Honduras scandal may undermine Hernandez re-election

Subject Outlook for the government of President Juan Orlando Hernandez. Significance On November 7, in a move that opposition figures claim is unconstitutional, President Juan Orlando Hernandez announced his intention to run for re-election in 2017. The announcement follows allegations relating to Hernandez's brother, that have highlighted links between senior figures in public life and a leading drug cartel. This risks undermining relations with the United States, and compounds controversy over the president's re-election bid. Impacts Hernandez may succeed in distancing himself from allegations of Cartel del Atlantico influence in public life. Presidential re-election may well be in the interests of a range of political actors. Increased government spending will drive higher growth in the run-up to next year's election.

Subject Guyana election outlook. Significance In October, Guyana’s government announced that new legislative elections would be held on March 2, 2020. This follows a no-confidence vote in the government passed in December 2018, with the intervening months having been spent in legal wrangling over the requirements for an election. Setting a date as far off as March 2020 will spark outcry from the opposition, but efforts to bring the polls forward are unlikely to succeed. Impacts The elections will face international scrutiny given concerns voiced by the United States and EU about the delay. Non-oil investment is likely to slow in the run-up to elections as investors wait for the outcome. Legal challenges have undermined popular trust in the judiciary, raising longer-term questions around judicial selection and training.


Significance The government will appeal the rulings, which follow action by renewables firms. With constitutional battles over energy investments already unfolding, the future of Mexico’s energy framework has been thrown into turmoil. Impacts Increasing energy prices will probably push inflation above Banxico’s upper target limit of 4%. AMLO’s apparent disregard for international trade agreements will strain relations with the United States. AMLO’s pro-austerity fiscal stance could take a toll on his popularity.


Significance The outcome comes as little surprise, given the repressive tactics used by the Ortega administration in the run-up to the vote, which included the disqualification or imprisonment of numerous opposition candidates. The United States and other international actors are now poised to put increased pressure on the re-elected government. Impacts The prospect of extended sanctions will act as a further disincentive to foreign investment. Ortega’s efforts to boost regional support through increased alignment with Honduras may lead to greater bilateral trade. More undocumented Nicaraguan migration looks inevitable, whether due to continuing political repression or worsening economic hardship.


Significance Erdogan adopted a relatively conciliatory tone and stopped short of declaring retaliatory measures, for fear of the economic consequences in particular, despite the fact that most Turks see Biden’s move as an insult and an attack on Turkish dignity. Impacts Ankara’s options for retaliation are limited but could include reduced military coordination with Washington in Syria and Iraq. Turkey could ask non-NATO US forces to leave, but closing the Incirlik air and Kurecik radar bases would hurt relations with NATO. The issue could be used internally to rally Turkish nationalist anger with the United States in support of the government.


Significance Trudeau’s government has been held up as a bulwark of liberalism given the surge of anti-immigration populist candidates and parties in Europe and the United States. However, two leadership candidates in the Conservative race have sought to ape the political style and policy agenda that brought Donald Trump to power in the United States. Mainstream Canadian political actors are seeking to either counter or benefit electorally from rising distrust in government, fears over immigration and integration, and communitarian focus on Islam within right-wing politics. Impacts Opposition to the Trump presidency may help unify fractious left-leaning Canadian voters behind the Liberals. However, the social-democratic New Democratic Party will cite Trudeau-Trump cooperation to peel off progressive voters. Alienation of anti-immigration Conservatives will increase under libertarian or pro-business leadership.


Significance The government is aligning itself with the emerging international strategy against ISG in Syria. Its push to participate in airstrikes in part reflects a wish to reassert the United Kingdom's role as an international security partner, especially to the United States and France. Impacts The government envisages airstrikes as being needed for at least 12-18 months. The United Kingdom will be important but secondary in the anti-ISG coalition, with the United States continuing to conduct most operations. In the interests of its anti-ISG strategy, the government will temper its insistence on Syrian President Bashar al-Assad stepping down. The risk of an Islamist terrorist attack in the United Kingdom will increase. If Labour leader Jeremy Corbyn comes to be seen as correct in his anti-airstrikes stance, it will further envenom relations on the left.


Significance After four sluggish years, economic growth has been picking up steadily since mid-2017. However, as noted by Moody’s, medium-term prospects remain hampered by reliance on copper exports as, in the shorter term, has also been apparent in the context of the tariff war between the United States and China. Impacts According to the IMF, Chile will be the region’s fastest-growing economy this year, just ahead of Peru. The government will walk tightrope between a need for fiscal austerity and social demands. The tariff war will underscore the pressing need for diversification out of commodity exports.


Subject Mexico's brain drain. Significance Recent studies suggest increasing numbers of skilled professionals are emigrating from Mexico. A report by the University of Zacatecas (UAZ) published in March shows more than 1.4 million Mexicans with postgraduate degrees left the country between 1990 and 2015 due to a lack of professional development opportunities. According the National Council for Science and Technology (CONACYT), the government agency responsible for policy in this area, 46% of skilled emigrants live in Europe, 30% in the United States, 12% in Latin America and 7% in Canada. Impacts Emigration of skilled workers will be a fiscal burden as it annuls the benefits of investing in human resources. Policies to attract foreign talent could mitigate the problem, but there is no evidence that this is being considered. A contentious election outcome could trigger instability, further fuelling the outward flow of highly skilled Mexicans.


Significance The National Liberation Front (FLN) and Democratic National Rally (RND) received the most seats, as expected, amid widespread voter apathy. Impacts The government will continue its austerity strategy in response to the low oil price, and face more social tension and protests. The young generation will lose even more trust in the political system and opt for protest, resignation and emigration. The supporters of security and economic cooperation with the United States within the regime were strengthened.


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