey's proximity and vulnerability (which has been amplified by the Syrian refugee crisis), ISG attacks may be expected to increase in both frequency and severity in the second half of 2016. If Turkey plays a greater role in efforts to defeat ISG, such attacks will also be even more frequent and severe. Economic situation Investments are flat and credit growth subdued amid concerns about the global economic outlook, company and household finances, bank profitability and potential oversupply in the housing market, besides political uncertainties, tensions and violence. © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact 9 Oxford Analytica Daily Brief ® Global Prospects 6 5 4 3 2 1 0 Q1 Q2 Q3 Q4 Q1 2013 Q2 Q3 2014 Q4 Q1 Q2 Q3 Q4 2015 Q1 2016 Turkey: GDP growth (% change, year-on-year) Source: Turkish Statistical Institute (Turkstat) Export demand has been weak -- not least thanks to Russian sanctions, regional tensions and the problems of oil-producing countries. The prospect of shrinking global liquidity due to US interest rate hikes continues to constrain capital inflows, making it more difficult to roll over the mainly private-sector foreign debt, finance a large structural current account deficit, keep the exchange rate steady, hold down inflation and finance domestic credit growth. Economic policy The new government will seek to inspire confidence and support the private sector (see TURKEY: Economic reform will falter with new cabinet - November 30, 2015). Additional incentives may be announced for investment, production and employment, with a focus on technology usage, import substitution and regional development. Public investments will also be pursued vigorously. The budget deficit, which was 1.2% of GDP last year, may be allowed to exceed the 1.3% target. The Central Bank -- under new governorship since April -- may continue to cut rates, bringing the average actual cost of its lending to the banks down to 8.0% or below, compared to 8.5-9.0% in the early months of the year (see TURKEY: New TCMB governor may loosen monetary policy - April 22, 2016). Privatisation will resume, including a fresh effort to sell off the national lottery in August. Growth prospects A postponement of US rate rises could give the government some breathing space over the next few months. However, external demand will remain subdued. Russian sanctions and concerns about terrorism and Turkey's poor international image are set to reduce tourism revenues by perhaps 1% of GDP this year. Any cuts in Central Bank interest rates could deter capital inflows further and may not be reflected in market interest rates. Accordingly, GDP growth rates will probably edge downwards © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact Weak external demand, financial constraints and a poor tourism season will keep GDP growth in check 10 Oxford Analytica Daily Brief ® Global Prospects External balances and lira Thanks mainly to low international oil prices, the perennial current account deficit fell to 4.5% of GDP in 2015 from 5.4% in 2014. Despite further narrowing since January, the relatively weak lira and moderate domestic demand growth, the deficit is unlikely to fall further, particularly given the tourism crisis. Even assuming that capital inflows are sufficient to cover the deficit, there will be bouts of lira weakness if and when US rate rises come closer, the Central Bank overdoes its rate cuts or political and social tensions mount. Currently trading at about 2.90 against the dollar, the lira could end the year at 3.10 or thereabouts. 12 10 8 6 4 Dec Jan Feb Mar Apr May Jun 2014 Jul Aug Sep Oct Nov 2015 Dec Jan Feb Mar Apr May 2016 Turkey: Consumer price inflation (% change, year-on-year) Source: Turkish Statistical Institute (Turkstat) Inflation Annual consumer price inflation fell to 6.6% at end-April, well inside the relatively unambitious official end-year target of 7.5%. In the absence of a sustained increase in oil prices or a sharp slide in the lira, the target should be achieved. © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact 11 Oxford Analytica Daily Brief ® Global Prospects August 16, 2016 Global discourse on terrorism needs revision Source: Global Terrorism Database Fatalities from terrorist attacks, 2011-15 UKRAINE 2,163 SYRIA 9,814 IRAQ 33,498 YEMEN 5,862 NIGERIA 17,089 CAMEROON 1,727 AFGHANISTAN 20,359 PAKISTAN 11,330 INDIA 2,092 SOMALIA 4,736 30,000 20,000 10,000 The majority of terrorist attacks occur in conflict areas, or countries where state-sponsored political violence is widespread. The post-Arab-uprisings environment fostered the rise of themselves with well-known terrorist networks, such as Islamic cause. This is what Libya’s and Egypt’s Islamic State branches did, though groups further afield, such as Nigeria’s Boko Haram and Somalia’s al-Shabaab, have done the same. _ main form of attacks in the West in the medium term. _ More than 80% of deaths in the West are attributed to right-wing extremist, supremacist, nationalist and other motivations. _ These types of incident will continue to exceed Islamist-inspired terrorism in the West. _ vastly and will require diverse solutions. Despite media attention, transnational terrorism in the West is a low-frequency event. Excluding 9/11, only 0.5% of all fatalities in the years since 2000 have occurred in the West. See also: Right-wing terrorism could rise in the West -- March 7, 2016 © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact 12 Oxford Analytica Daily Brief ® Global Prospects Prospects for Russian politics to end-2016 Thursday, June 30 2016 An Oxford Analytica Prospect Elections to Russia's State Duma in September provide a focus for public criticism of the governing party, United Russia, but its victory is assured. In foreign policy, the emerging rapprochement with Turkey after months of animosity shows that President Vladimir Putin is prepared to adopt a more conciliatory tone in some areas in an attempt to reduce Russia's isolation. What next To counter the risk of growing social unrest stemming from the recession, Moscow will clamp down on opposition activity in the run-up to the election. Russia will aim to exploit growing pressure within the EU -- itself diminished by the UK vote to leave -- to relax or lift sanctions in January 2017, and will continue to build trading ties with Asian powers. Analysis Elections remain an important source of legitimacy and the United Russia party will seek to capitalise on the nationalism that has boosted Putin's popular support (see RUSSIA: Nationalism will be core message in election - June 3, 2016). While the leadership will play on nationalist feeling and anti-Western sentiment at home, the government's desire to end isolation will require it to seek better relations with European states. The tension between these domestic and foreign policy objectives will become more apparent as the elections approach, but this dissonance will not cause serious political problems for the authorities this year. Domestic tensions President Vladimir Putin delivers a speech during a meeting with United Russia party members in Moscow (Reuters/Ivan Sekretarev/Pool) Strategic summary • State control over the political and media spheres will tighten in the run-up to the September elections. • Support for United Russia is likely to fall, but the party will maintain its majority in the Duma. • Moscow will seek to take advantage of growing European divisions on the renewal of sanctions. • Relations with China and other Asian powers will be strengthened through new trade deals. Economic problems are likely to increase the level of popular dissatisfaction with the performance of the government and regional authorities, and these tensions will be apparent as the September elections approach. Public discontent with the government -- although not with Putin -- is evident from the falling approval ratings of Prime Minister Dmitry Medvedev and his cabinet. Indicators of support for regional authorities are falling, too, even in such prosperous regions as Moscow and Tatarstan. United Russia's popularity