The Week Ahead: 18 – 24 February 2018

The Week Ahead: 18 – 24 February 2018

South Africa’s new president seeks change in direction following tumultuous Zuma years. Ethiopia’s ruling party looks for solutions after PM’s resignation. Australia’s coalition government at a crossroads as leaders trade barbs. Mueller investigation enters new phase as 13 Russians are indicted. All in The Week Ahead 

SOUTH AFRICA: New president seeks new direction after tumultuous Zuma years

  • After 8 years of tumultuous rule over Africa’s second largest economy, investors and the public breathed a sigh of relief when President Zuma resigned last week and Cyril Ramaphosa took over the presidency. South Africa’s stock market indices have risen by over 5% since the resignation was announced.
  • Investors were also happy with President Ramaphosa’s speech to parliament, in which he discussed the creation of a youth job training and internship program (South Africa’s youth unemployment is extremely high) and addressing government corruption. However, opposition leaders were less than impressed and expressed skepticism that Ramaphosa would differ substantially from President Zuma. This Wednesday’s budget announcement will be an early indicator of what type of agenda Ramaphosa will pursue. South Africa’s budget is due to be announced by the finance minister, Gigaba, who was appointed by Zuma.

GRI Take: Should Finance Minister Gigaba be replaced by a more market-oriented individual, it could further buoy South Africa’s stock markets and could help boost its current junk debt rating.

ETHIOPIA: Ruling party looks for solutions amid state of emergency following PM resignation

  • This week, the ruling Ethiopian People’s Revolutionary Democratic Front (EPRDF) faces the daunting task of trying to stabilize the 100 million strong east African nation, following Prime Minister Hailemariam’s surprise resignation last Thursday. The country has undergone several years of protests and extensive arrests of opposition leaders and journalists, starting in 2015. Despite the recent release of thousands of opposition supporters, protests have continued unabated, particularly in the Oromia and later Amhara region.
  • Regional experts remain concerned that the resignation of Prime Minister Hailemariam could lead to a vacuum within the ruling coalition and could create disputes among coalition parties jockeying for influence. The designation of a state of emergency last Friday implies this instability could continue for a while, as the last state of emergency in Ethiopia lasted 10 months.

GRI Take: PM Hailemariam’s decision to maintain his position as caretaker before a new prime minister is selected could staunch some of the country’s tensions, but the longer the role of PM remains unfilled, the more pressure opposition parties and leaders will place on the government for the release of prisoners and for the expansion of human and political rights.  Additionally, the longer the duration of the crisis, the more opportunity for fractures within the coalition government, which possibly foreshadows future caretaker governments. Elections do not appear likely at the moment as the coalition fears it will lose its majority.

AUSTRALIA: Coalition government at a crossroads as leaders trade barbs

  • The current coalition government in Australia remains on edge following a quickly escalating exchange between Prime Minister Turnbull of the Liberals and deputy prime minister and leader of the Nationals, Barnaby Joyce, over revelations that Joyce has been conducting an affair with a staffer.
  • Joyce has repeatedly turned down calls to step down, despite new questions over whether taxpayer money had been used inappropriately by his office. Immediately following the news, Turnbull indicated that Joyce might consider stepping down given his behavior. Joyce responded by saying Turnbull’s comments were “inept.”
  • An attempt  to mend fences last Friday does not appear to have worked, with Turnbull yesterday remarking that he “has nothing to apologize for” when interviewed by the press. Members of the Nationals, Joyce allies and Turnbull opponents, have turned their anger toward Turnbull and murmurs are rising over a possible withdrawal from the government, or otherwise the removal of Turnbull as prime minister in exchange for staying in government.

GRI Take: What appears more likely at this point, barring any developments on Joyce’s side, is for further cracks to emerge between the Nationals and Liberals in their governing coalition. Nationals are more likely to drive a hard bargain, and what had previously been described as a friendship between the two leaders is likely to sour.

UNITED STATES: Mueller investigation enters new phase as 13 Russians are indicted

  • After Congress signed a 2-year spending deal, the Mueller investigation of the 2016 presidential election dominated headlines with the announcement last Friday that 13 Russian nationals and 3 organizations had conspired to undermine the presidential election.
  • Charges include defrauding the election commission and impersonating U.S. individuals, with an overarching goal of supporting Trump’s and Sanders’ campaigns and undermining Clinton’s. These charges, coupled with the recent shooting in a Florida school, has derailed the political environment in Washington and shone a particularly bright light on the administration.
  • The indictment also adds a more substantive angle to what is publically known about the Mueller investigation, which has managed to keep a lid on leaks to the public. The announcement by the Deputy Attorney General Rod Rosenstein of the indictments explicitly not accusing any US individuals of wrongdoing has been taken by some Trump supporters to suspect that he was in the clear. But the recent addition of charges to former campaign chairman Paul Manafort’s ongoing charges from the Mueller investigation suggests that the recent indictment of the Russian individuals does not represent a conclusion of the investigation, but rather the pursuit of a new angle.

GRI Take: While Mueller’s team has been tight-lipped on any new developments, any further charges in the near future against a U.S. citizen would likely put the administration in a tailspin.

Stay ahead of the news cycle with GRI. Drawing on expert knowledge and local sources, The Week Ahead provides analytical foresight on the consequences of key upcoming political developments.

This edition of The Week Ahead was produced by GRI Senior Analyst Brian Daigle and Senior Editor Luke Iott.

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