is declining. Over the first six months of this year, support for the party returned to levels last seen in 2011. A recent poll by the Levada Centre put the party's support at 35%. Increasing repression Concern about possible political mobilisation around the elections will result in a clampdown on political opposition as the elections approach. Fearing the protests against electoral fraud that followed the 2011 Duma elections, the authorities appear less willing to rely on election-day manipulation to achieve the desired result (see RUSSIA: Over-reaction to protests is a stability risk - May 25, 2016). © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact The authorities plan to head off the kind of demonstrations that followed the last election 13 Oxford Analytica Daily Brief ® Global Prospects Consequently, efforts are being taken to prevent unrest well in advance of polling day. The National Guard will be called in to crush street demonstrations (see RUSSIA: New National Guard reflects stability worries - April 8, 2016). New counter-terrorism legislation could be used against opponents of United Russia, as offences are so loosely defined. The arrest of Kirov region governor Nikita Belykh, one of the few serving politicians with a liberal profile, shows how highly publicised prosecutions can be used to address grassroots concerns about corruption without tarnishing United Russia or senior officials in general (see RUSSIA: Leaders will try to limit Panama leak damage - April 20, 2016). Election forecast United Russia is unlikely to secure an absolute majority of the vote nationally, but will maintain its dominant position by winning seats in single-mandate constituencies. The party will benefit from the support of the All-Russian Popular Front, a broad movement backed by Moscow, and up to a point, from Putin's personal backing (see RUSSIA: Putin will stand back from Duma polls - March 22, 2016). Polls indicate that the three other parties in the current Duma -- the Communist Party, the Liberal Democratic Party and Just Russia -- should surpass the 5% threshold they need to win seats. The pro-democracy liberal parties -- Yabloko and Parnas -- face large obstacles to overcoming the barrier, and their candidates are likely to be disqualified if they stand a chance of winning (see RUSSIA: Opposition will not forge winning coalition - February 26, 2016). New intake United Russia has used primaries this year to select new candidates for regional and federal elections, which offer the leadership an opportunity to rejuvenate the political class. This should mitigate tensions at the regional level, which are partly fuelled by intra-elite conflicts; socio-economic protests are likely to subside after the ballot. This will strengthen the regime as it prepares for the 2018 presidential election. Foreign policy Moscow will seek sympathy and alliances in Europe as well as Asia. The United Kingdom's decision to leave the EU will prompt Russia to probe further member states' resolve on sanctions, in hopes of the measures being relaxed or lifted by January 2017. Over the next six months, pressure to end sanctions is likely to grow within the EU. No end in sight for Ukraine The dilution or removal of EU sanctions will open up a divide if the incoming US president maintains a tougher line. US sanctions targeting prominent figures close to Putin are up for review in March 2017. Moscow will be happy if UK departure weakens EU resolve on sanctions The EU has linked sanctions to progress on the 2015 Minsk 2.0 peace plan for eastern Ukraine, where little has been achieved except a fragile, often-breached ceasefire. The local elections that form part of the agreement remain a distant prospect. Russia will exploit the inertia by accusing Kyiv of reneging on the agreement as part of its argument for ending sanctions (see UKRAINE: Conflict risks will rise as peace talks stall - March 9, 2016). © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact 14 Oxford Analytica Daily Brief ® Global Prospects Calculated moves in Syria Russia will engage more or fewer forces in Syria as it judges necessary, applying air power to back government ground troops and striking Islamic State group, but without giving President Bashar al-Assad the unconditional support he needs to win outright. The wider agenda is about restoring Russia's position as a global power that Washington must take seriously. Moscow will push this through military attacks and diplomatic moves designed to contrast its strength with US weakness and indecision. Russian rhetorical and on-the-ground responses to NATO in eastern Europe will be even more robust (see RUSSIA/NATO: West will meet threats with deterrence - March 21, 2016). Fixing relations with Turkey President Recep Tayyip Erdogan's apology for the Turkish air force's downing of a Russian jet in November 2015 is leading to a rapprochement that will reduce the chance of direct confrontation over Syria, although Moscow and Ankara will continue to take different views on Assad, the Kurds and other matters (see today's TURKEY/RUSSIA: Policy on Syria may still diverge). It will also restore a trading relationship important to both countries. Russia's 'Asian pivot' Greater engagement with China is partly through necessity, to make up for investment and trade lost to Western sanctions, but is also a tactic to mitigate and manage the growing Chinese economic dominance in Central Asia, a region where Moscow will seek to retain primacy at least in political and security affairs (see RUSSIA: Moscow's need for China will not be reciprocal - June 24, 2016). Privatisations should help cement ties with China and India. The planned sale of shares in the oil major Rosneft could be the basis for closer trading and diplomatic relations. © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact 15 Oxford Analytica Daily Brief ® Global Prospects July 21, 2016 External shocks accentuate Central Asian weaknesses Governments muddled along through stagnation, but have been confounded by low oil prices and a malfunctioning Russia Stability risks in Central Asia MIGRANTS RETURN FROM RUSSIA UZBEKISTAN Powerful security forces deter and quell protests. Uncertainty about the president’s longevity. Troubled relations with all neighbouring states. GDP growth challenged by large and growing population. Uzbekistan, Tajikistan and Kyrgyzstan face risk of unrest as unemployment swells due to returning labour migrants. KAZAKHSTAN Prudent policies may mitigate oil-price and Russian recession impacts. President’s silence on succession question will create uncertainty. Russia’s intentions towards Kazakhstan remain uncertain. Socieconomic unrest is not a threat, but an excessive government response would be. Russia Kazakhstan TURKMENISTAN Lack of challengers to the leadership. Failure to let substantial gas revenues trickle down to the population. Uzbekistan Iran Kyrgyzstan Tajikistan After regime change in 2005 and 2010, governance has settled down. Chronic economic problems are potential source of unrest. Lack of positive impacts from Eurasian Economic Union accession. China Afghanistan TAJIKISTAN Russian military presence bolsters weak army. Centralisation of political power strengthens regionally-based opposition. KYRGYZSTAN Turkmenistan ISLAMIC EXTREMISM Domestic armed groups pose a threat in Tajikistan and to a lesser extent Kazakhstan and Kyrgyzstan. Militants in northern Afghanistan are a threat to border areas of Tajikistan and Turkmenistan. The five Central Asian states were ill-prepared to deal with the impact of falling global commodity prices and the multiple KEY Stabilising factor Destabilising factor _ Elites in Kazakhstan and Uzbekistan will prepare to sideline rivals when the moment for succession comes. _ Governments should contain Islamist violence and Afghan border trouble, but will feel embattled and respond with repressive measures. Net oil and gas importers Kyrgyzstan and Tajikistan have been migrant remittances and exchange rates. hit hardest. One state, Kyrgyzstan, has a semi-functioning democracy, while the rest have ossified structures centred on leadership cults. In Kazakhstan and Uzbekistan, unanswered questions about the presidential succession create scope for contested transitions. Governments are corrupt, poor at social provision and liable to respond to protests with excessive force. Lack of political opposition has created space for Islamic movements, both peaceful and violent. _ Russia will be Central Asia’s security guarantor of last resort. _ Chinese investment and regional transport projects will foster stability although country indebtedness to Beijing will become a concern. _ Cross-border water disputes will sour Uzbekistan’s relations with Kyrgyzstan and Tajikistan. See also: Near-zero growth is expected in Kazakhstan in 2016 -- July 7, 2016 © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact 16 Oxford Analytica Daily Brief ® Global Prospects Prospects for Africa's economies to end-2016 Monday, June 6 2016 An Oxford Analytica Prospect The IMF's most recent forecast of 3% GDP growth for sub-Saharan Africa (SSA) in 2016 represents a significant cut from the 4.25% it expected in October 2015. This is a consequence of sharp slowdowns in the region's two largest economies, Nigeria and South Africa, droughts in previously buoyant economies (notably in eastern and southern Africa), a variety of idiosyncratic shocks and a prolonged commodity price downturn. Nigerian President Muhammadu Buhari, IMF Managing Director Christine Lagarde and Governor of Central Bank of the Nigeria Godwin Emefiele attend a meeting in Abuja (Reuters/Stephen Jaffe) What next Commodity exporters, particularly of oil, will struggle to implement their economic development plans as depressed growth prospects, reduced government revenues, and rising debt and borrowing costs curb investment. The outlook for states that have already made improvements to their infrastructure and business conditions (such as Kenya and Rwanda) is broadly positive. Analysis Droughts have had dramatic effects in some SSA economies: Ethiopia's growth is expected to slow to 4.5% this year from 10.2% in 2015, while several states require emergency food aid. In others, revelations of poor governance (Mozambique) or financial sector weakness (Kenya) are cause for concern. 6 Sub-Saharan Africa Oil exporting countries Oil importing countries 5 Strategic summary • In many oil importers, low global prices will dampen inflation, allowing central banks to cut interest rates. • Nigeria could face a recession this year given low oil output, currency restrictions and severe fiscal shortfalls. • South Africa will likely see a sell-off of financial assets if its credit rating is downgraded to junk status. 4 3 2 1 0 2011 2012 2013 2014 2015 2016 2017 Sub-Saharan Africa: GDP growth, 2011-17 (%; 2016-17 are projections) Source: IMF Promising prospects The slowdown masks significant heterogeneity. Two-fifths of the region's economies expect to expand more rapidly this year, with some growing at 6% or faster (Kenya, Ivory Coast and Senegal) due to strong investment activity (see IVORY COAST: Non-French firms to lead investment boom - February 9, 2016). © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact 17 Oxford Analytica Daily Brief ® Global Prospects A further one-fifth are expected to maintain broadly similar growth rates to 2015 (Togo, Benin, Lesotho and Guinea Bissau). These countries benefit from a virtuous economic cycle in which lower oil prices dampen inflation, allowing authorities to loosen monetary policy, boosting borrowing and consumption. Infrastructure investments and improvements in the business environment are also bearing fruit, particularly in Kenya where transportation and electricity upgrades have raised industrial productivity. Oil's toil In contrast, low global hydrocarbon prices mean net energy exporters will be the worstperforming group in SSA with output slowing to 2.2% from 2.6% in 2015. In some cases, unorthodox policies -- notably Nigeria's and Angola's currency restrictions -- are compounding the situation: • Planned exchange rate liberalisation in Nigeria could release pent-up foreign investment. However, speculative attacks on the currency could pose short-term risk, possibly requiring large interest rate hikes to prevent a collapse of the naira. • Angola's kwanza could face a harder landing given the wider spread between the official and parallel markets. The forthcoming IMF programme could help smooth the transition. In both the major oil producers, the slowdown could be worse than the IMF predicts, with a full recession in Nigeria a distinct possibility. Debt dilemmas Elsewhere, risks of debt distress have risen partly due to the sharp accumulation of nonconcessional sovereign debt over the last five years. As about 70% of the region's external debt is dollar-denominated, while currency depreciations have pushed up debt burdens across the board. 100 Sub-Saharan Africa Nigeria 2011 2011 South Africa Ethiopia 80 60 40 20 0 100 2017 Ghana 2017 Ivory Coast 2011 Kenya 2017 2011 2017 Angola 80 60 40 20 0 2011 2017 2011 2017 2011 2017 2011 2017 Sub-Saharan Africa: Government debt (% of GDP) Source: IMF © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact 18 Oxford Analytica Daily Brief ® Global Prospects 10 Sub-Saharan Africa Nigeria South Africa Ethiopia 5 0 2011 2017 2011 2017 2011 2017 2011 2017 -5 -10 10 Ghana Ivory Coast Kenya Angola 5 0 -5 -10 Sub-Saharan Africa: Fiscal balance, 2011-17 (% GDP; 2016-17 are projections) Source: IMF At end-2015, the IMF classed 20 SSA states as "moderately debt-distressed", compared with ten in 2010 (and 14 in 2013). There are twelve countries at high risk of debt distress (including Djibouti, Mozambique, Cameroon and Ghana). So far, only countries that have experienced an abrupt increase in their debt burdens since the global commodity price collapse (Angola and Zambia) are expected to begin fresh IMF bailout talks. Others may follow, particularly if a default by Mozambique prompts a wider re-evaluation of the region's creditworthiness. This could widen the region's sovereign spreads, which currently stand at 350 basis points above the emerging market average (see AFRICA: Debt, revenue woes to push states to seek help - February 5, 2016). 12 Number of states at high risk of debt distress Humbled hegemons The slowdown in Nigeria and South Africa could spill into neighbouring countries. The effect of this will be sharpest in southern Africa, where remittances from South Africa are important, though Nigeria's close trade links with the rest of West Africa means states such as Benin could also suffer. Nigeria The economy contracted by 0.36% year-on-year in the first quarter of 2016, compared with growth of 2.11% in the previous quarter. This was due to steep output declines in manufacturing and construction, which have been hurt by foreign exchange restrictions and militant attacks on the Nigerian Petroleum Development Company's Forcados oil pipeline in February, which halved the country's already poor electricity supply. Such attacks have increased in recent months, pushing oil output down to around 1.4 million barrels per day from 2.2 million in January. The federal budget, which was adopted in May, assumes January production levels, making major fiscal shortfalls highly likely. The outlook for both private and public sector consumption has worsened. Unemployment grew to 12.1% in the first quarter of 2016 from 10.4% in the previous quarter. Largely, this was a consequence of an increase in the labour force rather than job losses. On balance, the economy appears to have created 80,000 new jobs (see NIGERIA: Hefty budget will not dispel investor unease - April 5, 2016). © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact 19 Oxford Analytica Daily Brief ® Global Prospects However, this masks shifts from formal full-time employment (which shed 528,148 jobs) to informal low-paying underemployment (which added 607,613 jobs). The trend will undermine Abuja's goal of sharply increasing tax revenues this year since many informal workers lie outside the tax net. South Africa 0.36% Size of Nigeria's economic contraction in the first half of 2016 Pretoria is bracing for a possible cut in the country's sovereign rating to junk status by end -2016. If it materialises, the downgrade will likely come from Standard and Poor's rather than Fitch. Both rate the country BBB-, but the former takes a dimmer view on South Africa's political stability. This would trigger a sizable sell-off of South African financial assets by institutional investors, many of which cannot hold speculative-grade debt in their portfolios. These assets could soon be purchased by bargain-hungry investors eager to capitalise on the country's strong medium-term prospects. Its status as an investment gateway for the rest of SSA is an added pull factor. Nevertheless, the shock could spell an economic contraction: GDP will barely expand this year (the IMF expects 0.6%) and unemployment (26.7%) is at its highest point since the 2008-09 recession (see SOUTH AFRICA: Cabinet chaos raises junk status risk December 14, 2015). Credit rating agencies opting to maintain South Africa's investment-grade status will likely cite the government's firm grip on public debt (which is only expected to increase by around one percentage point to 51.4% in 2016 despite the lower growth outlook) and signs of a revival in private sector activity. Promising policies? SSA could receive a modest boost from reform efforts at the regional level. The tripartite free trade agreement covering eastern and southern Africa could facilitate expanded intraregional trade. Depressed SSA currencies have already made exports from within the region relatively competitive. Intra-regional trade could also spur the development of regional value chains, particularly in countries that have a strong manufacturing base such as South Africa, Mauritius and Kenya. Meanwhile, the African Development Bank's 2016-25 Strategy for the New Deal on Energy for Africa, adopted in May, will provide financing relief for countries still at the early stages of implementing infrastructure development plans, potentially spurring economic development. © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact 20 Oxford Analytica Daily Brief ® Global Prospects August 25, 2016 EU and African xenophobia may hurt remittance flows European curbs on migration are not the only risks facing remittance-dependent economies Spain France United Kingdom 457 Spain 30 210 Major sources of remittances, 2014 (million dollars) Italy 296 Senegal 10.3% 50 Gambia 21.2% 135 France Mali 7.4% 184 Gambia Ivory Coast 15 68 Portugal 26 Ghana 103 Senegal 10 87,494 Ivory Coast Ghana Lesotho Liberia 350,611 France 75,408 41 Togo 8.8% 39 Guinea-Bissau 6.2% South Africa United States Ghana Cape Verde 57,636 Ivory Coast 222,377 Portugal United States 343 356,019 France Cape Verde 10.5% 29 Remittances as a share of national GDP, 2014 342 Togo Mali Y Country X% Nigeria 122 Netherlands Portugal Y Main destinations for migrants from remittance-dependant states, 2015 Madagascar 4.0% Ivory Coast Liberia 24.6% 107 131 Ghana 5.2% 92 105 Senegal Botswana Germany Italy 362 27,517 Guinea Bissau United Kingdom 258 Nigeria Nigeria 117,870 4 414 Gambia 16,954 Lesotho 17.4% France South Africa Spain Ivory Coast Growing anti-immigrant sentiment across much of Europe in the wake of record inflows of refugees and asylum seekers is restrictions on ‘sending’ countries. In sub-Saharan states where households rely on cash remittances to support their incomes, such curbs would hurt consumption, deepening the region’s economic downturn. Yet focussing on flows originating outside the continent misrepresents the risks facing many remittance-dependent economies. In some European destinations, eg Portugal, moderate attitudes towards migration portend no major policy shifts. Meanwhile, xenophobic sentiment in other sub-Saharan states -several of which are themselves important sources of remittances -- could drive anti-immigrant policies, hurting intra-African flows. _ Zimbabwe’s plans to ‘export’ skilled workers and appropriate a portion of their incomes will fail due to administrative complexity. _ Increased mechanisation at South African mines will reduce demand for migrant workers from neighbouring countries. _ In East Africa, the rapid growth of mobile banking and improving network coverage will facilitate transmission of remittance funds. _ Ivory Coast’s strong economic growth will attract rising numbers of migrants from Francophone West Africa. See also: African migration will exacerbate skill shortages -- April 30, 2015 © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact 21 Sources: World Bank, UN Population Division, Oxford Analytica African countries heavily reliant on remittances -- and key sources of those remittances Oxford Analytica Daily Brief ® Global Prospects Prospects for India to end-2016 Thursday, June 9 2016 An Oxford Analytica Prospect Policymakers are counting on improved agrarian performance, cheaper credit and economic diplomacy to drive growth in coming months. On the political front, after a modest triumph in the last round of regional elections, Prime Minister Narendra Modi and his Bharatiya Janata Party (BJP) are emboldened but still politically encumbered. What next The second half of 2016 is unlikely to see any shift from the currently estimated 7.6% growth in 2016-17, regardless of the monsoon. The Uttar Pradesh election campaign will gather momentum, risking communal violence but without guaranteeing a BJP victory. Modi's key forthcoming foreign visits to China and Pakistan are unlikely to alter these relationships' status quo. Analysis The southwest monsoon, due this month, is forecast to be normal or better after three bad seasons. This could lift economic performance in multiple ways: Bumper crop The agriculture ministry is expecting a record 270.1 million tonnes (mt) of foodgrains production in the July 2016-June 2017 crop year. The increase from 253.2 mt in 2015-16 could alleviate the distress of indebted and drought-affected farmers. Farmers in a rice field on the outskirts of Srinagar (Reuters/Danish Ismail) Strategic summary • Spectacular growth figures betray India's deeper industrial slump, which an export-driven manufacturing strategy is unlikely to reverse. • Good monsoons could help ease pressure on food inflation and purchasing power, creating scope for monetary easing. • China will veto India's inclusion into the Nuclear Suppliers Group. On the other hand, it would also boost demand and sentiment as lower food prices increase the purchasing power of the net purchasers of food. Industrial offset It is also expected to offset the low month-on-month industrial growth figures. Manufacturing growth was negative in four of the five months ending in March 2016. Government spending and austerity The absence of inflation fears could enable the government to increase spending. However, here the government's approach is likely to be mixed. In 2016-17, the government intends to implement the Seventh Pay Commission (SPC) award to central government employees. The significant increase in public sector salaries could lift GDP growth by 0.25-0.75 percentage points. © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact 22 Oxford Analytica Daily Brief ® Global Prospects Fiscal deficit The government realised its fiscal deficit target of 3.9% of GDP in 2015-16. In 2016-17, the target is 3.5% and to cut corporate taxes, while absorbing the cost of the SPC award. Indeed, the 2016-17 budget projects the total expenditure to GDP ratio to fall marginally to 13.1% from 13.2% in 2015-16. This may necessitate cuts in other areas. Monetary policy This will increase pressure for a monetary policy stimulus. The government will pressure the Reserve Bank of India (RBI) to cut rates but there is no guarantee the RBI will comply, and that reduced interest rates will raise investment directly. Nonetheless, a good monsoon would improve sentiment and could encourage debtfinanced private spending. Opportune moment If both a good monsoon and cheaper credit materialise, the government would be using an excellent opportunity provided by two factors: • relatively low inflation, initially aided by low oil prices and the end of the commodity boom, and then by domestic slowdown; and • a favourable balance-of-payments situation; the trade deficit fell to 48.9 billion dollars in 2015-16 from 61.1 billion in 2014-15. Consequently, a revival in demand would generate neither inflation nor balance-of-payments difficulties. NPAs A key dampener is rising non-performing assets (NPAs). Gross NPAs stood at an estimated 4 trillion rupees (60.3 billion dollars) in mid-December 2015, with much of it on public sector banks' balance-sheets. Unsurprisingly, total losses of 23 public sector banks (after provisioning for NPAs) stood at 234 billion rupees during the fourth quarter of 2015. This stress will make banks reluctant to lend and many customers (both corporates and households) ineligible to borrow. Consequently, expectations of a major revival in creditfinanced consumption or investment, particularly the latter, may prove far-fetched. Export surge? If this proves true, as is likely, an export surge would be seen as the only route to higher growth. Here the prospects are mixed. Exports are falling despite the policy push Decline In 2015-16, India's merchandise exports fell 15.9% to 261.14 billion dollars, from 310.34 billion in 2014-15. Even services exports are losing dynamism. Services exports were down to 37.9 billion dollars between October and December 2015, compared with 39.6 billion during the year-before period. © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact 23 Oxford Analytica Daily Brief ® Global Prospects Dampeners This is partly attributable to sluggish global demand (see PROSPECTS H2 2016: Global economy - June 1, 2016), and China's slowdown, which has affected areas such as iron ore exports. However, domestic factors such as export duties on ore exports have also played a role. Moreover, Indian business has yet to deliver on the expectation that deregulation and liberalisation would result in a restructuring that gives India an edge in international markets. This explains why the government is seeking to improve India's overseas image and attract investors who could export India out of its industrial slump. However, there is little evidence that such a turn can happen in a marginal exporter such as India and quickly enough to deliver near-term economic gain. Political prospects The next round of regional elections, due in 2017, will include Modi's own Gujarat. However, the Uttar Pradesh polls will dominate electoral politics in coming months. The largest state with a population of 200 million, Uttar Pradesh was crucial to Modi's general election victory in 2014 and provided him with 71 of its 80 seats in parliament. Yet its legislative assembly is in the hands of the rival Samajwadi Party, which has performed well in recent by-elections. Victory for the BJP here would not only lay foundations for the 2019 national elections but also demonstrate the strength of support for Modi. However, election campaigning is likely to be accompanied by communal violence, which may not necessarily benefit the BJP. GST bill Meanwhile, Modi will press his economic agenda in the monsoon session of parliament (from July 21) -- especially, the Goods and Services Tax (GST) bill - but likely with patchy results. The GST bill may not secure approval this year The last regional polls will make little immediate difference to his position in the upper house where his government lacks a majority. Nonetheless, he may be gaining some traction. At least 53 of the upper house's 245 current members retire this year. Their positions will be re-filled by nominations from their regional state assemblies, where BJP-led or BJPfriendly governments have replaced Congress regimes in Karnataka, Andhra Pradesh and Maharashtra since they were appointed. Modi could gain 13 seats -- taking the BJP's total to 62 and its supporting National Democratic Alliance to 81. Moreover, recently re-elected Tamil Nadu Chief Minister Jayalalithaa Jayaraman (whose party has twelve seats in upper house) and West Bengal Chief Minister Mamata Banerjee (also twelve) may support the government on case-by-case basis (see INDIA: State polls modestly boost Modi's reform plan - May 20, 2016). © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact 24 Oxford Analytica Daily Brief ® Global Prospects Foreign policy Since coming to power, the government has prioritised economic and geo-strategic diplomacy to attract investment and tackle China's rise. This trend will continue. G20 Notably, Modi will visit China for the G20 summit in September, during which bilateral discussions will focus on reviving trade and investment: • Between 2000 and September 2015, China invested only 1.2 billion dollars in India. Delhi hopes this figure will rise to 5 billion-10 billion by 2018-19. • India's trade deficit with China has ballooned to 44.5 billion dollars in 2015 from 36.6 billion in 2012. No diplomatic breakthrough is expected partly due to China's geostrategic rivalry with India. Despite the US push, China will veto India's entry into the Nuclear Suppliers Group unless Pakistan's candidature is accepted. This is unacceptable to Washington (see INTERNATIONAL: Politics will undermine NSG function - May 24, 2016). SAARC Modi is expected in Pakistan for the South Asian Association for Regional Cooperation (SAARC) summit in early November. He may use the trip to ease border tensions, but his own nationalist base and the Pakistan military's control over Pakistan's foreign policy will prevent a resumption of the peace dialogue. © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact 25 Oxford Analytica Daily Brief ® Global Prospects June 23, 2016 China reaches political crossroads as economy matures The balance China has traditionally struck between economic openness and political repression may not hold much longer China’s political and economic openness Maoism Deng’s ‘Reform and opening up’ PostTiananmen crackdown Jiang Zemin Hu-Wen second term Hu-Wen first term Global Financial Crisis prompts massive state intervention Liberal Xi Jinping Possible outcomes Regulatory assertiveness and indigenisation under Xi Jinping 2001: WTO entry 1989: Tiananmen Square crackdown: Conservatives seize power Repressive Semi-democracy (Singapore model) Beijing Olympics, Tibet and Xinjiang riots Institutionalisation, public consultation and intra-party democracy under Hu Jintao Political experimentation under Hu Yaobang and Zhao Ziyang Arab Uprisings and Jasmine Revolution Consultative authoritarianism Reformer Zeng Qinghing Political openness Economic openness 1992: Deng Xiaoping’s Southern Tour restarts reforms Falun Gong crackdown Hard authoritarianism campaign begins ‘Organic’ spread of NGOs, commercial media and the internet 1970 1975 1980 1985 1990 1995 2000 2005 2010 Neo-totalitarianism (’North Korea Lite’) 2015 2017 onwards Economic growth and political repression, the pillars of Communist Party rule, are in tension. The Party strives for an optimum balance that maximises economic openness without weakening its political control. However, the terms of the _ Innovation requires critical thinking and exchange of information and ideas, which censorship, propaganda and indoctrination will impede. point where innovation becomes the primary driver of growth; at this point, the cost of political repression in foregone economic potential may rise. sake of political control; the question is how far this The leadership may then face a choice between political liberalisation and economic stagnation, both risky: economic stagnation would undermine the state’s ‘performance legitimacy’ and erode its repressive capabilities, while political liberalisation could get ‘out of control’ if it creates space for more powerful oppositional forces than the Party is willing to tolerate. _ _ opening to steer back towards a more liberal course. _ The early 2000s provide a precedent for a more liberal politics; the late 1980s provide a warning against loosening controls too much. See also: Key anniversary raises hopes for China’s liberals -- December 11, 2015 © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact 26 Sources: Oxford Analytica; China’s Future, David Shambaugh, 2016 China has gone through cycles of liberalisation and retrenchment in both economy and politics Oxford Analytica Daily Brief ® Global Prospects Prospects for Venezuela to end-2016 Thursday, June 16 2016 An Oxford Analytica Prospect Prospects for the second half remain grim, amid continued political and economic turmoil. The political focus will stay on the contested recall referendum against President Nicolas Maduro that the opposition Democratic Unity Movement (MUD) is seeking to convene before January 2017. On the economic front, the government will be under intense pressure to liberalise the economy amid worsening shortages and as the country and state oil company PDVSA face onerous debt repayments. What next The government will focus on mobilising hemispheric support against the recent threat of suspension from the Organization of American States (OAS), relying on its team of experienced diplomats in Washington to lobby support of regional allies. After a period of dominating the political discourse, the MUD will turn inward to confront deepening schisms over the next steps in its campaign to remove Maduro from the presidency. Popular sentiment will remain volatile, with the ongoing risk of spontaneous and violent protests against shortages. Analysis Wrangling over the legitimacy and timing of a recall referendum will dominate the coming months. Recall referendum The opposition MUD is seeking to mobilise the constitutional right to a recall referendum against Maduro mid-way through his term (see VENEZUELA: Converging pressures risk implosion - May 19, 2016). By May, it had collected the requisite number of signatures required to petition the National Election Council (CNE) for a recall. A protest over food shortage and against Venezuela's government in Caracas (Reuters/Marco Bello) Strategic summary • The military should resist opposition calls for intervention -- which would in any case not necessarily favour the opposition. • The catastrophic economic situation will not improve this year, though default may be staved off at a high cost. • External actors are likely increasingly to seek dialogue rather than potentially destabilising intervention. If a larger share of the electorate vote against Maduro in a recall than backed him in the April 2013 presidential election (7.6 million), there will be fresh presidential elections. Tense constitutional arguments will prevail: Timing The government maintains that Maduro began his term in January 2013, when he stood in for late President Hugo Chavez when the latter was receiving treatment for cancer in Cuba. Under the government's reasoning, the opposition MUD has already missed the deadline for a recall. The opposition, by contrast, will maintain that Maduro's term commenced with the April 2013 presidential election in which he was elected to succeed Chavez. In any case, if a recall vote is delayed beyond January 2017 and Maduro loses, VicePresident Aristobulo Isturiz will serve the remainder of Maduro's term through to 2019. © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact 27 Oxford Analytica Daily Brief ® Global Prospects Signature verification The government will continue to challenge the veracity of the signatures collected and submitted to the CNE. The CNE has said that some 600,000 of the 1.97 million signatures it received 'did not meet requirements'. According to Maduro, over 20,000 signatures have been falsified. The CNE has commenced the verification process, but a long delay in approving signatures will exacerbate political tensions. Referendum outlook The government will continue to resist a referendum, but if one is convened before January, the country will face a period of intense partisan agitation and mobilisation. Prospects for Maduro in a recall vote are poor, with the president likely to face heavy defeat amidst an acute economic crisis and diminished popular confidence in ambitions to create a model of '21st Century Socialism'. Political violence cannot be discounted. Proand anti-government groups will continue to rally street demonstrations. Any rise in violence might increase pressure for military intervention The military will remain under pressure to intervene, most recently deflecting demands from MUD leader and former presidential candidate Henrique Capriles to observe a 'constitutional duty' to remove Maduro. Attitudes within the armed forces remain difficult to gauge, although it is expected that majority and senior level sentiment will remain loyal to Maduro. External influences External actors will be important determinants of domestic political stability in the months ahead. However, regional neighbours and the international community are divided over next steps and the legitimacy of intervening in Venezuela. The opposition MUD will continue to look to the OAS to isolate Maduro, including lobbying for Venezuela to be suspended under the OAS Democratic Charter. However, recent missteps by OAS Secretary-General Luis Almagro, including strongly critical statements against Maduro that were not endorsed by the 34 OAS member states, have proved counterproductive and led several countries to pronounce in favour of dialogue and negotiation. The MUD will also look to the United States as another important ally in its campaign to remove Maduro. However, as with OAS member states, signals from the United States -including a meeting on June 14 between US Secretary of State John Kerry and Venezuelan Foreign Minister Delcy Rodriguez at the OAS General Assembly in Santo Domingo -- point to a US preference for a negotiated resolution to Venezuela's political crisis. While the Maduro administration will continue to be relatively receptive to dialogue, albeit on its own terms, the MUD will need a significant inducement to engage in negotiations. The opposition will maintain a hostile stance toward any mediation that is seen to strengthen the position of a government that they maintain is illegitimate and discredited (see VENEZUELA: Constitutional crisis is accelerating - April 15, 2016). Economic outlook The already parlous economic situation will deteriorate unless the government embraces drastic policy reforms. However, there is no indication that Maduro's economic team is preparing to reorient economic strategy in the months ahead (see VENEZUELA: Political machinations will worsen crisis - February 19, 2016; and see VENEZUELA: Politics deepen economic crisis - January 27, 2016). © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact 28 Oxford Analytica Daily Brief ® Global Prospects Although price and exchange controls are creating shortages, inflationary pressures and a thriving black market, there will be profound reluctance to embrace any form of market liberalisation in the remainder of the year, particularly at a time when the government is facing the prospect of an election. The scarcity index stands at 80%, and the IMF forecasts inflation of 720% and a GDP contraction of 8% this year, following on from a 10% GDP decline in 2015. Recent proposals to distribute food and medicines 'house by house' via community councils might only compound problems given that the councils are inefficient and lack structures to undertake such a programme. 8%/720% GDP contraction/inflation rate forecast by IMF for 2016 There are high market expectations that PDVSA will default on an onerous 5 billion dollars in principal and interest payments that fall in October and November. Although the government and PDVSA continue to emphasise their commitment to the repayment schedule -- including 20 billion dollars in payments on maturing sovereign debt and interest over the next 18 months -- this can only be maintained at a high social cost. Meanwhile, a further deterioration in oil and energy output is to be anticipated due to power outages and equipment failures (see VENEZUELA: No rapid oil sector upturn on the cards - January 18, 2016): • The Paraguana oil refining complex is now reported to be operating at 25% capacity, driving an 11.9% reduction in national crude output to 2.53 million barrels per day (b/d) in the first quarter of 2016 compared with the same period of 2014. • According to OPEC, in May oil output fell by 5% month-on-month and nearly 11% yearon-year, to 2.37 million b/d. A steep reduction in imports to address oil export revenue declines and a rapidly deteriorating international reserve position has compounded problems of scarcity. The greatest immediate challenge facing the government is controlling mounting popular anger and rising incidents of spontaneous riots and disorder. © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact 29 Oxford Analytica Daily Brief ® Global Prospects June 16, 2016 India’s energy demand set to soar by 2040 India’s demand growth is likely to outpace that of Brazil, Russia, China and South Africa by 2040 Total primary energy demand (billion tonnes of oil equivalent) India China Brazil Russia India’s domestic energy targets are likely to prove overoptimistic 2015 2020 2025 2030 2035 South Africa Coal production (million tonnes) 4 3 477 2020 likely output: 996 2020 target: 1,500 2 Nuclear installed electric capacity (gigawatts) 1 5.7 0 2020 2040 2020 2040 2020 2040 2020 2040 2020 2040 The oil slump and deregulation have dramatically cut India’s energy subsidy bill Subsidies on petroleum products (billion dollars) 25 20 15 Domestic LPG Kerosene 5 100 61 2032 target 2025 likely output 2022 target 60 77 2025 likely output Other renewables (excluding hydro & including bioenergy) (gigawatts) Diesel 0 2012 2022 target 31 Wind installed electric capacity (gigawatts) 25.1 10 63 Solar installed electric capacity (gigawatts) 4.9 2035 likely output 2013 2014 2015* 51.6 2022 target 15 14 2025 likely output * 9 months of fiscal year Over the next two decades, India’s energy demand growth is expected to outpace that of all other members of the BRICS grouping, with its energy demand rising 87% between 2020 and 2040, compared with only 18% in China. In line with the demands of the fast-growing economy, Prime Minister Narendra Modi’s government has advanced ambitious targets for domestic production, especially in the coal and renewables sectors by 2020. Although nearly all of the targets will prove unrealistic, India is likely to see a dramatic rise in coal production and electricity generation from renewables (particularly solar). Given India’s weak domestic resource base on oil, and infrastructural and price constraints in upstream gas development, it will continue to rely heavily on imports. This will make India a crucial international market for oil and gas exporters, and nuclear operators, while also increasing its impact on global price movements. _ The oil slump has helped India reduce energy subsidies, but for political reasons subsidies may need to rise when oil prices pick up. _ India’s coal reliance is unshakeable on current trends. _ The government will cite its renewables achievements, especially on solar, to appease climate activists. _ As energy consumption rises, the government will fail to cut air and noise pollution to acceptable levels. See also: India elevates energy ambitions as 2019 polls near -- May 23, 2016 © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact 30 Sources: Ministry of Power; Ministry of Coal-Government of India; IEA World Energy Outlook 2015 and Sylvie Cornot-Gandolphe 2016 India’s total primary energy demand will nearly double by 2040 Oxford Analytica Daily Brief ® Global Prospects September 8, 2016 Low investment restricts Latin American infrastructure Transport and telecoms infrastructure shortfalls are two key factors undermining Latin American competitiveness Total public and private infrastructure investment, average 2008-13 (% of GDP) 6.02 5.08 5.06 Nicaragua Panama Honduras 4.78 Peru 4.50 4.34 Bolivia 3.79 Costa Rica Paraguay 3.28 Chile 3.11 2.98 Brazil 2.66 2.29 1.99 1.95 Colombia Guatemala Uruguay El Salvador Argentina 1.62 Mexico … but only Bolivia consistently increased the percentage of GDP spent on infrastructure for every year of the period Public and private infrastructure investment, 2013 (Billion dollars) Public and private infrastructure investment, 2008-13 (% of GDP) Nicaragua Mexico Honduras Nicaragua Panama Guatemala El Salvador Costa Rica XX Transport Total infrastructure investment (billion dollars) Costa Rica 4 Brazil 2 0 Bolivia Energy Bolivia 6 Peru Telecommunications Honduras 8 Colombia Waterrelated Panama Peru Paraguay Chile 2008 Uruguay Argentina 2015 4 2 0 Goal 9 of the UN Sustainable Development Goals (SDG) calls for building “quality, reliable, sustainable and resilient infrastructure … to support economic development and human well-being”. _ Brazil’s proposed 198.4-billion-dollar transport infrastructure plan, announced in 2015, has made little progress. However, Latin America continues to lag in attaining the SDGs, in particular with respect to infrastructure. Despite being the world’s most urbanised region, it is particularly deficient in transport and communications infrastructure, limiting trade opportunities and prompting protests over service quality. The fall in commodities prices may further curtail infrastructure investment prospects. _ Argentina’s newly announced 14.2-billion-dollar plans for passenger rail could fare little better. Brazil is a case in point. Public transport is a key source of citizen anger and the so-called ‘Brazil cost’ linked in part to poor cargo infrastructure reduces competitiveness and investment. _ Water-related investment is also crucial to boost the population’s access, and the region’s future as a global food producer. _ Despite more ‘business-friendly’ governments, investors will be wary given the long-term nature of infrastructure spending. See also: Latin America’s patchy MDGs record could deteriorate -- October 21, 2015 © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact 31 Sources: UN Economic Commission for Latin America and the Caribbean, Inter-American Development Bank, Latin American Development Bank Mexico's investment levels lag, though Central America has performed better ... Oxford Analytica Daily Brief ® Global Prospects Prospects for emerging economies to end-2016 Wednesday, June 15 2016 An Oxford Analytica Prospect Despite political risks causing bouts of volatility in countries such as Brazil and Turkey, emerging market (EM) growth prospects have improved moderately and asset prices have rebounded after the turbulence of early 2016. More stability in exchange rates has helped, with the US Federal Reserve (Fed) holding off raising rates. The rebound in commodity prices has been supportive, too, together with receding concerns about China's slowdown. Some countries have also eased fiscal policy to reduce social tensions risks. What next The main risk for EMs in the second half of 2016 is currency vulnerability in the face of possible renewed dollar strength caused by Fed rate raises. However, US rate hikes are anticipated, and a repeat of the 2013 'taper tantrum' looks unlikely. On fundamentals, growth could accelerate in mid-2016. In the medium term, it will be challenged by scepticism concerning the sustainability of the commodity price rally, uncertainty over China's outlook and fiscal pressures. Analysis The more favourable environment has allowed some EMs to increase fiscal spending (eg, Nigeria) or ease monetary policy (India). The weaker dollar and lower inflation let EM central banks worry less about exchange rates and instead align policy with economic fundamentals. Further easing is likely. Nearly two-thirds of EM central banks have eased policy in 2016 thus far or are expected to do so before year-end. Hanjin shipping's container terminal is seen at the Busan New Port in Busan, South Korea (Reuters/Lee Jae) Strategic summary • If exchange rates remain stable, India, Indonesia and Hungary could ease monetary policy further, supporting growth. • Poor governance and policy credibility, along with rating risks, cloud the outlooks for Brazil, Turkey, South Africa and Poland. • EM corporate debt remains vulnerable, but to a lesser degree due to Chinese corporates deleveraging. China is stimulating its economy, including through easier fiscal policy. Additional infrastructure and social spending to boost poorer regions will raise domestic welfare and development although the impact on GDP will be modest. For commodity producers, the rebound in commodity prices will alleviate pressure, but the economic and financial situation remains difficult. Unless oil and gas prices move sharply higher and quickly, which is unlikely, most energy exporters will need to enforce both monetary and budget discipline despite negative effects on growth. For those facing budget overspends, the alternative is external financing, which could be costly when lending standards are tightening and private investors may be reluctant to increase their exposure to oil-related issuers. © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact 32 Oxford Analytica Daily Brief ® Global Prospects Emerging Asia Despite efforts to shore up China's economy, the region is not recovering strongly. Trade flows weakened in early 2016 after some recovery at end-2015. Prospects for a short-term rebound remain limited. Demand from advanced economies is slowing, and competition remains fierce. Policy support is rising, but industrial activity remains sluggish amid high inventories and low capacity utilisation. The inventory overhang persists while supply disruptions in India have compounded the industrial slowdown. Housing is the only sector showing improvement. India's growth will slow to around 7.5% in 2016 due to supply disruption in the car sector and broad-based decline in agriculture and industrial production. Nevertheless, India will remain the fastest-growing Asian economy. Emerging Europe The region will remain unattractive for foreign investors, with outflows likely from Polish and Romanian bond and equity funds (see EUROPE: Policy risks will dog emerging markets June 10, 2016). Russia In Russia, the commodity rebound will help the recession bottom out in 2016. A mild recovery might emerge before year-end (see RUSSIA: Recovery is coming with rapid growth unlikely - June 10, 2016). Russia's recession should bottom out this year Domestic demand stabilisation will support the turnaround. The economy has adjusted to lower global oil prices and the government may relax spending ahead of the September election. Russia's external trade and investment will remain constrained by sanctions, weighing on its key trading partners. © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact 33 Oxford Analytica Daily Brief ® Global Prospects Turkey The deteriorating security situation and poor relations with Russia are affecting tourism, which overall accounts for 13% of GDP. These, together with erratic changes in political appointments, will discourage investors. Inflation is high, yet the new Central Bank governor will be under pressure to loosen policy to weaken the lira, potentially damaging corporates with dollar-denominated debt. Poland After a quarterly contraction in January-March, GDP growth could disappoint again. Rating agencies, sceptical about economic policy, are contemplating downgrades. Hungary Hungary has returned to investment-grade with rating agency Fitch, thanks to: • current account surpluses; • high EU funding inflows; • banks' external deleveraging; • a self-financing public debt programme; and • a foreign-exchange-mortgage conversion scheme. With Moody's next review of Hungary's rating scheduled for July and S&P's for September, the country could regain the investment-grade status it lost in 2011. The OECD forecasts accelerating growth, to 3.1% in 2017, when the government will likely loosen fiscal policy ahead of elections (see HUNGARY: Another ratings upgrade is likely soon - May 23, 2016). Middle East and North Africa In the Middle East, growth should slow further in oil-exporting countries given low oil prices, fiscal restraint and liquidity tightening. Oil importers such as Tunisia are benefiting from low commodity prices. Egypt Egypt's Central Bank devalued the pound in March, followed by aggressive rate hikes, up 150 basis points year-to-date to 10.75%, aimed at boosting forex reserves. Large external and fiscal imbalances require: • further pound devaluation; • fiscal reforms; • external sovereign issuance; and • external financial support to achieve this year's forex reserve target. © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact 34 Oxford Analytica Daily Brief ® Global Prospects Gulf States Export revenue losses are forcing the Gulf States into fiscal restraint and accelerated reforms. Delays or reversals could keep ratings under pressure, notably in Saudi Arabia. Sub-Saharan Africa Sub-Saharan Africa (SSA) will see slow growth after the slump in late 2015 as a combination of these factors hits individual countries: • severe drought; • low commodity prices; • interruptions in electricity supply; and • tighter monetary and fiscal policy. The region will see its weakest period since the early 1990s in 2015-16. Risks of debt distress have risen, partly due to the accumulation of non-concessional sovereign debt. About 70% of the region's external debt is dollar-denominated, thus currency depreciations have increased debt burdens (see PROSPECTS H2 2016: Africa economies - June 6, 2016). 2015-16 will be the weakest period for SSA since the early 1990s Many countries need tighter fiscal policy, unlikely to be implemented. The many forthcoming elections will sustain social spending and subsidies. Pressure for economic reform remains substantial, and rating agencies are watchful. South Africa may lose its investment-grade status. Currency markets have benefited from the recent dollar weakness, though dollar availability remains a constraint in Nigeria, Angola and Zambia and is tight in other countries, except South Africa. Latin America Latin America is adjusting to lower commodity prices and weak global manufacturing activity. It is likely to slow further, with stagnant or slightly negative growth, dragged by Brazil, Venezuela, Ecuador and possibly Argentina. South America is predicted to see a 1.9% GDP contraction, with Mexico and Central America set to expand by 3.9%, according to the UN Economic Commission for Latin America and the Caribbean. The commodity prices rebound is insufficient to improve macroeconomic prospects (see LATAM: Growth gloom persists - June 14, 2016). However, it has helped reduce downside risks, especially given weak domestic demand. Trade data could recover from their 2015 lows. As commodity prices dropped by 35% in 2015, dollar-denominated merchandise exports fell 15% in Brazil, 35% in Colombia, 17% in Argentina and Chile and 4% in Mexico. In 2016, the pace of annual contraction in exports has moderated. In Brazil, year-on-year export growth turned positive, due to the weak exchange rate boosting manufacturers' sales. It should improve further if commodity prices keep recovering. Nevertheless, commodity prices remain at half their 2011-13 average. Given fragile global growth, a trade-led recovery looks unlikely. © Oxford Analytica 2016. All rights reserved No duplication or transmission is permitted without the written consent of Oxford Analytica Contact us: T +44 1865 261600 (North America 1 800 965 7666) or oxan.to/contact 35 Master the macroeconomic and geopolitical environment Oxford Analytica is a global analysis and advisory firm which provides an edge in understanding the impacts of political events, and economic and social trends. We combine our global network of over 1,400 experts with high-calibre in-house analysts to deliver authoritative and relevant analysis and advice. A rigorous process of validation ensures timely and impartial insights. Our empirically proven methodology results in heightened prediction accuracy. www.oxan.com – The Oxford Analytica Daily Brief® – Global Risk Monitor – Advisory Services – Training and workshops – Special Reports – The Oxford Analytica Conference